India's economy remains strong despite all the global challenges on the back of strong domestic demand, good monsoon and fiscal prudence (careful and responsible management of finances by the government). This has been revealed in a new report of the Finance Ministry.
The country's economy is moving forward with the help of these
The Finance Ministry said in its 'Monthly Economic review June 2025' released on Monday, 28 July, that the indian economy in mid-2025 presents a picture of cautious optimism. India's macroeconomic fundamentals remain strong despite global adversities arising from trade tensions, geopolitical instability and external uncertainties. It is being helped by strong domestic demand, fiscal prudence and monetary support. india will remain one of the fastest growing major economies.
Professional forecasters like S&P, ICRA and reserve bank of india (RBI) have estimated the GDP growth rate for FY26 to be between 6.2 percent and 6.5 percent in their surveys. The report further stated that India's economic activity in the first quarter of FY26 was based on strong domestic demand, growth of the service sector and encouraging signals from manufacturing and agriculture.
Income of rural families will increase
The report also mentions encouraging progress in the agricultural sector due to favorable monsoon. It said, "Agricultural activity has received a significant boost from the favourable southwest monsoon, which arrived ahead of schedule and has so far received above-normal rainfall.
The report also mentions encouraging progress in the agricultural sector due to favorable monsoon. It said, "Agricultural activity has received a significant boost from the favourable southwest monsoon, which arrived ahead of schedule and has so far received above-normal rainfall.
Along with this, the kharif crop is expected to be good due to adequate fertilizer availability and healthy reservoir levels. Citing NABARD's rural sentiment survey, the ministry said, "More than 74.7 percent of rural households expect their income to increase next year, the highest since the start of the survey."
The report also said that things have also remained better on the inflation front, giving some relief to policymakers. The ministry said, "Core inflation remains low and overall inflation is well below the RBI's target of 4 percent, which provides scope for inflation to remain low. "
This warning was given in the report
According to the report, the outlook for FY26 remains broadly positive, but the review does not ignore the risks. It warned, "The global slowdown, especially in the US (which contracted by 0.5 per cent in Q1 2025), could further reduce demand for indian exports." The ministry also warned against placing too much reliance on real GDP estimates in view of wholesale deflation.
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