Union Budget 2025 | GDP expected to grow by 6.3-6.8% in FY26: Economic Survey

New Delhi: India’s economic growth is likely to be in the range of 6.3 to 6.8 per cent in 2025-26 — nearly the similar expansion projected for the current financial year as concerns remain on trade uncertainties, commodity price shocks and private investments, as per the Economic Survey 2024-25 tabled in parliament on Friday.

The country’s gross domestic production (GDP) growth is estimated at 6.4 per cent in the current financial year, according to the first advance estimate by the Ministry of Statistics and Programme Implementation.

The Economic Survey released in July 2024, had pegged the FY 2024-25 growth in the range of 6.5 to 7 per cent. The economic expansion in the first half of the fiscal year was lower than projected.

The Economic Survey report, tabled in Parliament by Finance Minister Nirmala Sitharaman, indicates that sluggishness in the economy would continue in the next fiscal also.

“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, the translation of order books of the private capital goods sector into sustained investment pick-up, improvements in consumer confidence, and corporate wage pick-up will be key to promoting growth, the report noted.

The report underlined that to achieve the aspirations of developed India by 2047 India would require 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, the investment rate must rise to approximately 35 per cent of GDP, up from the current 31 per cent. Additionally, it will be essential to develop the manufacturing sector further and invest in emerging technologies such as AI, robotics, and biotechnology, it said.

India will also need to create 78.5 lakh new non-farm jobs annually till 2030, achieve 100 per cent literacy, develop the quality of our education institutions, and develop high-quality, future-ready infrastructure at scale and speed, the report noted.

“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 report underlined that the headline retail inflation came down to 4.9 per cent during April-December 2024 period from 5.4 per cent in the previous year.

The decline is attributed to a 0.9 percentage point reduction in core (non-food, nonfuel) inflation between FY24 and April-December 2024. While the average inflation in FY25 has trended downward, monthly volatility in food prices and a select few commodities have been responsible for CPI inflation printing towards the upper side of the tolerance band of 4 per cent plus/minus 2 per cent.

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.