Economic Survey 2026 Key Highlights: Domestic economy remains on a stable footing, need ‘caution not pessimism’

The Economic Survey typically discusses GDP growth trends, inflation and monetary policy, fiscal health, the performance of the external sector, social indicators such as employment, health, and education, and chapters on emerging themes.

The Union Budget 2026 will be presented in Parliament on 1 February by Finance Minister Nirmala Sitharaman.

The Economic Survey is prepared by the Department of Economic Affairs, Ministry of Finance.

Released just before the Budget, the survey shapes the government's economic outlook and provides a detailed overview of India's financial position ahead of upcoming policy announcements.

Amid the rising use of AI, the survey noted that "One of the most urgent responsibilities of an AI Economic Council is to calibrate the pace of AI adoption within the country."

The Economic Survey typically covers GDP growth trends, inflation and monetary policy, the fiscal position, the state of the external sector, social indicators such as employment, health, and education, and other emerging themes.

The International Monetary Fund has projected 7.3% growth in FY26 and 6.4% in FY27 and the World Bank has estimated growth at 7.2% in FY26 and 6.5% in FY27.

The India-US trade agreement was highlighted in the Economic Survey 2026, which noted that while progress has been made in negotiations, some tariff effects have been observed.

"Policies on age-based access limits may be considered, as younger users are more vulnerable to compulsive use and harmful content," the survey read.

The Economic Survey typically reviews key macroeconomic indicators, including GDP growth trends, inflation and monetary policy, the government’s fiscal position, and the external sector's performance. It also assesses social indicators such as employment, health and education, alongside special chapters focused on emerging and structural themes.

The Economic Survey said that FY26 was an “unusually challenging year” for the economy due to external factors — global trade uncertainty, high tariff imposition, stress on manufacturers, especially exporters, which hit business confidence.

The Economic Survey 2026 document noted that the RBI and IMF have projected a progressive increase in headline inflation in the upcoming fiscal, bringing the levels within the targeted range of 4% (± 2%).

The Economic Survey noted that the outlook for the global economy remains dim over the medium term, with downside risks dominating.

Global growth is expected to remain modest, leading to broadly stable commodity prices.

Inflation across economies has trended downward, and monetary policies are therefore expected to become more accommodative and supportive of growth.

According to Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, “The Economic Survey introduces two interesting phrases that presents the core of the fleeting economic snapshot that India currently faces. These terms are ‘strategic sobriety’ and ‘running the sprint and marathon’ at the same time. There is an honest assessment in the survey of the achievements of the government and also the course corrections that the Government has done that is termed as an ‘entrepreneurial state’ i.e. learning and agile policy making.”

_“The Economic Survey 2025–26 reinforces the growing maturity of indirect taxes, with GST firmly established as a stable and growth-aligned revenue pillar. Gross GST collections of INR 17.4 lakh crore during April–December 2025, with a 6.7% YoY growth, underscore revenue resilience despite lower inflation and calibrated rate rationalisation, driven largely by compliance-led buoyancy. The expansion of the taxpayer base to over 1.5 crore and a 21% YoY growth in e-way bill volumes reflect deeper formalisation of the economy," said Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat.

The Economic Survey 2025-26 estimates India's economy to grow at 6.8-7.2% in FY27, driven by regulatory reforms and strong fundamentals. It focuses on private sector investment, infrastructure development, and self-sufficiency in key areas to navigate global trade pressures.

“Inflation has moderated to historically low levels, although some firming is expected to occur going forward. Balance sheets across households, firms and banks are healthier, and public investment continues to support activity. Consumption demand remains resilient, and private investment intentions are improving. These conditions provide resilience against external shocks and support the continuation of growth momentum,” the Economic Survey noted.

Economic Survey 2025-26, prepared by Chief Economic Adviser V Anantha Nageswaran and his team in the Finance Ministry, underscores that global economic growth remains fragile, but the Indian economy is reflecting strong growth momentum. Read 10 top takeaways here

The Survey document noted that cumulative impact of policy reforms over recent years appears to have lifted the Indian economy’s medium-term growth potential closer to 7%.

