Finance Minister Nirmala Sitharaman praised the Economic Survey 2025-26 for showcasing the robust banking fundamentals, a result of banking reforms initiated by Prime Minister Narendra Modi’s government over the past decade. The Gross Non-Performing Asset (GNPA) ratio of scheduled commercial banks has dropped to a multi-decadal low of 2.2% as of September 2025, indicating a significant improvement from previous stress periods. Sitharaman noted that the recovery efficiency has strengthened, with NPA recovery rates almost doubling from 13.2% in FY18 to 26.2% in FY25.
Regional Rural Banks have also shown progress, with consolidation and technology integration leading to a record consolidated net profit of Rs 7,600 crore in FY24. Additionally, their GNPA ratio decreased to a 13-year low of 5.4% in FY25 as per the Survey findings. The Finance Minister emphasized the government’s fiscal strategy focused on credible deficit reduction, robust revenue mobilization, and a shift in spending towards capital formation, which has enhanced macroeconomic stability and supported growth post-pandemic.
Sitharaman reiterated the government’s commitment to fiscal consolidation while ensuring growth. The fiscal deficit target of 4.4% for FY 2026 is on track, with three sovereign rating upgrades acknowledging this achievement in the current financial year. Capital expenditure has surged by nearly 89% since FY22, reaching a budgeted Rs 11.21 lakh crore in FY26. The effective capex has risen from 2.7% (pre-pandemic average) to 3.9% of the GDP post-pandemic.
The Finance Minister highlighted the significant infrastructure developments aimed at bolstering the economy. The national highway network expanded by almost 60%, reaching 1.46 lakh km by FY26, while operational high-speed corridors increased almost tenfold to 5,364 km, reducing freight bottlenecks. Rail capacity creation has accelerated, with annual commissioning more than doubling over the last decade. Port infrastructure has also expanded, with cargo handling rising from 1,052 MMT to 1,602 MMT.
The Survey underscored the importance of trust, predictability, and civic cooperation for successful cities. Clear rules, reliable services, and respect for public spaces contribute to sustainable growth. The Finance Minister emphasized the government’s commitment to creating cities that enhance the ‘ease of living’ for citizens. The Survey 2025-26 highlighted India’s sharp reduction in headline inflation, recording 1.7% between April-December 2025, driven by lower food prices of key commodities like vegetables and pulses.
