Source: The Hindu
Why in News?
The Economic Survey 2025–26, tabled in Parliament, projects a strong medium-term growth outlook for India while warning of a grim and fragile global economic scenario that could pose risks to the Indian economy.
Key Highlights of Economic Survey 2025–26
India’s Growth Outlook
- Medium-term growth forecast raised to: 7%
(Earlier estimate: 6.5% in Economic Survey 2022–23) - FY 2025–26 (current year):
- Government estimate: 7.4%
- Survey ‘nowcast’ for Q3 (Oct–Dec 2025): 7%
- FY 2026–27 (FY27):
- Growth range projected at 6.8% – 7.2%
Drivers of Higher Medium-Term Growth
- Capital accumulation
- Improved labour force participation
- Higher efficiency in factor deployment
Reform Momentum Cited
- Manufacturing push: Production-Linked Incentive (PLI) schemes
- FDI liberalisation
- Logistics reforms
- Sustained public investment in physical & digital infrastructure
- Tax law simplification
- MSME-focused measures to ease credit constraints
- Improved corporate and financial sector balance sheets
- Rising formalisation of employment
- Better tax administration
These factors collectively raise India’s potential growth to ~7% in the medium term.
Global Economic Outlook: Key Risks
- Survey flags a fragile and insecure global environment
- Estimates a 10–20% probability of a global crisis in 2026
- Potentially worse than the 2008 Global Financial Crisis
- Even the best-case global scenario mirrors 2025 conditions but with greater fragility
- All three global scenarios outlined by the Survey could adversely impact India
