Economic Survey 2025-26: Key Highlights
The Economic Survey 2025-26 provides a comprehensive analysis of India's economy, emphasizing its progress in a challenging global environment and continuity from previous surveys. It presents technically sound conclusions, notably predicting GDP growth and highlighting fiscal challenges.
Growth Projections
- GDP Growth Prediction:
- Forecasting a GDP growth rate between 6.8% to 7% for FY27, which is 0.5% higher than the previous forecast for FY26.
- This aligns closely with the estimated potential GDP growth of 7%.
- Factors Influencing Growth:
- Domestic reforms post-April 2025 and stable external sector conditions.
- Robust econometric methods and the use of an in-house nowcasting model for GDP prediction.
Fiscal Analysis
- Union Level Achievements:
- Credible fiscal consolidation and sustained public investment over 3% annually post-COVID.
- Macro stability with high growth and low inflation, leading to rating upgrades.
- State Level Concerns:
- Fiscal slippage due to populist measures, revenue deficits, and cash transfer schemes.
- 10-year bond yield at 6.7% higher than Indonesia's 6.3%, indicating fiscal challenges.
- Implications on sovereign borrowing costs and suggestions to improve fiscal health.
Industry and Investment
- Focus Areas:
- Process reforms in cost of capital, land, ease of doing business, and productivity.
- Strengthening the external account and rupee via microeconomic reforms.
- Swadeshi Approach:
- Use of 'Swadeshi' as a policy lever to ensure production continuity and build national capabilities.
- Examples of swadeshi model adoption in countries like China.
Conclusion
The Survey provides insight into India's path towards becoming "Viksit Bharat" but warns of challenges in a volatile global context. It emphasizes the need for continued reforms and fiscal prudence, especially at the state level, to achieve long-term economic goals.
