Resilient Outlook Amidst Moderating Sentiments: Highlights from RBI’s January 2026 Surveys
SDG 8: Decent Work and Economic Growth | SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Reserve Bank of India (RBI) | Ministry of Finance | Ministry of Statistics and Programme Implementation (MoSPI)
The Reserve Bank of India (RBI) has released the results of its forward-looking surveys for January 2026, which show that the Indian economy is maintaining a strong growth trajectory despite a slight moderation in consumer sentiment and rising household inflation expectations.
While urban and rural consumer confidence saw marginal declines in current perceptions, professional forecasters and industrial leaders remain optimistic, with GDP growth for FY26 projected at a robust 7.4 per cent.
Survey-Specific Highlights The following highlights extract the critical metrics and thematic findings from each of the primary survey instruments:
Consumer Confidence (Urban & Rural): The urban Current Situation Index (CSI) eased marginally to 98.1 in January from 98.4 in November, while the rural CSI softened to 100.5. Despite this current caution, the Future Expectations Index (FEI) remains optimistic at 123.4, reflecting long-term confidence in income and employment prospects.
Inflation Expectations (IESH): Median household inflation perceptions for the current period rose by 30 basis points (bps) to 6.9 per cent. Households also expect price pressures to increase by 30 bps over the three-month horizon and 60 bps over the one-year horizon.
Industrial Outlook (IOS): The Business Expectations Index (BEI) remains firmly above the neutral threshold of 100, supported by improved corporate performance and an 8.3 per cent increase in operating profits for private manufacturing firms in Q3:2025-26.
OBICUS (Manufacturing Sector): Seasonally adjusted Capacity Utilisation (CU) of the manufacturing sector stood at 74.8 per cent in Q2:2025-26, continuing to track above the long-term average of 73.9 per cent.
Professional Forecasters (SPF): The consensus real GDP growth projection is revised to 7.4 per cent for 2025-26, with headline CPI inflation expected to remain low at 2.1 per cent for the full fiscal year.
Bank Lending Survey: Bankers reported higher loan demand across most sectors in Q3:2025-26, with system-level credit growing at 13.8 per cent (y-o-y), particularly driven by retail, services, and MSME segments.
Services and Infrastructure Outlook: Sentiment in the services sector remains strong with a PMI of 58.5 in January 2026, while infrastructure business expectations firmed up to 14.0 per cent.
What is the “Future Expectations Index” (FEI) in the context of RBI’s Consumer Confidence Survey? The Future Expectations Index (FEI) is a forward-looking metric that captures households’ sentiments regarding the economic situation, employment, price levels, income, and spending for the one-year-ahead period. While the Current Situation Index (CSI) measures “how things are now,” the FEI measures “how things will be”. A score above 100 indicates optimism, while a score below 100 represents pessimism. In the January 2026 round, the urban FEI of 123.4 remains high despite a decline from 125.6, suggesting that while households feel a temporary pinch in the present, their long-term confidence in India’s growth story remains intact.
Policy Relevance
The January 2026 survey results represent a transition from post-pandemic recovery to a “steady-state” high-growth regime. By monitoring the widening gap between Current Perception and Future Expectations, the RBI can calibrate its “Neutral” monetary stance to ensure that temporary inflationary blips do not dampen long-term investment and consumption cycles.
Calibration of Interest Rates: The rise in household inflation expectations to 6.9 per cent provides the RBI with the necessary evidence to remain “growth-supportive” but vigilant, ensuring that the 5.25 per cent repo rate continues to anchor future price expectations.
Incentivizing Private Capex: With capacity utilization high at 75.8 per cent, policy interventions should now focus on easing the transition from “credit demand” to “actual plant and machinery investment” to prevent future supply-side bottlenecks.
Facilitating MSME Credit: The survey's finding of robust credit demand supports the RBI’s decision to double the collateral-free loan limit for MSMEs to ₹20 lakh, applicable from April 2026.
Preparing for the New Base Year: Policy stakeholders must prepare for the new GDP and CPI series (base 2024=100) to be released in February 2026, which will redefine the baseline for measuring India’s structural transformation.
Follow the full update here: RBI Survey Results February 2026 | RBI