Prime Minister Narendra Modi has welcomed India’s stronger-than-expected economic performance after official data showed real GDP growth of 7.8% in the April-June quarter of 2026-27, describing the performance as a reflection of the collective strength and resilience of the country’s people.

The latest growth figure exceeded the Reserve Bank of India’s earlier estimate of 7% and market expectations of around 7.1%. The expansion came despite global economic uncertainties, oil price pressures and supply-chain disruptions. 

PM Modi calls 7.8% growth a ‘herculean feat’

Reacting to the GDP data, Modi said the 7.8% growth recorded in the first quarter was an achievement made possible by the collective strength of Indians.

In a post on social media, the Prime Minister said the economy had maintained its momentum despite oil price shocks, supply-chain issues and wider global uncertainties. He also described the result as evidence of India's resilience. 

Modi later used the phrase “doomsayers were doomed and India bloomed” while highlighting the latest economic numbers and taking aim at those who had projected a more pessimistic picture of the Indian economy. 

GDP growth beats expectations

India’s real GDP expanded 7.8% year-on-year during the first quarter of FY2026-27. The performance was stronger than both the RBI’s previous projection and market expectations.

However, the quarterly growth rate was lower than the 8.6% recorded in the previous quarter, meaning the latest figure represents a moderation from the immediately preceding quarter even as the economy continued to expand at a strong pace. 

The data has nevertheless strengthened expectations that India’s economic momentum remains relatively robust despite challenging international conditions.

Manufacturing and services support expansion

Manufacturing was among the key contributors to the latest growth numbers, expanding by 9.2% during the quarter. Financial and related services also recorded strong growth, with the financial, real estate and professional services segment expanding by 12.1%, according to reports based on the latest GDP data. 

Gross value added, another important measure of economic activity, increased by 8.2% during the quarter.

Strong domestic consumption and investment also supported economic activity. Reuters reported that private investment rose sharply during the quarter, while consumer spending received support from income and tax-related measures. 

PM’s remarks trigger political debate

The GDP numbers have also become part of a wider political debate over the state of the Indian economy.

While the government has highlighted the latest growth figures as evidence of economic resilience, Opposition criticism has focused on issues including employment, wages and whether strong headline GDP growth is translating into broader economic gains. Current political reporting shows the data has already triggered a fresh exchange between the ruling side and the Opposition.

Modi, however, used the occasion to push back against what he described as pessimistic narratives surrounding India's economic performance.

Global risks remain

Despite the strong quarterly growth, economists and financial analysts have pointed to several risks that could affect the outlook.

Higher energy prices, global trade disruptions, currency movements and geopolitical tensions remain concerns for the Indian economy. India's dependence on imported crude oil makes changes in international energy prices particularly important for inflation and economic activity. 

The latest GDP figures therefore provide a strong start to FY2026-27, but sustaining the pace of expansion will depend on domestic demand, private investment, manufacturing activity and the wider global economic environment.

Gross GST revenue for May 2026 rises 3.2% year-on-year but slips sharply from April's record high; imports drive growth as domestic collections dip

Numbers Down From Record High

India's gross GST collections eased to Rs 1.94 lakh crore in May 2026, pulling back from a record Rs 2.42 lakh crore logged in April, though the figure remained 3.2 per cent higher than the Rs 1.88 lakh crore collected in the same month last year. The Finance Ministry released the official data on Monday, June 1.

The moderation was widely anticipated. April's numbers had been buoyed by year-end business activity and tax settlements — a seasonal spike that doesn't carry over into May. Experts noted the softer numbers were largely expected due to the high base effect and seasonal adjustments following the financial year-end surge.

Imports Carry the Month

The real story in May's data was the sharp divergence between import-driven and domestic collections. IGST collection from imports rose 19.1 per cent during May to Rs 59,654 crore, signalling expansion in industrial capacity, the Finance Ministry stated.

Sources said that over 66% rise in lithium-ion battery imports underlines India's deepening integration into the EV and grid storage ecosystem. Coal collections rose by more than 391%, reflecting heightened fuel and coking coal requirements of steel plants, cement kilns, and thermal power generation.

On the domestic side, however, the picture was less encouraging. Gross domestic revenue took a slight dip of 2.6 per cent, falling to Rs 1,34,530 crore in May 2026 from Rs 1,38,102 crore in May 2025.

Net Collections and Refunds

After adjusting refunds, net GST revenues in May rose 3.3 per cent to about Rs 1.67 lakh crore. Total refunds for the month grew 2.6 per cent to Rs 27,281 crore, of which domestic refunds accounted for Rs 17,030 crore.

Adjusting for a Rs 10,000 crore one-time payment made by a telecom operator for spectrum allocation in May 2025, gross GST collection this May would be higher by about 9% and net collection higher by about 10.1%. This is a significant qualifier, as last year's base had been artificially elevated by that one-off entry.

Component-Wise Breakup

GST collections from domestic transactions reached Rs 1.34 lakh crore in May, comprising Rs 37,397 crore in CGST, Rs 45,143 crore in SGST, and Rs 51,990 crore in IGST.

The growth was broad-based across all major goods and services categories, with taxable supplies in the goods sector rising 26.9 per cent and services sector growing 22.2 per cent, government sources said.

State-by-State Picture

State-wise performance varied across the country. Maharashtra remained the largest contributor to domestic collections despite a flat growth rate, generating Rs 29,141 crore compared to Rs 29,236 crore last year. Karnataka registered a marginal increase of one per cent to reach Rs 13,130 crore, while Gujarat also posted a one per cent growth to collect Rs 11,206 crore.

On the other end, Lakshadweep saw its collections plunge 82 per cent to just Rs 1 crore, and Sikkim recorded a 53 per cent drop, with revenue falling to Rs 200 crore.

Cumulative Picture Remains Positive

Despite the month-on-month dip, the broader fiscal trajectory remains intact. Gross GST collection for the first two months of FY2026–27 totals Rs 4.37 lakh crore, up 6.2% from Rs 4.11 lakh crore during the same period in FY2025–26.

"This cumulative year-on-year performance is healthy and in the right direction to achieve the full-year GST revenue target," sources said. The government has budgeted to mop up Rs 10.19 lakh crore from GST in the current fiscal.