India's Economic Survey 2026, tabled in Parliament on Thursday, January 29, 2026, projects a real GDP growth between 6.8% and 7.2% for fiscal year 2027. This forecast comes as Finance Minister Nirmala Sitharaman prepares to present the Union Budget on February 1st.
The survey, which serves as the government's annual report card on the economy, suggests that recent policy reforms have cumulatively boosted India's medium-term growth potential to nearly 7%. It emphasizes that domestic factors are the primary drivers of this growth, with macroeconomic stability providing a solid foundation. The overall economic outlook is one of steady expansion amidst global uncertainties, calling for a cautious but not pessimistic approach.
Key Highlights and Projections:
- GDP Growth: The survey anticipates a GDP growth of 6.8% to 7.2% in FY27, a slight moderation compared to the 7.4% growth estimated for FY26.
- Domestic Demand: Growth is expected to be fueled by domestic demand, with Private Final Consumption Expenditure (PFCE) reaching its highest share in GDP since FY12, at 61.5%.
- Investment: Gross Fixed Capital Formation (GFCF) is holding steady at 30.0% of GDP, supported by public capital expenditure and a revival in private investment.
- Fiscal Deficit: The government aims for a fiscal deficit of 4.4% in FY26, building upon the achievement of 4.8% in FY25.
- Inflation: Headline inflation, measured by the Consumer Price Index (CPI), has declined to a low of 1.7% between April and December 2025, attributed to a drop in food prices.
Focus on Artificial Intelligence:
The Economic Survey 2026 includes a dedicated chapter on Artificial Intelligence (AI) and its implications. While last year's survey touched upon AI, it did not fully address its effect on employment. This year's report seeks to provide further insights into AI's impact on the labor market and the broader economy. The survey also comes at a time when there are rising concerns about the adverse outcomes of AI.
Broader Economic Context:
The Economic Survey is presented against a backdrop of global economic uncertainty and geopolitical challenges. The survey acknowledges the challenges posed by heightened tariffs and a volatile global environment. It also addresses the underperformance of the rupee in 2025, attributing it to the drying up of foreign capital flows.
Looking Ahead:
As India approaches its Union Budget, the Economic Survey sets the stage for upcoming fiscal policies and economic strategies. The survey's emphasis on deregulation, infrastructure development, and technological advancement signals the government's priorities for sustained economic growth. The document also highlights the importance of balancing growth with macroeconomic stability and addressing the challenges posed by the global economic landscape.
