Winning Bizness Desk

Mumbai. Finance Minister Nirmala Sitharaman on January 29 tabled the Economic Survey 2025–26 in the Lok Sabha, presenting what the government described as the country’s annual economic report card. The survey projects India’s GDP growth to remain between 6.8% and 7.2% in the coming financial year, despite global uncertainties and geopolitical tensions. It also highlights trends in inflation, employment, agriculture, government finances and exports, offering a snapshot of where the economy stands and where it is headed.

Growth outlook remains strong despite global risks

According to the Economic Survey, India is expected to grow at 6.8% to 7.2% in FY27, reflecting resilience even as the global economy faces instability. For the current financial year FY26, the survey pegs growth at 7.4%, marginally higher than the Reserve Bank of India’s estimate of 7.3%. The document underlines that domestic demand, public investment and a stable financial system are key drivers supporting this momentum.

Inflation outlook and monetary stability

On inflation, the survey notes that both the RBI and the International Monetary Fund expect price pressures to rise gradually but remain within the RBI’s target range of 4% with a tolerance band of ±2%. Improved agricultural output has helped keep food prices in check. In December 2025, the RBI revised its inflation estimate for FY26 down from 2.6% to 2%. For FY27, the RBI projects inflation at 3.9% in the first quarter and 4% in the second quarter.

Employment trends and labour market shifts

The survey claims that in the second quarter of FY26, covering July to September 2025, around 56.2 crore people aged 15 years and above were employed in India. Compared to the first quarter of the same year, nearly 8.7 lakh new jobs were added. Key points highlighted include:

• Higher hiring in industrial and services sectors due to tax reforms and simplified regulations
• Labour reforms by states supporting formal employment
• Gig work emerging as a significant source of income
• Need to bridge the skill gap through vocational training at school level

The government is also working on an integrated data system to track employment more effectively.

Agriculture performance and rural focus

The survey estimates agricultural growth at 3.1% in FY26, noting that nearly half of India’s population depends on farming. Record foodgrain production of 332 million tonnes in 2024–25 has played a crucial role in controlling inflation. Beyond increasing output, the government’s focus is shifting towards securing farmers’ incomes and improving storage infrastructure. Amid global trade wars, India is also diversifying agricultural exports to reduce dependence on any single market.

Fiscal health and external buffers

The Centre has achieved its fiscal deficit reduction target ahead of schedule, with the deficit at 4.8% of GDP in FY25. The target for FY26 has been set at 4.4%, signalling improved fiscal discipline. A lower fiscal deficit is seen as a marker of economic strength and lower inflation risks. Meanwhile, India’s foreign exchange reserves rose from 668 billion dollars in 2023–24 to 701 billion dollars in 2024–25, strengthening the rupee against the dollar.

Exports, trade strategy and survey background

Despite global trade uncertainty, India’s total exports of goods and services touched a record 825.3 billion dollars in FY25, with the momentum continuing into FY26. The survey notes that even after the US imposed 50% tariffs, India’s goods exports rose by 2.4% between April and December 2025, while services exports grew by 6.5%. In the final section, the survey highlights:

• Reduced reliance on the US market
• Finalisation of a trade deal with the European Union
• New trade agreements with the UK, New Zealand and Oman

Prepared by the Finance Ministry’s Economic Division under Chief Economic Adviser V Anantha Nageswaran, the Economic Survey has been presented annually since 1951. Initially part of the Union Budget, it has been tabled separately a day before the Budget since 1964, serving as both a review of the past year and a roadmap for future reforms.