India on Track for 6.9% GDP Growth in FY27 Amid Goldilocks Scenario: Ind-Ra

India Ratings & Research (Ind-Ra) has projected that India's GDP will grow by 6.9% in the fiscal year 2026-27, starting April 1, 2026.  

This growth is attributed to key reforms such as GST and income tax cuts, along with trade agreements that are expected to act as economic catalysts. 

Economic Growth and Inflation 

The Indian economy is anticipated to maintain a 'Goldilocks' situation characterised by high growth and moderate inflation.  

Retail inflation is expected to average 3.8% in the next fiscal year. The Indo-US trade deal, with reduced tariffs, is also expected to contribute positively to GDP growth. 

Government Debt and Fiscal Measures 

The Union government's debt as a percentage of GDP is projected to decrease to 55.5% in FY27 from an estimated 56.3% in the current fiscal year.  

The government aims to reduce this further to 50% over the next 3-4 years. The fiscal deficit for the current fiscal is expected to be at the budgeted 4.4%, amounting to ₹15.69 lakh crore. 

Trade Agreements and Investment 

Free Trade Agreements (FTAs) with countries like New Zealand, the UK, and Oman are expected to boost foreign investment and help keep the Current Account Deficit (CAD) lower. 

These agreements are anticipated to attract more foreign investments, thereby supporting economic stability. 

Read More: Budget 2026: Capex Will Rise by Nearly 12%, Railways and Infra to be in Focus! 

Budget and Revenue Projections 

Ind-Ra expects the total budget size to rise to ₹52 lakh crore in FY27, up from the budgeted ₹50 lakh crore in FY26.  

However, the revised estimates for FY26 are expected to show a lower budget size of around ₹49 lakh crore due to a shortfall in tax revenue.  

It is estimated that tax revenues will fall short by ₹2 lakh crore in the current fiscal, compensated by non-tax revenue collection and slightly lower capital expenditure. 

Conclusion 

India's projected GDP growth of 6.9% in FY27, along with strategic fiscal measures and trade agreements, indicates a stable economic environment. The reduction in government debt and the anticipated increase in foreign investments further support this outlook. 

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