India's Economic Growth: Strong Fundamentals with Global Challenges Ahead

India's economy is anticipated to grow by 6.3% to 6.8% in FY26, as highlighted by the Economic Survey 2024-25. The survey notes strong economic fundamentals supported by a stable external account, fiscal consolidation, and private consumption. However, global uncertainties and inflation risks pose challenges.

India's economy is poised for growth, with projections between 6.3% and 6.8% for FY26, according to the Economic Survey 2024-25 presented in Parliament. The report underscores the strength of the nation's economic fundamentals, bolstered by a stable external account, fiscal consolidation, and robust private consumption.

The government has laid plans to boost long-term industrial growth by prioritizing research and development, micro, small, and medium enterprises, and capital goods to enhance productivity and global competitiveness. Food inflation is likely to ease by Q4 FY25, thanks to seasonal vegetable price drops and the Kharif harvest, although adverse weather and rising international agricultural prices remain risks.

India's foreign exchange reserves continue to be a source of strength, covering 90% of external debt and offering over ten months of import cover. Formal employment growth is noteworthy, with EPFO subscriptions more than doubling from 61 lakh in FY19 to 131 lakh in FY24. While the macroeconomic outlook appears positive, global uncertainties and inflationary pressures present significant challenges moving forward.

(With inputs from agencies.)