About Economic Survey 2025-26
The Economic Survey 2025-26 outlines India’s transition towards a high-growth, resilient, and developed economy. The central theme focuses on “Pushing the Growth Frontier” amidst global geopolitical challenges.
Macroeconomic Snapshot & Growth Outlook
India continues to be the fastest-growing major economy, maintaining strong momentum despite global geopolitical conflicts and energy weaponisation.
- GDP Growth Projections: Real GDP is expected to grow between 6.8% and 7.2% in FY27. Nominal GDP for FY26 is estimated at ₹357.1 lakh crore.
- Drivers of Growth: Growth is primarily driven by robust Private Consumption (~61.5% of GDP) and Investment (~30.0% of GDP).
- Potential GDP: Structural reforms in capital accumulation and digital public infrastructure have pushed India’s potential GDP to approximately 7%.
Fiscal Developments: Anchoring Stability
The government has maintained a path of credible fiscal consolidation to anchor macroeconomic stability.
- Fiscal Deficit: Targeted to reduce to 4.4% in FY26 (Budget Estimate) from 4.8% in FY25 (Provisional Actuals).
- Tax Buoyancy:
- Direct Tax Base: The share of direct taxes in Gross Tax Revenue rose to 48% (FY25PA) compared to a pre-pandemic average of 41%.
- GST Momentum: Average monthly gross GST collections have shown robust transaction momentum, tracking nominal GDP growth.
- Capital Expenditure (Capex): Centre’s effective capex scaled up to 4% of GDP in FY25.
Monetary Management & Financial Health
- Inflation Control: Monetary policy remains effective. The Weighted Average Call Rate (WACR) averaged 8 bps lower than the repo rate in FY26.
- Banking Health:
- Asset Quality: Scheduled Commercial Banks (SCBs) are at multi-decade bests. Gross NPAs (GNPA) dropped to 2.2% and Net NPAs (NNPA) to 0.5% by September 2025.
- Credit Growth: Bank credit to Micro and Small Enterprises (MSEs) grew by 11.2% YoY in Aug-24.
- Financial Inclusion:
- NPS: Subscribers grew to 97.5 lakh (FY25) with AUM of ₹118.3 thousand crore.
- Insurance: Total life and non-life premiums rose to ₹11.9 lakh crore in FY25
External Sector: Strategic Resilience
India is “playing the long game” by building strong external buffers to withstand global shocks.
- Forex Reserves: Reached a historic high of $701.4 billion as of January 16, 2026.
- Current Account Deficit (CAD): Moderated to 0.8% of GDP in H1 FY26 from 1.3% in H1 FY25.
- FDI & Digital Investment: India leads the world in greenfield digital investment (2020-2024), attracting $114 billion.
- Trade Agreements: Concluded 8 FTAs/CEPAS in the last 5 years, with negotiations ongoing for the EU, UK, and Peru.
Inflation: Tamed and Anchored
India recorded the lowest inflation rate since the beginning of the CPI series.
- Headline Inflation: Averaged 1.7% during April-Dec 2025.
- Food Inflation: Contraction in prices of vegetables and pulses led food inflation to -2.71% in Dec-2025.
- Core Inflation: Remained steady at 4.62%, influenced by precious metal prices.
Agriculture, Industry, and Services
Agriculture: Diversifying for Incomes
- GVA Growth: The sector averaged 4.7% growth (FY20-FY24).
- Key Drivers: Livestock (6.1% growth) and Fisheries/Aquaculture (7.2% growth) are leading the transformation.
- Policy Focus: Ethanol pricing, soil health-guided fertiliser use, and Digital Agriculture Mission.
Industry: Structural Transformation
- Manufacturing: High-tech activities now account for 46.3% of India’s total manufacturing value added.
- Electronics: A 30-fold increase in mobile manufacturing production value from FY15 to FY25.
- Innovation: India ranks 4th in trademarks and 6th in patents globally.
- Infrastructure Pace:
- National Highways: Increased by 60% since FY14, reaching 1,46,572 km.
- Railways: Average commissioning increased to 5,364 km/year (2014-24) from 1,499 km/year (2004-14).
- Digital: 99.56 crore internet connections as of 2025.
Services: The Growth Engine
- Share in GVA: Services sector share rose to 53.6% in H1:FY26.
- Global Hub: India is the 3rd largest technology startup ecosystem and a global hub for Global Capability Centres (GCCs).
Infrastructure, Environment & Social Sector
Connectivity & Energy
- Physical Infra: 60% increase in National Highway network since FY14; High-speed corridors increased 10-fold.
- Digital Infra: Over 81% of rural households have tap water under Jal Jeevan Mission.
- Clean Energy: National Nuclear Energy Mission (2025-26) launched with a ₹20,000 cr allocation to reach 100 GW capacity by 2047.
Social Progress: Health & Education
- Health: Infant Mortality Rate (IMR) dropped by 37% in the past decade. Ayushman Bharat cards reached 42.78 crore.
- Education (NEP): School enrollment (GER) reached 90.9% for Grades I-V. Higher Education GER increased to 29.5.
Employment & Skilling
- Labour Dynamics: Unemployment Rate (UR) declined to 4.8% in Dec-FY26.
- Female Participation: Female LFPR rose significantly from 23.3% (2017-18) to 41.7% (2023-24).
- Formalisation: Implementation of 4 Labour Codes (enacted Nov 2021) is expected to create ~77 lakh jobs.
New Age Themes: AI & Environment
- AI Ecosystem: India is balancing trade-offs between “Sovereign AI” vs “Applications”. The focus is on Data as a Strategic Resource with a framework to retain domestic value.
- Climate Action:
- Renewables: Highlighting the resource intensity (silver, copper) required for solar/wind transition.
- Nuclear Mission: ₹20,000 cr allocation for 2025-26; target of 100 GW by 2047.
Frequently Asked Questions
Q. What is the Economic Survey of India?
Ans: The Economic Survey is an annual document prepared by the Ministry of Finance reviewing India’s macroeconomic performance and future growth outlook.
Q. Who presents the Economic Survey in Parliament?
Ans: The Economic Survey is tabled by the Union Finance Minister a day before the Union Budget.
Q. What is the theme of the Economic Survey 2025–26?
Ans: Economic Survey 2025–26 focuses on resilience-led growth, private investment revival, and employment-intensive development.
Q. What does the Economic Survey say about inflation in India?
Ans: Inflation moderation is attributed to supply-side interventions and calibrated monetary policy.
