India’s real Gross Domestic Product (GDP) growth for the second quarter (from July to September) may have scaled up to 7.5 per cent or even higher, as government-backed Goods and Services Tax (GST) rate cut supported higher consumption, says a new report by a leading private sector bank.
Analysis by the State Bank of India (SBI) Research says the gross domestic GST collections might total around ₹1.49 lakh crore for November 2025 (including returns of October 2025, but filed in November 2025), which projects a Y-o-Y growth pf 6.8 per cent.
On September 22, the Centre had implemented its ambitious GST rate-cut regime, which slashed GST on most goods, especially essentials, from 18 per cent to 5 per cent and did away with two tax slabs of 12 per cent and 24 per cent.
“Growth is being supported by a pick-up in investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, underpinned by structural reforms like GST rationalisation that also helped unleash a festive spirit that decisively showcased triumph of hope over hype,” said the SBI Research in a report released on November 18.
When coupled with ₹51,000 crore of IGST and cess on import, the November GST collections could cross ₹2 lakh crore, driven by peak festive season demand, the report added.
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The Reserve Bank of India (RBI) had projected Q2 GDP growth rate at 7 per cent in its recent report.
The consumption boost in the September-October 2025 festive season is indicated by analysis of debit and credit card spending patterns, the report added, saying merchant categories like auto, grocery stores, electronics, furnishing and travel saw the biggest surge.
“In continuum of the good numbers from festive-led sales, percentage of leading indicators in consumption and demand across agriculture, industry, service sectors showing acceleration has increased to 83 per cent in Q2 from 70 per cent in Q1. Based on the estimated model, we obtain a nowcast of real GDP growth of 7.5% per cent in Q2FY26 with possibility of an upside surprise,” it said.
On data regarding vehicle sales, it said all regions exhibited double-digit growth in car sales volume of 19 per cent, while maximum growth came from rural regions, followed by urban areas with 39 per cent of cars sold in the price range of above ₹10 lakh.
“The reduction of effective GST rate should spurt savings for the consumers. Juxtaposing GST rates with Monthly Per Capita Consumption Expenditure (MPCE) [Household Consumption Expenditure Survey (HCES: 2023-24] reveals that on an average, a consumer may save 7 per cent per month on their consumptions based on initial estimates and could rise further with availability of more data,” it added.
However, it cautions against risks from trade disruptions and volatile global commodity markets.
“However, risks persist from volatile global commodity markets and potential spillovers from trade disruptions. Overall, India’s near-term outlook is strong, with macroeconomic stability providing space for sustained medium-term growth,” it pointed out.
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