Consumption revival may spur FY26 GDP growth to 7%

New Delhi: India’s consumption engine is poised for a powerful revival in the second half of FY26, supported by the ‘regulatory trident’ of tax cuts, rate cuts, and GST rationalisation, a re-port said on Thursday. The report from MP Financial Advisory Services LLP (MPFASL) also forecasted that GDP growth could reach seven per cent by FY27. This outlook is also supported by a favourable monsoon and easing inflation, which will increase household disposable income and reduce borrowing costs, and lower retail prices. Transmission of monetary easing remains incomplete, with banks passing through only 20–30 ba-sis points of the 100-basis-point repo cut to their MCLR, it noted. The report maintained that a sudden food or fuel price shock could undo much of the inflation relief, while fiscal pressures from tax concessions need careful balancing, adding that trade tensions and supply-chain disruptions also remain a concern.