It added that domestic drivers in particular playing a dominant role, while macroeconomic stability is well anchored, keeping the balance of risks around growth “broadly even”.

“Taking these considerations together, the Economic Survey projects real GDP growth in FY27 in the range of 6.8-7.2%. The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism,” it stated.

According to the Economic Survey 2026, India's domestic economy remains on a stable footing.

“Inflation has moderated to historically low levels, although some firming is expected to occur going forward. Balance sheets across households, firms and banks are healthier, and public investment continues to support activity. Consumption demand remains resilient, and private investment intentions are improving. These conditions provide resilience against external shocks and support the continuation of growth momentum,” it noted.

Further, it pointed to the forthcoming rebasing of the CPI series, adding that this will have implications for inflation assessment and warrant careful interpretation of price dynamics.

The document further noted that protracted trade conflicts would weigh on investment and further weaken the global growth outlook and suggest that downside risks “remain prominent, although a fragile stability holds for now”.

“For India, these global conditions translate into external uncertainties rather than immediate macroeconomic stress. Slower growth in key trading partners, tariff- induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment,” it added.

It felt that ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front.

“While these risks remain manageable, they reinforce the importance of maintaining adequate buffers and policy credibility,” the Economic Survey said.

The Economic Survey noted that the outlook for the global economy remains dim over the medium-term, with downside risks dominating.

• At the global level, growth is expected to remain modest, leading to broadly stable commodity price trends.
• Inflation across economies has trended downward, and monetary policies are therefore expected to become more accommodative and supportive of growth.
• However, certain key risks persist — If the AI boom fails to deliver the anticipated productivity gains, it could trigger a correction in overly optimistic asset valuations, with the potential for broader financial contagion, it said.

The Economic Survey noted that FY26 was an “unusually challenging year” for the economy due to external factors — global trade uncertainty, high tariff imposition, stress on manufactureres, particularly exporters, which hit business confidence.

It noted that the government responded by using this crisis as an opportunity to push through key measures including GST rationalisation, faster progress on deregulation, and further simplification of compliance requirements across sectors.

“FY27 is therefore expected to be a year of adjustment, as firms and households adapt to these changes, with domestic demand and investment gaining strength. That said, it must be acknowledged that the external environment remains uncertain, which shapes the overall outlook,” it added.

The Economic Survey 2026 noted that despite global trade uncertainty, India’s total exports (merchandise and services) reached a record $825.3 billion in FY25, with continued momentum in FY26.

“Despite heightened tariffs imposed by the United States, merchandise exports grew by 2.4% (April–December 2025), while services exports increased by 6.5%,” the government said in the Economic Survey.

The Economic Survey 2025-26 projects India's economy to grow at 6.8-7.2% in FY27, driven by regulatory reforms and strong fundamentals. It emphasizes private sector investment, infrastructure development, and self-sufficiency in key areas to navigate global trade pressures. Read full here

The Economic Survey 2026 document noted that the RBI and IMF have projected a progressive increase in headline inflation in the upcoming fiscal, bringing the levels within the targeted range of 4% (± 2%).

It further added that in December 2025, the RBI revised its inflation projections for FY26 from 2.6% to 2%, owing to a good kharif harvest and healthy rabi sowing. The RBI’s forecast for headline Inflation for Q1 and Q2 of FY27 currently stands at 3.9% and 4%.

While the IMF has projected an inflation rate of 2.8% in FY26 and 4% in FY27.

• The advanced FY26 estimates projected 7.4% growth for the year.
• IMF has projected 7.3% growth for India in the current fiscal, with economy expected to grow 6.4% in FY27
• World Bank has pegged it at 7.2% in FY26 and 6.5% in FY27.

The statistics ministry will scheduled release a second advance estimate for FY26 on 27 February, based on a new GDP series that shifts the base year from 2011-12 to 2022-23. While headline GDP numbers will change, economists expect minimal impact on growth rates.

