Economic Survey 2025-26
Economic Survey 2025-26: India’s Growth Strategy & Structural Reforms – Complete Exam Analysis
On January 31, 2026, the Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025-26 in Parliament. The document provides a detailed report card of the economy and projects India’s growth trajectory for the upcoming fiscal year (FY 2026-27) amidst global volatility.
Economic Survey 2025-26 Key Highlights
- GDP Projection: India’s real GDP is projected to grow by 6.8% – 7.2% in FY 2026-27.
- Inflation Control: Headline CPI inflation eased to a historic low of 1.7% (Apr-Dec 2025).
- Fiscal Discipline: The government is on track to achieve a fiscal deficit target of 4.4% for FY26.
- Forex Reserves: Buffers hit an all-time high of $709.41 billion, providing 11 months of import cover.
- Employment: Worker Population Ratio (WPR) rose to 53.4%; Female LFPR increased to 35.3%.
- Investment: Gross Fixed Capital Formation (GFCF) sustained a 30% share of the GDP.
- Structural Warning: Flagged AI-led labor disruptions as a significant medium-term challenge.
Economic Survey 2025-26 Highlights
The Economic Survey 2025-26 provides a comprehensive overview of India’s macroeconomic performance, structural reforms, growth drivers, inflation outlook, fiscal discipline, and emerging challenges. These highlights are extremely important for UPSC, SSC, Banking, State PCS, and other competitive exams.
Detailed Explanation: Core Analysis
1. Macroeconomic Resilience and Growth
The Economic Survey 2025-26 characterizes India as a “global outlier” and an “oasis of economic performance.” While the global economy faces a 10-20% chance of a crisis worse than 2008, India’s medium-term growth potential has been upgraded to 7% (from 6.5%). This resilience is driven by robust domestic demand, particularly Private Final Consumption Expenditure, which now accounts for 61.5% of the GDP—the highest since 2012.
2. The Role of Technology and Innovation
India has consolidated its position as the world’s third-largest technology startup ecosystem. The survey highlights the rapid scaling of GenAI startups, signaling a shift toward innovation-led growth. However, it issues a “strategic sobriety” warning: while AI drives efficiency, it poses structural risks to the traditional labor market, necessitating a focus on re-skilling and high-value services.
The survey highlights the AI impact on Indian jobs in 2026, stating that while automation may disrupt certain low-skill roles, it will also create new opportunities in data, technology, manufacturing, and digital services. Skill development and reskilling remain key priorities for India’s future workforce.
3. Fiscal and External Sector Stability
Prudent fiscal management has brought the deficit down from 9.2% (FY21) to 4.8% (FY25). The quality of spending has shifted toward Capital Expenditure (Capex), which now stands at approximately 4% of GDP. Externally, the current account deficit (CAD) remains manageable at 0.8% of GDP, supported by record services exports ($825.3 billion in FY25) and strong remittance inflows.
According to the Economic Survey 2025-26, the India GDP Growth 2026 Projection reflects strong domestic demand, government capital expenditure, and resilience in the services sector.
The survey also emphasizes maintaining fiscal prudence, with a clear roadmap towards the Fiscal Deficit Target of India for 2026, balancing welfare spending and long-term growth sustainability.
4. Rural and Social Transformation
The survey notes a significant decline in extreme poverty to 5.3% (based on the $3.0/day poverty line). This progress is attributed to tech-driven initiatives like SVAMITVA (property cards for 2.76 crore people) and Namo Drone Didi, which have integrated rural India into the formal economy. The e-Shram portal now hosts over 31 crore unorganized workers, 54% of whom are women.
India’s external sector remains stable, supported by healthy Forex Reserves of India as of January 2026, which act as a buffer against global economic uncertainties and volatile capital flows.
The Concept of Economic Survey:
The Economic Survey is a flagship annual document of the Ministry of Finance, prepared by the Economics Division under the guidance of the Chief Economic Adviser (CEA). Traditionally, it is presented a day before the Union Budget. The first Economic Survey of India was presented in 1950-51. Until 1964, it was presented along with the Budget, but was later de-linked to provide better context for budgetary proposals.
Constitutional & Institutional Framework:
While the “Annual Financial Statement” (Budget) is mandated by Article 112 of the Constitution, the Economic Survey is not a constitutional requirement. It serves as a policy guide and a comprehensive data source on the performance of various sectors like Agriculture, Industry, and Services. It provides the “Logic of the Budget,” explaining the rationale behind fiscal targets and reform priorities.
Why Important for Competitive Exams?
