India’s Economic Survey 2026 presented a cautiously optimistic assessment of the country’s growth trajectory, underlining the government’s preference for steady, investment-led expansion rather than short-term stimulus-driven acceleration. The survey projected that India’s economy will continue to remain among the fastest-growing major economies, supported by strong domestic demand, rising public capital expenditure and improving private investment sentiment, even as global uncertainties persist.
The survey noted that macroeconomic stability has been largely restored after a period of global shocks, including supply-chain disruptions, geopolitical tensions and aggressive monetary tightening in advanced economies. Inflation has moderated from recent peaks, providing policymakers with greater room to focus on sustaining growth while keeping price pressures under control. The fiscal consolidation path is being maintained, with the government reiterating its commitment to gradually reduce the fiscal deficit without compromising on essential capital spending.
Public investment remains the central pillar of the government’s growth strategy. The survey highlighted sustained increases in capital expenditure on infrastructure, including roads, railways, ports, power and urban development, as a key driver of economic activity and job creation. This push is expected to crowd in private investment by improving logistics efficiency, reducing transaction costs and strengthening overall productivity.
On the demand side, the survey pointed to resilient private consumption, supported by rising incomes, improving rural conditions and expanding formal employment. Urban consumption continues to benefit from growth in services and manufacturing, while rural demand is showing signs of recovery as agricultural output stabilises and government support schemes remain in place.
The manufacturing sector is expected to play a larger role in driving growth over the medium term, aided by production-linked incentive schemes, ease-of-doing-business reforms and efforts to integrate India more deeply into global value chains. The survey underscored the importance of export diversification, both in terms of products and markets, to reduce vulnerability to external shocks and strengthen India’s position in global trade.
Services remain a strong growth engine, with sectors such as information technology, financial services, tourism and professional services continuing to expand. The survey emphasised that services exports are emerging as a crucial source of foreign exchange and employment, complementing the government’s push to boost manufacturing exports.
The survey also drew attention to labour market trends, noting improvements in formalisation and workforce participation. It stressed the need for continued skilling, reskilling and upskilling to ensure that the workforce can meet the demands of a rapidly evolving economy, particularly in areas such as digital technologies, advanced manufacturing and green energy.
On the external front, the survey said India’s foreign exchange reserves remain comfortable, providing a buffer against global volatility. The current account deficit is assessed as manageable, supported by strong services exports and steady remittance inflows, even as merchandise trade faces headwinds from weak global demand.