- India is projected to grow 7.4% in FY26, remaining the fastest major economy globally
- Private consumption reached 61.5% of GDP, indicating strong domestic demand recovery
- Gross Fixed Capital Formation hit 30% of GDP, boosted by public and private investments
India's Economic Survey 2025–26, penned by V Anantha Nageswaran, Chief Economic Advisor to the Government of India, has painted a picture of an economy that has not only weathered a hostile global environment but accelerated on the back of strong domestic engines.
Here are the 10 key highlights from the survey:
1. India remains the world's fastest growing major economy
Real GDP growth for FY26 is projected at 7.4%, marking the fourth consecutive year of top global performance.
2. Domestic demand is the primary engine of growth
Private consumption has surged to 61.5% of GDP, the highest in more than a decade, signalling broad based recovery.
3. Investment cycle strengthens sharply
Gross Fixed Capital Formation stands at 30% of GDP, supported by record public capex and a revival in private investment.
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4. Inflation collapses to multi year lows
Headline CPI fell to 1.7% (Apr–Dec 2025), driven by disinflation in food items and improved supply conditions.
5. Fiscal consolidation progresses without slowing growth
Fiscal deficit has reduced from 9.2% (FY21) to 4.8% (FY25), with a glide path towards 4.4% in FY26 on track.
6. Rupee weakens despite strong fundamentals
The Indian rupee depreciated 6.5% against the US dollar, which the Survey attributes to geopolitics and global capital flow volatility—not domestic weakness.
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7. External sector remains stable with strong buffers
Current Account Deficit stands at a comfortable 0.8%, while forex reserves cover 11 months of imports.
8. Labour market strengthens
Unemployment has fallen to 4.9%, LFPR is rising, and formalisation continues to expand under labour code implementation.
9. Poverty continues to decline
Using the World Bank's updated poverty line, extreme poverty stands at 5.3%, while lower middle income poverty is 23.9%. This is seen as a major improvement.
10. The Warnings
The survey highlights that the global environment is entering a phase of heightened fragility, where geopolitical tensions, tariff wars, leveraged AI investments and shifting capital flows could trigger sudden, cascading shocks.
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