EY Projects 6.8–7.2% Real GDP Growth for FY27
India’s real GDP is projected to grow between 6.8 per cent and 7.2 per cent in FY27, according to the latest EY Economy Watch report released on Thursday.EY India Chief Policy Advisor D K Srivastava said that India’s medium-term growth prospects have strengthened, supported by extensive bilateral trade agreements with major economies and economic groupings. The report estimates that real GDP growth will remain in the 6.8 to 7.2 per cent range in FY27, reflecting resilience in economic activity.
The outlook aligns with India’s broader growth trajectory as the country works toward long-term development goals.
Higher Tax-GDP Ratio Key to Viksit Bharat 2047 Vision
The report noted that achieving the Viksit Bharat objective by 2047 may require a higher tax-GDP ratio. It emphasized that further gains would likely come from improved tax compliance, as significant structural tax reforms have already been implemented.According to EY, major tax changes were introduced in the current fiscal, particularly in personal income tax and the Goods and Services Tax framework. These reforms were designed to enhance household disposable incomes and support private consumption demand.
Revenue Sacrifice and Fiscal Discipline in FY26
The report highlighted that both the personal income tax and GST reforms involved a substantial sacrifice of the Government of India’s Gross Tax Revenues. As a result, gross tax collections were expected to fall short of the budget estimates for FY26.Despite the anticipated revenue shortfall, the government was widely expected to adhere to its budgeted fiscal deficit target for FY26, underlining a continued focus on fiscal discipline even amid tax relief measures.
The EY assessment suggests that while near-term revenue pressures may persist due to tax reforms, India’s growth outlook remains steady, supported by trade integration and consumption-led momentum.
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