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Introduction

The Economic Survey 2025-26 characterizes India’s current growth phase as a “marathon with the pace of a sprint.” While new-age sectors like AI, renewable energy, and ethanol offer a pathway to Viksit Bharat @2047, they introduce “structural asymmetries.” Policymakers are now tasked with ensuring that this innovation-driven momentum does not collide with emerging economic vulnerabilities or social inequities.

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Mitigating Emerging Economic Risks

• Sequenced AI Adoption: Rather than an omnibus law, policymakers are adopting a phased approach building coordination first and binding policy last—to avoid “premature lock-ins.”
  Eg: The Survey recommends focusing on sector-specific, small, and open-weight AI models to ensure efficient resource utilization and prevent corporate monopolies.
• Calibrated Ethanol Pricing: To mitigate distortions, the government is shifting focus toward second-generation (2G) biofuels that do not compete with food crops.
  Eg: Administered prices for maize-based ethanol rose at 11.7% CAGR (FY22-25), leading to “early warning signals” of reduced pulse and oilseed acreage.
• Grid Stability Focus: In renewable energy, policy is shifting from mere capacity addition to ensuring baseload adequacy and storage to prevent grid congestion.
  Eg: India curtailed 2.3 TWh of solar generation in late 2025 to maintain stability, highlighting the risk of transitions outpacing transmission infrastructure.

Mitigating Emerging Social Risks

• Human-Centric AI Deployment: Policymakers are prioritizing AI as a tool for labor augmentation rather than replacement, focusing on sectors like healthcare and education.
  Eg: The Survey identifies “AI-disruption-proof” vocations such as elder care, nursing, and artisanal crafts, urging that these be made “fashionable” career choices.
• Food vs. Fuel Balance: To protect nutritional security, the government is implementing feedstock caps to prevent ethanol production from inflating the prices of dietary staples.
  Eg: The “fuel vs. feed” dilemma has already caused supply tightness for the poultry and cattle industries that rely on maize.
• Reskilling for Green Jobs: Integrating foundational capabilities like reasoning and judgment into vocational training to ensure the workforce can adapt to rapid technological shifts.
  Eg: The Survey justifies the Viksit Bharat Guarantee for Rozgar (Gramin) Act, 2025, as a legislative reset to align rural livelihoods with modern tech.

Associated Concerns

• Structural Asymmetries: Global AI development is concentrated in a few frontier firms, risking “technological dependence” for India.
• Import Dependency: Excessive focus on maize for ethanol could entrench India’s dependence on edible oil imports as farmers shift away from oilseeds.
• Capital Constraints: The high material intensity of renewable energy and AI hardware requires massive capital, which remains “risk-averse” in developing economies.
• Regulatory Overreach: The risk that rigid localization or prescriptive controls could stifle the very innovation India seeks to lead.

Conclusion

Policymakers must adopt “strategic sobriety” by creating regulatory sandboxes that enable experimentation while protecting the public interest. This requires linking PLI incentives to sustainability audits and investing in decentralised, application-driven systems to secure supply chains and expand economic pathways, ensuring growth and resilience advance together.

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