Nominal gross domestic product (GDP) measures economic output at current market prices, without adjusting for inflation, and is crucial for tax revenues because taxes are collected on current prices and incomes, not inflation-adjusted values.
“Probably we can expect an uptick, post the trade deal with the US,” Thakur said said in an interview.
The trade agreement, she added, is expected to provide a meaningful push to manufacturing, which accounts for over 16% of India’s GDP, while also expanding economic activity across sectors.
India’s nominal GDP is expected to grow at 8% in the current fiscal year ending 31 March, as per the first advanced estimate released last month, compared to the FY26 budget estimate of 10%.
Trade Deal to Lift Uncertainty, Improve Investor Sentiment
Describing the India-US trade deal as a positive development, Thakur said it could help ease market uncertainty and revive investor confidence that has remained subdued in some segments.
“The wait-and-watch stance adopted by certain segments would probably get lifted. So, cumulatively, the deal should add up to a positive uptick in various parts of the economy,” she said.
According to her, improved sentiment could feed into investment decisions and trade flows, adding momentum to growth in the coming months.
US president Donald Trump on Monday said that he and Prime Minister Narendra Modi have agreed to a trade deal between India and the US. Trump also claimed that Modi had agreed to stop India’s Russian oil purchases, and instead buy more energy from the US and, potentially, Venezuela.
Under the deal, Washington would lower its reciprocal tariff on Indian goods from 25% to 18%, while India would reduce its tariffs and non-tariff barriers against the US to zero, Trump said. US is also removing the extra 25% duty imposed on Indian goods to punish the country for purchasing Russian oil.
Inflation Trends Stabilising; Review of Inflation Band Underway
On inflation, Thakur said recent data suggests that core inflation is stabilizing, and its impact would become clearer going forward.
She confirmed that the finance ministry is currently examining the Reserve Bank of India’s (RBI) report on inflation targeting and will soon take a call on recalibrating the inflation band.
“The 2–6% inflation band has held us in good stead so far. But the time has come for its recalibration. RBI’s recommendations are with us and we are examining them now,” Thakur said.
India follows the Flexible Inflation Targeting (FIT) framework, under which the RBI is mandated to keep consumer price index-based (CPI) inflation at 4%, with a tolerance band of ±2%. The framework, introduced in 2016, is reviewed every five years, with the current cycle ending in March 2026.
Public Capex to Remain Strong Despite Lower Utilization
Addressing concerns over lower-than-budgeted capital expenditure utilization this year, Thakur said the shortfall could be partly attributed to reform-linked spending under the Special Assistance to States for Capital Investment (SASCI) scheme.
Under SASCI, allocations rose from ₹1.44 trillion in FY26 to ₹1.85 trillion in FY27, but reform-linked components may have seen slower uptake.
“We believe scaled-up capex can be done without disturbing the fiscal consolidation path,” she said.
She emphasized that public capital expenditure is now being deployed across diversified infrastructure segments, and continues to play a catalytic role in crowding in private investment.
“Public capex will also trigger private investments. For example, in inland waterways, training and skilling initiatives can come from the private sector. So, public capex is creating avenues for scaling up private investment,” Thakur said.
States Keen on SASCI Funds; Scheme Under Review
Thakur said states remain keen to tap SASCI funds for capital spending, and the expenditure department is considering a review of the scheme.
“There is thinking in the expenditure department to review the whole package — whether the framework needs to be updated or changed, or whether something new needs to be added in terms of reforms linked to allocations,” she said.
Disinvestment Push: CPSE REITs on the Anvil
The Union budget has set a higher disinvestment and asset monetization target of ₹80,000 crore for FY27, to be achieved through equity sales, monetization and instruments such as InvITs and REITs.
Thakur said a new monetization avenue being explored is the creation of REITs from real estate assets of central public sector enterprises (CPSEs).
“Rent on space would be the income generator for the trust. We have shared a concept note on CPSE REITs with the Department of Disinvestment, and expect modalities to be worked out soon,” she said.
Pilot projects could be rolled out early next fiscal year, she added.
Rupee Movement Linked to Capital Flows
On the rupee, Thakur said currency levels are closely tied to capital flows, particularly foreign portfolio investment (FPI), which tends to be cyclical and sentiment-driven.
“With the change in sentiment, flows will change, and that will lead to stability in the rupee,” she said.
While acknowledging that the rupee’s value affects export competitiveness and the broader economy, she stressed that currency management must be viewed in the context of multiple macroeconomic factors.
“Like the RBI, we also watch rupee movement closely. But so many other things have to be at the right level. We do what we can do, and that has been the guiding principle over the last 10 years,” Thakur said.
FDI Levels Healthy, Reforms to Drive Further Inflows
Thakur said India’s gross foreign direct investment (FDI) levels are not low, but the government is aiming to attract more by pushing reforms and opening up new sectors.
“That’s why there is a very strong push on reforms and opening up new areas like electronics, biopharma and others,” she said.
Such reforms, she added, not only attract foreign capital, but also stimulate domestic investment and strengthen India’s position as a strategic player in global value chains.
“We have a path, and we keep going on that path,” Thakur said.