Why in News?

• The Economic Survey 2025–26, tabled in Parliament by the Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, reflects on India’s post-Covid economic resilience amid rising global geopolitical and economic uncertainties.
• The Preface departs from conventional macroeconomic commentary and makes a strong normative case for transforming India into an “entrepreneurial state” capable of navigating uncertainty while pursuing the goal of Viksit Bharat.

What’s in Today’s Article?

• Reconfigured Economic Survey
• Core Theme - Entrepreneurial Policy Making under Uncertainty
• Early Signals of the Entrepreneurial State
• India’s Macroeconomic Resilience in a Turbulent World
• Global Headwinds vs India’s Aspirations
• Three Possible Global Scenarios for 2026
• India’s Relative Strengths
• Running a Marathon and Sprint Simultaneously
• Challenges
• Way Forward
• Conclusion 

Reconfigured Economic Survey:

• Structural changes:
  • The Economic Survey 2025-26 expanded to 17 chapters - indicating greater depth and breadth.
  • Chapters are rearranged based on national priority and relevance, not convention.
• Special essays on:
  • Evolution of Artificial Intelligence
  • Quality of life in Indian cities
  • State capacity, private sector and households in achieving strategic resilience and strategic indispensability. 

Core Theme - Entrepreneurial Policy Making under Uncertainty:

• Fundamental shift in the role of the State: From risk-averse, compliance-driven governance to risk-structuring, capability-driven and adaptive governance.
• Key features of an ‘Entrepreneurial State’:
  • It acts before certainty emerges, structures and manages risk, rather than avoiding it.
  • It will learn from systematic experimentation, and correct course without policy paralysis.
• Significance: This vision is presented as practical and already unfolding, not merely aspirational.

Early Signals of the Entrepreneurial State:

• The Survey highlights ongoing initiatives as evidence of this shift. For example,
  • Mission-mode platforms (e.g., Semiconductors, Green Hydrogen).
  • Public procurement reforms enabling first-of-a-kind domestic innovation.
  • State-level deregulation compacts, replacing inspection-based controls with trust-based compliance.
• These initiatives mark a transition from regulation to capability building.

India’s Macroeconomic Resilience in a Turbulent World:

• Despite the Covid-19 shock, US tariffs imposed (in April 2025), rising global fragmentation, India has demonstrated strong macroeconomic fundamentals.
• For example, expected real GDP growth of over 7% in 2025–26, with momentum continuing into the next year.
• However, the Survey identifies a “Paradox of 2025”:
  • India’s strongest macroeconomic performance in decades coincides with a global system that no longer rewards macroeconomic prudence with currency stability, capital inflows, or insulation from shocks.

Global Headwinds vs India’s Aspirations:

• India, with 145 crore people, aims to become a high-income country within a generation, within a democratic framework—a path with no ready-made global template.
• The Survey notes:
  • Retreat of the global dominant power from earlier commitments.
  • Rising trade frictions, geopolitical rivalries, and economic nationalism.
• These headwinds can become tailwinds only if the State, private sector, and households align and commit to sustained effort.

Three Possible Global Scenarios for 2026:

• Managed disorder:
  • Less coordinated world
  • Higher risk aversion
  • Integrated yet distrustful global system
  • Narrower margin of safety
• Disorderly multipolar breakdown:
  • Intensified strategic rivalry
  • Coercive trade, sanctions, supply chain realignments
  • Greater trade-offs between autonomy, growth, and stability
• Systemic shock cascade (low probability, high impact): Financial, technological, and geopolitical shocks amplify each other - potentially worse than the 2008 Global Financial Crisis.

India’s Relative Strengths:

• India is better placed than many countries due to:
  • Large domestic market
  • Less financialised growth model
  • Strong foreign exchange reserves
  • Credible strategic autonomy
• Yet, a common risk across all scenarios remains:
  • Disruption of capital flows
  • Sustained pressure on the rupee

Running a Marathon and Sprint Simultaneously:

• External sector imperative: Rising incomes will inevitably lead to rising imports. Therefore, India must generate export earnings, and foreign investor confidence.
• Policy stance for 2026:
  • Focus on supply stability, resource buffers, diversification of routes and payment systems.
  • Adopt strategic sobriety, not defensive pessimism.
• India must “India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint”—maximising growth while absorbing shocks.

Challenges:

• India’s central challenge - Policy and process reforms:
  • The Survey underlines that policy reforms are necessary, and process reforms are even more critical.
  • Why? Processes govern state–citizen interaction. They determine whether policy intent succeeds or fails.
  • Positive signals: State-led deregulation and smart regulation, and shift from control to enabling governance.
• Other challenges:
  • Global geopolitical fragmentation and economic coercion
  • Capital flow volatility and exchange rate pressures
  • Need for rapid institutional adaptation
  • Balancing growth with resilience and stability

Way Forward:

• Integrating 3 pillars for Viksit Bharat:
  • The Survey integrates three pillars: state capacity, societal participation, and deregulation.
  • In a democracy, the State remains the principal development agent, but must upskill and reskill, be mentally prepared for a hostile and uncertain global terrain, and adapt to the reality that old rules no longer apply.
• Strategic opportunity amid global crises:
  • Potential global crises may open space for India to shape the emerging global order, and enhance strategic influence and indispensability.
  • This demands the most agile, flexible and purposeful governance since Independence.
• Delayed gratification over short-term fixes:
  • The Survey advocates resilience over quick wins, innovation and persistence over short-term pressure management.
  • This will help India to stay committed to Viksit Bharat amid prolonged global churn.
• Other suggestions:
  • Deepen entrepreneurial governance.
  • Strengthen process reforms and deregulation.
  • Build buffers, redundancy, and liquidity.
  • Align state, market, and society towards long-term national goals.
  • Invest in state capacity and institutional learning.

Conclusion:

• The Economic Survey 2025–26 Preface redefines India’s economic strategy for an era of uncertainty.
• It calls for an entrepreneurial, adaptive and resilient State that can sustain high growth while absorbing shocks.
• In a volatile global order, India’s path to Viksit Bharat lies not in quick fixes, but in patient resilience, relentless innovation, and strategic sobriety—running the marathon of development at the pace of a sprint.