Why Sensex rebounded 900 pts, Nifty hit 25,400 after Economic Survey; analyst views

Domestic stock market indices rebounded sharply on Thursday after the Economic Survey 2026 projected FY27 real GDP growth at 6.8-7.2 per cent and suggested that India is on track to meet its fiscal deficit target for the ongoing financial year. There was also optimism over rising tax collections. 

The BSE Sensex climbed more than 900 points from the day’s low, rebounding 920.58 points from 81,707.94 to hit an intraday high of 82,628.52. At 2.22 pm, the 30-share index was trading at 82,518.14, up 175.33 points, or 0.21 per cent. The Nifty also recovered strongly, topping the 25,400 mark. The benchmark index was trading at 25,401.20, up 58.50 points, or 0.23 per cent.

The survey noted that India’s recent fiscal performance reflected a careful balancing of growth imperatives and fiscal prudence. Strong macroeconomic fundamentals have been reinforced by a calibrated fiscal strategy that prioritised capital expenditure while steadily consolidating deficits and debt, it noted. 

"The Centre’s commitment to a transparent and credible medium-term debt glide path has enhanced policy credibility, providing fiscal space and flexibility to respond to evolving domestic and global conditions without undermining stability," it noted. 

Besides, based on the broad trends observed during the year, the survey noted that the central government is well on track to achieve its envisaged fiscal consolidation path, aiming to attain a fiscal deficit target of 4.4 per cent of GDP by FY26. As of November 2025, the union government’s fiscal deficit stood at 62.3 per cent of the budget estimates, the survey noted.

This lifted market mood ahead of the Union Budget 2026 on February 1, Sunday.

Importantly, said Anil Rego-Founder and Fund Manager at Right Horizons PMS, the survey it reiterated a reform-led framework highlighting measures such as income-tax/GST relief, a simplified direct-tax law from April, and tweaks to FDI and bankruptcy frameworks, alongside a renewed push for systematic deregulation/EoDB 2.0, all of which should aid formalisation, intermediation and long-term savings.

Dipesh Jain, Partner, Economic Laws Practice said  the Economic Survey 2025-26 indicated that while the nominal GDP, per Budget Estimates for FY26, is likely to be higher by 51 per cent from FY 2022, the corresponding gross direct tax revenue is likely to be higher by 58 per cent.  

"The increased tax collection is attributed to, amongst others, NUDGE approach of the Income-tax Department… NUDGE referring to Non-intrusive Usage of Data to Guide and Enable. NUDGE identifies potential non-compliances and guides taxpayers with relevant information leading to voluntarily corrections / compliance by tax-payers, without resorting to audits or litigation.  This is a win-win for both – the income-tax department and the tax-payers," Jain said.

Sachin Sawrikar, Managing Partner from Artha Bharat Investment Managers IFSC LLP said India’s economy delivered a stronger-than-expected performance in FY26, with real GDP growth of around 7.4 per cent, up from 6.8 per cent in FY24, surpassing pre-Budget projections. 

"Broad-based sectoral momentum and resilient domestic demand helped cushion the impact of global headwinds, making FY26 one of the better-performing years in recent cycles," he said.

Rumki Majumdar, Economist at  Deloitte India said the Economic Survey suggested that there is a lot of confidence that growth is resilient and is expected to remain so and India is becoming structurally self-propelled via domestic demand, public capex and reform compounding, even as external buffers are prioritized. 
 
"The Economic Survey 2025-26 places India’s medium-term growth potential at 7 per cent, noting that while investment has lagged in recent years, a gradual firming of investment cycle which is now visible through high frequency indicators with improving credit conditions, above-trend capacity utilisation, and sustained strength in capital goods activity," Majumdar said.