The Economic Survey 2025-26 presents a rosy picture of the national economy and asserts that we are “relatively better off than most other countries” due to the nation’s strong macroeconomic fundamentals. It however warns that this does not guarantee insulation from external economic developments, and expresses “cautious optimism” amid global uncertainties. The outlook seems good. The survey projects India’s potential growth rate to 7 per cent – up from the 6.5 per cent three years ago when it was still recovering from the aggressive global Covid-related hits. The survey says India runs a trade deficit in goods and that its net trade surplus in services and remittances would not suffice to offset this. The survey admits that the Indian rupee “underperformed” in 2025. India benefits from its “large domestic market, strong foreign exchange reserves.” These provide buffers in an environment where global “financial volatility is imminent and geopolitical uncertainty is permanent.” India’s priority, it says, is boosting manufacturing. Notably, the survey proposes an age bar for social media use, stressing a cut-down in online teaching to reduce digital addiction.
The survey claims the government remains well on track to achieve a 4.4 per cent fiscal deficit target for FY 26. The target would be achieved through public investment and consolidations. “The external environment will require India to prioritise both domestic growth maximization and shock absorption.” It notes that India’s relatively late entry into AI has its positive side. It offers an “unprecedented advantage,” allowing it to avoid energy-intensive and financially risky models adopted by the previous players. India would instead pursue a more resource-efficient and inclusive AI path aligned with the country’s public objectives. The central government’s capital expenditure has increased by four times from the 2.63lakh crore in 2018 to 11.21 lakh crore and the projected capital expenditure for this fiscal is 15.48lakh crore. Infrastructure is a key growth driver. The NH infrastructure grew by about 60 per cent in the last 11 years. The railway infrastructure expanded, it says but does not elaborate much on this, and claims a 99 per cent electrification has been achieved. India has emerged as the world’s third largest domestic aviation market, with the number of airports increasing from 74 to 164 under the Modi dispensation.
Agriculture and services sector are cited as the largest contributors to GDP. These, along with the other economic engine, manufacturing, “should fire together.” Swadeshi, the survey says, is a “legitimate policy instrument” when trade is longer reciprocal and the market no longer neutral.” India’s foodgrain production growth is driven by rice, wheat, maize and coarse cereals. With a good monsoon season, this production has reached 3,577 lakh metric tonnes, an increase of 254 LMT over the previous year. The expanding network of free trade agreements that India finalized with other nations are supporting the country’s trade strategy by providing reliable market access amid global uncertainties. India’s total exports reached a record $825 billion, registering a 6.1 per cent year-on-year growth. Notably, India recorded the lowest inflation rate since the start of the CPI series, with the latest average headline inflation recorded at 1.7 per cent. The mood, overall, is one of optimism about the future.
