7.8% GDP in Q1 FY26, Bhakts calling it booming, Trump called India a dead economy, US tariffs hitting exports, REAL GDP on the ground shows farmers in debt, youth unemployed, rupee crashing.
Skip this thread if you can’t handle facts about India..
Skip this thread if you can’t handle facts about India..
India’s GDP grew 7.8% in Q1 FY 2025-26, surpassing expectations. Headlines celebrate a booming economy.
But walk the streets of Punjab, Assam, or Madhya Pradesh and you see a different picture.
Farmers are drowning in debt, daily wage earners struggle to find work, small shopkeepers are shutting down.
Growth exists on paper, not in everyday life.
But walk the streets of Punjab, Assam, or Madhya Pradesh and you see a different picture.
Farmers are drowning in debt, daily wage earners struggle to find work, small shopkeepers are shutting down.
Growth exists on paper, not in everyday life.
GDP measures the total value of goods and services produced, but it ignores crucial realities.
Failed crops, rising input costs, unpaid wages, and families skipping meals are invisible in these numbers.
GDP growth is often mistaken for prosperity, yet millions experience stagnation despite the headline
Failed crops, rising input costs, unpaid wages, and families skipping meals are invisible in these numbers.
GDP growth is often mistaken for prosperity, yet millions experience stagnation despite the headline
The 7.8% figure looks huge, but last year’s growth in the same quarter was only 6.5 percent. Low base effects exaggerate growth. Real GDP is adjusted for inflation using a deflator that underestimates what people actually pay for food, fuel, and essentials.
Paper growth inflates reality while lived experiences tell another story.
Paper growth inflates reality while lived experiences tell another story.
Government spending rose 9.7% this quarter, boosting GDP. But these are borrowed funds or reallocated budgets. The government’s coffers appear fatter while household income growth remains sluggish. Paper wealth does not make ordinary citizens richer, yet it makes the economy look strong on paper
Private consumption, the real driver of household well-being, grew only 7%, down from 8.3% last year.
Streets, markets, and villages tell a different story than the headline. Growth is being driven by government spending and urban services, not everyday citizens. People are cautious, not celebrating
Streets, markets, and villages tell a different story than the headline. Growth is being driven by government spending and urban services, not everyday citizens. People are cautious, not celebrating
Services sector grew 9.3% in Q1 FY26, driving headline GDP growth.
But agriculture, employing nearly 40% of India, grew only 3.7% in the same period.
Mining contracted by 3.1% while construction grew 7.6%, mostly in urban luxury projects.
Rural India and informal workers see very little of this so-called boom.
But agriculture, employing nearly 40% of India, grew only 3.7% in the same period.
Mining contracted by 3.1% while construction grew 7.6%, mostly in urban luxury projects.
Rural India and informal workers see very little of this so-called boom.
Punjab and Assam faced floods and erratic monsoons in this Q1, with crop losses impacting thousands of farmers. Input costs for seeds and fertilizer rose over 6% YoY.
GDP counts total crop output but ignores the loans, losses, and distress these farmers endure. Paper says growth, ground reality says struggle.
GDP counts total crop output but ignores the loans, losses, and distress these farmers endure. Paper says growth, ground reality says struggle.
Youth unemployment remains above 11% in Q1 FY26, while wages for daily earners rose less than 4%.
Corporate profits grew over 12%, yet household income growth averaged only 5%.
GDP rises, but paychecks remain stagnant for millions, highlighting the disconnect between paper growth and real livelihoods
Corporate profits grew over 12%, yet household income growth averaged only 5%.
GDP rises, but paychecks remain stagnant for millions, highlighting the disconnect between paper growth and real livelihoods
NPAs in public sector banks rose to ₹12.5 lakh crore in Q1 FY26, up from ₹11.9 lakh crore in Q1 FY25, a 5.1% increase.
Corporate NPAs grew 6.2%, while retail NPAs rose 4.3%. Rising bad loans and stressed credit markets temporarily inflate GDP numbers, but this signals a fragile financial system where defaults could slow future growth
Corporate NPAs grew 6.2%, while retail NPAs rose 4.3%. Rising bad loans and stressed credit markets temporarily inflate GDP numbers, but this signals a fragile financial system where defaults could slow future growth
Central and state govt. debt reached nearly 82% of GDP in Q1 FY26, up from 79% last year.
Interest payments consume over ₹10 lakh crore annually, more than 15% of government revenue.
Borrowed growth inflates Q1 GDP but adds fiscal pressure, forcing higher taxes or cuts in welfare, leaving ordinary citizens to carry the burden even as the headline looks strong.
Interest payments consume over ₹10 lakh crore annually, more than 15% of government revenue.
Borrowed growth inflates Q1 GDP but adds fiscal pressure, forcing higher taxes or cuts in welfare, leaving ordinary citizens to carry the burden even as the headline looks strong.
The Indian rupee has depreciated by approximately 5.2% over the past year, from ₹83.89 per US dollar on August 30, 2024, to ₹88.31 today.
This decline increases the cost of imports, including fuel, machinery, and essential goods, putting additional strain on household budgets. While GDP figures may show growth, the weakening currency reflects underlying economic pressures that affect everyday life.
This decline increases the cost of imports, including fuel, machinery, and essential goods, putting additional strain on household budgets. While GDP figures may show growth, the weakening currency reflects underlying economic pressures that affect everyday life.
