​A job well done: On the Economic Survey 2025-26

Through his Economic Survey 2025-26, Chief Economic Adviser (CEA) V. Anantha Nageswaran has once again shown the value of level-headed analysis while eschewing sensationalism. With the global economy in flux and the Indian economy displaying stability, the need of the day is pointed analysis of current data for future policy. In this, the Survey has delivered. It has charted out a broad framework for a medium-term economic and governance strategy, highlighting the concept of an ‘entrepreneurial state’ that is more risk-taking, agile, and willing to experiment. The CEA is pushing for a forward-looking dynamic shift to policymaking that is willing to fail and learn in the quest for much-needed growth acceleration. Now past the turbulent COVID-19 pandemic, it is time to look ahead with policy filling the economy’s sails. The Survey acknowledges that this will not be easy. Indeed, it assigns a 10%-20% probability to the global economy, in 2026, descending into a crisis worse than that in 2008. Even its best-case scenario is a worsening of conditions as they were in 2025. Yet, the Survey does paint a favourable picture of India’s economy, backed with facts and figures. It also does not shy away from pointing out some emerging risks and developing problems.

At the macro level, it points out that the falling rupee does not reflect India’s economic fundamentals, and the depreciation is due in large part to capital flowing to countries with more developed AI industries and to safe-haven assets. A weak rupee is good for exporters, but India predominantly depends on imports — and those have become more expensive. If trade negotiations have revealed anything, it is that India is not strategically vital to any merchandise supply chain. To address this and other structural weaknesses, the Survey outlines an ambitious plan to focus on strategic resilience and, eventually, develop “strategic indispensability”. It also argues for greater fiscal flexibility for the Centre to address geopolitical and geoeconomic uncertainties, but, simultaneously, cautions States against fiscal populism. The reasoning is clear: while the Centre has managed to more than halve its fiscal deficit ratio in five years, an increasing number of States have fallen into revenue deficits in this period. This cannot be ignored, despite the political attractiveness of unconditional cash transfers. It is noteworthy that four major States go for elections this year, only one of which is currently led by the BJP. The Survey points out several other emerging problems, such as the impact of ethanol production on food security, the real costs of the ongoing shift to renewable energy, the lack of adequate fodder, and, not insignificantly, the impact of “compulsive scrolling” on smartphones. Each of these merits attention, and the Survey has done its job well by highlighting them.