FY27 Budget: Govt to Project 10-10.5% Nominal GDP Growth Amid Inflation Uptick

• The central government may project nominal GDP growth at 10-10.5% for FY27, up from 8% in FY26, driven by an expected inflation uptick.
• Real GDP growth is estimated at 6.5-7% for FY27, with a deflator of 3.2-3.5%, crucial for fiscal deficit calculations.
• The fiscal deficit target for the current year is Rs 15.69 lakh crore (4.4% of nominal GDP); April-November deficit reached 62.3% of this target.
• Next year's Budget may aim for a fiscal deficit of 4.1-4.2% of GDP, with the government focused on managing expenditure to meet targets.
• Economists anticipate CPI inflation above 4% in FY27, while WPI inflation is expected to remain contained, supporting the nominal GDP projection.

Why It Matters: Government eyes 10-10.5% nominal GDP growth for FY27, balancing inflation and fiscal consolidation goals.