Budget assumptions likely to factor moderate inflation and slower base growth as Centre prepares FY27 fiscal math
India’s nominal gross domestic product (GDP) growth for the financial year 2026–27 (FY27) is likely to be pegged in the 10–10.5% range, economists said, as the Centre prepares to present the Union Budget on February 1.
According to a compilation of public statements and a poll of economists, the Ministry of Finance is expected to use this growth assumption as the basis for key fiscal calculations in the upcoming Budget.
The estimate follows the first advance estimates for FY26, released earlier this month, which projected nominal GDP growth of around 8% to ₹357 trillion in the current financial year, compared with 9.8% growth recorded in FY25. This FY26 estimate will serve as the base for projecting FY27 nominal GDP in the Budget documents.
However, economists cautioned that the final assumption could change, as the statistics ministry is scheduled to release the second advance estimates for FY26 on February 27, incorporating the new base year of 2022–23. Any revisions to FY26 nominal GDP numbers could lead to adjustments in the FY27 projections.
Nominal GDP, calculated at current market prices, captures both real economic growth and the impact of inflation. It plays a critical role in determining key macroeconomic indicators such as the fiscal deficit, debt-to-GDP ratio, revenue buoyancy, and expenditure ceilings.
Economists said a 10–10.5% nominal growth assumption would reflect expectations of moderate inflation, steady real growth, and a more conservative fiscal stance amid global uncertainty. A lower nominal GDP base could also constrain fiscal headroom for higher spending or tax relief measures in the Budget.
The government typically uses nominal GDP growth assumptions to anchor its medium-term fiscal consolidation path, making the FY27 projection a key input for markets and policymakers tracking India’s public finances.
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