Economic Survey 2025-26: Key Highlights
The Economic Survey 2025-26, presented by Chief Economic Advisor V. Anantha Nageswaran, offers an optimistic outlook for India's domestic growth but acknowledges potential global economic challenges.
India's Domestic Growth Outlook
- The medium-term growth outlook for India has been raised to 7% from the previous 6.5%.
- Drivers of growth include:
- Increased capital and improved labor participation.
- Greater efficiency in resource deployment.
- Estimate for growth in 2025-26 is 7.4%, with a Q3 growth forecast of 7%.
- Growth projection for 2026-27 is between 6.8-7.2%.
Reforms and Initiatives
- Significant reforms over the past three years have bolstered growth:
- Production-Linked Incentive (PLI) schemes.
- FDI liberalization and logistics reforms.
- Public investment in infrastructure and tax law simplification.
- Measures aimed at easing credit constraints for MSMEs.
Global Economic Scenarios
- Risk of a crisis worse than the 2008 financial crisis assessed at 10-20% probability.
- Best-case scenario suggests 2025 conditions continuing with increased fragility, having a 40-45% chance.
- Possibility of a "disorderly multipolar breakdown" with increased strategic rivalries, also 40-45% probability.
- Challenges from highly-leveraged investments in AI and geopolitical tensions.
Implications for India
- Despite a relatively better position, India faces risks like:
- Disruption of capital flows and impacts on the rupee.
- Importance of generating investor interest and boosting export earnings to cover import expenses.
