The Economic Survey for 2025-26, presented in Parliament, has increased India’s potential growth rate to 7.0%, up from 6.5% three years ago. This growth is attributed to sustained domestic reforms and public investments that are enhancing the economy’s capacity despite global challenges. The survey highlights the expansion of infrastructure, such as the growth in the airport network and inland waterways, which is improving logistics and overall efficiency.
While headline inflation remains volatile due to food prices, core inflation, excluding gold and silver, indicates a strengthening of supply-side conditions across the economy. State-level deregulation efforts are facilitating the expansion of small and medium enterprises, integrating them more effectively into formal value chains, thereby boosting the economy’s medium-term growth potential. The survey also praises the Centre’s fiscal trajectory, balancing growth imperatives with fiscal sustainability for macroeconomic stability.
The Union Budget for FY22 outlined a medium-term fiscal deficit target below 4.5% of GDP by FY26, emphasizing growth-oriented expenditure, particularly in capital investments. Amid global geopolitical shifts impacting investments and supply chains, India is urged to prioritize resilience and innovation for long-term growth. Chief Economic Adviser V. Anantha Nageswaran emphasizes the importance of India’s strategic choices in navigating global uncertainties towards a sustainable economic path.
