Moneycontrol Pro Panorama | Economic Survey calls for bolder bets by India Inc in new global order

India Inc

Dear Reader,

The key takeaway from the Economic Survey 2025-26 tabled in Parliament on Thursday is that the India’s macroeconomic sweet spot, which is the outcome of sustained economic reforms, is being tested by geopolitics and a changing global order.

An undertone of confidence in domestic demand and growth comes through in the resilient 6.8-7.2 per cent growth projection for FY2027. The Survey also revised the potential growth rate up to 7.0 per cent from 6.5 per cent three years ago attributing credit to reforms and public investment. “Growth is good; the outlook remains favourable; inflation is contained; rainfall and agricultural prospects are supportive; external liabilities are low; banks are healthy; liquidity conditions are comfortable; credit growth is respectable; corporate balance sheets are strong; and the overall flow of funds to the commercial sector is robust. Policy dynamism and purposeful governance reinforce this backdrop.”

India exits a turbulent FY2026 and enters FY2027 in a position of macroeconomic strength, domestic growth, anchored inflation, and improving fiscal health. The survey takes cognisance of reforms across taxation, financing institutions, capital markets, digitisation, and infrastructure which helped medium-term stability.

However, in the backdrop of rising geopolitical tensions, what built India’s resilience to keep the growth engine is infrastructure. The document reiterates the Centre’s 89 per cent increase in capital outlay from Rs 5.92 lakh crore in FY2022 to a budgeted allocation of Rs 11.21 lakh crore for FY2026.

Highlighting the importance of investing in roads, railways, ports, airports, it states that the multiplier effect in economic growth is most pronounced in infra capital expenditure (capex). This means, for every rupee spent by the government in creating infrastructure, GDP gains worth Rs 2.5-Rs 3.5.

That said, when public capital expenditure on infrastructure has expanded significantly, the end-result depends upon quality of project plans and execution. Cost overruns as a result of delays in execution, incomplete reports or inaccurate assessments are a given.

Another pertinent point made is the calibrated shift needed by the private sector, mainly in manufacturing, from a model that looks to import substitution towards one that focuses on scale, competitiveness innovation and integration into the global value chains. Here, the survey calls out India Inc. for its unwillingness to take risks that are beneficial in the long run. Companies need to step on the capex pedal and take bigger risks, make investments with longer time horizons, become globally competitive, and avoid rent-seeking, oligopolistic tendencies. It needs to increase private sector investment in research and development, technology adoption, skills, and quality systems.

India’s industrial journey could be more fruitful if it aligns to the new geopolitical changes, supply-chain realignments, reworked trade agreements between nations and a more protectionist and fragmented global order.

This time around, the survey has gone a step further from being an annual narrative of economic health and the outlook ahead to a 799-page report that enlists how the government and industry should walk the talk.

Of course, there’s no brushing aside the persistent weakness in the Indian rupee amid the domestic macroeconomic buoyancy. At present, in spite of dollar weakness, the INR is flirting with the 92 mark to the USD. My colleague Manas Chakravarty explains the reasons.

The biggest comfort in FY26 came from benign inflation that looks “anchored and tamed”. How long will this trend last? Read here.

Indeed, a Survey document this long may have taken hours of burning the midnight oil to collate but will take even longer for investors to digest and extrapolate into investment decisions. Little wonder then that Indian equities surged initially to record daily highs before settling lower, just a tad above the previous day’s closing. Over to the Finance Minister on Sunday when the Union Budget will be presented. Will it pay heed to some of the observations made in the survey?

Economic Survey 2026

The Rupee Paradox -- India's macroeconomic triumph meets a persistent weakness: Economic Survey 2026

What's the change in India Inc that the Economic Survey wants to see?

Don’t fret a weak rupee, but don’t ignore it either, says Economic Survey 2026

What will India’s inflation trajectory look like, going forward? Economic Survey dives in

Financial regulation needs a different approach, says Economic Survey

Economic Survey 2026 sows the seeds of urea price reforms to tackle fertiliser overuse

Economic Survey urges microfinance lenders to move beyond impact washing

Economic Survey flags sticky CAD as cause of high interest rates but underrates the best solution

Investing insights from our research team

What’s in store for Indian investors as the Fed presses pause button?

CSB Bank Q3 FY26 – Asset quality slips, higher provisions dent profitability

Larsen & Toubro: Favourable investment climate to lift earnings

Mahindra Finance Q3FY26: Pick-up in disbursements growth, lower credit cost to sustain

Maruti Suzuki Q3 FY26: Demand revival drives growth, margin pressure persists

TVS Q3 FY26: Racing ahead of industry

Godrej Consumer: Higher growth, stable margins to drive stock re-rating

BEL: Robust Order Book and Strategic Indigenisation Underpin Strong Growth Trajectory

Bikaji Foods: Margin recovery drives sharp profit growth in Q3 FY26

What else are we reading?

What bond markets should expect from the FY27 Budget

IIP growth surges to 7.8%, giving Budget room to tackle debt, boost employment

Banks’ Q3 struggle: Deposits trail loans, CASA falls, PSBs worse off

Is silver's record rally running out of steam?

The outlook for equity and bond markets as Budget day nears

Budget Snapshot | Will the Budget drive capex in data centres -- the next big opportunity?

Budget 2026 — Can FM address India’s AI paradox?

Startup Street | 2025 was a boring year for VC investments, and that’s good news

How shopping chatbots might transform retail (republished from the FT)

India’s $7 billion cap on foreign equity investments by mutual funds needs a rethink in the budget

Davos Diaries: AI, and the battle for cognitive infrastructure

Is a free grinder as an election promise, okay? Yes, but Supreme Court’s now uneasy

Budget 2026-27 must balance growth and fiscal discipline

Pre-Budget Expectations for Investment: Turning momentum into credible capital

Markets

Budget 2026: Three risks that could trigger a post-budget sell-off in a nervous market

Technical Picks: POWERGRID, INDUSTOWER, PPLPHARMA, KNRCON

Vatsala Kamat Moneycontrol Pro