TLDR;
This video provides a detailed analysis of the Economic Survey 2025-26, explaining its importance for regulatory body examinations like RBI and NABARD. It covers key concepts, growth projections, fiscal performance, and sector-wise analysis, including agriculture, industry, and services. The video also discusses proposals related to artificial intelligence, urbanization, and indigenization.
- Importance of Economic Survey for regulatory exams
- Detailed analysis of key economic indicators and sector-wise performance
- Discussion of proposals on AI, urbanization, and indigenization
Introduction to Economic Survey 2025-26 [0:04]
The session introduces a detailed discussion of the Economic Survey 2025-26, emphasizing its importance for exams like RBI and NABARD. The Economic Survey is crucial for RBI exams, with paragraph-based questions appearing in past exams. It also plays a significant role in NABARD exams, where questions on debt and economic glimpses have been asked. For other regulatory bodies like SEBI, PFRDA, and IFSCA, the Economic Survey and Union Budget are vital, especially in paper two.
Key Economic Terms and Structure of the Survey [3:32]
The Economic Survey includes technical terms like GDP (Gross Domestic Product), GVA (Gross Value Added), gross fixed capital formation, fiscal deficit, primary deficit, and effective revenue deficit. The Economic Survey 2025-26 consists of 16 chapters, with 13 chapters focusing on economic growth and the last three chapters proposing suggestions on AI, urbanization, and Swadeshi (indigenization). The initial chapters cover the status of the economy, fiscal deficit, monetary policy, and sector-specific analysis.
Chapter 1: State of the Economy - Pushing the Growth Frontier [6:50]
Chapter one focuses on pushing the growth frontier, with GDP growth projected between 6.8% to 7.2% for the next financial year and 7.4% for the current financial year 25-26. The agriculture sector is expected to grow at 3.1%, while the industry sector is projected to grow from 5.9% to 6.2%. The service sector is expected to grow at 9.1%. India's foreign reserves are sufficient for 11 months, considering imports and external debt. The fiscal deficit is projected to be 4.8% for the year 2024-25, and the per capita income is around 2.2 lakh at the current price.
Chapter 2: Fiscal Developments - Anchoring Stability [13:20]
Chapter two discusses fiscal developments, highlighting the anchoring of stability through credible consolidation. The fiscal deficit is consistently declining and is estimated to be around 4.4% for the financial year 2025-26. The current account deficit is around 0.8%, and capital expenditure has increased to 4%, indicating the government's focus on infrastructure. The debt to GDP ratio is around 55.7% and is expected to be 50% by financial year 31. Income tax filing has increased due to government reforms, with filers now at 9.2 cr compared to 7 cr previously. GST reforms have been appreciated, with GST collection growing by 6.7%.
Chapter 3: Monetary Management and Financial Intermediation [20:02]
Chapter three covers monetary management, focusing on banking and financial sector systems. The primary goal is to refine regulatory touch and diversification. Outsourcing credits by scheduled commercial banks have increased from 11.2% to 14.5%. Bank credit to the MSME sector has increased to 21.8%. Gross non-performing assets have decreased to 2.2%, and net non-performing assets are at 0.5%. Financial inclusion is discussed, highlighting schemes like PMJDY, PM Swanidi, PM Mudra, and Stand-Up India. The number of Regional Rural Banks (RRBs) has reduced from 196 to 28 due to the "one state, one RB" initiative. Public sector banks have launched a credit assessment model for MSMEs, sanctioning over 41.15,000 cr rupees across 3.2 lakh applications.
Chapter 4: External Sector - Trade and Balance of Payments [31:46]
Chapter four discusses the external sector, noting that total exports are around US $825.3 billion. Service exports are at an all-time high, and India remains the world's largest recipient of remittances. Foreign exchange reserves are around $701.4 billion, covering about 11 months of imports. According to WTO's world trade statistics, India's global exports have nearly doubled from 1% to 1.8%, and commercial service exports have also doubled from 2% to 4.3%. India is ranked as the leading economy in terms of diversification of its assets, ranked third in the global south.
Chapter 5: Inflation - Trends and Management [36:36]
Chapter five addresses inflation, stating that India has recorded the lowest inflation rate since the beginning of the consumer price index series, with average inflation at around 1.7%. Despite global economic volatility, India is managing inflation within its target range of 2% to 6%, with CPI inflation at 5.5%. Rural inflation remained lower than urban rates due to timely government measures. Kerala and Lakshadweep breached the 6% inflation target, while Delhi and Himachal Pradesh were below the national average.
