Highlights Of Indian Economic Survey — FY 2025-26 Summary

This document covers

1. Background
2. Summary of Economic Survey 2025-26
3. Highlights of Economic Survey

1. Background

The Economic Survey presents a comprehensive examination of the performance of the Indian economy during the preceding financial year, comprising economic trends, policies, challenges, and future prospects. It additionally functions as a framework for policy development and budgetary planning.

The Economic Survey will be published one day before the budget.

The Economic survey for FY 25-26 is presented by Hon'ble Finance Minister Smt. Nirmala Sitharaman on 29^th January 2026

2. Summary of Economic Survey 2025-26

3. Highlights of Economic Survey

The highlights of Economic Survey are as follows

• India's real GDP growth is estimated at 7.4% in FY26, while GVA growth is estimated at 7.3%.
• Services continue to be the primary growth driver, with services GVA growing by 9.3% in H1 FY26.
• Retail Inflation: Average headline CPI inflation stood at 1.7% during April–December 2025, the lowest since CPI series began
• Rationalization of GST rates ahead of festive season in 2025 enabled temper the prices of many consumer goods and services
• The Central Government’s effective capital expenditure increased to about 4% of GDP in FY25.
• India reduced its general government debt-to-GDP ratio by about 7.1 percentage points since 2020, while sustaining elevated levels of public capital investment.
• The combined fiscal deficit of State Governments remained broadly stable at around 2.8% of GDP post-pandemic, comparable to pre-pandemic levels, but rose to 3.2% in FY25, indicating emerging fiscal pressures on States.



• External Sector:
  
  • India's global trade footprint expanded strongly, with merchandise export share rising to 1.8% and services export share to 4.3% by 2024.
  • Expanding network of FTAs like India-EU FTA, India-UK CETA, India- Oman CEPA etc underpins the India’s diversified Trade Strategy
  • India emerged as a highly diversified trading economy, ranking third in the Global South and outperforming Global North peers in trade partner diversity (UNCTAD 2025) and ranked fourth globally in greenfield investment announcements in CY 2024
  • Forex reserves rose to USD 701.4 billion (Jan 2026), providing 11 months of import cover and covering over 94% of external debt, strengthening shock resilience.



• Investment and Infrastructure:
  
  • Government capital expenditure surged 4.2 times from FY18 to FY26 (BE), firmly positioning infrastructure as a key growth engine.
  • Transport infrastructure expanded rapidly, with National Highways up 60%, high-speed corridors rising ten-fold, rail electrification reaching 99%, and airports more than doubling since 2014.
  • Power sector achieved major gains, with installed capacity crossing 509 GW, zero demand–supply gap, DISCOMs posting profits for the first time, and renewables nearing 50% of total capacity.
  • Digital and social infrastructure deepened, with tele-density at 86.8%, 5G covering almost all districts, and over 81% of rural households receiving tap water.
  • Strategic infrastructure advanced, as India strengthened space capabilities with autonomous satellite docking and greater private-sector participation.
  • India became the world’s third-largest domestic aviation market, with the number of airports increasing from 74 in 2014 to 164 in 2025.



• Industry:
  
  • Industrial activity strengthened in FY26, with Industry GVA growing 7.0% in H1, despite global economic headwinds.
  • Manufacturing GVA grew by 7.72 per cent and 9.13 per cent in Q1 and Q2 of FY26
  • India's innovation performance has strengthened steadily, with its Global Innovation Index rank improving to 38th in 2025 from 66th in 2019.
  • Core industries maintained strong momentum, with India remaining the second-largest global producer of steel and cement.



• Services:
  
  • The average growth rate of the services sector was doubled to 14% during FY 2023-FY 2025 from 7.6% in the pre-pandemic period (FY16-FY2020)
  • India held a 4.3 % share in global services exports in 2024, ranking seventh worldwide
  • India's services export growth surged to 14 % during FY23-FY25, up from 7.6 % in pre-pandemic period (FY16-FY20).
  • Services share in GDP rose to 53.6% in H1 FY26(April to September 2025)
  • Services accounted for 51.7% of net EPFO employment additions during April to July 2025



• Agriculture and Food Management:
  
  • Increase in Agricultural Input Quality, Farm Mechanization, Market Support, Crop Insurance and Credit Lead to huge positive outcomes. Average annual growth rate in the agriculture and allied sector is recorded at around 4.4% at constant prices, over the last 5 years.
  • Livestock and fisheries recorded strong growth, with livestock GVA rising by 195% (FY15–FY24) and fish production increasing by over 140% during 2014–2024.
  • Horticulture emerged as a major growth driver, accounting for about 33% of agricultural GVA, with production at 362.08 MT, surpassing food grain output.
  • Agricultural marketing and infrastructure are being strengthened through AMI, AIF, and e-NAM, which has on boarded 1.79 crore farmers, 2.72 crore traders, and 4,698 FPOs across 1,522 mandis across 23 States and 4 UTs.



• Employment and Skill Development:
  
  • Implementation of new labour codes now recognizes gig and platform workers expanding social security, welfare funds, and benefit portability.
  • Around 8.7 lakh new jobs were created in Q2 (July to Sep 2025) compared to Q1.
  • The organized manufacturing sector grew employment by 6% year-on- year in FY24, creating over 10 lakh jobs.
  • The National Career Service (NCS) has emerged as a key employment platform, connecting 5.9 crore job seekers and 53 lakh employers, and mobilizing around 8 crore vacancies



• Artificial Intelligence:
  
  • India is focusing on small, task-specific AI models instead of large and expensive models. This reduces the costs and entry barriers for firms, MSME etc.
  • Artificial Intelligence (AI) is expanding across healthcare, agriculture, urban management, education, disaster preparedness, and public administration.
  • There is a increased demand for AI systems that work on local hardware and operate in low resource settings.



• Banking sector:
  
  • Banking sector asset quality improved sharply, with GNPA at 2.2% and net NPA at a record low of 0.5% (Sept 2025), alongside credit growth rising to 14.5% YoY by December 2025.
  • Capital market participation broadened, as demat accounts exceeded 21.6 crore, mutual fund investors reached 5.9 crore, and participation rose significantly from non-metro regions.
  • Targeted credit schemes expanded entrepreneurship, through Stand-Up India, PM SVANidhi, and PMMY, with Mudra loans crossing ₹36.18 lakh crore across 55.45 crore accounts.
  • RBI's Financial Inclusion Index value rose to 67.0 in March 2025 from 64.2 in March 2024