Economic Survey 2026: Union Finance Minister Nirmala Sitharaman tabled the Economic Survey in Parliament on Thursday, January 29. According to the survey, strong macro fundamentals and regulatory reforms may help the Indian economy expand at 6.8-7.2% in the next financial year (FY27).
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.
The Economic Survey is an annual document that reviews the performance of the Indian economy, outlines government policies, and provides an outlook for the upcoming financial year. It is prepared by the Economic Division of the Department of Economic Affairs and is headed by the Chief Economic Adviser (CEA).
Economic Survey 2026: 10 key takeaways
Here are 10 key highlights of the Economic Survey 2025-26:
1. Domestic economy remains on a stable footing
The Survey highlighted that while the medium-term outlook for the global economy remains weak, with downside risks dominating, the domestic economy remains on a stable footing.
“For India, 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,” says the Survey.
The Survey hopes that the ongoing trade negotiations with the United States may conclude during the year, reducing uncertainty on the external front.
The Survey highlighted that healthy domestic macroeconomic fundamentals and a series of policy reforms over the recent years have lifted the Indian economy’s medium-term growth potential closer to 7%.
“With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even. Taking these considerations together, the Economic Survey projects real GDP growth in FY27 in the range of 6.8 to 7.2%. The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism,” says the Survey.
2. Inflation to rise in FY27
The Survey suggests that India’s core (excluding precious metals) and headline inflation rates will likely be higher in FY27 than in FY26. However, it is unlikely to be a concern.
As the Survey highlights, the RBI and the IMF have projected a gradual increase in headline inflation in the upcoming fiscal year, bringing it within the targeted range of 4% (± 2%). The IMF has projected inflation rates of 2.8% in FY26 and 4% in FY27.
The below-normal temperature, above-normal monsoon are expected to keep food inflation at moderate levels in the upcoming months.
“The government’s efforts to increase fertiliser supply may help keep input prices in agriculture in check, thereby containing inflationary pressures in the food basket. The continued pass-through of GST rate rationalisation into commodity prices may also temper inflationary pressures on the cost side,” says the Survey.
The Indian rupee’s weakness could pave the way for imported inflation, but the impact could be limited as global commodity prices are expected to remain soft.
3. Fiscal consolidation
As per the Survey, as of November 2025, the union government’s fiscal deficit stood at 62.3% of the Budget Estimates. The central government aims to attain a fiscal deficit target of 4.4% of GDP by FY26.
“The government achieved a fiscal deficit of 4.8% of GDP in FY25 and has set a target of 4.4% for FY26, moving towards its long-term goal of reducing the deficit,” as per the Survey.
4. Survey highlights the importance of coordinated fiscal discipline
The Survey underscored that any fiscal indiscipline at the State level also casts a shadow on the sovereign borrowing costs.
The Survey emphasises that the recommendations of the Sixteenth Finance Commission will play a critical role in shaping Centre-State fiscal relations.
As markets take into account government debt on a consolidated basis, persistent revenue deficits or an expansion of committed expenditures at the State level could affect sovereign bond yields. This underscores the importance of coordinated fiscal discipline across levels of government, says the Survey.
5. Finance as a catalyst of economic transformation
The Survey emphasises India’s development aspirations, which demand a fundamental rethinking of finance as the architecture of economic transformation.
“Finance is the central enabler. When finance builds trust, fosters competition, and enables innovation, it becomes the catalyst of development,” says the Survey.
The Survey underscored the importance of a simpler and service-oriented tax system to foster certainty and predictability.
Besides, the Survey also emphasises the significance of reshaping financial regulation, deepening long-term finance, and building a balanced financial ecosystem to make finance an enabler for growth.
6. Services Sector
The Survey says that while services remain a mainstay for exports, they are not a complete substitute for a goods-based export ecosystem.
“Services exports are extremely valuable for growth, foreign exchange, and firm-level excellence. However, they are structurally incapable of forcing system-wide state upgrading,” says the Survey.
According to the Survey, sustaining India’s position in the global services market will depend on productivity gains, continued innovation, ongoing investment in skills aligned with emerging technologies, and further simplification of regulatory processes.
7. FDI increased in the first 8 months of FY26
As per the Survey, in April-November 2025, gross FDI inflows strengthened further to $64.7 billion, compared with $55.8 billion in April-November 2024. Net FDI increased nearly sevenfold to $5.6 billion during April-November 2025, up from $0.8 billion in the same period a year earlier, attracting investments across various categories, including digital services, data centres, and IT infrastructure
“The magnitude of inflows during the first eight months of the year highlights sustained investor confidence despite a subdued global environment and reflects the underlying strength of India’s digital economy, as well as the continued policy emphasis on manufacturing and infrastructure,” says the Survey.
Track Economic Survey 2026 Live Updates Here
(This is a developing story. Please check back for fresh updates.)
