Survey presented the state of the Indian Economy amidst uncertain global economic environment shaped by geopolitical tensions, trade disruptions, and divergent growth and inflation outcomes across major economies.
State of Indian Economy
- Fastest Growing Major Economy: First Advance Estimates place FY26 real GDP growth at 7.4% and GVA growth at 7.3%, with growth largely driven by domestic demand.
- Growth Drivers: On the supply side, services remain the main growth driver with an estimated 9.1 % growth for the entire fiscal year.
- While on the demand side, domestic demand was main driver with Private Final Consumption Expenditure reaching 61.5 % of GDP, the highest since 2012.
- Investment Activity:Gross Fixed Capital Formation grew by 7.8 % and its share remained steady at 30 % of GDP.
- Pressure on State Finances: Combined fiscal deficit of State Governments has increased to 3.2% in FY25, up from around 2.8% of GDP in post-pandemic period.
- Government Debt: India reduced its general government debt-to-GDP ratio by about 7.1 percentage points since 2020.
- External Sector: India remained the world’s largest recipient of remittances, with inflows reaching USD 135.4 billion in FY25 with its foreign exchange reserves increasing to USD 701.4 billion as of mid-January.
