Economic Survey 2025: India Eyes 6.3-6.8% GDP Growth in FY26 and Other Key Highlights

Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2025 in Parliament on January 31. The report highlights India’s expected GDP growth of 6.3-6.8% in FY26, despite global uncertainties. It also projects controlled inflation, stable financial markets, and strong contributions from all major sectors.

This survey follows the Economic Survey 2024, which was presented in July 2024 after the General Election. Prepared by the Department of Economic Affairs under Chief Economic Advisor V. Anantha Nageswaran, the report provides an overview of India’s economic performance and outlook for the upcoming financial year.

Key Highlights of Economic Survey 2025

Here are the key highlights of the Economic Survey 2025:

1. Indian Economy Remains Resilient

India’s economy is projected to grow at 6.4% in FY25, close to the 10-year average. The expected GDP growth for FY26 is between 6.3% and 6.8%. The Gross Value Added (GVA), which measures overall economic productivity, is also set to grow by 6.4% in FY25.

2. All Sectors Driving Growth

• Agriculture continues to perform well, staying above its long-term average.
• The industry has recovered and is now growing beyond pre-pandemic levels.
• Services have returned to their historical growth trends.

3. Inflation Under Control

Retail inflation dropped from 5.4% in FY24 to 4.9% in April-December 2024. Despite food inflation challenges due to supply disruptions and extreme weather, the government’s buffer stock policies and market interventions have helped stabilise prices. The Reserve Bank of India (RBI) and IMF expect inflation to reach 4% by FY26.

4. Strong Financial Sector

• The Gross Non-Performing Assets (GNPA) ratio of commercial banks fell to 2.6% in September 2024, a significant improvement from FY18 levels.
• The credit-to-GDP gap has narrowed, reflecting sustainable bank lending growth.
• The insurance market grew by 7.7% in FY24, reaching ₹11.2 lakh crore.
• The pension sector saw a 16% increase in subscribers (YoY) as of September 2024.

5. Foreign Investment and Exports Grow

• FDI inflows increased by 17.9% YoY in FY25, reaching $55.6 billion in the first eight months.
• Total exports (goods and services) grew by 6% YoY in FY25 despite global challenges.
• India’s external debt remains stable at 19.4% of GDP as of September 2024.

6. Push for Economic Deregulation

The survey emphasises removing regulatory hurdles to support India’s long-term growth. It calls for “Ease of Doing Business 2.0”, focusing on simplifying business rules and reducing government interference.

7. Focus on Infrastructure Investment

• The government’s capital spending on infrastructure grew 38.8% from FY20 to FY24.
• Post-election, capital expenditure picked up between July and November 2024, helping accelerate projects.

8. Industrial Growth Led by Electricity & Construction

• The industrial sector grew by 6.2% in FY25, driven by electricity and construction.
• Steel production rose by 4.6% (April-November FY25), and automobile sales jumped 12.5% in FY24.
• Electronics manufacturing grew at 17.5% CAGR from FY15 to FY24.
• Textile exports totalled $35.87 billion in FY24, while pharmaceutical turnover reached ₹4.17 lakh crore.

9. Skill Development for the Services Sector

The service sector’s contribution to GDP increased from 50.6% in FY14 to 55.3% in FY25. The survey stresses skill development and simplifying regulations to boost both manufacturing and services.

10. Support for Agriculture and Food Security

• Agriculture remains a key part of the economy, contributing 16% of GDP in FY24.
• The government is focusing on minimum support prices (MSP), credit access (Kisan Credit Card), and subsidies (Modified Interest Subvention Scheme – MISS).
• PM-KISAN has benefited over 11 crore farmers, providing direct income support.
• PM-KISAN Maandhan Yojana, which offers pensions to farmers, has enrolled 23.61 lakh farmers so far.

Conclusion

The Economic Survey 2025 presents a positive outlook for India’s economy despite global uncertainties. Controlled inflation, strong banking health, rising investments, and infrastructure growth are expected to support GDP expansion. The government’s focus on deregulation, skill development, and agriculture will further strengthen India’s growth trajectory in FY26.

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