A case for optimism, and a vision for faster growth

Economic Survey sees 6.8-7.2% growth in FY27; mid-term potential rises to 7%

- Gireesh Chandra Prasad & Subhash Narayan

The Economic Survey 2025-26 projected India's economic growth at 6.8-7.2% in the next fiscal year, outstripping forecasts from the International Monetary Fund, World Bank, and the Reserve Bank of India's outlook for the first half of fiscal year 2027 (FY27). Behind the optimism lie the country's recent structural reforms, and a resilient performance that together bolstered its growth potential in a volatile world.

The Survey, prepared by chief economic adviser V. Anantha Nageswaran and his team in the finance ministry, also articulated how India could transform itself in the face of external uncertainties. This involves stepping up manufacturing competitiveness, generating external surplus to ensure capital inflows and exchange rate stability, states adhering to fiscal discipline, building resilience through Swadeshi movement and making Indian products integral to global value chains. The Survey, tabled in Parliament by finance minister Nirmala Sitharaman, also proposed making entrepreneurial spirit central to government policymaking, and making policy choices that offer enduring good rather than fleeting gratification.

The Survey made a strong case for lowering basic customs duty on raw materials and intermediate products used by Indian firms to help them become more globally competitive, citing the success of Vietnam.

Income tax and GST reforms, a new direct tax law taking effect in April, labour reforms and better spending quality have helped raise India's growth potential over the medium term from 6.5% estimated three years ago to 7% now, the Survey said. Nageswaran told reporters at a briefing that with further reforms, it can go further up.

"If we are able to achieve manufacturing and export competitiveness, and pursue further process reforms in the areas of land, and cross-subsidization, and bring down the cost of manufacturing, this 7% can even rise to 7.5% or 8% in the next few years as well," Nageswaran said.