India’s GDP Could Surpass 6.3%–6.8%, Driven by Tax Cuts

The Indian government has stated that GDP growth in FY 2025–26 could exceed the projected 6.3%–6.8%, boosted by a surge in consumption following recent GST tariff cuts, along with strong Q1 GDP performance. Finance Minister Nirmala Sitharaman expressed confidence that revenue buoyancy, driven by increased consumption, will offset the estimated ?48,000 crore GST shortfall resulting from tax rate reductions across a range of items. As a result, she asserted there would be no negative impact on public finances, and the move would support GDP growth. “So I don’t see an impact on my fiscal deficit or my fiscal management. I will stick to my numbers (of 4.4% of GDP),” Sitharaman told news agency PTI, as reported by The Economic Times. Last week, the GST Council, chaired by Sitharaman, approved a two-tier tax structure of 5% and 18%, in addition to a 40% slab for select items.