GDP Growth At 6.3-6.8%, Inflation To Stay Under Control: Economic Survey

New Delhi: The Indian economy is projected to expand at a rate of 6.3 percent to 6.8 percent in the financial year 2025-26 (FY26), according to the Economic Survey 2024-25 presented in Parliament today by Finance Minister Nirmala Sitharaman.

The Economic Survey, released ahead of the Union Budget 2025-26, emphasizes strong domestic economic fundamentals, a declining unemployment rate, stable inflation, and the need for structural reforms to sustain growth momentum.

"The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation, and stable private consumption. On balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 percent," the Economic Survey stated.

The projected GDP growth rate for FY26 is the lowest since 2020-21, when the economy recorded a negative growth of -5.8 percent due to the Covid-19 pandemic. In the years that followed, India’s GDP growth stood at 9.7 percent in 2021-22, 7 percent in 2022-23, and 8.2 percent in the last fiscal year.

Key Highlights from the Economic Survey 2024-25

• Macroeconomic Stability: India’s economy remains resilient, supported by strong domestic demand, stable external accounts, and calibrated fiscal policies.
• Inflation Outlook: Food inflation is expected to soften in Q4 FY25, driven by seasonal price corrections in vegetables and Kharif harvest arrivals.
• Geopolitical and Trade Uncertainties: Growth faces risks from global trade disruptions, geopolitical instability, and elevated commodity prices.
• Structural Reforms for Competitiveness: India must focus on grassroots-level reforms, deregulation, and governance improvements to sustain long-term growth.
• Currency and Market Dynamics: The rupee depreciation in 2024 was driven by a strong US dollar, geopolitical factors, and uncertainty around the US elections.
• Stock Market Volatility: A significant market correction in 2025 could impact India’s financial sector, especially with the growing participation of retail investors.
• Artificial Intelligence Regulations: The absence of an effective AI governance framework could lead to misuse and regulatory concerns.
• Insolvency Law and Debt Resolution: The Insolvency and Bankruptcy Code (IBC) has played a preventive role, encouraging early resolution of financial distress among businesses.
• Corporate Bond Market Reforms: High entry costs, information asymmetry, and the absence of a secondary market are challenges affecting corporate bond market liquidity.

Union Budget 2025-26 To Be Presented on Saturday

Finance Minister Nirmala Sitharaman will present the Union Budget 2025-26 on Saturday, with expectations of fiscal measures and policy interventions to sustain economic growth, enhance financial stability, and boost key sectors.

As India continues to navigate global economic uncertainties, structural reforms and prudent fiscal management will be crucial in ensuring sustained economic momentum in the coming fiscal year.