- UPSC (Prelims + Mains): Vital for understanding terms like Twin Balance Sheet advantage, GFCF, and Fiscal Consolidation. The survey’s themes (like AI impact or Swadeshi policy) often become direct questions in GS Paper III (Economy).
- SSC & Banking: Direct questions on GDP projections, inflation figures (CPI/WPI), and Forex reserve data.
- State PCS: Understanding the Special Assistance to States for Capital Expenditure (SASCI) mentioned in the survey is crucial for state-level governance exams.
Quick Exam Facts Box
| Parameter | Value / Detail |
| Projected GDP (FY27) | 6.8% – 7.2% |
| Fiscal Deficit Target (FY26) | 4.4% |
| Headline Inflation (Avg) | 1.7% (Apr-Dec 2025) |
| Forex Reserves (Jan 2026) | $709.41 Billion |
| Chief Economic Adviser | V. Anantha Nageswaran |
| Unemployment Rate | 4.8% (as of Dec 2025) |
| Services GVA Growth | 9.1% |
Economic Survey 2025-26 Practice MCQs
1. What is the GDP growth projection for FY 2026-27 as per the Economic Survey 2025-26?
A) 6.1% – 6.5%
B) 6.8% – 7.2%
C) 7.3% – 7.5%
D) 7.5% – 8.0%
Correct Answer: B
Explanation: The survey projects a stable growth range of 6.8% to 7.2% despite global uncertainty.
2. Which portal has registered over 31 crore unorganized workers as per the latest data?
A) SAMARTH
B) e-Shram
C) SVAMITVA
D) PM-Kisan
Correct Answer: B
Explanation: The e-Shram portal is a centralized database of unorganized workers, where women registrants exceed 54%.
3. According to the Survey, what was the average headline CPI inflation during Apr-Dec 2025?
A) 4.2%
B) 3.5%
C) 1.7%
D) 5.1%
Correct Answer: C
Explanation: India recorded its lowest-ever CPI inflation at 1.7%, driven by disinflation in food and fuel.
4. The government’s fiscal deficit target for FY 2025-26 (FY26) is set at:
A) 5.1%
B) 4.8%
C) 4.4%
D) 3.2%
Correct Answer: C
Explanation: The government aims to meet a fiscal deficit target of 4.4% of GDP for FY26.
5. Which technology trend was flagged by the survey as a potential “structural labor disruption”?
A) Blockchain
B) Cloud Computing
C) Artificial Intelligence (AI)
D) 5G Technology
Correct Answer: C
Explanation: The survey warns that AI could disrupt labor markets, requiring a strategic rather than pessimistic approach.
6. What is the current share of Private Final Consumption Expenditure (PFCE) in India’s GDP?
A) 50.5%
B) 55.2%
C) 61.5%
D) 65.0%
Correct Answer: C
Explanation: At 61.5%, PFCE is at its highest share since 2012, driving domestic demand.
7. India’s Forex reserves reached a record high of ______ in January 2026.
A) $650.41 Billion
B) $709.41 Billion
C) $750.11 Billion
D) $690.30 Billion
Correct Answer: B
Explanation: Reserves hit $709.41 billion, strengthening India’s external sector resilience.
8. Which sector is the main growth driver on the supply side, with a 9.1% GVA growth?
A) Agriculture
B) Manufacturing
C) Services
D) Mining
Correct Answer: C
Explanation: The Services sector remains the primary engine of India’s economic growth.
9. The “Namo Drone Didi” scheme mentioned in the survey primarily targets:
A) Urban Transport
B) Rural Women/Agriculture
C) Border Surveillance
D) Disaster Management
Correct Answer: B
Explanation: It is a tech-driven rural initiative empowering women through drone technology in agriculture.
10. Who prepares the Economic Survey of India?
A) NITI Aayog
B) Finance Commission
C) Economics Division, Dept of Economic Affairs
D) Reserve Bank of India
Correct Answer: C
Explanation: It is prepared by the Economics Division of the Department of Economic Affairs, Ministry of Finance.
Official Government Source – Read More
📘 Want to read the complete Economic Survey 2025-26?
For detailed tables, data, charts, and the full policy document, candidates are advised to visit the official Government of India website.
🔗 Read the full Economic Survey 2025-26 on the Ministry of Finance (Government of India) website, including the Nirmala Sitharaman Economic Survey Speech presented in Parliament.
Related for Competitive Exams
- 📌 UPSC Economy Notes 2026 – Concept-based coverage from Economic Survey & Budget
- 📰 Current Affairs – 31 January 2026 (Economy & Government Reports)
- 📊 Economic Survey MCQs & Practice Questions (Coming Soon)
