Key Highlights from the Economic Survey 2025-26: Projected GDP Growth at 7.4%
India is poised to maintain its status as the world’s fastest-growing major economy, with a projected real GDP growth of 7.4% for the fiscal year 2025-26, according to the Economic Survey 2025-26 released on Wednesday. Presented by Union Finance Minister Nirmala Sitharaman in Parliament, the survey highlights the resilience of India’s macroeconomic fundamentals, driven by strong domestic demand and fiscal discipline. Despite global uncertainties stemming from geopolitical tensions and trade fragmentation, the report emphasizes the importance of strategic resilience as the international landscape evolves.
Strong Growth Projections
The Economic Survey outlines a robust growth outlook for India, projecting a real GDP growth of 7.4% in FY26, followed by an estimated range of 6.8% to 7.2% in FY27. The Gross Value Added (GVA) growth is anticipated to be around 7.3% in FY26, reaffirming India’s position as the fastest-growing major economy for the fourth consecutive year. This growth is underpinned by a significant increase in private consumption, which rose by 7% in FY26, contributing to 61.5% of the GDP. Additionally, gross fixed capital formation saw a growth of 7.8%, with investments remaining stable at 30% of GDP, primarily driven by public capital expenditure and a resurgence in private investments.
Sectoral Contributions to Economic Growth
The services sector continues to be a key driver of economic momentum, with GVA growth in this area reaching 9.3% in the first half of FY26. The full-year estimate for services GVA growth stands at 9.1%, indicating a broad-based expansion across both modern and tradable services. The survey also highlights the importance of fiscal consolidation, noting that the central government’s revenue receipts increased to 9.2% of GDP in FY25, bolstered by strong tax collections. India’s credit rating has improved, with three sovereign credit upgrades achieved in 2025, enhancing the country’s financial credibility.
Improvements in Financial Health and Inclusion
The banking sector is experiencing significant improvements, with gross non-performing assets (NPAs) dropping to a multi-decade low of 2.2% as of September 2025. Credit growth has accelerated to 14.5% year-on-year by December 2025, reflecting a healthier financial environment. Financial inclusion has also deepened, with over 55 crore Jan Dhan accounts opened and the number of unique investors surpassing 12 crore, of which nearly 25% are women. This surge in participation is indicative of a growing confidence in the financial system.
External Sector Resilience and Inflation Control
India’s external sector has shown remarkable resilience, with its share of global merchandise exports nearly doubling to 1.8%. Services exports reached a record $387.6 billion, while remittances amounted to $135.4 billion in FY25. Foreign exchange reserves have risen to $701.4 billion, sufficient to cover 11 months of imports. Notably, inflation has remained at historic lows, with the headline Consumer Price Index (CPI) averaging just 1.7% during the first half of FY26, driven by moderation in food and fuel prices. The survey also highlights a structural recovery in manufacturing, with GVA growth of 7.72% in Q1 and 9.13% in Q2 FY26, supported by Production-Linked Incentive (PLI) schemes that attracted over Rs 2 lakh crore in investments and created 12.6 lakh jobs.
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