India’s macroeconomic indicators, including fiscal stability, strong corporate balance sheets, and recovering consumption, remain robust despite a global economic slowdown, according to a report on Wednesday. The report projects real GDP growth at 6.5% and nominal GDP growth of 10-11% over the long term.
Banks’ non-performing assets (NPAs) have fallen below 1%, and corporate profits are rising alongside strong free cash flows, marking a shift from the deficit years of 2003-2008. Household debt in India remains comparatively low, and the country’s overall debt-to-GDP ratio is lower than in 2010, even as global debt levels have risen.
The report highlights the Nifty 50 Index’s valuation at 19 times FY26 earnings estimates and 17 times FY27, noting that earnings growth across sectors provides stability. However, certain industrial sectors are trading at premium valuations, with a potential return to mean levels expected.
Agriculture is showing signs of improvement, with a favorable kharif crop and positive outlook for the rabi season. Total sown area for rabi crops reached 632.3 lakh hectares, slightly higher than last year’s 631.4 lakh hectares.
Government capital expenditure is expected to accelerate in the second half of FY25. Rural consumption, driven by harvest gains, could balance weaker urban demand. State welfare programs and potential monetary policy easing are also likely to boost near-term growth.
Despite rising short-term concerns affecting investor sentiment, the report affirms India’s medium- and long-term growth trajectory remains solid.