What the Macroeconomic Framework Statement assumes: 7.4% real growth, and a 10% nominal number that does the real work

Most Indian budget reading starts with the outlay figures. The document that comes before them is the Macroeconomic Framework Statement, issued by the Finance Ministry on February 1, and it is the part of the budget day paperwork that rarely gets quoted and always gets used. Its job is to state the economic baseline the rest of the budget is built on.

For 2025-26, the statement estimates real GDP growth at 7.4% and nominal growth at 8%. For 2026-27 it projects nominal GDP growth of 10%, and puts services growth for that year at 9.1%, the highest of the major sectoral projections. Effective Union capital expenditure is set at ₹17.15 lakh crore.

• Real GDP growth, 2025-26: 7.4%
• Nominal GDP growth, 2025-26: 8%
• Nominal GDP growth, 2026-27: 10%
• Services growth, 2026-27: 9.1%
• Effective Union capital expenditure, 2026-27: ₹17.15 lakh crore

The gap between 7.4% and 10% is not an inconsistency. It is the difference between what the economy produces in volume terms and what it earns in current rupees, and it is the deflator — the change in the average level of prices — sitting in between. Fiscal targets are expressed against nominal GDP, so a year in which nominal growth runs above real growth leaves more room for revenue to grow than the headline rate suggests, and a year in which the two converge leaves less. Anyone tracking the deficit path therefore watches the nominal projection, not only the real one.

Two things the statement is not. It is not a forecast guarantee: these are the government's own projections, formed before the year's outturn is known, and the figures for 2025-26 remain estimates until the national accounts close. And it is not a monetary policy document. Interest rates and the inflation anchor sit with the Reserve Bank's Monetary Policy Committee, which meets on its own calendar and will have its first 2026 meeting shortly after budget day.