India’s Economic Survey 2025-26: Key Highlights

India’s Economic Survey 2025-26 presents a compelling narrative of sustained macroeconomic strength and structural transformation. Despite global headwinds—including geopolitical tensions, trade fragmentation, and financial vulnerabilities—the survey projects India to maintain its position as the world’s fastest-growing major economy, with real GDP growth estimated at 7.4% in FY26 and projected at 6.8–7.2% for FY27. The document underscores a confluence of positive developments across growth trajectories, inflation management, financial sector health, sectoral diversification, and employment dynamics, positioning India for medium-term prosperity while highlighting the nation’s structural resilience.
India’s growth trajectory reflects broad-based economic expansion underpinned by robust domestic demand. The Real GDP growth estimate of 7.4% for FY26 reaffirms India’s position as the fastest-growing major economy for the fourth consecutive year. This performance is driven by complementary engines: private consumption has risen 7% in FY26, accounting for 61.5% of GDP, while gross fixed capital formation (investment) grew 7.8%, holding steady at 30% of GDP. This balanced growth composition signals healthy economic fundamentals, with both consumer spending and business investment contributing productively.
The survey projects India’s potential GDP growth at approximately 7% for the medium term (FY26-FY30), elevated from the earlier estimate of 6.5%, reflecting structural improvements in capital accumulation, labour inputs, and total factor productivity growth. This upward revision is consequential: it indicates the economy has moved beyond cyclical recovery to institutional-level improvements in productive capacity.
Headline CPI inflation averaged 1.7% during April–December 2025—the lowest level since the CPI series commenced. This achievement represents a significant stabilization of macroeconomic conditions, enabling monetary policy space and supporting real purchasing power. The moderation has been driven by supply-side interventions and calibrated monetary policy, creating conditions favorable for investment and consumer spending.
The fiscal deficit is projected to decline to 4.4% of GDP in FY26 (Budget Estimate), continuing a disciplined consolidation path from 4.8% in FY25. Centre’s revenue receipts rose to 9.2% of GDP in FY25, up from a pre-pandemic average of 8.5%, reflecting improved tax buoyancy. Direct tax revenues have expanded substantially—income tax return filings increased from 6.9 crore in FY22 to 9.2 crore in FY25, indicating both improved formalization and enhanced compliance. Gross GST collections during April–December 2025 stood at ₹17.4 lakh crore, growing 6.7% year-on-year, demonstrating robust transaction momentum. These fiscal achievements have earned India three sovereign credit rating upgrades in 2025, signaling institutional credibility.
The banking sector presents a compelling picture of institutional strength. Gross Non-Performing Assets (NPAs) declined to 2.2% in September 2025—a multi-decade low—while Net NPAs fell further to 0.5%, reflecting markedly improved asset quality. Bank credit growth has accelerated to 14.5% year-on-year by December 2025, supporting broad-based economic activity. The improved health of Scheduled Commercial Banks, combined with strong credit expansion, indicates financial intermediation is functioning efficiently to support growth.
Over 55 crore Jan Dhan accounts have been opened, democratizing access to formal financial services. The number of unique investors crossed 12 crore by September 2025, with nearly 25% women, signaling deepened participation in capital markets and broader financial engagement. This financial inclusion infrastructure is foundational for sustained inclusive growth.
Services have emerged as the economy’s paramount growth engine, accounting for 56.4% of Gross Value Added (GVA)—the highest proportion ever recorded. Services GVA grew 9.3% in H1 FY26 and is estimated at 9.1% for the full year, with India emerging as the world’s seventh largest exporter of services, increasing its share in global services trade to 4.3% in 2024 from 2% in 2005. The rising weight of modern, tradable, and digitally delivered services is evident in both domestic output and export performance, positioning India advantageously in the global digital economy.
Industrial GVA grew 7.0% in real terms in H1 FY26 despite subdued global demand, with manufacturing growth accelerating to 7.72% in Q1 and 9.13% in Q2 FY26. This acceleration reflects structural recovery supported by policy interventions and improving capacity utilization. The Production Linked Incentive (PLI) schemes across 14 sectors have attracted over ₹2.0 lakh crore of actual investment, generated incremental production and sales exceeding ₹18.7 lakh crore, and created over 12.6 lakh jobs as of September 2025. High-tech activities now account for 46.3% of India’s total manufacturing value added, with mobile manufacturing production value rising 30-fold from FY15 to FY25.
India’s Global Innovation Index ranking has risen to 38 in 2025 from 66 in 2019, reflecting accelerating innovation capabilities. The nation ranks 4th in trademarks and 6th in patents globally.
Agriculture has undergone significant structural transformation, with horticulture emerging as a major growth engine. In FY25, horticulture production reached 362.08 million tonnes, surpassing foodgrain production of 357.73 million tonnes for the first time. Horticulture now accounts for approximately 33% of agricultural GVA, diversifying income sources and reducing volatility. Agricultural GVA grew 3.6% in H1 FY26, supported by favourable monsoons, while allied activities (livestock and fisheries) continue to expand stably at 5–6% rates. Support mechanisms including assured minimum support prices, income transfers under PM-KISAN (which has released ₹4.09 lakh crore through 21 instalments), and pension coverage under PM Kisan Maandhan Yojana (24.92 lakh farmers enrolled as of December 2025) have strengthened farm incomes.