The Indian economy is expected to expand at 6.8-7.2% in FY27, supported by strong macro fundamentals and a series of regulatory reforms, the Economic Survey 2025-26 said, laying out a strategic vision for navigating a global economy strained by a tougher US tariff regime.

Last year, the Survey expected India to have real GDP growth of 6.4% in FY25 — close to the decadal average — despite global uncertainty.

The survey, prepared by chief economic adviser V. Anantha Nageswaran and his team in the finance ministry, highlights reform measures undertaken in the current financial year, including income tax and goods and services tax (GST) relief, a new simplified direct tax law to take effect from April, and changes to foreign direct investment (FDI) and bankruptcy frameworks.

Finance Minister Nirmala Sitharaman has tabled Economic Survey 2025-2026 before both houses of Parliament today, on 29 January (Thursday).

The Economic Survey typically reviews key macroeconomic indicators, including GDP growth trends, inflation and monetary policy, the government’s fiscal position, and the performance of the external sector. It also assesses social indicators such as employment, health and education, alongside special chapters focused on emerging and structural themes.

According to the 2025 survey:

• Services sector continues to be the largest recipient of foreign direct investment (FDI), accounting for 19.1% of total equity inflows in the first half of FY25.
• Other key sectors attracting significant foreign investments include computer software and hardware (14.1%),
• Followed by trading (9.1%), non-conventional energy (7%), and cement and gypsum products (6.1%).

Market participants will watch out for the Survey’s commentary on global risks, fiscal consolidation, and sectoral trends as these influence equity, bond, and currency sentiment.

Economic Survey 2025 also said India’s manufacturing sector has faced challenges owing to weak global demand and domestic seasonal fluctuations. Despite this, private consumption remained stable, underscoring resilient domestic demand.

“Fiscal prudence coupled with a strong external balance—and supported by a surplus in services trade and healthy remittance inflows—has contributed to overall macroeconomic stability. Together, these factors provided a solid foundation for sustained growth amid external uncertainties,” it added.

• The survey forecast that inflation will remain under control, with consumption expected to stabilise.
• It also predicted that rural demand would gain momentum in the coming months.
• It highlighted a decrease in retail headline inflation from 5.4% in FY24 to 4.9% during April-December 2024 (9MFY25) owing to government initiatives and monetary policy measures.
• It added that rural demand will be backed by a rebound in agricultural production, and anticipated ease in food inflation, with a stable macro-economic environment providing upside to near-term growth.
• “Overall, India will need to improve its global competitiveness through grassroots-level structural reforms and deregulation to reinforce its medium-term growth potential,” it stated.

The Economic Survey 2025 highlighted and proposed 10 key reforms in areas such as building, land, labour, logistics and utilities.

• These included the suggestion that controls distorting markets should be minimised.
• A ‘minimum necessary, maximum feasible’ approach should be adopted for setting regulations, the survey said.
• It added that reforms may set off a ‘butterfly effect’ in which small actions have large consequences.
• “Small acts of deregulation may set off big waves of entrepreneurship, investment, innovation and growth,” the survey stated.
• Further, the Survey noted that India’s economic prospects for FY26 are balanced — but it identified geopolitical, trade uncertainties, and possible commodity price shocks as headwinds.
• Domestically, the Survey noted that translation of order books of private capital goods sector into sustained investment pick-up, improvements in consumer confidence, and corporate wage pick-up will be key to promoting growth.

The Survey termed the agriculture and allied activities sector as “backbone of the Indian economy”, noting that it contributes around 16% of GDP for FY24 (PE).

It highlighted the government initiatives to boost the agriculture and food processing sector, such as increasing minimum support prices (MSP), providing credit support to all farmers through the Kisan Credit Card (KCC), the Modified Interest Subvention Scheme (MISS), and the Pradhan Mantri Kisan Sampada Yojana (PMKSY).

“Government initiatives like PM-KISAN, which provides direct income support to farmers, and PM-KISAN Maandhan Yojana, which offers pension schemes for farmers, have successfully contributed to bolstering farmers' incomes and enhancing their social security safety nets. As of 31 October, over 11 crore farmers have benefitted under PM Kisan, while 23.61 lakh farmers are enrolled under PM Kisan Mandhan,” it added.

