The first was robust GDP growth. The dominant impact was from fiscal policy in the first half of the year. On the monetary front, the RBI’s Monetary Policy Committee cut the repo rate by a cumulative 125 bps in calendar year 2025. We expect GDP growth of 6.7 per cent and inflation at 5 per cent, largely driven by the low base effect, in fiscal 2027. Tax collections should improve as nominal GDP growth picks up on the back of robust real growth and a moderate increase in inflation.

Source: Indian Express December 29, 2025 06:44 UTC