A new EY report forecasts India’s GDP growth at 6.8-7.2% for FY 2026-27, driven by bilateral trade deals with big economies and government reforms cushioning against U.S. tariff risks. This projection signals resilience amid global headwinds.
‘India’s proactive trade diplomacy is unlocking new growth avenues,’ said EY India’s DK Srivastava. These agreements with major players are set to bolster medium-term economic prospects significantly.
To realize the ‘Developed India 2047’ goal, elevating the tax-to-GDP ratio remains crucial. With key reforms like GST and income tax already in place, focus shifts to compliance enhancement for revenue growth.
This year’s tax tweaks, targeting higher disposable incomes, are designed to fuel private spending. Yet, they could dent government coffers, potentially missing FY 2026 revenue targets.
Fiscal discipline prevails, with expectations high for meeting the budgeted deficit. The Finance Minister targets 4.3% of GDP for 2026-27, continuing the consolidation path from 4.4% this year.
Sitharaman’s budget address detailed borrowings: ₹11.7 lakh crore net and ₹17.2 lakh crore gross. This strategy balances growth acceleration with fiscal health, positioning India as a bright spot in global economics.