Ind-Ra predicts FY27 GDP growth at 6.9% supported by tax cuts, GST reforms

India Ratings & Research (Ind-Ra) in its latest report has said that India’s Gross Domestic Product (GDP) is likely to grow by 6.9 % in the next financial year (FY27). Key reforms such as Goods and Services Tax (GST), income tax cuts, and Free Trade Agreements (FTAs) are poised to act as economic catalysts and safeguard the economy from global challenges, especially the US tariffs. Ind-Ra expects GDP in FY26 to grow 7.4%, while nominal GDP expansion is expected at 9%.

According to the report, the Indian Rupee is expected to average 92.26 to a dollar in FY27, higher than 88.64 to a dollar in the current fiscal. The government's debt as a percentage of GDP is projected to fall to 55.5% in FY27, from an estimated 56.3% in FY26. The government aims to further reduce this ratio to around 50 per cent over the next 3-4 years.

The agency also said that the FTAs, especially with New Zealand, UK and Oman, entered into by the government will boost foreign investment and help to keep Current Account Deficit (CAD) lower by attracting more foreign investments. It expects the total budget size to rise to ₹52 lakh crore in FY27, from the budgeted ₹50 lakh crore in FY26. It expects the revised estimates for FY26 to have a lower budget size of around ₹49 lakh crore due to a shortfall in tax revenue. It estimates tax revenues to fall short by ₹2 lakh crore in the current fiscal, which will be made up from non-tax revenue collection and slightly lower capex.