EY projects India's growth at 6.8-7.2% in FY27

India’s expanding network of bilateral trade agreements with major economies has improved its growth trajectory, even as structural reforms continue to reshape the fiscal landscape, the report said.

Achieving the government’s long-term Viksit Bharat 2047 vision would require a sustained rise in the tax-to-gross domestic product (GDP) ratio, primarily through stronger compliance rather than fresh structural overhauls, since most major tax reforms have already been implemented, it noted.

This fiscal (FY26) witnessed significant policy changes, especially in personal income tax and the goods and services tax (GST) framework. These steps involved substantial revenue foregone by the government, with the objective of boosting household disposable incomes and supporting private consumption demand, a key pillar of growth. As a result, gross tax revenues were expected to fall short of FY26 budget estimates.

Despite this anticipated gap, the report said markets and analysts broadly expect the government to meet its fiscal deficit target for the year, signalling confidence in fiscal discipline and revenue management, added the report.

Meanwhile, the revenue department rolled out the 30-day duty deferral facility for eligible manufacturer-importers beginning this month. This will help such importers better manage their liquidity.

This would mean that eligible manufacturer-importers can now clear the goods on the day of import and will have the option to pay customs duty within 30 days.

The latest budget had proposed to provide eligible manufacturer-importers the same duty deferral facility as is available to authorised economic operators.

Fibre2Fashion News Desk (DS)