ENA Economy 2026-01-05 17:21:09 <p><span style="font-size:14px"><strong>New Delhi, Jan 5 (KNN)</strong> Household consumption in India is likely to continue outpacing capital expenditure (capex) in 2026, supported by a fiscal policy tilt towards consumption and a revival in credit, even as corporate investment sentiment remains cautious, according to a report by Nuvama.</span></p> <p><strong><span style="font-size:14px">Drivers of Consumption Growth</span></strong></p> <p><span style="font-size:14px">The report attributes consumptions relative resilience compared with capital expenditure to three factors: during slower economic growth, consumption tends to hold up better than investment; fiscal policies are increasingly geared toward supporting consumption, aided by improving credit availability; and while overall income growth remains modest, demand from lower- and middle-income households is expected to remain stronger than that from higher-income groups, reported ANI.</span></p> <p><span style="font-size:14px">Despite subdued income growth and a moderated wealth effect, consumption in FY26 is expected to be sustained primarily by leverage and government transfers rather than a broad-based improvement in household incomes. </span></p> <p><span style="font-size:14px">Recent state-level schemes, particularly women-focused direct benefit transfers, are providing additional support to lower-income consumption.</span></p> <p><strong><span style="font-size:14px">Capex to Remain Subdued</span></strong></p> <p><span style="font-size:14px">Investment activity is likely to remain restrained through 2026. Limited fiscal space is expected to constrain public capex, while large corporations are cautious amid weak revenues and profitability. </span></p> <p><span style="font-size:14px">Household-led capex is also moderating, with high-end and premium real estate entering a soft patch. The combination of these factors is expected to keep capex growth slow.</span></p> <p><strong><span style="font-size:14px">Twin Engines of Growth</span></strong></p> <p><span style="font-size:14px">Consumption and capex remain Indias twin engines of growth: household spending drives demand, while investment expands supply capacity, generates employment, and supports income growth. </span></p> <p><span style="font-size:14px">In 2026, the report suggests that demand strength will be concentrated in lower- and middle-income segments, whereas investment activity will remain restrained due to fiscal limits and cautious corporate sentiment.</span></p> <p><em><strong><span style="font-size:14px">(KNN Bureau)</span></strong></em></p> 44667 https://knnindia.co.in/news/newsdetails/economy/indias-growth-in-2026-likely-driven-by-consumption-investment-remains-weak-nuvama-report 2026-01-05 17:21:09 knnindia.co.in