India must run a marathon and sprint simultaneously: Economic Survey 2026

Even as the Economic Survey 2025-26 has upped India’s growth potential to 7% from 6.8% and pegged GDP growth in FY27 to 6.8%-7.2%, it has presented a sobering picture of economic conditions, advocating caution amid  global headwinds.

Coming ahead of the Union Budget 2026-27, the Survey tabled in Parliament on January 29 by Finance Minister Nirmala Sitharaman, highlighted three global scenarios for 2026 that could have an impact on the global economy and on India as well.

Noting that 2026 may mark the point at which policy credibility, predictability and administrative discipline cease to be mere virtues and instead become strategic assets in their own right, the Survey advocated, “The appropriate stance for 2026 is therefore one of strategic sobriety rather than defensive pessimism.” 

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The external environment will require India to prioritise both domestic growth maximisation and shock absorption, with a greater emphasis on buffers, redundancy, and liquidity. “India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint,” it said.

While the best-case scenario is one of business as in 2025, the second scenario could be a disorderly multipolar breakdown where strategic rivalry intensifies, trade becomes more coercive and sanctions and countermeasures proliferate.

The third scenario could be around the AI boom and could involve the risk of a systemic shock cascade in which financial, technological, and geopolitical stresses amplify one another rather than unfolding independently. “The recent phase of highly leveraged AI-infrastructure investment has exposed business models that are dependent on optimistic execution timelines, narrow customer concentration, and long duration capital commitments,” the Economic Survey warned.

While India is relatively better off than most other countries due to its strong macroeconomic fundamentals, this does not guarantee insulation, the Survey pointed out that all three scenarios pose a common risk for India: disruption of capital flows and the consequent impact on the rupee. 

“Only the degree and the duration will vary,” it said, underlining that economic policy must focus on the stability of supply, the creation of resource buffers, and the diversification of routes and payment systems.

“Against today’s global churn, India must choose to build resilience, innovate relentlessly, and stay the course toward Viksit Bharat, rather than seek quick fixes to visible, short-term pressures,” it said.

Significantly, the Survey written by Chief Economic Advisor V. Anantha Nageswaran and his team has also examined three topics of medium- to long-term interest in special essays: the evolution of Artificial Intelligence, the challenge of quality of life in Indian cities, and the roles of state capacity and the private sector (including households) in achieving strategic resilience and strategic indispensability.