SBI pegs India's FY27 nominal GDP growth at 10.5–11%

Based on that, fiscal deficit is expected to be nearly 4.2 per cent of GDP for FY27, though the new GDP series may alter the fiscal arithmetic.

Borrowings may give some positive surprise as net central borrowing for FY27 is expected at ₹11.7 trillion (close to 70 per cent of fiscal deficit) and repayment of ₹4.87 trillion while state gross borrowings may come at ₹12.6 trillion and repayment of ₹4.2 trillion, SBI said.

The central bank would need to do much more open market operations (OMOs) to balance the borrowing requirements, it noted.

The bank expects a modest growth in tax revenue and flat growth in non-tax revenue.

Government capital expenditure may cross ₹12 trillion in FY27—a year-on-year (YoY) growth of close to 10 per cent, it said.

As states account for a significant share of general government debt, state budgets should explicitly chart medium-term, preferably scenario-based, debt-to-gross state domestic product trajectories, aligned with realistic growth assumptions and development needs, rather than relying solely on annual deficit targets, SBI added.

Fibre2Fashion (DS)