The blind hole drilling technique, utilized for measuring residual stress by using strain gauge rosette, is associated with plastic deformation of material that is removed from the hole and also with stress concentration effect of multi point cutting tool. Further, the plasticity effect is also induced in presence of high applied stress which may lead to local yielding of the hole boundary. The present paper describes the plasticity and stress concentration effects of blind hole drilling technique on the calculation of residual stresses for SS 304L and modified Cr-Mo Grade 91 alloys. For uniaxial loading, the responses of strain gauge rosettes were investigated experimentally through tensile testing and for biaxial loading through numerical modeling. Correlations were developed to directly calculate the corrected values of residual stresses from the experimental strain data obtained through the strain gauge rosette and from stress values as per ASTM E837-13. © 2015 Elsevier Ltd. All rights reserved.