Economic Survey 2025-26: Complete Notes & Analysis for UPSC and JKSSB
By Home Academy
Introduction
The Economic Survey 2025-26 presents a comprehensive picture of India’s economic performance, structural reforms, sectoral growth, and future challenges. Tabled in Parliament before the Union Budget, the Survey acts as a policy document and analytical roadmap for the Indian economy.
For UPSC, JKSSB, SSC, and other competitive exams, the Economic Survey is a high-value source for:
Data-based MCQs
Analytical mains answersEssay enrichment
Economy & current affairs integration
1. Overall State of the Indian Economy
GDP Growth Performance
India remains the fastest-growing major economy.
FY 2025-26 GDP growth: around 7.4%FY 2026-27 projected growth: 6.8% – 7.2%
Growth Drivers
Strong domestic consumption
Rising private investmentGovernment-led capital expenditure
Stable macro-economic environment
🔹 Exam Point: India’s growth is consumption-led, not export-dependent.
2. Key Macroeconomic Indicators (Very Important for Prelims)
| Indicator | Economic Survey 2025-26 |
|---|---|
| GDP Growth (FY26) | ~7.4% |
| GDP Growth (FY27 projection) | 6.8% – 7.2% |
| CPI Inflation | ~1.7% (Apr–Dec 2025) |
| PFCE Share in GDP | ~61.5% |
| Fiscal Deficit (FY26 BE) | ~4.4% of GDP |
| Forex Reserves | ~US $700 billion |
| Services Exports | Record high |
🔹 JKSSB Focus: These figures are frequently asked as one-liner MCQs.
3. Inflation & Monetary Stability
Inflation during FY26 remained at historically low levels.
Food inflation moderated due to:
Better supply management
Improved logisticsStable agricultural output
Role of RBI
Balanced monetary policy
Anchoring inflation expectationsSupporting growth without overheating the economy
🔹 Exam Use: Link inflation control with monetary policy & macro stability.
4. Fiscal Policy & Government Finances
Fiscal Consolidation
Fiscal deficit reduced gradually to ~4.4% of GDP
Focus on quality expenditure, not just expenditure sizeCapital Expenditure Push
Higher spending on:
Infrastructure
Transport
Energy
Digital public infrastructure
Tax Reforms
Shift towards simplification and trust-based compliance
Use of behavioural economics and “NUDGE” approachReduction in tax disputes
🔹 UPSC GS-3 Angle: Fiscal responsibility + growth balance.
5. External Sector & Foreign Trade
Exports
Services exports emerged as the strongest pillar.
IT, business services, tourism, and financial services contributed significantly.
Current Account
Current Account Deficit remained manageable
Supported by:
Services exports
Remittances
Forex Reserves
Comfortable reserve levels providing:
Import cover
External shock absorption
FDI & Capital Flows
India among top destinations for:
Greenfield investments
Digital economy investments
🔹 Risk Highlight: Volatile foreign portfolio investment (FPI).
6. Sector-Wise Performance
A. Agriculture & Allied Sectors
Agriculture growth stable.
Horticulture production exceeded foodgrain output.
Livestock and fisheries emerged as major income sources.
Focus on diversification, not just cereals.
🔹 Exam Note: Structural transformation of agriculture.
B. Manufacturing Sector
Manufacturing GVA showed improvement.
PLI (Production Linked Incentive) Schemes:
Boosted domestic production
Encouraged global supply chain integration
Generated employment
🔹 UPSC Link: Make in India + Atmanirbhar Bharat.
C. Infrastructure Development
Capital expenditure nearly quadrupled since FY18.
Major achievements:
Highway expansion
Railway electrification
Airport and port modernisation
🔹 JKSSB Angle: Infrastructure = growth + employment.
D. Services Sector
Largest contributor to:
GDP
Employment
Exports
Backbone of India’s external sector resilience.
7. Banking & Financial Sector
Banking Health
Gross NPAs at multi-decade lows
Improved credit discipline
Strong balance sheets
Credit Growth
Robust lending to:
MSMEs
Housing sector
Retail borrowers
Financial Inclusion
Deepening of digital payments
Greater formalisation of the economy
🔹 Exam Question: Link NPAs with banking reforms.
8. Technology, Digital Economy & AI
AI as a Public Good
Proposal for an AI-OS Platform
Objective:
Democratise AI access
Encourage innovation
Prevent monopolisation
AI Governance
Emphasis on ethical boundaries
Regulation in sensitive areas like:
Surveillance
Profiling
Data misuse
🔹 High-Yield Topic: AI governance for GS-3 & essays.
9. Strategic Vision: “Disciplined Swadeshi”
The Survey introduces a three-layer strategy:
Reduce critical import dependencies
Build domestic capabilities in strategic sectors
Compete globally in high-value manufacturing
🔹 Exam Use: Excellent for essays on self-reliance & globalisation.
10. Human Development & Social Sector
Education
Near-universal enrolment at school level
Expansion of higher education institutions
Health
Decline in:
Infant Mortality Rate
Maternal Mortality Rate
Employment & Welfare
Expansion of social security coverage
Decline in multidimensional poverty
🔹 GS-2 Link: Inclusive growth & welfare state.
11. Key Challenges Highlighted
Global geopolitical instability
External demand slowdown
Capital flow volatility
Technological disruption risks
🔹 UPSC Edge: Balanced optimism with realism.
Quick Revision Box (Very Important)
GDP Growth FY26: ~7.4%
Inflation: ~1.7%
PFCE share: ~61.5% of GDP
Fiscal deficit: ~4.4%
Forex reserves: ~US $700 bn
Services = growth engine
Banking NPAs at historic lows
AI-OS proposed
Strategic Swadeshi framework introduced
Expected Exam Questions
Prelims
What is PFCE and its share in GDP?
Which sector dominates India’s exports?
What is AI-OS proposed in Economic Survey 2025-26?
Mains
Analyse India’s growth strategy in the context of global uncertainty.
Discuss the role of fiscal consolidation in sustaining long-term growth.
Evaluate the significance of AI governance in India’s economic future.
Conclusion
The Economic Survey 2025-26 presents India as a resilient, reform-oriented, and future-ready economy, balancing growth with stability, and innovation with inclusion. For competitive exams, it serves as a goldmine of data, analysis, and policy directions