Exam Tip: Economics is a high-weightage section in WBCS Prelims. Focus on RBI policies, GDP growth forecasts, inflation trends, and Union Budget 2026-27 highlights.
📑 QUICK NAVIGATION
Section
Topic
1
GDP Growth Forecasts (IMF, World Bank, ADB, RBI, OECD)
2
Inflation – CPI, WPI & Divergence Trends
3
GST Collections & GDP Linkage
4
RBI Monetary Policy – Repo Rate & Stance
5
Union Budget 2026-27 – Key Highlights
6
External Sector – Forex Reserves, Trade, CAD
7
Banking & Financial Sector
8
Key Economic Terms & Concepts
9
Very Important One-Liners
10
Quick Revision Table for Exams
📈 SECTION 1: GDP GROWTH FORECASTS (2026-27)
India – Among the Fastest-Growing Major Economies
Institution
FY 2025-26 (Actual/Proj)
FY 2026-27 (Projected)
IMF (April 2026)
7.6% (actual)
6.5%
World Bank
7.2%
6.6%
ADB
–
6.9%
RBI
7.4%
6.9%
OECD
7.6%
6.1%
NSO First Advance Estimate
7.4%
–
Key Observations
Fact
Detail
GDP Base Year Revision
Changed from 2011-12 to 2022-23 (FY26 onwards)
Real GDP (FY26) – New Series
₹201.90 lakh crore
Nominal GDP (FY26) – New Series
₹357.14 lakh crore
India’s Status
Fastest-growing major economy for 4th consecutive year
Key Growth Drivers for FY 2026-27
Driver
Impact
Private consumption
Strong and steady
Fixed investment
Improved corporate performance
Services sector
Resilient and growing
Manufacturing
Revival in momentum
Rural demand
Steady improvement
Infrastructure push
Government capex support
Global Context
Region
Growth Forecast
Global growth 2026
3.1%
Global growth 2027
3.2%
India is estimated to remain among the fastest-growing major economies for FY 2026-27 and FY 2027-28.
📊 SECTION 2: INFLATION – CPI, WPI & DIVERGENCE
A. Consumer Price Index (CPI) – Retail Inflation
Period
CPI Inflation
Key Points
FY 2025-26 (actual)
2.1%
Well below tolerance band
April 2026
3.5%
Rising gradually
May 2026 (estimate)
3.8%
India Ratings projection
FY 2026-27 (IMF proj.)
4.7%
B. Wholesale Price Index (WPI) – Wholesale Inflation
Period
WPI Inflation
Key Drivers
March 2026
3.9%
–
April 2026
8.3% (more than doubled)
Fuel & power: +24.71%
May 2026 (estimate)
9.0%
Rising crude oil prices
C. CPI vs WPI Divergence – Why It Matters
Indicator
Meaning
Current Trend
CPI
Household consumption impact
Moderate rise (3.5-3.8%)
WPI
Producer input cost pressure
Sharp rise (8.3-9.0%)
Key Risk: If elevated oil prices persist, upstream cost pressures will increasingly be passed through to consumers, pushing CPI higher.
D. RBI Inflation Projections (April 2026)
Period
CPI Projection
Q1:2026-27
4.0%
Q2:2026-27
4.2%
Q3:2026-27
4.3%
Q4:2026-27
4.5%
📋 SECTION 3: GST COLLECTIONS & GDP LINKAGE
A. GST – Basic Facts
Fact
Detail
GST Introduced
July 1, 2017
Constitutional Amendment
101st Amendment Act, 2016
Type
Destination-based consumption tax
Tax Structure
CGST + SGST + IGST
GST Council Chairman
Union Finance Minister (Nirmala Sitharaman)
B. Monthly GST Collections (2025-26 & 2026-27)
Month
Gross GST Collection
YoY Growth
Net GST Collection
March 2026
₹2,00,064 crore
8.8%
₹1,77,990 crore
April 2026
₹2.43 lakh crore (Record)
8.7%
₹2.11 lakh crore
Key Insight: April 2026 collections hit an all-time high, surpassing the previous record of ₹2.37 lakh crore in April 2025.
C. Annual GST Collections
Financial Year
Gross GST
Growth
FY 2024-25
₹20 lakh crore
–
FY 2025-26
₹22.27 lakh crore
8.3%
FY 2026-27 (Budget Estimate)
₹10.2 trillion (net)
–
D. Import vs Domestic GST – The Divergence (April 2026)
Component
Value
YoY Growth
Gross Domestic GST
₹1.85 lakh crore
4.3%
Gross Import GST
₹57,580 crore
25.8%
Net Customs GST
–
42.9%
Expert View: “The surge was powered by a 42.9% jump in net customs GST collections, reflecting higher import costs amid global supply chain disruptions and war-driven commodity movements.” – Vivek Jalan, Tax Connect Advisory Services
E. State-wise GST Performance (April 2026)
Strong Performance
Weak Performance
Maharashtra (₹42,467 crore)
Bihar (decline)
Karnataka (₹18,939 crore)
Assam (decline)
Gujarat (₹15,620 crore)
West Bengal (decline)
Kerala (strong increase)
Jharkhand (decline)
Telangana (strong increase)
–
F. GST as % of GDP – Key Indicator
Year
Gross Tax-to-GDP Ratio
GST-to-GDP (approx)
FY 2025-26 (RE)
~11.9%
~5.5-6.0%
FY 2026-27 (BE)
12.0%
~5.5-6.0%
Budget 2026-27 GST Projection: Net GST pegged at ₹10.2 trillion, a 2.6% decline compared to FY26 revised estimates due to conservative assumptions and recent rate cuts.
G. GST & GDP Correlation
Relationship
Explanation
GST as economic indicator
GST collections track nominal GDP growth closely
FY26 GST growth
8.3% vs Nominal GDP growth ~8.6%
Compliance improvement
Steady rise in collections reflects formalization of economy
🏦 SECTION 4: RBI MONETARY POLICY
A. Key Policy Rates (As of April 2026)
Rate
Current Value
Status
Repo Rate
5.25%
Unchanged
Standing Deposit Facility (SDF)
5.00%
Unchanged
Marginal Standing Facility (MSF)
5.50%
Unchanged
Bank Rate
5.50%
Unchanged
Note: Reverse Repo Rate has become less operationally important after SDF introduction. The SDF currently acts as the effective floor rate for the liquidity adjustment corridor.
B. Monetary Policy Stance
Feature
Detail
MPC Decision (April 2026)
Unanimous vote to keep repo rate unchanged at 5.25%
