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Economic Survey 2025: Innovation, MSMEs and R&D at the Forefront of India’s Growth Agenda

Economic Survey 2025 forecasts India’s GDP growth at 6.3%-6.8%, with a strong focus on innovation, MSMEs, and R&D to boost industrial growth and competitiveness.

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Economic Survey 2025

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Economic Survey 2025: India’s economy is set to grow between 6.3% and 6.8% in FY26, as highlighted in the Economic Survey 2025 presented in Parliament. The report underscores that India’s economic fundamentals remain strong, backed by a stable external account, fiscal consolidation and steady private consumption.

The government is focusing on long-term industrial growth by supporting R&D, MSMEs, and capital goods sectors. These initiatives aim to boost productivity, innovation, and global competitiveness, ensuring sustained economic progress.

Indian Economy Maintains Strong Growth Momentum

According to the Economic Survey 2025, India’s GDP growth outlook remains positive, driven by robust domestic demand and strategic policy measures. Despite global uncertainties, the country’s economic resilience continues to strengthen, with stable inflation, fiscal prudence, and rising employment rates playing crucial roles.

The survey notes that food inflation is expected to decline in Q4 FY25, aided by seasonal vegetable price drops and the arrival of the Kharif harvest. A strong Rabi crop output is also likely to keep food prices stable in early FY26. However, weather-related disruptions and global agricultural price fluctuations remain potential risks.

India’s External Strength: Forex Reserves and Inflation Outlook

The Indian economy remains well-insulated against external shocks, with strong foreign exchange reserves covering nearly 90% of external debt and ensuring an import cover of over ten months.

The reserves saw an increase from USD 616.7 billion in January 2024 to USD 704.9 billion in September 2024, before settling at USD 634.6 billion in January 2025. This capital stability supports India’s external account, helping manage any global economic uncertainties.

Meanwhile, commodity and energy prices have softened, bringing core inflation under control. However, global geopolitical and economic challenges continue to pose risks that need careful monitoring.

Rising Formal Employment and Industrial Growth

A key highlight of the Economic Survey 2025 is the significant rise in formal employment. Net EPFO subscriptions have more than doubled—from 61 lakh in FY19 to 131 lakh in FY24—indicating a strong formal workforce expansion.

The government's push for industrial growth through R&D, MSMEs, and capital investment is expected to further boost employment, economic productivity, and global competitiveness.

While India’s economic outlook remains optimistic, challenges such as global uncertainties, climate-related risks, and fluctuating international prices require continuous policy adjustments. With a solid foundation and strategic planning, the Indian economy is well-positioned to achieve steady and sustainable growth in the coming years.

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