India’s economy is projected to grow between 6.3% and 6.8% in FY26, according to the Economic Survey 2024-25, tabled in Parliament on Friday.
The survey highlights that the country’s economic fundamentals remain strong, supported by a stable external account, fiscal consolidation, and private consumption. It noted that the government plans to strengthen long-term industrial growth by focusing on research and development (R&D), micro, small, and medium enterprises (MSMEs), and capital goods. These measures aim to enhance productivity, innovation, and global competitiveness.
The survey also highlighted that food inflation is expected to ease in Q4 FY25 due to the seasonal decline in vegetable prices and the arrival of the Kharif harvest. A good rabi production is also expected to help keep food prices in check in the first half of FY26. However, adverse weather conditions and rising international agricultural prices pose risks to inflation.
Meanwhile, global energy and commodity prices have softened, stabilizing the core inflation outlook. However, uncertainties in the global political and economic environment remain a challenge.
The survey added that India’s foreign exchange reserves remain strong, covering 90% of external debt and providing an import cover of over ten months. The reserves increased from USD 616.7 billion in January 2024 to USD 704.9 billion in September 2024, before moderating to USD 634.6 billion as of January 3, 2025. The stability in capital flows has played a key role in supporting India’s external strength.
The survey also drew attention to the substantial growth in the formal employment sector, with EPFO net subscriptions more than doubling from 61 lakh in FY19 to 131 lakh in FY24. “The formal sector in India has witnessed strong growth, with EPFO subscriptions increasing from 61 lakh in FY19 to 131 lakh in FY24”, the report said.