The Economic Survey 2025 noted that the service sector's contribution to total GVA has risen from 50.6% in FY14 to 55.3% in FY25.

It emphasised prioritising skill development for the labour force and revising complex grassroots-level procedures and regulations as two key interventions for the growth of manufacturing and service sectors.

The 2025 survey noted that India's growth plans for the next decade require large investments in infrastructure.

• Centre's capex on key infrastructure sectors grew 38.8% from FY20 to FY24.
• Industrial sector grew 6.2% in FY25, as per the first advance GDP estimates, driven by robust growth in electricity and construction.
• Finished steel production registered growth of 4.6%. Indian automobile domestic sales grew by 12.5% in FY24.
• Domestic production of electronic goods has grown at a CAGR of 17.5% from FY15 to FY24.
• Exports of textiles and apparel, including handicrafts, were valued at $35.87 billion in FY24.
• Total annual turnover of pharmaceuticals in FY24 was ₹4.17 trillion, growing at an average rate of 10.1% over the past five years, it added.

On achieving ‘Viksit Bharat’, the 2025 Economic Survey called for assessing India's medium-term growth outlook in the context of new global realities — such as geo-economic fragmentation and China's manufacturing prowess and strategic dominance.

“The way forward for India is to reinvigorate the internal engines and domestic growth levers and focus on economic freedom. The focus of reforms and economic policy must now be on systematic deregulation as the key agenda under Ease of Doing Business 2.0,” it stated.

India's gross foreign direct investment (FDI) inflows increased 17.9% from $47.2 billion in the first eight months of FY24 to $55.6 billion in the same period of FY25, as per the Survey document last year.

It pointed to the export sector resilience, despite global economic advantage. Stating: “Overall exports (merchandise + services) have grown steadily in the first nine months of FY25, witnessing a YoY growth of 6%. India’s external debt has remained stable over the past few years, with the external debt to GDP ratio standing at 19.4% at the end of September 2024.”

Notably, this year's document would likely show impact of United States President Donald Trump's 50% tariffs on Indian exports into America. It will also suggest measures to work around the hefty duties.

Commercial banks: The survey in 2025 highlighted a consistent decline in the gross non-performing assets (GNPA) ratio of commercial banks, from peak in FY18, to 2.6% low by September 2024 end.

It added that the credit-GDP gap narrowed to -0.3% in Q1FY25 from -10.3% in Q1FY23, indicating that the recent growth in bank credit was sustainable.

Insurance: The Survey further noted that India’s insurance market is on upward trajectory. In FY24 it noted that the total insurance premiums grew by 7.7% to ₹11.2 trillion.

Pension: It added that the pension sector has also seen significant growth — total number of pension subscribers grew 16% YoY as of September 2024.

Writing for Mint, CEA V Anantha Nageswaran noted that Economic Survey for 2025-26 comes at an extraordinary time for the world.

“Global politics is in flux. Most agree that the world order they were comfortable with is no longer relevant. Beyond that, agreement ends. There is little clarity on what might replace it, or whether such clarity will emerge gradually or through a catalytic-or even cathartic-event,” he said.

Read here for his perspective on the unprecedented pressures on India's economy, how the country can sustain growth, how we can achieve greater indigenisation and export competitiveness, and how to structurally reduce the cost of capital. Read full here

The previous Survey pointed out that retail headline inflation softened from 5.4% in FY24 to 4.9% in April-December 2024 amid government initiatives and monetary policy measures.

On food inflation it noted that supply chain disruptions, extreme weather conditions and consequent reduced harvests were the causing major impact. To stabilise this, it noted that the Centre's policy interventions, including strengthening buffer stocks for essential food items, periodic open market releases and efforts to ease imports during supply shortages had helped.

“Despite challenges, there are positive signs for inflation management in India. The RBI and IMF project that India’s consumer price inflation will gradually align with the target of around 4 per cent in FY26,” it added.

