GDP growth for second quarter at 7.5% and more due to GST cut led festive sales, says SBI report

Core Viewpoint - India's real GDP growth for Q2 (July to September) is projected to be 7.5% or more, driven by consumption boosts following the GST rate cut, surpassing the Reserve Bank of India's projection of 7% [1][4]. Economic Indicators - Growth is supported by increased investment activities, recovery in rural consumption, and buoyancy in services and manufacturing, aided by structural reforms like GST rationalization [2]. - The percentage of leading indicators in consumption and demand across agriculture, industry, and service sectors has increased to 83% in Q2 from 70% in Q1 [3]. GST Collections - Gross domestic GST collections for November 2025 are estimated to be around ₹1.49 lakh crore, reflecting a year-on-year growth of 6.8% [4]. - Including ₹51,000 crore of IGST and cess on imports, November GST collections could exceed ₹2 lakh crore, driven by peak festive season demand and increased compliance [5]. Consumer Spending Trends - During the festive season (September-October 2025), consumption received a significant boost, with credit and debit card spending patterns indicating substantial growth in categories like Auto, Grocery stores, Electronics, and Travel [6]. - In e-commerce, 38% of spending was on Utility & Services, followed by 17% on Supermarkets and Grocery, with mid-tier cities showing the most growth [7]. Sectoral Analysis - All sectors, except textiles, exhibit high elasticity in response to GST rationalization, indicating a strong consumption response [8]. - The reduction of the effective GST rate is expected to lead to an average consumer saving of 7% per month on consumption, with potential for further increases as more data becomes available [9]. Vehicle Sales - Vehicle sales showed double-digit growth, with car sales volume increasing by 19%, particularly strong in rural regions, and a notable premiumization trend in urban and metro centers [10].