As India awaits today’s Union Budget presentation, the Economic Survey 2025—tabled in the Lok Sabha yesterday—paints a more complex picture than the government’s narrative of steady growth and resilience. While Chief Economic Advisor V. Anantha Nageswaran strikes an optimistic tone, the numbers suggest otherwise. GDP growth is projected at just 6.6% for 2025, falling short of the once-anticipated 7%—a reality check on India’s economic trajectory. For years, we’ve heard that India is on the brink of becoming a $4 trillion economy, set to claim the third-largest global ranking by 2027. While these projections excite policymakers and investors, they gloss over deeper challenges. Economic momentum exists, but at what cost? More importantly, is it truly sustainable? The Survey suggests GDP will expand between 6.3% and 6.8% in FY26, but this figure fails to acknowledge the hurdles ahead. Inflation may be stabilizing at around 4%, and infrastructure investment is rising, yet private sector hesitancy and regulatory roadblocks continue to plague long-term economic expansion. A stock market capitalization-to-GDP ratio of 136% might seem impressive, but should we celebrate when real wage growth remains sluggish?
Foreign Direct Investment (FDI) saw a 17.9% increase year-on-year, reaching $55.6 billion in the first eight months of FY25. However, this influx of capital does not automatically translate to equitable growth. The CEA rightly warns that businesses must balance capital investment with labour employment, but government policies do little to incentivize such an equilibrium. India’s unemployment rate has dropped to 3.2%, yet this statistic overlooks the reality of underemployment and low-income job creation. A push for renewable energy is crucial, yet the CEA cautions against substituting one form of dependency (fossil fuels) with another (imported critical minerals for green energy). This warning cannot be ignored. India must develop domestic supply chains for renewable technology rather than merely shifting its reliance from oil-exporting nations to mineral-rich ones. The Survey acknowledges the potential disruptions caused by Artificial Intelligence (AI) in the job market, urging collaboration between government, private enterprises, and academia. However, vague calls for cooperation won’t be enough. Policymakers must take decisive action now to retrain and upskill workers or risk mass displacement. The Economic Survey 2025 indeed provides a comprehensive overview, but it lacks urgency in addressing the nation’s economic vulnerabilities. As we approach the Union Budget, policymakers must recognize that glossy numbers alone won’t drive India’s economic future. Real reforms—deregulation, employment-focused policies, and industrial self-reliance—are needed to turn potential into lasting prosperity. India’s growth story is far from over, but it’s time to replace blind optimism with pragmatic, results-driven action.
