PIB:- Published on 29 January 2026
Why is it in the news?
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presented the Economic Survey 2025-26 in Parliament on 29th January 2026. The survey highlights India’s strong economic performance amid a fragile global environment, emphasizing fiscal prudence, monetary stability, robust sectoral growth, and strategic policies for long-term resilience. It underscores India’s status as the fastest-growing major economy for the fourth consecutive year.
Strong Economic Growth and Consumption
India’s economic growth remains robust, with first advance estimates projecting real GDP growth at 7.4% and GVA growth at 7.3% for FY26. Private consumption continues to be the main driver, reaching 61.5% of GDP—the highest share since 2012—supported by low inflation, stable employment, and rising real incomes.
Rural consumption is bolstered by strong agricultural performance, while urban consumption benefits from tax rationalisation and increasing purchasing power. Investment activity is gaining momentum, with Gross Fixed Capital Formation growing 7.8%, reflecting sustained public capital expenditure and a revival of private investment. On the supply side, the services sector leads growth, contributing to a projected 9.1% GVA expansion for FY26, highlighting the broad-based expansion of modern and tradable services.
Key Pointers:
Fiscal Discipline and Government Revenue
India’s fiscal management has strengthened credibility and macroeconomic stability. Centre’s revenue receipts rose to 9.2% of GDP in FY25, up from 8.5% in FY16–20, driven by higher non-corporate tax collections. The direct tax base expanded steadily, with income tax returns filed increasing from 6.9 crore (FY22) to 9.2 crore (FY25).
Gross GST collections during April–December 2025 stood at ₹17.4 lakh crore, with a YoY growth of 6.7%, supported by rising transaction volumes and robust economic activity. Effective capital expenditure increased to 4% of GDP, signalling a strong public investment push, while the general government debt-to-GDP ratio has declined by about 7.1 percentage points since 2020.
Key Pointers:
Banking, Financial Inclusion, and Credit Growth
The banking sector has shown strong recovery, with the GNPA ratio at 2.2% and net NPA at 0.5%, the lowest in decades. Credit growth accelerated to 14.5% YoY, reflecting improved liquidity and lending activity. Financial inclusion has expanded through schemes such as PMJDY (55.02 crore accounts), PMMY, Stand-Up India, and PM SVANidhi, enabling access to banking and credit for rural, semi-urban, and small entrepreneurs. Investor participation has also risen, with unique investors crossing 12 crore, nearly a fourth of them women, indicating increasing financial empowerment.
Key Pointers:
External Sector and Global Integration
India’s exports reached a record USD 825.3 billion, with services exports at USD 387.6 billion. India’s share of global merchandise exports nearly doubled from 1% to 1.8% (2005–2024), and services exports more than doubled from 2% to 4.3%. Remittances remained high at USD 135.4 billion, reinforcing external stability, while foreign exchange reserves rose to USD 701.4 billion, covering 11 months of imports. India continued to attract significant FDI, with gross inflows of USD 64.7 billion during April–November 2025, ranking fourth globally in Greenfield investment announcements.
Key Pointers:
Inflation, Agriculture, and Rural Development
India’s average CPI inflation fell to 1.7% (April–Dec 2025), the lowest since the series began, aided by moderation in food and fuel prices. Agricultural production is strong, with foodgrain output estimated at 3,577.3 LMT, and horticulture reaching 362.08 MT, surpassing foodgrain production. Over ₹4.09 lakh crore has been disbursed to farmers under PM-KISAN, and social security for farmers is supported by PM-KMY. Rural infrastructure improved through e-NAM, AMI, AIF, and property mapping under SVAMITVA.
Key Pointers:
Industry, Infrastructure, and Innovation
Industrial activity remains robust, with manufacturing GVA growth at 7.72% (Q1) and 9.13% (Q2) FY26. PLI schemes across 14 sectors attracted over ₹2 lakh crore investment, generating 12.6 lakh jobs. India’s semiconductor mission progressed with 10 approved projects worth ₹1.6 lakh crore.
Infrastructure investment has been transformative, with national highways growing by 60%, high-speed corridors expanding nearly ten-fold, rail network additions of 3,500 km, and India emerging as the 3rd largest domestic aviation market. Power sector reforms led to a positive PAT for DISCOMs and installed renewable energy capacity placing India 3rd globally.
Key Pointers:
Education, Health, and Employment
India has made remarkable progress in education, with a GER of 90.9% (primary), 90.3% (upper primary), and 78.7% (secondary). The number of IITs, IIMs, and AIIMS has increased significantly, including two international IIT campuses. Health outcomes have improved dramatically: maternal mortality declined 86% since 1990, under-five mortality by 78%, and infant mortality by over 37% in the last decade. Employment increased to 56.2 crore in Q2 FY26, supported by skill development initiatives and recognition of gig workers.
Key Pointers:
Strategic Resilience and AI Integration
The survey emphasizes a disciplined Swadeshi strategy, progressing from self-reliance to strategic indispensability. India is adopting AI across sectors like healthcare, agriculture, education, disaster management, and urban governance, focusing on practical solutions for local challenges. The country aims to strengthen domestic capabilities while embedding itself in global supply chains.
Key Pointers:
Conclusion
The Economic Survey 2025-26 presents a strong, consumption- and investment-led growth story, supported by low inflation, fiscal prudence, financial inclusion, infrastructure expansion, and global integration. India’s focus on technology, strategic self-reliance, and social development positions it for sustainable growth and global leadership by 2047.
