New Delhi, Jan 29 (JKNS): The Economic Survey 2025–26 on Thursday projected India’s GDP growth in the range of 6.8 to 7.2 per cent for the next financial year, stating that the economy continues to remain on a stable footing driven by the cumulative impact of reforms undertaken in recent years.
The projected growth is marginally lower than the estimated 7.4 per cent expansion in the current fiscal year, as per news agency JKNS.
Addressing concerns over the sharp depreciation of the rupee in recent months, the Survey noted that the currency’s valuation does not fully reflect India’s strong economic fundamentals and observed that the rupee is currently “punching below its weight.”
It added that while a relatively undervalued rupee may cushion the impact of higher US tariffs on Indian exports and poses no immediate inflationary risk from crude oil imports, it could make investors cautious.
Prepared under the leadership of Chief Economic Advisor V Anantha Nageswaran, the Survey stated that a strong and stable currency would naturally support India’s long-term goals, including the vision of Viksit Bharat and enhanced global influence. It attributed pressure on the rupee largely to the slowdown in foreign capital inflows.
The pre-Budget document, tabled in Parliament by Finance Minister Nirmala Sitharaman, highlighted that India remains better placed than many economies due to robust macroeconomic fundamentals. It said the cumulative effect of policy reforms is lifting India’s medium-term growth potential close to 7 per cent and underscored the need to strengthen institutional capacity while factoring in geopolitical developments.
The Survey stressed the importance of prioritising domestic growth amid global uncertainty, with greater focus on liquidity buffers. It noted that shifting geopolitical alignments are reshaping global investment patterns, supply chains and growth dynamics.
On inflation, the document pointed to a subdued core inflation trend, indicating improving supply-side conditions across the economy.
Regarding fiscal health, the Survey said the Centre is on track to meet its fiscal consolidation targets, aiming for a fiscal deficit of 4.4 per cent of GDP in 2025–26. As of November 2025, the fiscal deficit stood at 62.3 per cent of Budget Estimates. It added that markets have responded positively to fiscal discipline, with sovereign bond yields declining and the spread over US bonds narrowing significantly.
Despite higher tariffs imposed by the United States, the Survey noted that merchandise exports grew by 2.4 per cent during April–December 2025, while services exports rose by 6.5 per cent. Merchandise imports increased by 5.9 per cent during the same period.
The document said reforms such as the GST overhaul have helped convert global uncertainty into opportunity and described the next fiscal year as a phase of adjustment. It added that as India enters multiple free trade agreements, competitiveness in production will be crucial, noting that a potential FTA with Europe could enhance manufacturing strength and export resilience.
Highlighting external finances, the Survey said remittances have exceeded gross FDI inflows in most years, keeping the current account deficit moderate at 0.8 per cent of GDP in H1 FY26.
The Survey stated that while there is no room for pessimism, caution is necessary given global uncertainties, adding that multiple global crises could offer India an opportunity to play a larger role in shaping the global order.
It also included a dedicated chapter on artificial intelligence, warning that corrections in asset valuations may occur if anticipated productivity gains from AI fail to materialise.
On aviation, the Survey said India’s civil aviation sector continues on a strong growth path supported by rising demand and infrastructure expansion. While India is now the world’s third-largest domestic aviation market, passenger volumes still represent only a fraction of its potential.
The Survey also advocated for policy interventions to reshape working conditions for gig workers.— (JKNS)
