India's consumption revival likely to accelerate in H2 FY26: Report

Mumbai, Oct 6 (IANS) India’s consumption revival is expected to gain strong momentum in the second half of FY2026, supported by tax cuts, rate reductions, and GST rationalisation, a new report said on Monday.

The data compiled by MP Financial Advisory Services LLP (MPFASL) said that these policy measures, combined with a better monsoon and easing inflation, are creating a favourable environment for household demand and spending.

The report said that this “regulatory trident” of supportive measures is likely to boost disposable incomes, reduce borrowing costs, and lower retail prices, helping revive India’s consumption engine.

Private final consumption expenditure -- which accounts for nearly 61 per cent of India’s GDP -- is projected to rise meaningfully in the latter half of the fiscal year.

Mahendra Patil, Founder and Managing Partner at MP Financial Advisory Services LLP, said the overall economic backdrop is more supportive than in recent years.

“A stronger monsoon this year is expected to boost agricultural output, leading to improved rural incomes and healthier cash flows. This, in turn, should support a pickup in rural consumption and complement the recovery in urban discretionary demand,” he said.

The report pointed out that inflation has eased significantly, giving consumers more spending power.

According to the report, the RBI’s decision in October to keep the repo rate unchanged at 5.5 per cent shows confidence in India’s growth outlook and price stability.