India’s Economic Survey 2025-26: Reading Between the Numbers

Union Finance Minister Nirmala Sitharaman’s presentation of the Economic Survey 2025-26 arrives at a pivotal moment for India’s economy. While the headline figure of 7% potential growth might seem reassuring, the document deserves closer scrutiny than the usual post-budget media cycle typically allows. This Survey is not merely a statistical roundup. It is a roadmap that reveals both the government’s economic priorities and the structural challenges that could determine whether India achieves its ambitious “Viksit Bharat 2047” vision or falls short.

The Survey’s acknowledgment of a “slight moderation” in GDP growth for the coming year is significant, though perhaps understated. In a global environment marked by persistent geopolitical tensions, supply chain disruptions, and tightening monetary conditions in major economies, India cannot remain insulated. The question is not whether we will feel these headwinds, but how prepared we are to navigate them. A 7% growth rate in such circumstances would indeed be commendable, but achieving it will require more than business as usual.

What stands out most in this year’s Survey is the breadth of challenges it addresses: inflation, exports, employment generation, infrastructure development, manufacturing competitiveness, and welfare delivery. Each of these areas represents a critical pillar of economic strength, yet also a potential vulnerability. The real test lies in whether the government can move beyond diagnosis to deliver the reforms that will turn potential into performance.

Take inflation, for instance. While the Survey likely projects price stability, the ground reality for millions of Indians tells a different story. Food inflation continues to pinch household budgets, particularly for those in lower income brackets who spend a disproportionate share of their earnings on essentials. Monetary policy alone cannot solve supply-side constraints in agriculture. We need urgent reforms in agricultural marketing, better cold storage infrastructure, and more efficient supply chains that reduce wastage and connect farmers directly to consumers. Without these interventions, inflation will continue to erode purchasing power and constrain consumption-driven growth.

On exports, the Survey’s observations must be read against a backdrop of increasing protectionism globally. India’s export performance has been mixed, with services continuing to outshine merchandise trade. The government’s production-linked incentive schemes show promise, but they need deeper evaluation. Are we creating globally competitive industries or merely subsidizing production that cannot survive without government support? The answer will determine whether India can capture a larger share of global value chains or remain a marginal player in manufacturing exports. Countries like Vietnam and Bangladesh have demonstrated that focused industrial policy, coupled with ease of doing business reforms, can rapidly transform export competitiveness. India has the scale and talent; what we need is execution.

Employment generation remains perhaps the most politically sensitive issue the Survey addresses. India adds millions of young people to its workforce each year, yet quality job creation has not kept pace. The informal sector still absorbs the majority of workers, offering neither security nor social protection. While the government’s infrastructure push has created construction jobs and schemes like MGNREGA provide a safety net, these are not substitutes for sustainable employment in productive sectors. Manufacturing, which historically has been the pathway to middle-class prosperity in developing nations, employs a stubbornly small share of India’s workforce. Unless we can dramatically scale up labor-intensive manufacturing and modern services, the demographic dividend risks becoming a demographic disaster.

Infrastructure development is one area where the government can legitimately claim significant progress. The capital expenditure push of recent years has been substantial, with visible improvements in roads, railways, airports, and digital infrastructure. However, the Survey should prompt us to ask harder questions about efficiency and sustainability. Are we building the right infrastructure in the right places? Is private sector participation being adequately leveraged? How do we ensure that infrastructure investments translate into productivity gains rather than becoming white elephants? The quality of infrastructure planning and execution will determine the return on these massive investments.

The manufacturing sector remains the great unfulfilled promise of India’s economic story. Despite various initiatives, manufacturing’s share of GDP has remained stubbornly stagnant for decades. China’s rise was built on becoming the world’s factory; India has yet to find its manufacturing identity. The Survey’s treatment of this issue will reveal whether the government understands the depth of reform required. We need simpler regulations, faster clearances, reliable power, better logistics, and a more flexible labor market that protects workers without destroying job creation. Half-measures will not suffice when competing with economies that have spent decades perfecting their manufacturing ecosystems.

Welfare delivery, the final pillar, presents both achievements and challenges. India has made remarkable progress in direct benefit transfers, reducing leakages and ensuring that subsidies reach intended beneficiaries. The digitization of welfare through platforms like Aadhaar and UPI represents genuine innovation. Yet coverage gaps remain, and the quality of public services in health and education still lags far behind what a middle-income country should provide. The Survey should be evaluated on whether it charts a path toward universal, quality public services or continues to rely on targeted schemes that often miss the most vulnerable.

Reading the Economic Survey 2025-26 effectively means looking beyond the growth forecasts to the structural reforms proposed. It means asking whether the government is addressing the binding constraints that prevent India from achieving sustained high growth. It means evaluating whether policies are evidence-based and outcomes are being rigorously measured.

India’s potential is undeniable. A young population, a growing middle class, technological capabilities, and democratic institutions provide a strong foundation. But potential alone does not guarantee success. The journey to Viksit Bharat 2047 requires difficult reforms: in land and labor markets, in agricultural policy, in education and skill development, in judicial and administrative efficiency, and in environmental sustainability. The Economic Survey can guide us toward these reforms, but only if we read it critically and hold the government accountable for implementation. The numbers matter, but the reforms matter more.