Credit rating agency India Ratings and Research has estimated that India’s economic growth rate may be 6.9 percent in the financial year 2026-27. According to the agency, key structural reforms such as the Goods and Services Tax (GST) and income tax cuts, as well as various trade agreements, will boost economic activity and keep the economy largely insulated from global turmoil.

Devendra Kumar Pant, Chief Economist of India Ratings, said that the environment of high growth rate and low inflation will continue in the next financial year also. The agency estimates that the average retail inflation may be around 3.8 percent. He also said that a low-tariff India-US trade agreement can further boost gross domestic product (GDP) growth.

FTA promotes foreign investment

The agency has estimated real GDP growth at 7.4 percent and GDP growth at market prices at 9 percent based on the base year of 2011-12 for the current financial year. On the currency front, India Ratings expects the rupee to average 92.26 per dollar in FY 2026-27, weaker than the estimated 88.64 per dollar in the current fiscal year.

The agency says that the free trade agreements (FTAs) being made by the government with countries like New Zealand, Britain and Oman will promote foreign investment. This will not only increase foreign direct investment but will also help in keeping the current account deficit under control.

Pant said that rationalization of customs duty and allocation under the ‘Developed India-Ram-Ji Act’ could be among the major announcements in the Union Budget for 2026-27 to be presented on February 1. Along with this, the report of the 16th Finance Commission is also expected to be made public on February 1, in which the ratio of tax transfer between the Center and the states will be proposed for five years starting from April 1.

estimated revenue shortfall

According to India Ratings, there may be a reduction of about Rs 2 lakh crore in tax revenue in the current financial year. This is likely to be compensated through an increase in non-tax revenues and modest cuts in capital expenditure.

The agency said that according to the budget estimate, the fiscal deficit in the current financial year may be 4.4 percent, i.e. Rs 15.69 lakh crore. Although the deficit may increase in terms of amount in the Revised Estimates (RE), but as a percentage of GDP it may remain at 4.4 percent.

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India gdp growth rate: The country’s Chief Economic Advisor V. Anantha Nageshwaran said that despite the upheaval in the last four years, India not only kept the energy prices stable but also kept them low. He says that these low energy prices are a major basis for the strength of the country’s economic growth. He said that for this reason, during the last four-five years, the Indian economy has performed more than expected.

Why is Indian economy strong?

In an AIMA program, he said that there has been a significant structural improvement in the country. This is to maintain financial discipline and fiscal stability despite Covid epidemic and regional security challenges. However, it has not been highly appreciated.

He said that the Government of India had promised that the financial deficit would be reduced from 9.2 percent to half in five years, and the government completed it. Recently, Union Finance Minister Nirmala Sitharaman has also said that in the current financial year we will achieve the target of financial deficit of 4.4%.

Ahead

Nagswaran said that the biggest thing is that we keep following the path of financial stability and discipline. This keeps Macroeconomic Stability, and this gives the basic strength to increase economic activities in the coming years.

On the other hand, Fitch Ratings has increased the estimate of India’s GDP (GDP) growth for the current financial year by 6.9 percent due to a strong growth of the June quarter and domestic demand. Earlier, Fitch had estimated the Indian economy to grow at a rate of 6.5 percent.

In its September global economic scenario (GEO), the rating agency said that there has been a rapid increase in economic activities between March and June quarters of the current financial year, and the actual GDP growth rate has increased from 7.4 percent of January-March to 7.8 percent on an annual basis. This is much higher than the forecast of 6.7 percent in our June, GEO.

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India GDP Growth: Amidst the stir in the global world on the economic front, India is moving forward with a faster speed than the rest of the countries of the world. On one hand, Pakistan’s economy is in worse condition. Inflation is touching the sky there and the neighboring country is taking a loan and running the economy of its country. On the other hand, China is also trying to overcome the shock of tariff war. Meanwhile, it is estimated to achieve 7 to 8 percent economic growth rate in the next one and a half decade of Indian economy.

Good news on the economic front

Romal Shetty, CEO of the South Asia unit of the global professional service provider Deloitte, said in his estimate that India has successfully recovered many global crisis in the years. While the IMF also said in its estimate that India remains the fastest growing major economy in the world. Also, this year, India can become the fourth economy in the world with about $ 4.2 lakh crore except Japan.

Shetty told the news agency PTI that India’s economy could increase at a speed of 6.7 percent due to tremendous performance in the service sector, improvement in agriculture production and increasing market investment in the current financial year. He says that the way India has become an economy combative despite the coronic epidemic and Bhurajnic stress, and the economy can grow at the rate of 7 to 8 percent of the economy for the next one to one and a half decades.

Better trade deal between India and America

Shetty said that Indo-US relations are the strongest in the last several years. Due to this, there is a more similar basis between the two countries than before. His remarks have come amidst the time-limit of August 1 of putting high tariffs on India.

He says that the high tariff rates of this time will be reduced and the trade war will also end. Along with this, Indo-US and US are trying to find a middle way, protecting their interests. He hoped that there will be an agreement between the two countries that will give significant benefit to both the markets.

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