The Economic Survey 2025 expected India to have real GDP growth of 6.4% in FY25 — close to the decadal average — despite global uncertainty. It stated, “Keeping in mind the upsides and downsides to growth, real GDP growth in FY26 is expected to be between 6.3% and 6.8%. From an aggregate supply perspective, real gross value added (GVA) is also estimated to grow by 6.4% in FY25.”

It also noted that all sectors were performing well, stating that the agriculture sector “remains strong” and operates “well above trend levels”, while the industrial sector “found its footing above pre-pandemic trajectory”.

“The robust growth rate in recent years has brought the services sector to its trend levels,” it stated.

• Economic Survey 2025 expected India's FY26 GDP growth to be in the range of 6.3-6.8% amid global uncertainty.
• The survey expected inflation to remain under control and consumption to remain stable.
• It also expected rural demand to gain traction going forward.
• The survey was released just six months after the previous one was presented in July 2024, after the general election.

Economy watchers are keen to seen what the Economic Survey 2026 will say about agricultural indicators. In the previous document, agri sector growth expected to rebound with 3.8% growth in FY25, remaining above trend levels.

The industry sector was forecast to grow by 6.2% in FY2025, though manufacturing faced challenges from slowing global demand and supply chain disruptions.

It stated that food inflation would soften in Q4FY25 with the seasonal easing of vegetable prices and kharif harvest arrivals. Good rabi production is likely to contain food prices in the first half of FY26. Adverse weather events and increases in international agricultural commodity prices, however, pose risks to food inflation. Global energy and commodity prices have softened in the recent past, making core inflation outlook benign, the survey said.

Market participants will watch out for the Survey’s commentary on global risks, fiscal consolidation, and sectoral trends as these influence equity, bond, and currency sentiment.

All eyes are peeled for the Economic Survey document for a snapshot of the Indian economy in the financial year so far, which will be released ahead of the Budget announcement in Parliament on Thursday, 29 January 2026.

People who are looking to catch live video coverage of the Economic Survey, they can stay tuned with Mint on our official website LiveMint or on our YouTube channel. Check details

• The budget session kicked off on 28 January with a joint address by President Droupadi Murmu to both Houses of Parliament.
• The Economic Survey 2026 will be presented in Parliament by Finance Minister Nirmala Sitharaman between 11 am to 12 pm today, on 29 January.
• Later India's Chief Economic Advisor (CEA) V Anantha Nageswaran will hold a press conference on 29 January.
• The Union Budget 2026 will be presented in Parliament on 1 February by Finance Minister Nirmala Sitharaman.
• The Parliament's budget session will conclude on 2 April 2026.

• The first Economic Survey was presented in 1950-51 along with the Union Budget but has been presented separately since 1964.
• Typically, the Economic Survey document is divided into two parts, A and B.
• Part A consists of major macroeconomic developments over the course of the fiscal year, as well as a broader review of the Indian economy.
• Part B, meanwhile, covers specific socio-economic issues pertaining to the economy.
• The Economic Survey, occasionally, can also have particular themes: for instance, the 2017-18 document was known as the Pink Economic Survey, with its focus on women, and was printed in pink to denote its focus on gender equality and women's empowerment.
• Separation of announcements was aimed at providing lawmakers and the public with important economic context, including data-driven views on the condition of the economy ahead of the Budget.
• The document, by identifying challenges and other issues, also gives crucial context for policy direction.

The full official Economic Survey 2026 document can be downloaded in PDF format from the official website on the following link: https://www.indiabudget.gov.in/economicsurvey/index.php

The link will be activated once the presentation is complete.

• People who are looking to catch live video coverage of the Economic Survey 2025-26
• Also stay tuned with Mint on our YouTube channel
• People can also track the government's broadcast via the Sansad TV channel on YouTube
• Doordarshan TV channels for the live feed from Parliament's Budget Session.
• The official Union Budget website (indiabudget.gov.in)
• Finance Ministry's official social media pages
• Press Information Bureau's (PIB) official social media pages will also host the live video feed.