India’s Growth Story Continues: FY27 Poised for Adjustment, Opportunity, and Reform-Led Expansion |

Updated: January 29, 2026 07:00

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The Economic Survey 2026 highlights FY27 as a year of adjustment, with investment and consumption expected to strengthen as firms adapt to reforms. While inflation remains benign, risks from currency volatility and global commodities persist. Regulatory prudence is urged to balance growth with stability, with medium-term growth potential revised to 7%.

India’s Economic Survey 2026, presented ahead of the Union Budget, offers a cautiously optimistic outlook for the economy, projecting FY27 as a year of adjustment. The Survey emphasizes that while the domestic economy remains on a stable footing, regulatory authorities must tread carefully to reconcile growth ambitions with financial stability.

Key highlights from the Survey:

Financial system challenges: The Survey underscores the need for regulators to navigate prudently, ensuring that India’s financial system remains resilient while supporting growth.
External pressures: Volatility in capital flows and slower growth among trading partners could intermittently weigh on exports and investor sentiment, requiring proactive policy responses.
Inflation outlook: Price gains are expected to stay within target ranges, keeping inflation benign. However, risks from currency fluctuations and global commodity markets persist, demanding vigilance.
Growth potential revised: India’s medium-term potential growth rate has been revised upward to around 7%, reflecting cumulative structural reforms, infrastructure expansion, and tariff rationalisation for intermediates and capital goods to enhance competitiveness.
Domestic resilience: The Survey highlights that India’s economy continues to be supported by strong domestic demand, policy continuity, and reform momentum.
FY27 adjustment year: Investment and consumption are expected to gain strength as firms adapt to recent reforms, positioning India for sustained growth in subsequent years.
Policy priorities: The Survey calls for balancing fiscal discipline with capital expenditure, while focusing on job creation, skilling, and innovation to ensure inclusive growth.

Analysts note that the Survey’s emphasis on tariff rationalisation and infrastructure push reflects the government’s intent to strengthen India’s manufacturing base and reduce costs for businesses. At the same time, the cautionary tone on capital flow volatility and global risks signals the importance of regulatory prudence in safeguarding stability.

Overall, the Survey paints a picture of an economy that is resilient yet mindful of external uncertainties. With reforms continuing to reshape the landscape, FY27 is expected to serve as a crucial transition year, laying the foundation for India’s long-term growth trajectory.

Sources: Ministry of Finance, Economic Times, Business Standard, CNBC TV18

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