The Economic Survey 2025-26 by the Ministry of Finance stated that in a world of geopolitical turbulence, India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint. The survey looked at key factors, including trade imbalances and geopolitical factors, as well as growth stimulators such as consumption.
From GDP growth, rupee depreciation to PSU disinvestment, here the the 5 key highlights of Economic Survey 2025-26
#1 PSU disinvestment
The Economic Survey highlights that to facilitate larger disinvestment, the government is considering changing the definition of a listed Government Company to allow 26 per cent government ownership.
The Economic Suvey stated that, “Since effective control requires only about a 26 per cent stake, the Government could consider amending the definition of “Government Company” under the Companies Act, limited to listed entities, to allow them to remain as government companies with a minimum of 26 per cent ownership, thereby retaining special resolution rights, while enabling the government to monetise its stake”.
Currently, the Companies Act requires a 51 per cent government shareholding in a PSU to be called a Government Company. At present, only 30 per cent of listed PSU companies have government shareholding below 60 per cent. The survey said that the govt ownership reduction resolution will allow for a larger monetisation while retaining the govt control through special resolution rights
#2 Risk of systemic shock
The Economic Survey also highlighted the key risks for the economy. It sees “10%-20%” probability of a “systemic shock cascade in which financial, technological, and geopolitical stresses amplify one another rather than unfolding independently.”
According to the Survey, the recent phase of “highly leveraged AI-infrastructure investment has exposed business models that are dependent on optimistic execution timelines, narrow customer concentration, and long duration capital commitments.”
The survey pointed out that a correction in this segment would not end technological adoption, but it could “tighten financial conditions, trigger risk aversion and spill over into broader capital markets.”
However, the survey also highlighted that “this remains a lower-probability scenario, its consequences would be significantly asymmetric. The macroeconomic consequences could be worse than those of the 2008 global financial crisis.”
#3 GDP Growth
The Economic Survey pegged India’s real GDP growth at 7.4 per cent for the financial year 2025-26. The survey states that in the first half of fiscal 2026, H1 FY26, India’s economy grew by 8 per cent.
For the financial year 2026-27, the Economic Survey projected the real GDP growth in the range of 6.8 per cent to 7.2 per cent. For the medium term, the survey revised growth at 7 per cent from the previous.
The survey highlighted that the domestic demand is the key driver of the Indian economy. Further, structural reforms, good public investment, and the service sector remained significant contributors to economic growth.
#4 Rupee depreciation
The Economic Survey stressed the depreciation of the Rupee in FY26. Rupee fell by 6.5 per cent against the dollar between April 1, 2025 and January 22, 2026. The survey stated that, coupled with the trade deficit, foreign portfolio investment (FPI) and market uncertainty due to tariffs and trade negotiations with the United States were the key reasons for the Rupee depreciation in FY26.
The survey highlighted the mismatch between India’s consistently strong economic growth on the one hand and the continuous Rupee depreciation on the other.
“The rupee’s valuation does not accurately reflect India’s stellar economic fundamentals. In other words, the rupee, therefore, is punching below its weight.”, the Economic Survey noted.
#5 Consumption
The Economic Survey stated that domestic consumption continues to be the biggest contributor to economic growth. The share of Private Final Consumption Expenditure (PFCE) in GDP grew to 61.5 per cent in fiscal year 2026, reaching the highest mark since FY12.
In H1 FY26, PFCE increased by 7.5 per cent, resulting from rising purchasing power, low inflation and stable employment throughout the year. The survey stated that while urban consumption was driven by rationalisation of income tax and GST, rural consumption was aided by a strong performance of the agricultural sector.
#6 Trade
The Economic Survey showed that while India’s services trade remained strong, the merchandise trade deficit remained large at $283.5 billion in FY25. While the $135 billion surplus from services exports and remittances helped offset the merchandise deficit, it warns of a soft currency status due to the risk of volatility in capital inflows.
Mentioning the enormous US tariffs, up to 50 per cent on certain goods, on Indian exports, the survey highlights that trade is no longer driven by efficiency, but rather by political considerations and security.
The survey recommended indigenisation with policy support in manufacturing, raw materials, logistics and energy. Further, the Economic Survey highlighted the need for trade diversification and Free Trade Agreements.