Economic Survey 2025-26: The Ultimate "Report Card" of India’s Growth

Paisa and More team
16 hours ago
3 min read

On January 29, 2026, Finance Minister Smt. Nirmala Sitharaman presented the Economic Survey 2025-26 in Parliament. If the upcoming Union Budget is a "Vision" for the future, the Economic Survey is the "Reality Check" of the past year.

Prepared by the Chief Economic Advisor (CEA) Dr. V. Anantha Nageswaran, this document gives us a deep dive into how India is performing compared to the rest of the world. The verdict? India is not just growing; it is leading.

1. India: The Global Growth Engine (GDP Outlook)

The biggest news from the survey is India’s Gross Domestic Product (GDP) growth. While many developed nations are facing a "slowdown," India remains the fastest-growing major economy.

Last Year’s Performance: The economy grew at a robust 7.4% in FY26.
The Forecast for 2026-27: The survey predicts a growth rate of 6.8% to 7.2%.
Why it matters: Sustained growth at 7% means more wealth creation, better infrastructure, and a stronger Indian Rupee on the global stage.

2. Inflation is Under Control (Relief for Your Kitchen)

Inflation (the rate at which prices rise) has been a big worry for Indian households lately. However, the 2025-26 Survey brings some much-needed relief.

Record Lows: Retail inflation has dropped to an average of 1.7% (between April and December 2025).
The "Food" Factor: Thanks to a healthy monsoon and better supply chains, the price of vegetables, oil, and pulses stayed stable.
What it means for you: When inflation is low, your savings go further, and the Reserve Bank of India (RBI) might even consider lowering interest rates on your loans.

3. The Banking Sector’s "Golden Age"

A few years ago, Indian banks were struggling with "bad loans" (known as NPAs). The 2026 Survey shows a massive turnaround.

Stronger Balance Sheets: Bad loans have hit a multi-decade low of 2.2%.
Profitability: Indian banks are now among the most profitable in the world.
Easy Credit: Because banks are healthy, they are lending more money to MSMEs (Small Businesses) and home buyers, which keeps the economy moving.

4. Jobs, Startups, and the New Workforce

The survey highlights a significant shift in how and where Indians are working.

Falling Unemployment: The national unemployment rate has dipped to 4.8%.
Women Empowerment: Female Labour Force Participation (FLFPR) has seen a steady rise, now crossing 35%. More women are starting businesses and entering corporate leadership roles.
Startup Hub: India is now the 3rd largest startup ecosystem in the world. In 2025 alone, thousands of new jobs were created in sectors like AI, Fintech, and Space-tech.

5. Infrastructure: The Backbone of "Viksit Bharat"

The government’s focus on Capital Expenditure (Capex)—which is money spent on building long-term assets—is paying off.

Airports: India now has 164 operational airports, more than double what it had a decade ago.
Railways: The "Vande Bharat" and "Amrit Bharat" trains have revolutionized travel, making it faster and safer.
Digital India: With over 100 crore internet users, India is the global leader in digital payments (UPI). The survey notes that digital growth is now reaching the deepest rural corners of the country.

6. Foreign Investment and Trade

Despite global tensions, foreign investors still see India as a "Safe Haven."

FDI Inflows: Foreign Direct Investment (FDI) remains strong, especially in manufacturing and renewable energy.
Service Exports: India is no longer just the "world's back office." We are now exporting high-end services in engineering, research, and software development.

The Challenges: What to Watch Out For?

No report card is perfect. The Economic Survey points out three "Risk Factors" that we must watch in 2026:

Global Geopolitics: Wars in Europe or the Middle East can suddenly spike the price of crude oil, which India imports in large quantities.
Trade Policies: Changes in trade rules by major countries (like the US or China) could affect Indian exports.
Climate Change: Unusual heatwaves or unseasonal rains remain a threat to our farmers. The survey emphasizes the need for "Climate-Smart" agriculture.

Conclusion: Setting the Stage for the Budget

The Economic Survey 2025-26 proves that the Indian economy is on a very stable footing. We have low inflation, high growth, and strong banks.

This sets a perfect stage for Finance Minister Nirmala Sitharaman to present a "growth-oriented" Union Budget on February 1st. We expect the budget to focus on middle-class tax relief and massive investments in the "Green Economy."