Economic Survey 2025–26: India’s Shift to an Entrepreneurial State

The Economic Survey 2025-26 presents a pragmatic blueprint for India, transitioning from post-pandemic recovery to a proactive “Entrepreneurial State.” 

• Amidst global volatility and capital flight, it emphasizes strategic resilience and structural reforms to navigate a potential global downturn. 

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Strategic Framework & Sectoral Analysis

• Macro-Governance & The “Entrepreneurial State”:
  • Policy Agility: Advocating for a “forward-looking dynamic shift” where the state acts as a risk-taker, fostering an environment that tolerates experimental failure to achieve accelerated growth.
  • Global Risk Assessment: Pragmatically predicts a 10%-20% probability of a 2008-style crisis by late 2026, urging policy “sails” to be set for turbulence.
• External Sector & “Strategic Indispensability”:
  • Currency Volatility: Attributes the falling Rupee to capital flight toward AI-centric economies and safe-havens, rather than domestic structural failure.
  • Supply Chain Realignment: Acknowledges India’s current absence as a “strategically vital” node in merchandise chains; proposes a roadmap to transition from resilience to global indispensability.
• Fiscal Discipline vs. Populism:
  • Divergent Fiscal Paths: Highlights the Centre’s success in halving its fiscal deficit ratio, contrasted against the rising revenue deficits in several States.
  • Populism Warning: Critiques “unconditional cash transfers” (Fiscal Populism) as a threat to long-term stability, especially in the context of the current election cycle.
• Emerging Multi-dimensional Challenges:
  • Energy-Food Nexus: Raises concerns over the trade-offs between ethanol production and food security.
  • Hidden Costs: Points to the economic burden of the renewable energy shift and the scarcity of primary resources like fodder.
  • The “Digital Externality”: Identifies “compulsive scrolling” on smartphones as a modern behavioral risk to national productivity.

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Conclusion

India’s path to “Strategic Indispensability” necessitates balancing fiscal prudence with agile, risk-taking governance. By addressing structural bottlenecks—from fiscal populism to digital productivity risks—the Survey provides a realistic roadmap to sustain growth despite a deteriorating and uncertain global economic climate. 

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