India's Economic Survey 2025-26 Projects Robust 7.4% GDP Growth, Reinforcing Global Leadership
India is poised to retain its status as the world's fastest-growing major economy, with real GDP growth projected at an impressive 7.4% in FY26, according to the Economic Survey 2025-26 presented on Wednesday. This optimistic outlook comes even as the global environment remains fragile, weighed down by persistent geopolitical tensions, increasing trade fragmentation, and underlying financial vulnerabilities.
Macroeconomic Fundamentals Strengthen Amid Global Uncertainties
Tabled in Parliament by Union Finance Minister Nirmala Sitharaman, the survey underscores that India's macroeconomic fundamentals have significantly strengthened. This resilience is attributed to robust domestic demand, disciplined fiscal consolidation, and improving financial sector health. The document emphasizes the critical need for strategic resilience as the global order undergoes rapid and unpredictable changes.
The survey projects India's potential growth at around 7%, supported by several key factors including rising investment levels, stable inflation, improving balance sheets across sectors, and ongoing structural reforms in manufacturing, infrastructure, services, and the financial system.
Key Highlights from the Economic Survey 2025-26
Growth Outlook Remains Strong: Real GDP growth is projected at 7.4% in FY26, with estimates for FY27 ranging between 6.8% and 7.2%. Gross Value Added (GVA) growth is estimated at 7.3% in FY26, reaffirming India's position as the fastest-growing major economy for the fourth consecutive year.
Consumption and Investment Drive Economic Momentum: Private consumption rose by 7% in FY26, accounting for 61.5% of GDP. Meanwhile, gross fixed capital formation grew by 7.8%, with investment holding steady at 30% of GDP. This growth is led by public capital expenditure and a notable revival in private investment.
Services Sector Powers the Economy: Services GVA grew by 9.3% in the first half of FY26 and is estimated to rise by 9.1% for the full year. This performance underlines broad-based expansion in both modern and tradable services.
Fiscal Consolidation Strengthens Credibility: The Centre's revenue receipts increased to 9.2% of GDP in FY25, aided by buoyant tax collections. Notably, India secured three sovereign credit rating upgrades in 2025, reflecting improved fiscal credibility.
Tax Base and GST Collections Expand Significantly: Income tax return filings increased from 6.9 crore in FY22 to 9.2 crore in FY25. Gross GST collections during April–December 2025 stood at Rs 17.4 lakh crore, marking a 6.7% year-on-year increase.
Banking Sector Reaches Multi-Decade Health Highs: Gross Non-Performing Assets (NPAs) fell to a multi-decade low of 2.2% in September 2025, while credit growth accelerated to 14.5% year-on-year by December 2025.
Financial Inclusion and Investor Participation Deepen: Over 55 crore Jan Dhan accounts have been opened, while the number of unique investors crossed 12 crore in September 2025, with nearly 25% being women.
External Sector Resilience Improves: India's share of global merchandise exports nearly doubled to 1.8%, services exports hit a record $387.6 billion, and remittances touched $135.4 billion in FY25. Forex reserves rose to $701.4 billion, covering 11 months of imports.
Inflation at Historic Lows: Headline CPI inflation averaged just 1.7% during April–December 2025, the lowest since the CPI series began, driven by moderation in food and fuel prices.
Manufacturing and PLI Schemes Show Structural Recovery: Manufacturing GVA grew by 7.72% in Q1 and 9.13% in Q2 of FY26. Production-Linked Incentive (PLI) schemes across 14 sectors attracted over Rs 2 lakh crore of investment, generating 12.6 lakh jobs.
Infrastructure and Connectivity Surge: High-speed corridors expanded nearly ten-fold to 5,364 km, airports increased from 74 in 2014 to 164 in 2025, and India emerged as the world's third-largest domestic aviation market.
Strategic Vision: From Self-Reliance to Strategic Indispensability
The survey proposes a forward-looking three-tier strategy, moving from self-reliance to strategic indispensability. This approach focuses on developing critical capabilities, enhancing cost competitiveness, and advancing manufacturing to strengthen India's long-term economic resilience in an increasingly complex global landscape.
