India's economy to grow 6.3-6.8% in FY26: Economic survey

India’s growth will be around 6.3 to 6.8% in 2025-26, similar to this year’s growth as trade uncertainties, commodity price shocks and private investments are concerns, as per the Economic Survey 2024-25 presented in parliament today.

The first advance estimate by MoSPI put the growth of GDP at 6.4 percent this year.

The Economic Survey in July 2024 had estimated a range of 6.5 to 7 percent growth for FY 2024-25. Growth in the first half of the year was less than expected.

According to the Economic Survey presented in parliament by Finance Minister Nirmala Sitharaman, the slowdown will continue into the next year as well.

“Looking ahead, India’s economic prospects for FY26 are balanced. Headwinds to growth include elevated geopolitical and trade uncertainties and possible commodity price shocks,” it said.

Domestically, translation of private sector order books into sustained investment, improvement in consumer confidence and corporate wage growth will be key to growth, the report said.

The report said to achieve developed India by 2047 India will have to “achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two.”

To achieve this growth, investment rate will have to rise to around 35% of GDP from the current 31%. And we will have to develop manufacturing sector further and invest in emerging technologies like AI, robotics and biotechnology, it said.

India will have to create 78.5 lakh new non-farm jobs every year till 2030, achieve 100% literacy, improve quality of education institutions and develop high quality, future ready infrastructure at scale and speed, the report said. 

Headline retail inflation came down to 4.9% during April-December 2024 from 5.4% in the previous year.

“While the desirability of this growth rate is unquestionable, it's important to recognise that the global environment–political and economic–will influence India's growth outcomes,” it said.

The decline is mainly attributed to a 0.9 percentage point fall in core inflation (non-food, non-fuel) from FY24 to April-December 2024. Although the average inflation for FY25 has eased, monthly volatility in food and select commodities has kept CPI inflation close to the upper tolerance limit of the 4% ± 2% band.