India's GDP Growth Forecasted at 6.3-6.8% for FY 2025-26: Economic Survey
India's economy is anticipated to grow between 6.3% and 6.8% in the financial year 2025-26, according to the Economic Survey 2024-25. The projection suggests moderate growth amid a challenging economic landscape.
The domestic economy remains fundamentally sound, buoyed by a strong external account, disciplined fiscal management, and resilient private consumption. “Considering these factors, we estimate growth in FY26 to range between 6.3% and 6.8%,” the survey stated.
Manufacturing Sector Under Pressure
The report acknowledged the challenges faced by the manufacturing sector, primarily due to subdued global demand and domestic seasonal fluctuations.
Private consumption demonstrated stability, underscoring consistent domestic demand. Fiscal prudence, along with a services trade surplus and robust remittance flows, contributed to overall macroeconomic stability. These factors collectively provided a stable platform for continued growth amid external uncertainties.
Food Inflation Expected to Ease
Addressing concerns over recent spikes in food inflation, the survey predicted relief in the final quarter of FY25, driven by a seasonal dip in vegetable prices and the arrival of the kharif harvest.
Furthermore, a strong rabi crop in the first half of FY26 is expected to help stabilize food prices, offering relief to consumers.
Investment Activity Poised for Recovery
Although investment activity has recently slowed, the survey described this downturn as temporary. It pointed to policy support and improving business sentiment as key factors likely to reinvigorate investments.
Positive trends in domestic investment, output growth, and disinflation were identified as signals of potential economic momentum in FY26.
Resilient Economic Fundamentals
The survey emphasized India's robust economic foundations, highlighting a stable financial system, advancing infrastructure, and pro-growth government policies.
With macroeconomic stability firmly in place, the report projected continued economic expansion, driven by steady private consumption, controlled inflation, and a revival in investment activity.