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Informist, Sunday, Feb. 1, 2026

 

MUMBAI/NEW DELHI – The Union Budget has projected a nominal GDP growth of 10.0% for the next financial year starting April, higher than the 8.0% projected for FY26 in the government's first advance estimate.

 

The Budget for FY26 had assumed a nominal GDP growth of 10.1%. The government's nominal GDP growth projection for FY27 is marginally below expectations. According to an Informist poll, the Budget was expected to assume a nominal GDP growth of 10.1% for FY27.

 

Nominal GDP growth is expected to rise next financial year, driven by higher inflation. In FY26, nominal GDP growth slowed to a five-year low of 8.0% from 9.8% the previous year, driven by record-low inflation.

 

CPI inflation averaged 1.7% in the first nine months of FY26, down from 4.6% in FY25, while WPI inflation averaged 0.1% during the same period, compared with 2.3% in FY25. As a result, the GDP deflator – which measures changes in the value of goods and services produced in the economy – is estimated to have fallen to a record low of 0.5% in FY26. Economists expect inflation to rise in FY27 due to higher food prices and unfavourable base effects. The Reserve Bank of India has projected CPI inflation at 3.9-4.0% in the first half of FY27.

 

Real GDP growth is expected to be robust in FY27, even if slightly lower than the current year. The Economic Survey for FY26, released Thursday, projected FY27 real GDP growth of 6.8%-7.2%, compared with the 7.4% growth estimated for FY26 by the government's first advance estimate.

 

The nominal GDP assumed in the Budget is crucial, as it will determine key targets, including fiscal deficit and tax collections.  The statistics ministry is set to release new CPI and GDP series in February, which could affect both official economic projections and the Budget's underlying calculations.  End

 

Reported by Shubham Rana and Divya Moolayattil

Edited by Saji George Titus

 

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