Economic Survey: India's Medium-Term Growth Potential Revised to 7%

• The Economic Survey 2025–26 has revised India's medium-term growth potential to 7%, up from 6.5%, citing sustained policy reforms and strong macroeconomic fundamentals.
• Finance Minister Nirmala Sitharaman presented the Economic Survey in Parliament on January 29, highlighting India's steady expansion amid global uncertainty.
• The upward revision is attributed to calibrated improvements in capital accumulation, labor input, and trend total factor productivity (TFP).
• High-frequency indicators like e-way bill generation, PMI, and non-food bank credit show robust economic activity, supporting the revised growth assessment.
• Reforms in MSMEs, tax systems, manufacturing (PLI schemes), and labor markets are expected to further strengthen India's economic trajectory.

Why It Matters: India's economic growth potential is now estimated at 7% due to reforms and strong fundamentals.