India's core merchandise exports grew by 7.2% in Q1 FY26, reaching approximately ₹3.8 lakh crore.
However, the U.S. imposed a 50% tariff on Indian goods, potentially affecting up to ₹57,660 crore of exports.
Despite this, India's overall export outlook remains positive, with projections indicating a 5% growth in merchandise exports (to $368.5 billion) and a 10% growth in services exports (to $421.9 billion) for FY2026.
However, the U.S. imposed a 50% tariff on Indian goods, potentially affecting up to ₹57,660 crore of exports.
Despite this, India's overall export outlook remains positive, with projections indicating a 5% growth in merchandise exports (to $368.5 billion) and a 10% growth in services exports (to $421.9 billion) for FY2026.
India's retail inflation in Q1 FY26 averaged 2.7%, well below the RBI's target range of 2–6%.
This marks the lowest quarterly CPI since 2019. Food inflation turned negative at -1.76% in July, the sharpest drop in over six years, driven by falling prices of vegetables, pulses, and oilseeds. Fuel inflation softened to 2.6% from 2.8% previously, reflecting lower global oil prices.
However, this deflationary trend masks underlying economic challenges. While consumers benefit from lower prices, farmers face reduced incomes, and businesses grapple with shrinking margins. The subdued inflation environment may limit the RBI's room for future rate cuts, potentially impacting economic growth momentum.
This marks the lowest quarterly CPI since 2019. Food inflation turned negative at -1.76% in July, the sharpest drop in over six years, driven by falling prices of vegetables, pulses, and oilseeds. Fuel inflation softened to 2.6% from 2.8% previously, reflecting lower global oil prices.
However, this deflationary trend masks underlying economic challenges. While consumers benefit from lower prices, farmers face reduced incomes, and businesses grapple with shrinking margins. The subdued inflation environment may limit the RBI's room for future rate cuts, potentially impacting economic growth momentum.
In Q1 FY26, Foreign Institutional Investors (FII) withdrew around ₹1.16 lakh crore, while Domestic Institutional Investors (DII) invested only ₹65,000 crore.
These volatile capital flows show that the stock market optimism fueling parts of GDP growth is fragile and dependent on foreign sentiment. GDP may rise on paper, but real economic confidence among investors is shaky, signaling potential risks for future investment-driven growth
These volatile capital flows show that the stock market optimism fueling parts of GDP growth is fragile and dependent on foreign sentiment. GDP may rise on paper, but real economic confidence among investors is shaky, signaling potential risks for future investment-driven growth
In Q1 FY26, India's construction sector experienced a growth rate of 7.6%, a deceleration from the previous quarter's 10.8%. This slowdown indicates that while infrastructure development continues, it may not be as robust as earlier in the fiscal year. Despite this, the sector remains a significant contributor to GDP growth.
Manufacturing expanded by 7.7% in Q1 FY26, up from 4.8% in Q4 FY25. This acceleration suggests a rebound in industrial activity, driven by strong domestic demand and favorable policy measures. However, challenges such as rising input costs and global supply chain disruptions persist.
Youth unemployment remains a pressing issue. In June 2025, the unemployment rate among urban youth aged 15–29 rose to 18.8%, up from 17.9% in May. In rural areas, the rate increased to 13.8% from 13.7%. These figures highlight the ongoing challenges in integrating young individuals into the workforce.
Corporate earnings in Q1 FY26 showed resilience. Manufacturing operating profit growth was 6.9%, while IT sector profits grew by 5.4%. Non-IT services saw an 11.3% increase. These figures indicate a stable corporate sector performance, though the pace of growth varies across industries.
Rural-urban disparity remains stark. In Q1 FY26, rural GDP contribution grew only 3.8%, while urban areas grew 9.1%, driven by IT, finance, and construction. Millions in villages continue to face low wages, poor infrastructure, and climate shocks, showing growth is concentrated in cities
Informal sector employment, which accounts for over 70% of India’s workforce, saw negligible growth in Q1 FY26. Daily wage earners earned less than ₹350/day on average, while GDP rose 7.8%. Paper growth hides the struggle of millions who lack job security, benefits, or social protection
India’s debt-to-GDP ratio has been rising steadily. From 68% in FY21, it climbed to 82% in Q1 FY26, with interest payments consuming over 15% of government revenue. Borrowed growth inflates GDP today but adds fiscal pressure, risking higher taxes and reduced public services tomorrow
Global shocks threaten India’s growth. Crude oil prices averaged $85/barrel in Q1 FY26, up from $72 last year, raising import bills. US Fed rate hikes and China’s slow growth reduce export demand. GDP growth appears robust, but external vulnerabilities could slow momentum
Real wages are stagnating. In Q1 FY26, median household income grew 5%, while inflation-adjusted costs for food, fuel, and electricity rose 6–7%, leading to a decline in real purchasing power. GDP may be up 7.8%, but ordinary Indians are not feeling wealthier
Do not be fooled by the 7.8% GDP growth in Q1 FY26. On paper, numbers look strong, but rural areas lag, informal workers struggle, real wages stagnate, debt rises, the rupee weakens, and global risks loom. True growth is about jobs, incomes, and well-being. Until these improve, the headline is just a number, not reality
• • •
Missing some Tweet in this thread? You can try to
force a refresh
