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India’s nominal GDP growth likely to miss FY26 target on soft inflation: Nageswaran
Sep-08-2025

Chief Economic Adviser V Anantha Nageswaran has said that there may be a shortfall in nominal GDP growth compared to the Budget estimate of 10.1% for the current financial year (FY26), given the expectation of benign inflation. Meanwhile, he expressed optimism about meeting the real GDP growth target of 6.3% to 6.8% for the current fiscal year, despite the steep 50% US tariffs on Indian goods. 

Nominal GDP includes changes in prices caused by inflation, reflecting the impact of rising overall price levels, while real GDP is an inflation-adjusted measure that evaluates the value of all goods and services produced in a country during a specific year. 

Talking about impact of GST reforms on GDP he said, ‘while it will be difficult to quantify it at this point, ultimately much will depend on how the consumers respond and whether it will be offset by any uncertainty related to external trade, etc.’. However, given the fact that this is a fairly radical overhaul of the GST structure itself, reducing four rates to two and also doing many other process simplifications, he said the impact on the economy will be fairly substantial, not just in terms of Business to Consumer (B2C), but also in terms of Business to Business (B2B) transactions.

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