India’s FY26 GDP growth can be closer to 6.8% if external headwinds don't worsen, says DEA Secretary Ajay Seth

Economic Affairs Secretary Ajay Seth

India’s GDP growth can be closer to 6.8 percent in the next financial year provided external headwinds do not intensify, Economic Affairs Secretary Ajay Seth said.

“In fact, with some of the measures being announced and if external headwinds don’t become stronger, perhaps we can be nearer to the upper limit (6.8 percent) rather than towards the lower limit (6.3 percent),” Seth told Moneycontrol in an interview.

He was referring to the real GDP growth projections outlined in the Economic Survey for 2024-25 that pegged it at 6.3-6.8 percent for the next fiscal.

“The band of 6.3-6.8 percent is a practical assessment at this point, the best assessment that is possible,” Seth added.

For the current fiscal year, the Indian economy is seen growing at 6.4 percent, according to the first advance estimates released by the government on January 7.

Referring to the nominal GDP growth projection of 10.1 percent for FY26, Seth said that the finance ministry has assumed a deflator of less than 4 percent to arrive at the number.

“The deflator we have assumed is below 4 percent, we don’t expect any pickup in inflation, either in CPI (consumer price index) or WPI (wholesale price index) to make the deflator more pronounced in the next fiscal,” Seth said.

Finance minister Nirmala Sitharaman has pegged India’s nominal growth at 10.1 percent for FY26.This is higher than the revised target of 9.7 percent in the current fiscal which is lower than the initial target of 10.5 percent.

“We had assumed 10.5 percent nominal GDP for the current year, and now we realise it will be lower. So that our fiscal deficit numbers and debt to GDP ratio do not see a variation on what we have assumed, we went for a conservative number of 10.1 percent for nominal GDP for FY26,” Seth explained.