Economic Survey 2025–26 highlights India’s strong banking reforms, fiscal discipline, record infrastructure expansion, low inflation, and logistics transformation, with Finance Minister Nirmala Sitharaman citing robust fundamentals and sustained growth momentum across sectors.
Finance Minister Nirmala Sitharaman on Thursday said the Economic Survey 2025–26 presents a clear picture of India’s healthy economic fundamentals, highlighting the success of structural reforms implemented over the past decade under the leadership of Prime Minister Narendra Modi. The Survey reflects sustained improvements across banking, fiscal management, infrastructure, logistics, inflation control, and urban governance.
In a series of posts on social media platform X, Sitharaman underlined that India’s banking sector has emerged stronger and more resilient, supported by decisive policy interventions and reforms. According to the Economic Survey, the Gross Non-Performing Asset (GNPA) ratio of scheduled commercial banks has declined to a multi-decadal low of 2.2 per cent as of September 2025, marking a significant departure from earlier cycles of financial stress.
The Finance Minister noted that recovery efficiency has improved substantially. NPA recovery rates have nearly doubled from 13.2 per cent in FY18 to 26.2 per cent in FY25, reflecting better credit discipline, strengthened insolvency frameworks, and improved governance. Bank profitability has also accelerated, with profit after tax rising by 16.9 per cent in FY25, while Return on Assets has stabilised at healthy levels.
Regional Rural Banks (RRBs) have also recorded notable gains due to consolidation and technology-driven reforms. The Survey revealed that RRBs achieved a record consolidated net profit of ₹7,600 crore in FY24. Their GNPA ratio fell to a 13-year low of 5.4 per cent in FY25, indicating improved asset quality and operational efficiency, particularly in rural and semi-urban credit delivery.
On the fiscal front, Sitharaman said the government’s calibrated fiscal strategy has reinforced macroeconomic stability while supporting growth in the post-pandemic period. The approach has been anchored in credible deficit reduction, resilient revenue mobilisation, and a decisive shift in public spending toward capital formation. She stressed that this fiscal resilience is the result of prudent policy choices and disciplined fiscal management.
“The government remains committed to fiscal consolidation without compromising growth,” Sitharaman said. She added that the fiscal deficit target of 4.4 per cent for FY26 is well on track, a performance that has been acknowledged through three sovereign rating upgrades during the current financial year.
Public capital expenditure has emerged as a key growth driver. Capital spending has increased by nearly 89 per cent since FY22, reaching a budgeted ₹11.21 lakh crore in FY26. Effective capital expenditure has risen from a pre-pandemic average of 2.7 per cent of GDP to 3.9 per cent in the post-pandemic period, reflecting the government’s focus on long-term asset creation.
The Survey highlights major infrastructure achievements across transport and logistics. The national highway network has expanded by nearly 60 per cent, growing from 91,287 kilometres in FY14 to about 1.46 lakh kilometres by FY26. Operational high-speed corridors have expanded almost tenfold to 5,364 kilometres, significantly reducing freight bottlenecks and logistics costs.
Railway capacity creation has more than doubled over the last decade, while port infrastructure has expanded in parallel. Cargo handling at major ports increased from 1,052 million metric tonnes to 1,602 MMT, with total port capacity reaching 2,771 MMT. At the same time, average container vessel turnaround time has been reduced from 43.44 hours to 30.88 hours, enhancing trade efficiency.
One of the most transformative shifts highlighted in the Survey is in inland water transport. Cargo movement through inland waterways surged from 18 MMT in 2013–14 to 146 MMT in 2024–25, indicating a structural move toward cheaper, greener, and more efficient freight logistics.
Beyond physical infrastructure, the Survey emphasised the importance of governance quality in urban development. Sitharaman said cities succeed not only through infrastructure but also through trust, predictability, and civic cooperation. Clear rules, reliable services, and well-maintained public spaces are essential for sustainable and inclusive urban growth.
The Economic Survey also highlighted India’s success in inflation management. India recorded the sharpest reduction in headline inflation among major economies in 2025, at 1.8 per cent. Between April and December 2025, inflation averaged 1.7 per cent, driven by a decline in food prices, particularly vegetables and pulses.
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Sitharaman credited timely trade policy interventions for balancing consumer and farmer interests. Customs duty on crude edible oils was reduced to 10 per cent to moderate prices, while a 30 per cent import duty on yellow peas helped protect domestic producers ahead of the sowing season.
Overall, the Economic Survey 2025–26 underscores India’s steady progress toward durable growth, financial stability, and infrastructure-led development, positioning the economy for sustained expansion in the coming years.
