India's Economic Survey 2025-26, presented on Thursday, indicates significant strides in poverty reduction and increased consumption, particularly among the most economically vulnerable. The survey, which precedes the Union Budget, highlights that targeted government welfare programs have led to the steepest rise in consumption and a notable decline in poverty for the bottom 5-10% of the population.
The Economic Survey emphasizes the positive impact of subsidies, pensions, direct benefit transfers, and public spending on education and healthcare. These initiatives have played a crucial role in lifting vulnerable populations out of deprivation, leading to a more equitable distribution of income. The Household Consumption Expenditure Survey (HCES) 2023-24 reflects these gains, showcasing a decline in consumption inequality and significant improvements for the most disadvantaged groups.
According to the survey, the largest growth in average monthly per capita expenditure (MPCE) between 2022-23 and 2023-24 was observed within the bottom 5-10% of the population, in both rural and urban areas. This underscores the effectiveness of government policies aimed at supporting the nation's poorest citizens. The Economic Survey suggests that government initiatives designed to uplift vulnerable populations from cycles of poverty have yielded positive results, as seen in various poverty reduction measures.
The Economic Survey also shines a light on the rebound of rural consumption in 2025, which outpaced urban consumption. This upturn is attributed to several factors, including firm growth in real agricultural and non-agricultural wages, increased sales of tractors and fertilizers, robust farm credit, healthy reservoir levels, lower input costs, and steady Minimum Support Price (MSP) procurement. These elements have collectively bolstered sowing activity and farm incomes, signifying improving economic conditions in rural India.
The Economic Survey projects a GDP growth between 6.8% and 7.2% for FY27, supported by strong macroeconomic fundamentals and continued regulatory reforms. While this is a slight slowdown from the 7.4% growth projected for the current fiscal year, the outlook remains positive, emphasizing steady growth amidst global uncertainties. The survey advocates for amplifying rural economic momentum through local opportunities and innovation, while preserving the environment, culture, and traditions to foster inclusive growth across rural India. The survey also notes that private consumption is now a key driver of India's economic growth. The share of Private Final Consumption Expenditure (PFCE) in GDP rose to 61.5% in FY26, marking the highest level since FY12.
