New Delhi, Jan 26 || India continues to remain the bright spot supported by its strong macro fundamentals and the government capex may cross Rs 12 lakh crore in FY27, a year-on-year growth of 10 per cent, an SBI Research report said on Monday.
The nominal GDP growth relevant for Budget math is expected at 10.5-11 per cent with the uptrend in global commodity prices may percolate in a higher WPI.
A bit slower nominal growth may hurt tax revenues in FY27, requiring better expenditure planning. However, GST rationalisation and reduction in marginal tax rates for personal income tax is expected to cushion the impact of sluggishness in tax base, said Dr. Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India.
Based on the above nominal forecast, fiscal deficit is expected to be at 4.2 per cent of GDP for FY27. The cost of borrowing from the government is expected at 6.8-7.0 per cent for FY27 with risk evenly balanced, Ghosh added.