Economic Survey pegs FY26 GDP growth at 6.3-6.8%: Key takeaways you must know before Budget 2025
Economic Survey 2025: The Narendra Modi 3.0 government released the Economic Survey 2025 on Friday, January 31. The crucial pre-Budget document pegs GDP growth at 6.3-6.8 per cent for the financial year 2025-26. This year's Economic Survey is prepared by a team of economists and statisticians led by the government's Chief Economic Advisor, V Anantha Nageswaran. The release of the crucial Budget-related document comes a day before the Finance Minister presents the Union Budget for the financial year 2025-26 in Parliament, on Saturday, February 1.
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The Economic Survey 2025, released on Friday, January 31, pegged gross domestic product (GDP) growth at 6.3-6.8 per cent for the financial year 2025-26, driven by strong fundamentals, calibrated fiscal consolidation and stable private consumption. In the current financial year, the economic growth rate is estimated to slip to a four-year low of 6.4 per cent, according to the annual pre-Budget document. This year's Economic Survey is prepared by a team of economists and statisticians led by the government's Chief Economic Advisor, V Anantha Nageswaran. The release of the crucial Budget-related document comes a day before the Finance Minister presents the Union Budget for the financial year 2025-26 in Parliament, on Saturday, February 1.
The Economic Survey serves as a precursor—containing valuable context, statistics and forecasts, among other things—that sets the tone of the Union Budget.
Here are key takeaways from the Economic Survey 2025, tabled in Parliament by the finance minister on Friday, January 31:
- Domestic economic fundamentals remain robust, with:
- strong external account;
- calibrated fiscal consolidation, and
- stable private consumption
- Growth in FY26 to be between 6.3 per cent and 6.8 per cent
- Several stock markets worldwide at elevated levels
- These markets do not appear unduly concerned about economic growth and earnings uncertainties
- Nor have financial stability risks fazed investors even though serious concerns are re-emerging about securitisation, leveraged loans
- Based on several metrics, current valuation and sentiment levels in the US stock market may be the most extreme or among the top three
- Agriculture and services sectors emerged as key growth drivers during this period
- Overall growth was tempered by moderation in industrial activity, particularly in manufacturing, which faced challenges from slowing global demand and supply chain disruptions
- Sustained growth is visible in the services sector but challenges remain on the manufacturing front
- The cost of doing business will decrease through regulation to increase economic growth and employment
-
India’s external sector has continued to display resilience amidst global headwinds of economic and trade policy uncertainties
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Total exports (merchandise and services) registered steady growth in the first 9 months of FY25, reaching $602.6 billion (6 per cent)
-
Growth in services and goods exports, excluding petroleum and gems and jewellery, stood at 10.4 per cent
-
Total imports reached $682.2 billion, marking 6.9 per cent
-
Evolving global trade dynamics, marked by gradual shifts towards greater protectionism, require assessing the situation and developing a forward-looking strategic trade roadmap
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By adapting to these trends and leveraging its strengths, India can accelerate its growth and enhance its presence in global trade
To strengthen its competitiveness and further integrate into global supply chains, India can focus on reducing trade-related costs and enhancing export facilitation to create a more vibrant export sector -
This proactive approach will help India continue to thrive in an ever-changing global market
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On the capital front, foreign portfolio investments (FPIs) have shown a mixed trend in FY25 so far
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Uncertainty in the global markets and profittaking by foreign portfolio investors led to capital outflows
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Strong macroeconomic fundamentals, a favourable business environment, and high economic growth have kept FPI flows positive overall
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Gross FDI inflows have shown signs of revival in the first eight months of FY25, though net FDI inflows declined relative to April-November 2023 due to a rise in repatriation/disinvestment
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Forex reserves stood at $640.3 billion as of the end of December 2024, sufficient to cover 90 per cent of external debt of $711.8 billion as of September 2024, reflecting a strong buffer against external vulnerabilities
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The industrial sector grew by 6 per cent in H1 of FY25
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Despite various challenges, India continues to register the fastest growth in manufacturing PMI.
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The services sector continues to perform well in FY25.
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Capex is up 8.2 per cent in July-November 2024, expected to pick up further
What is the Economic Survey and what does it contain?
An annual pre-Budget document, the Economic Survey gives a complete overview of the country's economy, highlighting its performance, key challenges and prospects.
ALSO READ: What is the Economic Survey, who prepares it and what does it tell?
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