Economic Survey pegs FY27 GDP growth at 6.8 to 7.2%

New Delhi: India’s gross domestic product (GDP) is expected to grow in the range of 6.8 per cent to 7.2 per cent in the financial year 2026-27, slightly lower than 7.4 per cent expansion estimated for the current fiscal, as per the Economic Survey tabled in Parliament by Union Finance Minister Nirmala Sitharaman on Thursday.

With a potential growth of around 7 per cent India will maintain its position as the fastest growing major economy for the fourth consecutive year.

For the current financial year the last year’s Economic Survey had pegged the GDP growth in the range of 6.3 per cent to 6.8 per cent. However, the real GDP growth is likely to substantially surpass this boosted by strong consumption and government investment. In its first advance estimate the National Statistics Office has pegged the 2025-26 GDP growth at 7.4 per cent.

Chief Economic Advisor V. Anantha Nageswaran noted in the report that a series of reform measures taken by the government has pushed the potential growth rate to 7 per cent, up from 6.5 per cent three years ago.

“At that time, we correctly anticipated weaker global tailwinds, particularly from exports, but also noted that sustained domestic reforms and public investment could lift the economy’s underlying growth capacity,” Nageswaran noted in the preface of the 687-page report.

“That possibility is now being realised. The expansion of infrastructure — illustrated by the doubling of the airport network over the past decade and the rapid growth of freight movement through inland waterways — is easing logistics constraints and raising economy-wide efficiency,” he added.

The Economic Survey, prepared by the Department of Economic Affairs under the supervision of Chief Economic Advisor, offers the central government’s official assessment of the state of the economy and an outlook for the coming fiscal year.

The report underlined that in 2025-26 heightened uncertainty in global trade and the imposition of high, penal tariffs by the United States created stress for manufacturers, particularly exporters, and affected business confidence.

The government responded by using this crisis as an opportunity to push through key measures such as GST rationalisation, faster progress on deregulation, and further simplification of compliance requirements across sectors, it said.

“The cumulative impact of policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7 per cent. With domestic drivers playing a dominant role and macroeconomic stability well anchored, the balance of risks around growth remains broadly even,” the report said.

Taking these considerations together, the Economic Survey projects real GDP growth in FY27 in the range of 6.8 to 7.2 per cent. The outlook, therefore, is one of steady growth amid global uncertainty, requiring caution, but not pessimism,” it added.

“There is a lot of confidence that growth is resilient and is expected to remain so and India is becoming structurally self-propelled via domestic demand, public capex and reform compounding, even as external buffers are prioritized,” said Rumki Majumdar, Economist, Deloitte India.

The annual Survey report, released ahead of the presentation of the Union Budget, noted that demand-led growth in the economy has unfolded alongside a marked easing of inflation, which has improved real purchasing power and supported consumption.

Domestic inflation dynamics in FY26 (April-December) reflect a broad-based easing in price pressures, led by a sharp disinflation in food prices. Headline CPI inflation declined to 1.7 per cent, driven primarily by corrections in vegetable and pulse prices, supported by favourable farm conditions, supply-side interventions, and a strong base effect.

 “The Survey is forward-looking in its assessment of the economy, candidly acknowledging emerging challenges while laying out a credible roadmap for reforms, resilience, and sustained growth,” said A Sakthivel, Chairman, Apparel Export Promotion Council.