EY’s latest Economy Watch report paints a promising picture for India’s growth trajectory, estimating GDP expansion of 6.8-7.2% in FY 2026-27. Key drivers include bilateral trade pacts and reforms offsetting U.S. tariff pressures.
Chief Policy Advisor DK Srivastava attributes this to India’s savvy engagement with global economic powerhouses. Such moves are fortifying the nation’s growth foundation for the medium term.
Achieving ‘Viksit Bharat 2047’ demands persistent tax-to-GDP gains, leaning on compliance over new reforms. Major tax changes, including income tax and GST updates, have already reshaped the fiscal landscape.
These reforms prioritize household spending power to invigorate consumption. The trade-off: possible revenue dips below FY 2026 projections.
Nevertheless, fiscal targets appear within reach. Finance Minister Nirmala Sitharaman aims for a 4.3% GDP fiscal deficit in 2026-27, succeeding the 4.4% for 2025-26.
Her budget speech outlined prudent borrowing plans—net ₹11.7 lakh crore, gross ₹17.2 lakh crore—highlighting equilibrium between expansion and stability. India’s fiscal path exemplifies disciplined growth in uncertain times.