Eco Survey Projects 6.8 – 7.2 PC Growth for FY27

Chennai: Notwithstanding the escalated uncertainty in the global landscape, the Economic Survey has found solace in domestic demand and engines of growth. With an outlook which is “cautious”, but not “pessimistic”, it has projected 6.8 per cent to 7.2 per cent GDP growth for the Indian economy in FY27, higher than last year's projection of 6.3 per cent to 6.8 per cent for FY26. However, the FY27 projection is lower than the government's latest estimate of 7.4 per cent growth for FY26.

The survey also has revised India’s potential growth rate to 7 per cent, up from 6.5 per cent three years ago as the cumulative impact of policy reforms over recent years appears to have lifted the economy’s medium-term growth potential closer to 7 per cent.

The survey's outlook for the economy in FY27 is one of “steady growth” amid global uncertainty, requiring "caution, but not pessimism". Fiscal year 2027 is expected to be a year of adjustment, as firms and households adapt to these changes, with domestic demand and investment gaining strength. The external environment remains uncertain, and the outlook for the global economy remains dim over the medium-term, with downside risks dominating. The Survey has suggested three scenarios in which global turmoil will worsen in varying degrees.

At the global level, certain key risks persist. If the AI boom fails to deliver the anticipated productivity gains, it could trigger a correction in overly optimistic asset valuations, with the potential for broader financial contagion. Additionally, a protraction of trade conflicts would weigh on investment and further weaken the global growth outlook.

For India, these global conditions translate into external uncertainties with slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment. Ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front.

Against this backdrop, the domestic economy remains on a stable footing. Inflation has moderated to historically low levels, although some firming is expected to occur going forward. Balance sheets across households, firms and banks are healthier, and public investment continues to support activity. Consumption demand remains resilient, and private investment intentions are improving. These conditions provide resilience against external shocks and support the continuation of growth momentum.

“Economic Survey 2026 reinforces that India is set for a steady growth trajectory, backed by projected 7 per cent medium-term potential, disciplined fiscal metrics, and ongoing reforms that aim to enhance productivity and investment appeal. Execution will determine how effectively these projections translate into tangible outcomes, but the data-driven narrative offers a clear, credible compass for policymakers, investors, and industry alike,” said Bhavesh Shah Managing Director, Head- Investment Banking, Equirus Capital.

The survey finds that the rise of medium and high-technology manufacturing, growing traction under PLI schemes, and improving business sentiment point to a strengthening production ecosystem. Fundraising and credit access have diversified, corporate balance sheets are healthier, and MSMEs are increasingly being integrated into formal supply chains, also through digital platforms and cluster development. India’s industrial path is unfolding at a time when the global economy is marked by supply-chain realignments, near-shoring and friend-shoring impulses, and a more fragmented global order. India must rely more on domestic engines of growth, and this moment represents an inflexion point.

The Centre’s commitment to a transparent and credible medium-term debt glide path has enhanced policy credibility, providing fiscal space and flexibility to respond to evolving domestic and global conditions, while core inflation excluding precious metals has decelerated. The Survey is also optimistic about the external sector with robust services trade, remittances and comfortable foreign reserves to support imports.