India’s GDP Growth Projected at 6.3-6.8% in FY26, Says Economic Survey

Summary:

• India’s GDP is forecasted to grow between 6.3% and 6.8% in FY26, backed by strong economic fundamentals and fiscal stability.
• The current financial year is expected to witness a four-year low growth rate of 6.4%.
• Investment activity is anticipated to rise, aided by higher public capital expenditure and improved business sentiment.

India’s economic growth is projected to range between 6.3% and 6.8% in the financial year 2025-26, driven by robust domestic fundamentals, disciplined fiscal management, and stable private consumption, as highlighted in the Economic Survey tabled in Parliament on January 31.

The survey indicates that the GDP growth rate for the ongoing fiscal year may slow down to 6.4%, marking a four-year low. Despite global uncertainties, India’s external account remains strong, and a cautious yet strategic fiscal approach is expected to maintain economic stability. The survey underscores that achieving the projected growth in FY26 will depend on balancing domestic strengths and navigating global challenges effectively.

Finance Minister Nirmala Sitharaman presented the Economic Survey 2024-25 in both houses of Parliament, emphasizing the need for prudent policy decisions to counteract external headwinds. The Union Budget 2024-25 has outlined a comprehensive multi-sectoral strategy aimed at ensuring long-term economic resilience.

The survey further notes an anticipated increase in investment activity, supported by higher public capital expenditure and improving business expectations. Inflation risks, particularly those stemming from elevated commodity prices, are projected to remain contained in FY26. However, geopolitical tensions remain a key concern. Food inflation is likely to ease in the final quarter of FY25 due to seasonal factors, such as the arrival of the Kharif harvest and a decline in vegetable prices.

Conclusion:
India’s economic outlook for FY26 remains optimistic, with growth driven by strong domestic fundamentals and increased investments. While inflation risks appear limited, geopolitical uncertainties persist, necessitating careful economic management to sustain momentum.