Each year, before the Union Budget captures headlines and political debate, the Government of India releases a quieter but far more revealing document — the Economic Survey. While the Budget announces what the government will spend and tax, the Economic Survey explains why those choices are being made.
The Economic Survey 2025–26, tabled in Parliament on 29 January 2026, offers a clear-eyed assessment of India’s economic position at a time when the global economy appears increasingly uncertain. It blends optimism about India’s domestic strength with caution about the external environment, making it one of the most strategically significant policy documents of the year.
Why the Economic Survey Is Released Every Year
The Economic Survey is published annually to provide a diagnosis of the economy before prescribing fiscal solutions. Prepared by the Economic Division of the Ministry of Finance under the leadership of the Chief Economic Adviser, it performs three critical functions.
First, it evaluates how the economy has performed over the past year across sectors such as agriculture, industry, services, infrastructure, employment, and trade.
Second, it identifies emerging risks and structural bottlenecks that could constrain future growth.
Third, it outlines the intellectual framework within which the Union Budget is framed.
In effect, the Survey ensures that the Budget is grounded in economic reasoning rather than short-term impulses.
The Big Picture: Growth With Guarded Optimism
The Survey projects India’s growth in FY 2026–27 to remain strong, in the range of 6.8% to 7.2%, reaffirming India’s position as the fastest-growing major economy. More importantly, it raises India’s medium-term growth potential to around 7%, reflecting confidence in domestic demand, public investment, and improving productivity.
At the same time, the document is unusually frank about global risks. It outlines scenarios ranging from a continuation of current global conditions to a severe international economic shock, underlining the need for policy resilience rather than complacency.
Inflation and Fiscal Health: Stability as a Strategic Asset
One of the Survey’s strongest messages is that macroeconomic stability itself has become a source of national strength.
Inflation, according to the Survey, is well-contained and anchored, supported by improved supply chains and prudent monetary policy. On the fiscal side, the central government remains on track to meet its consolidation targets, with the fiscal deficit projected at 4.4% of GDP.
However, the Survey also issues a warning: weak fiscal discipline at the state level, especially through unchecked revenue expenditure and cash transfers, could raise borrowing costs for the entire country. In a global environment marked by uncertainty, fiscal credibility is presented not as a technical choice but as a strategic necessity.
Where the Growth Impulse Is Coming From
Infrastructure at the Core
Public investment in infrastructure continues to anchor India’s growth strategy. Capital expenditure by the Centre has expanded sharply over recent years, supporting roads, railways, logistics, ports, urban transport, and digital infrastructure. The Survey highlights infrastructure not just as a stimulus tool, but as a long-term productivity enhancer.
Manufacturing and Strategic Self-Reliance
Manufacturing receives renewed emphasis, particularly in the context of shifting global supply chains. The Survey argues that in a world where trade is no longer neutral, building competitive domestic manufacturing capacity is essential. Production-linked incentives, land reforms, and logistics improvements are positioned as key enablers.
Agriculture and Rural Stability
Agriculture remains central to economic and social stability. The Survey notes strong foodgrain output and stresses the importance of improving productivity, diversification, and income security for farmers rather than relying solely on price support mechanisms.
Services and the AI Transition
The services sector continues to be a major contributor to growth and exports. At the same time, the Survey recognises the disruption caused by artificial intelligence and automation, calling for a renewed focus on foundational skills, adaptability, and lifelong learning.
A Shift in Economic Thinking: From Globalisation to Resilience
One of the most distinctive features of the Economic Survey 2025–26 is its evolving view of globalisation. The document acknowledges that the era of predictable global trade and open markets has weakened. In response, it introduces a layered strategy:
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Short term: Reduce critical import dependence
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Medium term: Build strategic resilience in key sectors
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Long term: Become indispensable in global value chains
This approach marks a shift from passive integration to purpose-driven economic engagement with the world.
Inclusion, Employment and State Capacity
Beyond growth numbers, the Survey repeatedly returns to the theme of inclusive development. Farmers, MSMEs, youth, and informal workers are identified as central to sustaining economic momentum. Employment generation, skilling for an AI-driven economy, and simplifying compliance are presented as governance challenges rather than welfare exercises.
Deregulation, the Survey argues, should not be seen as withdrawal of the state, but as smarter state capacity — enabling growth while maintaining accountability.
Conclusion: A Statement of Economic Intent
The Economic Survey 2025–26 is not merely a review of past performance. It is a statement of economic intent, signalling how India plans to navigate growth, risk, and reform in a complex global landscape.
By combining optimism about domestic fundamentals with realism about global uncertainty, the Survey presents a balanced vision—one that emphasises stability, capacity-building, and long-term competitiveness. As the Union Budget follows, the Survey provides the lens through which policy choices can be understood, debated, and evaluated.