India's Economy to Grow 6.8-7.2% in FY27, Driven by Domestic Demand: Survey

The survey highlights that India remains the fastest-growing major economy for the fourth consecutive year. Shashank Udupa, SEBI-registered RA and Fund Manager at Smallcase, stated that "growth momentum is likely to stay strong even as global conditions remain uncertain. A key positive is that domestic demand is going to be the major driver. This makes growth more stable and predictable"

Udupa noted a significant structural shift in electronics exports, which moved from the seventh-largest category in FY22 to the third-largest by FY25. With USD 22.2 billion in exports recorded in the first half of FY26, the sector is on track to become India's second-largest export segment.

Sector-specific insights from the survey also point toward a pivotal moment for the insurance industry. Hanut Mehta, CEO and Co-Founder at Bimapay Finsure, said the survey's insights highlight both the resilience and potential of India's insurance sector.

"While insurance penetration shows a slight dip, overall premium growth continues, signaling that the market is expanding and that consumers remain increasingly aware of the importance of protection," he said, observing that tier II and tier III cities, along with semi-urban and rural areas, are emerging as key growth drivers.

The banking and financial services sector enters the upcoming fiscal year from a position of resilience, according to the industry. Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, said the Economic Survey reinforces a broadly supportive macro-financial backdrop rather than signalling any abrupt policy shifts. Srivastava mentioned that the emphasis on balance sheet strength, improving asset quality, and sustained credit growth suggests that banks and NBFCs enter FY27 with a strong foundation.

"Credit growth is likely to remain anchored around nominal GDP growth, with retail, MSME and infrastructure-linked lending continuing to be key drivers, while capital adequacy and profitability buffers help absorb pockets of stress as rates remain higher for longer," she said.

Dipesh Jain, Partner, Economic Laws Practice, noted that the Economic Survey has indicated that while the nominal GDP, per Budget estimates for FY26, is likely to be higher by approximately 51 per cent from FY 2022, the corresponding gross direct tax revenue is likely to be higher by approximately 58 per cent.

"The increased tax collection is attributed to, amongst others, NUDGE approach of the Income-tax Department," Jain said. "This is a win-win for both - the income-tax department and the tax-payers."

NUDGE refers to Non-intrusive Usage of Data to Guide and Enable. NUDGE identifies potential non-compliances and guides taxpayers with relevant information leading to voluntary corrections or compliance by tax-payers, without resorting to audits or litigation.

- ANI