The Indian economy is projected to expand at a rate of 6.3 per cent to 6.8 per cent in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25 presented in Parliament by Finance Minister Nirmala Sitharaman today.
The survey, released ahead of the Union Budget, cites strong domestic economic fundamentals, a declining unemployment rate, stable inflation, and the need for further reforms to sustain growth momentum.
“The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 per cent,” the Economic Survey reads.
The GDP rate of 6.3 per cent to 6.8 per cent will be the lowest since 2020-21 – the Covid year – when India registered a negative growth of 5.8 per cent. The year 2021-22 witnessed GDP rate was 9.7 per cent, 7 per cent in 2022-23 an 8.2 per cent in the last fiscal year.
Ms Sitharaman will present the Union Budget 2025-26 on Saturday.
Here are the highlights from the Economic Survey:
- Fundamentals of Indian economy remain robust with strong external account and stable private consumption.
- Food inflation likely to soften in Q4 FY25 with seasonal easing of vegetable prices, Kharif harvest arrivals.
- India’s economic prospects for FY26 balanced. Headwinds to growth include elevated geopolitical, trade uncertainties.
- Navigating global headwinds will require strategic, prudent policy management and reinforcing domestic fundamentals.
- ndia needs to improve global competitiveness through grassroots-level structural reforms, and de-regulations, says Survey.
- The Survey says India needs to improve its global competitiveness through grassroots level structural reforms, deregulation.
- Inflation risk from higher commodity prices seems limited in FY26, geopolitical tensions still pose risk.
- Lack of appropriate governance framework for AI may lead to potential abuse or misuse of technology.
- Economic Survey says insolvency law’s deterrent effect has led thousands of debtors resolving distress in early stages.
- Entry costs, information asymmetry, absence of secondary market must be addressed to boost liquidity in corporate bond market.
- Rupee depreciation in 2024 mainly due to strong US dollar amid geopolitical tensions, uncertainty around US election.
- Meaningful market correction in 2025 could have cascading effect on India, especially given higher participation of new retail investors.
