Economic Outlook for 2025-26
India's economy is projected to grow between 6.3% and 6.8% in 2025-26 from the current estimate of 6.4%, as per the Economic Survey for 2024-25. This growth aligns with the IMF's forecast of about 6.5% for India from 2025-26 to 2029-30. However, achieving a developed country status by 2047 will necessitate consistent growth of 8% annually.
Domestic Economic Conditions
- The fundamentals of the economy remain robust with potential upsides in investment and output.
- There are challenges like uncertain urban demand and slowed government capital expenditure.
- Private sector investment growth is subdued due to political, global uncertainties, and overcapacities.
- The investment slowdown is considered temporary with visible "green shoots" in capital formation.
Globalization and Domestic Focus
With globalization in retreat and geopolitics reverting to Cold War dynamics, the Survey emphasizes boosting domestic economic drivers. This includes leveraging India's demographic dividend through deregulation.
Policy Recommendations
- Adopting a "get out of the way" approach to allow businesses to focus on core missions.
- Bridging the 'trust deficit' between authorities and citizens.
- Encouraging strategic policy management to navigate global challenges, including China's manufacturing dominance.
- Promoting domestic and foreign investments to enhance competitiveness and innovation.
Challenges and Dependence
India faces production limitations for critical goods, notably in solar energy components, indicating a reliance on Chinese supply chains. Attracting investments to build competitive capacities remains crucial amidst global competition.
