When the world economy is walking on a tightrope, India seems to be building a highway.
The Economic Survey 2025–26, tabled by the Union Finance Minister, presents a nuanced picture of an economy that is resilient, reform-driven, and structurally strengthening, even as global growth remains fragile due to geopolitical tensions, trade fragmentation, and financial vulnerabilities.
Rather than celebrating headline numbers alone, the Survey tells a deeper story—of consumption revival, investment momentum, financial stability, export resilience, and inclusive growth.
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1. State of the Economy: Growth That Defies Global Headwinds
India continues to stand out as the fastest-growing major economy for the fourth consecutive year.
- Real GDP growth (FY26): 7.4%
- GVA growth: 7.3%
- India’s potential growth: ~7%, with FY27 growth projected between 6.8–7.2%
Private consumption has emerged as the backbone of this growth.
- Private Final Consumption Expenditure grew 7% in FY26
- Its share in GDP touched 61.5%, the highest since 2012
Low inflation, stable employment, rising real incomes, strong agricultural output, and tax rationalisation have together revived both rural and urban demand.
2. Investment Revival: Capital Formation Takes Centre Stage
Investment activity strengthened notably:
- Gross Fixed Capital Formation (GFCF) grew 7.8%
- Investment remained steady at 30% of GDP
This momentum was powered by:
- Sustained public capital expenditure
- Revival in private investment, visible through corporate announcements
On the supply side, services remained the principal growth engine, with:
- 9.3% GVA growth in H1 FY26
- Estimated 9.1% growth for the full year
3. Fiscal Management: Credibility Through Discipline
India’s fiscal strategy reflects stability without sacrificing growth.
Key highlights:
- Three sovereign credit rating upgrades in 2025
- Centre’s revenue receipts rose to 9.2% of GDP (FY25)
- Strong rise in non-corporate tax collections
- Income tax filers increased from 6.9 crore (FY22) to 9.2 crore (FY25)
GST performance also remained robust:
- ₹17.4 lakh crore collected during Apr–Dec 2025
- 6.7% YoY growth, aligned with nominal GDP
Crucially, India managed to:
- Increase effective capital expenditure to ~4% of GDP
- Reduce general government debt-to-GDP ratio by 7.1 percentage points since 2020
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4. Financial Sector: Stability, Inclusion, and Deepening Markets
Banking System
- GNPA ratio fell to a multi-decadal low of 2.2% (Sept 2025)
- Net NPA declined to 0.5%
- Credit growth accelerated to 14.5% YoY
Financial Inclusion
- PM Jan Dhan Yojana: 55.02 crore accounts, majority in rural areas
- PM Mudra Yojana: ₹36.18 lakh crore disbursed across 55.45 crore loans
- 12 crore unique investors, nearly 25% women
India’s financial system now enjoys international validation through the IMF–World Bank FSAP, highlighting resilience even under stress scenarios.
5. External Sector: Playing the Long Game
Despite global trade uncertainty, India’s external sector remained resilient:
- Total exports (FY25): USD 825.3 billion
- Services exports: USD 387.6 billion, up 13.6%
- India remains the world’s largest remittance recipient: USD 135.4 billion
Foreign exchange reserves touched a historic high:
- USD 701.4 billion (Jan 2026)
- Covers 11 months of imports
- Covers 94% of external debt
India’s share in global merchandise exports has nearly doubled since 2005, while its services export share has more than doubled—a clear sign of structural competitiveness.
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6. Inflation: From Control to Comfort
India recorded its lowest inflation since the CPI series began:
- Average headline inflation (Apr–Dec 2025): 1.7%
This was driven by moderation in food and fuel prices, which together account for over half of the CPI basket. Among EMDEs, India achieved one of the sharpest inflation declines in 2025.
7. Agriculture: Productivity with Protection
Agriculture emerged as a stabilising force:
- Foodgrain production (AY 2024–25): 3577.3 LMT, up 254.3 LMT
- Horticulture output surpassed foodgrains at 362 MT
Farmers’ incomes were supported through:
- MSP regime
- PM-KISAN (₹4.09 lakh crore released)
- e-NAM integration across 1,500+ mandis
8. Industry and Infrastructure: Building Scale and Speed
Manufacturing showed strong recovery:
- 7.72% growth (Q1 FY26)
- 9.13% growth (Q2 FY26)
PLI schemes across 14 sectors:
- ₹2 lakh crore investment
- ₹18.7 lakh crore incremental output
- 12.6 lakh jobs
Infrastructure expansion has been transformative:
- High-speed corridors: from 550 km to 5,364 km
- Airports: 74 → 164
- India: 3rd largest domestic aviation market
9. Social Sector: Education, Health, and Employment
- GER: 90.9 (primary), 78.7 (secondary)
- 23 IITs, 21 IIMs, 20 AIIMS
- Maternal mortality down 86% since 1990
- 31 crore unorganised workers registered on e-Shram, 54% women
Employment momentum continues with 56.2 crore employed in Q2 FY26 and steady job creation across sectors.
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10. The Big Idea: From Swadeshi to Strategic Indispensability
Perhaps the most important philosophical shift in the Survey is its call for “disciplined Swadeshi”.
Not blind import substitution—but a three-tier strategy:
- Protect critical vulnerabilities
- Build economically viable capabilities
- Move towards strategic indispensability
The goal:
From “thinking about buying Indian” to “buying Indian without thinking.”
Conclusion: A Quiet Confidence
The Economic Survey 2025–26 is not loud optimism—it is measured confidence. It shows an India that is learning from shocks, investing in resilience, deepening markets, and expanding opportunity, without losing fiscal discipline.
In a turbulent world, India is not just growing—it is growing wisely.
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