India is projected to sustain GDP growth of 6.5% between FY28-30, positioning it as the world’s third-largest consumer market by 2026 and the third-largest economy by 2028. (UBS)
Arguments Supporting the View (Indian economy in good shape)
High GDP Growth – India remains the fastest-growing major economy. 7% in FY 2025.
Moderating Inflation – Eg- Retail inflation fell to a historic low of 0.25% in October 2025, due to GST rate cuts
Forex reserves at over $689 billion provide external stability.
Fiscal Consolidation Path- Fiscal deficit targeted to reduce to 4.8% of GDP in 2025-26.
Robust Financial Sector- Gross NPAs have declined from 9.11% (2021) to 2.8% (2025).
Production-linked incentives (PLI) has raised India’s manufacturing attractiveness. Eg: Electronics exports at a record $38 billion in 2024-25. (32% increase)
Arguments Against the View (Macro vulnerabilities persist)
Jobless Growth –Service sector contributes 55% of GDP but employs less than 30% workforce
High food inflation due to climate shocks, hurting the poor.
Rural Distress due to weak agriculture real wages and uneven monsoons.
Global slowdown, protectionism, and China’s dominance limit India’s merchandise exports.
High Public Debt- General government debt remains around 82% of GDP (IMF, 2024), limiting fiscal room.
The share of Gross Fixed Capital Formation (GFCF) was about 34.6% of GDP in 2023-24 and slipped to 29.61% of GDP in 2024, indicating weak investment.
Way Forward
Enhance R&D (2.5% of GDP), reduce logistics costs (PM Gati Shakti), and expand PLI schemes to boost manufacturing.
Promote labour-intensive manufacturing (textiles, toys, food processing) and expand services exports (IT, GBS, health tourism).
Improve ease of doing business, accelerate contract enforcement, and reduce regulatory uncertainty to crowd-in private capital.
Strengthen FOREX buffers and expand rupee trade settlement
Encourage domestic production of critical inputs (electronics, APIs, green tech) to reduce vulnerability to global shocks.
As highlighted by the Economic Survey, India must prioritise blue-sky thinking and foster a virtuous cycle of investment to achieve Viksit Bharat@2047.