Economic Survey 2025-26: India's Path to Growth
The Economic Survey 2025-26 presents a comprehensive overview of India’s economy, introducing the concept of 'strategic sobriety'. As India stands on the brink of becoming the world's third-largest economy, it encounters numerous internal and external challenges. The survey emphasizes the need for the government to 'run the sprint and marathon' simultaneously, adapting policies to nurture growth while addressing issues such as an over-leveraged technology sector and the competitiveness of micro, small, and medium enterprises (MSMEs).
India's external challenges are intensified by a continuously disrupted global environment, marked by geopolitical conflicts. The survey warns of the risks associated with the financial sector, particularly concerning high investments in artificial intelligence that may not yield the expected returns. The manufacturing sector, too, faces hurdles as it struggles to align with growth ambitions due to protectionist measures hampering MSME competitiveness.
In this constantly shifting landscape, India cannot rely heavily on any single strategic alignment. Instead, the emphasis is on demonstrating 'strategic sobriety' while pursuing diverse economic policies. The government's ability to pivot and implement effective changes, such as removing quality control orders that negatively impacted MSMEs, showcases an 'entrepreneurial state' approach.
Key achievements outlined in the survey highlight the resilience of the Indian economy. For India to achieve its Viksit Bharat ambition, the philosophy of 'Sabka Saath aur Sabka Vishwas' must be ingrained in all sectors, including private businesses and government entities. The survey also raises concerns regarding exchange rate stability in light of negative capital flows and emphasizes the need for manufacturing to shift from import substitution to strategic indispensability through cost reduction and advanced manufacturing practices.
With an optimistic potential GDP growth rate pegged at 7% for FY27, the survey reflects strong macroeconomic fundamentals. Despite global volatility, India's economic growth is supported by robust domestic demand and a healthy financial sector, alongside prudent monetary and fiscal policies. As we anticipate the upcoming Union Budget, it will be interesting to see if the finance minister embraces the insights from this survey to implement significant reforms that promote fiscal prudence and support MSMEs.
In conclusion, India stands at a pivotal moment, equipped to navigate economic challenges as an 'entrepreneurial state', fostering growth and resilience in the face of adversity.
