New Delhi: India’s capital expenditure is expected to grow by 10 percent annually, potentially crossing the ₹12 lakh crore mark in the financial year 2027, according to SBI Research’s latest report released on Monday.
The research forecasts that the nominal GDP growth rate for FY27 may range between 10.5 and 11 percent. However, rising global metal prices could contribute to increased wholesale inflation during this period.
Dr. Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI, highlighted that slower nominal GDP growth in FY27 could impact tax revenues, necessitating more efficient expenditure planning. He added that the country’s fiscal deficit is likely to remain around 4.2 percent in FY27.
The cost of borrowing is projected to stay between 6.8 and 7.0 percent in the same financial year. SBI Research also estimates the country’s net borrowing to reach approximately ₹11.7 lakh crore.
The report notes that the Union Budget 2026 arrives amid the broad and still somewhat unclear impacts of an emerging political landscape, which is significantly affecting global financial markets. A lack of global coordination has been identified as a key reason for sharp declines in stock and bond markets worldwide.
Furthermore, the report emphasizes the significant share of government debt held by states. It suggests that instead of relying solely on annual deficit targets in state budgets, medium-term debt-to-GSDP ratios should be clearly defined based on realistic growth estimates and developmental needs. This aspect may receive attention in the upcoming Union Budget.
My name is Bhupendra Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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