'Get out of the way': Survey suggests shift in governance approach to enable businesses to do their core mission

Remaining cautiously optimistic about the domestic economy faring better in FY26 with lower inflation, the Economic Survey 2024-25 has highlighted that India needs to raise the game for better growth as external uncertainties rise and globalisation retreats and protectionist policies emerge.

The Survey, tabled by Finance Minister Nirmala Sitharaman in Parliament on Friday, has projected that the economy will grow between 6.3% and 6.8% in FY26 from 6.4% this fiscal.

But to up the domestic growth game, the Survey has highlighted four key initiatives including deregulation, augmenting internal capacities for growth, the private sector’s role in nation building, and energy transition the Indian way. Along with these policy measures, the Survey has also underlined the need for governance with a philosophical approach of “getting out of the way” that would allow businesses to focus on their core mission.

“But ‘get out of the way’ and trust people, we must, for we have no other choice. ‘Business as usual’ carries a high risk of economic growth stagnation, if not economic stagnation,” the preface to the Survey noted, adding that this must be done in several sectors so that businesses and people can function at their best.

“The passing of the era of rapid world trade growth clouds the outlook for India’s export growth because, historically, India’s export growth has been a high beta play on global export growth. This means domestic growth levers will be relatively more important than external ones in the coming years,” said the Survey, written by Chief Economic Advisor V Anantha Nageswaran along with his team.

“Given this, naturally, we have to raise the game for a new playing field. The playing field has changed, and the game has to be to rely on domestic drivers of growth,” he said at a press conference after the Survey was tabled, noting that India also has a goal of becoming a developed economy by 2047.

FY26 growth projections

Presented a day before the Union Budget 2025-26, the Survey also painted a conservative outlook for the next fiscal noting that “there are many upsides to domestic investment, output growth and disinflation in FY26. There are equally strong, prominently extraneous, downsides too.”

It, however, underlined that the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. Food inflation is likely to soften in Q4FY25 with the seasonal easing of vegetable prices and Kharif harvest arrivals. It also underlined the need for maintaining a real GDP growth of 8% up to 2046-47 for achieving a Viksit Nation status.

Economists note that the Survey has been more cautious in its growth estimate for FY26, and the Budget could peg nominal GDP growth at about 10% for next fiscal from 10.5% this fiscal.

DK Srivastava, Chief Policy Advisor, EY India, said, “If the mid-point of this range (of GDP growth of 6.3-6.8%) at 6.55% is compared with the corresponding mid-point of the range given at 6.75% for 2024-25, the Survey appears to signal a marginal deceleration in growth,” he said.

Aditi Nayar, Chief Economist, Head–Research & Outreach, ICRA Ltd, said the real GDP growth forecast of 6.3-6.8% made by the Survey suggests that the Union Budget is likely to build in a nominal growth of about 10% for FY26. “We believe that assumptions around the tax revenue would be anchored to a similar nominal growth print, when the Union Budget for FY26 is presented on Saturday,” she said.