India's growth seen at 6.8–7.2% in FY27 as tax reforms lift outlook
- IBEF
- February 27, 2026
The economic expansion in India is also expected to remain strong, with real GDP projected to grow in the range of 6.8-7.2% in FY27, according to the EY Economy Watch report. The report indicated that the growth of the Indian economy is being driven by structural reforms and economic resilience, despite global uncertainties. In particular, the recent personal income tax reforms and the Goods and Services Tax (GST) are expected to support higher disposable incomes and boost private consumption demand. These changes have involved a degree of revenue sacrifice but are expected to stimulate economic activity. The changes in the personal income tax rates have involved a degree of revenue sacrifice but are expected to stimulate economic activity.
The report also emphasised that the medium-term outlook for India has improved amid expanding trade ties with other large economies and economic blocs. Raising the tax-to-GDP ratio through enhanced tax compliance is considered a crucial element in meeting the long-term growth strategy, including the goal of becoming a developed nation by 2047. Even as there are concerns about possible shortfalls in the gross tax revenue because of tax reforms, the government is expected to stick to its fiscal deficit targets, which is a demonstration of fiscal prudence. The growth outlook is further bolstered by favourable domestic demand conditions and reforms that are driven by policies to enhance economic efficiency and the investment environment. Overall, the outlook is positive and stable, and tax reforms are a crucial element in the growth outlook.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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