Fri Jan 31 19:21:39 UTC 2025: ## India’s Economy Projected to Grow 6.3-6.8% in FY26: Economic Survey

**New Delhi, January 31, 2025** – India’s economy is expected to maintain a robust growth trajectory in the upcoming fiscal year (FY26), according to the Economic Survey 2025 tabled in Parliament today by Finance Minister Nirmala Sitharaman. The survey projects a GDP growth rate between 6.3% and 6.8%, despite global uncertainties.

The survey paints a largely positive picture of the Indian economy, highlighting several key achievements:

* **Strong GDP Growth:** Despite global headwinds, India’s real GDP growth in FY25 reached 6.4%, close to the decadal average. The projected growth for FY26 reflects continued optimism.
* **Inflation Under Control:** Retail headline inflation has eased, dropping from 5.4% in FY24 to 4.9% in the first three quarters of FY25, primarily due to government interventions and monetary policy measures. The Reserve Bank of India and the IMF anticipate further softening to around 4% in FY26.
* **Robust Industrial Growth:** The industrial sector showcased strong performance, expanding by 6.2% in FY25, fueled by growth in electricity and construction.
* **Increased Capital Expenditure:** Capital expenditure (CAPEX) witnessed significant growth, rising by 38.8% between FY20 and FY24, and further increasing by 8.2% during July-November 2024. This reflects the government’s focus on infrastructure development.
* **Booming Services Sector:** The services sector continues to be a significant driver of growth, contributing 55.3% to the total GVA in FY25.
* **Export Resilience:** Despite global challenges, overall exports (merchandise and services) grew by 6% in the first nine months of FY25. India’s share of global services exports reached 4.3% in 2023.
* **Improved Banking Sector:** The gross non-performing assets (GNPA) ratio of commercial banks has steadily decreased, reaching a low of 2.6% by September 2024.

However, the survey also acknowledges challenges:

* **Income Inequality:** While government programs aim to promote entrepreneurship, income disparity persists, particularly affecting women, who earn significantly less than men in self-employment.
* **Food Inflation:** Price volatility in essential commodities like tomatoes and onions contributed to higher food inflation, though government measures are aimed at mitigating this.
* **Geopolitical Risks:** Global geopolitical risks and the EU’s Carbon Border Adjustment Mechanism (CBAM) pose potential threats to India’s trade prospects. The survey suggests potential tax increases on salaried employees to offset potential job losses due to AI.

The survey emphasizes the need for continued reforms, particularly deregulation, under the “Ease of Doing Business 2.0” initiative, to sustain economic growth and achieve the goal of “Viksit Bharat” (developed India). The government’s focus on infrastructure development, skill development, and export diversification are highlighted as crucial for future growth. The document concludes with a cautiously optimistic outlook for the Indian economy, highlighting its resilience in the face of global headwinds.

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