NEW DELHI (Economy India): As the global economy navigates one of its most uncertain phases since the post-pandemic recovery, India stands out as a rare bright spot. The Economic Survey 2025–26, tabled in Parliament on January 29, offers a comprehensive assessment of this resilience — projecting GDP growth of 6.8–7.2 per cent in FY27, sustaining employment momentum, keeping inflation under control, and reinforcing India’s position as the fastest-growing major economy.
More than a routine pre-Budget document, this year’s Survey functions as a strategic report card on India’s reform trajectory, macroeconomic stability, and long-term growth prospects. Prepared under the leadership of Chief Economic Adviser Dr V Anantha Nageswaran, the document underscores that India’s economic performance is no longer cyclical alone — it is increasingly structural.
A World in Flux, An Economy Holding Firm
The Survey opens against a turbulent global backdrop. Advanced economies continue to battle sticky inflation, high interest rates, and slowing growth. Geopolitical tensions — from ongoing conflicts to trade fragmentation — have disrupted supply chains and dampened global trade.
Yet, India has largely insulated itself from these shocks.
“The outlook is one of steady growth amid global uncertainty, requiring caution, but not pessimism,” the Survey states.
This cautious optimism is grounded in India’s domestic demand-driven model, reduced external vulnerability, and a decade-long reform agenda that has strengthened economic fundamentals.
Growth Outlook: Moderation Without Weakness
India’s GDP growth is projected at 6.8–7.2 per cent in FY27, slightly lower than the estimated 7.4 per cent growth in FY26, but still well above global averages.
This moderation, the Survey clarifies, reflects:
- A high base effect
- Global slowdown pressures
- Normalisation after post-pandemic rebound
Crucially, it does not signal weakening fundamentals.
What’s Powering Growth?
The Survey identifies four key growth drivers:
- Private Consumption
Rising incomes, urban demand recovery, and improving rural purchasing power continue to anchor consumption growth. - Public Capital Expenditure (Capex)
Government investment in infrastructure — roads, railways, ports, logistics, and digital infrastructure — remains a powerful multiplier. - Healthy Financial Sector
Banks and corporates are deleveraged, credit growth is robust, and NPAs are at multi-year lows. - Structural Reforms
GST, Insolvency and Bankruptcy Code (IBC), digital public infrastructure, labour reforms, and production-linked incentives (PLI) are delivering cumulative gains.
The Survey notes that these reforms have lifted India’s medium-term growth potential closer to 7 per cent, a rare achievement among large economies.
Employment: Quantity Up, Quality the Next Frontier
One of the most politically and economically significant sections of the Survey focuses on employment.
Key Employment Numbers
- 56.2 crore Indians aged 15+ were employed in Q2 FY26
- 8.7 lakh net new jobs were created between Q1 and Q2 FY26
- Employment growth was strongest in industry, services, and gig platforms
The Survey credits:
- Simplified labour regulations
- Tax reforms
- MSME support
- Expansion of digital platforms
for improving job creation.
The Gig Economy’s Rising Role
Platform-based work — delivery services, ride-hailing, logistics, and freelance digital work — has emerged as a major supplementary income source, especially for youth and urban migrants.
The government is now working towards an integrated labour data system to capture employment trends more accurately across formal, informal, and gig sectors.
The Skills Challenge
Despite progress, the Survey flags a persistent concern: skill mismatches.
To address this, it recommends:
- Introducing vocational education at the school level
- Stronger industry–academia partnerships
- Aligning skilling programmes with market demand
Inflation: Stability Anchors Confidence
Inflation management remains a cornerstone of macroeconomic stability, and the Survey presents a reassuring outlook.
Inflation Projections
- Inflation expected to remain within RBI’s 4% target (±2%)
- RBI revised FY26 inflation estimate downward to 2%
- FY27 Q1 and Q2 inflation projected at 3.9% and 4%
Why Inflation Is Under Control
- Strong kharif harvest
- Improved rabi sowing
- Adequate food buffer stocks
- Prudent monetary-fiscal coordination
Lower inflation supports consumption, preserves purchasing power, and creates space for future growth-supportive policies.
Agriculture: From Output to Income Security
Agriculture continues to play a stabilising role, supporting nearly half of India’s population.
Highlights
- Agriculture growth projected at 3.1% in FY26
- Foodgrain output hits a record 332 million tonnes in 2024–25
But the Survey makes it clear that policy priorities are evolving.
Beyond Production
The government’s focus is shifting towards:
- Farmer income security
- Value addition
- Storage and cold-chain infrastructure
- Export diversification
This transition is critical in shielding farmers from global price volatility and climate-related risks.
Fiscal Consolidation: Discipline Without Compromise
India’s fiscal consolidation story remains one of the strongest among emerging markets.
Fiscal Deficit Targets
- FY25: 4.8% of GDP
- FY26 target: 4.4%
The Survey highlights that deficit reduction targets have been achieved ahead of schedule, enhancing investor confidence and macroeconomic credibility.
Lower deficits help:
- Contain inflation
- Reduce interest costs
- Free up resources for productive investment
Forex Reserves: A Strong External Shield
India’s foreign exchange reserves provide a critical buffer in a volatile global environment.
- FY24: $668 billion
- FY25: $701 billion
This reserve strength:
- Supports currency stability
- Shields against external shocks
- Enhances India’s global financial standing
Trade and Exports: Strategy Over Dependence
Despite global trade uncertainty and rising protectionism, India achieved a record $825.3 billion in total exports in FY25.
Export Performance
- Goods exports grew 2.4% (Apr–Dec 2025)
- Services exports surged 6.5%
Trade Strategy Reset
The Survey emphasises India’s strategic pivot away from overdependence on any single market.
Key developments:
- India–EU Free Trade Agreement finalised
- Trade pacts with UK, New Zealand, and Oman
- Greater focus on services exports and high-value manufacturing
These agreements expand market access for Indian farmers, MSMEs, manufacturers, and service providers.
Reform Dividend: The Power of Accumulation
One of the Survey’s central themes is the cumulative impact of reforms.
Reforms implemented over the past decade — once viewed in isolation — are now reinforcing each other.
Key reform pillars:
- GST creating a unified national market
- IBC cleaning up balance sheets
- Digital Public Infrastructure (Aadhaar, UPI, ONDC)
- PLI schemes boosting manufacturing
- Financial inclusion via Jan Dhan–Aadhaar–Mobile (JAM)
The Survey argues that India has moved from policy intent to policy execution, a transition critical for sustained growth.
Democracy, Demography and Development
Beyond numbers, the Survey places India’s economic story in a broader civilisational context.
It highlights:
- India’s demographic dividend
- The strength of its democratic institutions
- The predictability of its policy framework
Together, these form a powerful growth engine that few countries can replicate.
Economic Survey: More Than a Document
The Economic Survey is:
- India’s annual economic mirror
- Prepared by the Finance Ministry’s Economic Division
- First introduced in 1951
- Separated from the Union Budget in 1964
It provides not just diagnosis, but direction — outlining the policy challenges and reform priorities ahead.
The Road Ahead: Steady, Not Spectacular — and That’s the Strength
The Economic Survey 2025–26 does not promise miracles. Instead, it offers something far more valuable: predictability, resilience, and realism.
India’s growth story is no longer about short-term spurts. It is about building capacity, strengthening institutions, and delivering consistent outcomes.
As the world searches for stability, India’s message is clear: steady reform, disciplined policy, and inclusive growth remain the most powerful engines of long-term prosperity.
(Economy India)
