Union Finance Minister Nirmala Sitharaman arrived at the North Block on Saturday, ahead of presenting the Union Budget for 2025-26. Sitharaman is set to deliver her record eighth consecutive budget speech today at 11 am in the Lok Sabha, where she will outline the government’s fiscal policies, revenue and expenditure proposals, tax reforms, and other key announcements.
On the eve of the Union Budget, the Economic Survey, tabled in Parliament on Friday, projected India’s economy to grow between 6.3% and 6.8% in the upcoming financial year. The survey emphasized that the country’s economic fundamentals remain robust, supported by a stable external account, fiscal consolidation, and strong private consumption.
The survey also highlighted the government’s focus on strengthening long-term industrial growth by prioritizing research and development (R&D), micro, small, and medium enterprises (MSMEs), and capital goods. These efforts are expected to enhance productivity, foster innovation, and boost global competitiveness.
“The fundamentals of the domestic economy remain strong, with a healthy external account, prudent fiscal consolidation, and steady private consumption. Based on these factors, we expect growth in FY26 to be between 6.3% and 6.8%,” the survey noted.
Additionally, the survey projected a decline in food inflation in Q4 FY25 due to seasonal drops in vegetable prices and the arrival of the Kharif harvest. A positive Rabi harvest is expected to help stabilize food prices in the first half of FY26, although adverse weather conditions and rising international agricultural prices remain risks to inflation.
India’s foreign exchange reserves were also highlighted, with reserves covering 90% of external debt and providing over ten months of import cover. Reserves increased from USD 616.7 billion in January 2024 to USD 704.9 billion in September 2024, before moderating to USD 634.6 billion as of January 3, 2025. The stability in capital flows has been instrumental in supporting the country’s external financial strength.
The survey also pointed to significant growth in formal employment, with net Employees’ Provident Fund Organisation (EPFO) subscriptions more than doubling from 61 lakh in FY19 to 131 lakh in FY24.