Female Labour Force Participation Rate (FLFPR) has risen dramatically from 23.3% in 2017-18 to 41.7% in 2023-24, while female unemployment declined from 5.6% to 3.2%. This represents substantial economic inclusion progress. The survey identifies women as essential to achieving target growth rates, noting that FLFPR must rise to approximately 55% by 2050 to sustain high GDP growth trajectories. The expansion of female participation reflects both improved labour market access and economic necessity as household investment in female education has increased substantially.
Overall unemployment declined to 4.8% in December FY26. Employment stood at 56.2 crore persons (15 years and above) in Q2 FY26, with new job creation supported by manufacturing and services expansion. Organized manufacturing added over 10 lakh jobs in FY24, a 6% year-on-year increase, with the sector contributing 57 lakh jobs over the past decade at a 4% compounded annual growth rate. The unincorporated non-farm sector employed 12.9 crore individuals, including 28% women, signalling a self-employment revolution in rural India. The National Career Service portal mobilized over 2.3 crore vacancies by September FY26.Implementation of the four Labour Codes (enacted November 2021) is expected to create approximately 77 lakh jobs through enhanced formalization.Physical and digital infrastructure investments have transformed connectivity. The National Highway network increased 60% since FY14, while high-speed corridors expanded nearly ten-fold to 5,364 km. Airports increased from 74 in 2014 to 164 in 2025, with India emerging as the third-largest domestic aviation market. Railway electrification reached 99.1%, near-total coverage.
Digital infrastructure has advanced substantially, with over 81% of rural households now having access to tap water under the Jal Jeevan Mission. Central government capital expenditure increased over four-fold since FY18, reaching ₹11.21 lakh crore in FY26 (Budget Estimate), creating the physical foundations for sustained growth.
Renewable energy now constitutes 49.83% of total installed power generation capacity as of November 2025, with total renewable energy capacity more than tripling over the past decade from 76.38 GW in March 2014 to 253.96 GW by November 2025. India ranks third globally in overall renewable energy, installed solar capacity, and fourth in installed wind capacity. A record 34.56 GW of non-fossil capacity was added in the first eight months of FY26. Total installed power generation capacity reached 509.74 GW as of November 2025, an 11.6% year-on-year increase.
In a historic first, distribution utilities (DISCOMs) recorded a positive Profit After Tax of ₹2,701 crore in FY25, reversing years of losses. Aggregate technical and commercial losses fell from 22.62% in FY14 to 15.04% in FY25, while outstanding dues decreased sharply from ₹1.4 lakh crore in June 2022 to ₹4,927 crore by January 2026
Infant Mortality Rate declined 37% over the past decade, reflecting substantial improvements in maternal and child health outcomes. Ayushman Bharat cards reached 42.78 crore individuals, extending health coverage across the population.
School enrolment rates (Gross Enrollment Ratio) exceeded 90% at primary and upper primary levels, with higher education GER reaching 29.5%. These gains indicate expanded human capital formation and aspirational access to education. The National Education Policy has driven these improvements through structural reforms in educational infrastructure and pedagogy.
The Multidimensional Poverty Index declined sharply from 55.3% (2005-06) to 11.28% (2022-23) according to NITI Aayog, representing a transformative reduction in deprivation across multiple welfare dimensions. Social services expenditure increased to 7.9% of GDP in FY26 (Budget Estimate).India’s total exports (merchandise and services combined) reached a record USD 825.3 billion in FY25. Despite heightened US tariffs, merchandise exports grew 2.4% during April–December 2025, while services exports increased 6.5%. India’s share of global merchandise exports nearly doubled to 1.8%, while services exports hit a record $387.6 billion. India leads the world in greenfield digital investment (2020–2024) and maintains a comfortable Current Account Deficit at 0.8% of GDP in H1 FY26.
Forex reserves rose to USD 701.4 billion, providing coverage for 11 months of imports and ensuring substantial external sector cushioning. Remittances touched USD 135.4 billion in FY25, supporting household incomes and external inflows.
The survey proposes a three-tier strategy—termed “disciplined swadeshi”—moving from self-reliance to strategic indispensability, focusing on critical capabilities, cost competitiveness, and advanced manufacturing to strengthen long-term resilience. This forward-looking framework acknowledges global fragmentation while positioning India to build enduring competitive advantages in priority sectorsSurvey. In Concluding remarks Prof Sikander Kumar said that
India’s Economic Survey 2025-26 documents a nation experiencing broad-based economic strength across macroeconomic fundamentals, sectoral diversity, financial health, employment dynamics, and social progress. The convergence of robust growth (7.4% in FY26), historic low inflation (1.7%), fiscal consolidation, multi-decade banking sector health, manufacturing acceleration, services dominance, agricultural diversification, dramatic female workforce participation expansion, infrastructure advancement, and clean energy transition presents a compelling case for India’s sustained economic ascendancy. These positive developments reflect both effective macroeconomic management and structural reforms embedding resilience into the economy’s foundational institutions. The challenge ahead remains translating these achievements into equitable, inclusive development while navigating persistent global uncertainties.