The Economic Survey 2025-26, presented by Finance Minister Nirmala Sitharaman in the Parliament on Thursday, outlined India’s significant progress in rural transformation. The crucial document prepared by the Finance Ministry’s Department of Economic Affairs offers insights into the economic outlook, while setting the tone for the Union Budget. Sitharaman will present the Budget in the Parliament on Feb. 1, 2026.
The Economic Survey projected GDP growth in a range of 6.8% to 7.2% for FY27, supported by strong macroeconomic fundamentals and key reforms. It also outlined strategies to tackle challenges such as the impact of stricter US tariffs.
Apart from the key metrics, the Economic Survey also provided a detailed overview of poverty and inclusion, highlighting India’s rural transformation journey. Targeted policies, including income support, social protection and labour regulations, have led to a reduction in poverty and inequalities, the Survey noted.
Efforts To Tackle Poverty
According to the World Bank’s revised International Poverty Line of $3 per day, India’s extreme poverty stood at 5.3% in 2022-23, while multidimensional poverty was 15.5%. NITI Aayog’s Multidimensional Poverty Index also shows a decline from 55.3% in 2005-06 to 11.28% in 2022-23, the Survey noted.
State governments’ policies have also helped in making targeted efforts to reduce poverty. The Survey highlighted the success of Bihar’s ‘Satat Jeevikoparjan Yojana’ (SJY), launched in 2018, and Kerala’s model for this effort. While the Bihar initiative focused on ultra-poor women using the ‘Graduation approach’, providing assets, training, livelihood support, mentoring, and access to insurance and entitlements over 24 months.
Similarly, Kerala’s model identified vulnerable households through community participation.
At the national level, the Union Government runs the ‘Samaveshi Aajeevika Yojana’ under DAY-NRLM, a livelihoods programme for rural women, also based on the Graduation approach. These efforts are aimed at promoting long-term self-reliance and economic inclusion.
“Both SJY and the Kerala model showcase the involvement of the community and a multipronged strategy with continuous support and monitoring to ‘push’ the vulnerable out of the vicious cycle through handholding support, training, access to finance, and basic necessities,” the Economic Survey noted.
Focus On Inclusive Growth
The document also noted the achievements of India’s model of inclusive growth, which is guided by the ‘Sabka Sath, Sabka Vikas, Sabka Vishwas, Sabka Prayas’ objective. With a focus on economic development, several government initiatives in affordable housing, social security, food security, financial inclusion, basic amenities and healthcare have improved living standards.
According to the Economic Survey, the Ministry of Statistics and Programme Implementation’s (MoSPI) Sustainable Development Goal (SDG) National Indicator Framework 2025 showed that the social protection coverage rose from 22% in 2016 to 64.3% in 2025. It also noted that the rural access to improved drinking water increased to 99.6% and that universal electrification was achieved in 2021-22.
“While 100% of the districts were declared open defecation free (ODF) in 2019-20, and over 96% of Swachh Bharat Mission (SBM) villages have achieved the ODF plus status (As of Dec. 31, 2025),” the Survey mentioned.
According to the key economic document, from FY22 to FY26 (BE), total social services expenditure grew at a 12% CAGR. Additionally, the education spending rose by 11% annually, while health expenditure increased by 8%, reflecting the government’s determined focus on strengthening the social sector.
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