India projected to grow at 6.8 pc in FY27, can become transit hub for global tourists

New Delhi, April 18 (SocialNews.XYZ) India, which entered the global geo-political conflict from a situation of strength, is projected to grow at 6.8 per cent in FY27, as fears of super El Nino could cloud growth estimates, with inflation average at 4.5 per cent, an SBI Research report said on Saturday.

“India continues to demonstrate resilience with GDP likely to grow in the range of around 6.8 per cent-7.1 per cent, despite global uncertainties and regional conflicts,” said the report.

The gross fiscal deficit for FY27 is estimated at Rs 16.95 lakh crore, or 4.5 per cent of GDP for FY27 (2022-23 base).

With an estimated hike in subsidies of Rs 60,000 crore and expected loss of Rs 1.1 lakh crore due to excise duty cuts, there will be an additional fiscal burden of Rs 1.7 lakh crore. With this, the gross fiscal deficit could go up to Rs 18.7 lakh crore.

Consequently, CPI trajectory (as of now) may indicate more than 4.5 per cent inflation for the Q2 and Q3 quarters, though the FY27 projections are well under the RBI’s target range.

Subsequently, in FY27, the report expects 10-Yr G-sec yield to remain in the 6.75 per cent–7.0 per cent band, with a downward bias should the calm after the conflict prolong materially, attuned to higher gross borrowing plan, persistent geopolitical risks, and inflation concerns stemming from volatile oil prices.

“With disruptions shaking the Middle-East, India can position itself as transit hub for international tourists. With sky becoming unsafe over parts of Mideast/the UAE, airports in China and India could gain ground in global aviation as the Iran conflict disrupts traditional routes through the Middle East, creating an opening for alternative transit hubs,” the report mentioned.

However, this may require investments in airport infrastructure, connectivity and passenger experience.

—IANS

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Source: IANS