Economic Survey 2025-26: India Projets 7.3%-7.5% Growth Amid ‘Goldilocks’ Scenario

NEW DELHI — Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025-26 in Parliament today, Thursday, January 29, 2026. The document paints a picture of a resilient Indian economy that has successfully secured a “Goldilocks” scenario—a sweet spot of high growth and low inflation—despite a prolonged period of high global interest rates and shifting trade dynamics.

Under the guidance of CEA V. Anantha Nageswaran, the survey confirms India’s status as the world’s fastest-growing major economy, projecting a real GDP expansion of 7.3% to 7.5% for FY26.

1. The “Twin Win”: Growth and Inflation

The survey identifies a significant macroeconomic victory over the past year:

• GDP Momentum: Boosted by a record 8.2% growth in Q2 FY26, the full-year projection has been revised upward to 7.4% (beating earlier RBI estimates of 6.8%).
• Price Stability: Headline CPI inflation has “progressively softened,” dropping to a decade-low of 0.71% in November 2025, well below the RBI’s 4% target.
• Unemployment: The jobless rate fell to 4.7% in late 2025, the lowest level since April 2025, driven by a sharp rise in rural female labor participation.

2. Key Strategic Themes for 2026

The report highlights three pivotal shifts intended to bridge the “infrastructure gap” and modernize the economy:

• Manufacturing Pivot: A heavy focus on the Production Linked Incentive (PLI) schemes as India successfully captures supply chains diversifying away from China.
• The AI Dividend: For the first time, a dedicated analysis on how Artificial Intelligence and digital public infrastructure are boosting productivity in the services sector (which now contributes 60% of GVA).
• Fiscal Consolidation: The government is on track to hit its 4.4% fiscal deficit target, thanks to record GST collections (peaking at ₹2.37 lakh crore in April 2025).

3. Risks and “Known Unknowns”

While optimistic, the CEA strikes a cautionary tone regarding external headwinds:

• Trade Protectionism: The report flags the 50% US tariffs on certain Indian exports as a major risk to the export machinery.
• K-Shaped Recovery: Analysts remain focused on whether rural demand (which led the recent recovery) can permanently close the gap with urban discretionary spending.
• External Financing: While FDI grew by 19.4% in H1 FY26, volatile capital outflows due to global geopolitical shifts remain a concern.

Economic Indicators at a Glance (FY 2025-26)

What’s Next?

The Economic Survey serves as the intellectual foundation for the Union Budget, which will be presented on February 1, 2026. Its optimistic tone suggests the government may have enough “fiscal space” to consider middle-class tax relief while maintaining high capital expenditure.