GDP to grow at 7.4% in FY26: NSO

FROM THE FRONT PAGE

- 

THE GROWTH IN nominal GDP is seen at just 8%, marking one of the smallest differential with the real GDP expansion in several years.

With H1 nominal GDP growth of 8.75%, the second-half growth is implicitly estimated to be lower at 7.25%, one of the weakest in many years, barring the Covid-induced trough (FY21).

Though there could be pressure on the fiscal deficit to GDP ratio from lower than expected tax collections, the denominator will not be a pain point. With higher non-tax revenues and significant savings in revenue spending, no fiscal slippage is expected over the targeted 4.4% of GDP.

However, subdued nominal GDP could lead to a weakening of tax buoyancy, requiring revenue estimates for the next financial year to be conservative, and the FY27 Budget get size economical.

The February Budget had assumed a 10.1% growth in nominal GDP over revised estimates of FY25. However, the base was revised 2% upwards in May.