Chapter 6: Agriculture and Food Management [39:26]
Chapter six focuses on the agriculture sector, noting that while the growth rate has slightly dipped, productivity has increased, with an average annual growth rate of 4.4%. The livestock sector has grown by 195%, and the marine sector by 140% in the previous decade. Horticulture has contributed about one-third (33%) of the overall gross value addition from the agriculture sector. India is the largest producer of dry onions, contributing nearly 25% of the global output, and is the second-largest producer of vegetables, fruits, and potatoes.
Chapter 7: Services Sector - Key Driver of Growth [45:29]
Chapter seven highlights the services sector, which accounts for 53.6% of India's GDP. India is the world's seventh-largest exporter of services, contributing around 2% of global service exports. Software services account for nearly 40% of the service export. The service sector shares the highest GVA of 56.4%. Tourism is a major job engine, providing around 8.46 crude direct jobs. India is the largest recipient of public-private investment in South Asia, accounting for over 90% of the region's total private infrastructure investment.
Chapter 8: Industry and Infrastructure [48:48]
Chapter eight discusses the industry sector, noting that MSMEs account for approximately 48.5% of exports, 31% of GDP, and 35.4% of manufacturing output. MSMEs are India's second-largest employer after agriculture. India contributes about 2.9% of global manufacturing gross value addition and 1.8% of global merchandise exports. The pharmaceutical industry is the third largest by volume, meeting approximately 20% of global generic medicine demand. The electronic sector has emerged as the third-largest export category, led by mobile phone manufacturing.
Chapter 9: Investment and Infrastructure Development [53:01]
Chapter nine focuses on investment and infrastructure, highlighting that teledensity has reached approximately 86.7%, with 5G services available in about 99.9% of the country's districts. India's energy sector has shown a dramatic increase, with approximately 50% from renewable energy. India is third globally in overall renewable energy and installed solar capacity. India is the largest recipient of public-private investment in South Asia, accounting for over 90% of the region's total private infrastructure investment.
Chapter 10: Environment and Climate Change [57:15]
Chapter ten addresses environment and climate change, noting that India is working towards resilient competitiveness and de-competitive development initiatives. The mission life initiative, focusing on lifestyle for the environment, has been highlighted. India is taking mitigation actions by phasing in renewable diversifications, exemplified by the green hydrogen and nuclear power bill. India's climate adaptation and resilient-related domestic spending has enhanced from 3.7% to 56%.
Chapter 11: Education and Health [59:55]
Chapter eleven discusses education and health, noting that as per the national education policy, there is a 95.4% gross enrollment ratio at the preparatory stage, 90% at the middle stage, and 68.5% at the secondary stage. India has the world's largest school system, supporting around 24.69 cr students and 1 cr teachers. In health, the maternal mortality rate has reduced by 86%, and the under-five mortality rate has declined by 78% in the past three decades.
Chapter 12: Employment and Skill Development [1:03:45]
Chapter twelve focuses on employment and skill development, highlighting the introduction of four new labor codes from November 2025. The share of individuals with vocational technical training has increased from 8.1% to 34.7%. Approximately 43 lakh apprentices have been engaged through the national apprenticeship promotion scheme. There is a decline in the unemployment rate and a stabilization in the labor force participation rate. The gig economy has expanded, encompassing approximately 120 lakh workers.
Chapter 13: Rural Development [1:08:03]
Chapter thirteen discusses rural development, noting that the multi-dimensional poverty index has declined from 55.3% to 11%. Social service expenditure has grown by 12%, and expenditure on education has increased by 8%. The World Bank has revised the international poverty line from $2.15 to $3. Various rural schemes like Graham Saraki, TKG, aas yojana, gramin, her jan mission, and swamitwa scheme are being implemented.
Chapter 14: Artificial Intelligence as an Economic Strategy [1:09:47]
Chapter fourteen proposes treating artificial intelligence not just as a technology but as an economy. It emphasizes the need for coordination, capacity building, and binding policies to allow institutions and markets to evolve. The chapter suggests setting up an AI economic council for India, focusing on human primacy, labor market sensitivity, ethical AI systems, and public interest safeguards. It also proposes establishing an AI safety institute in India, based on the ministry of electronics and information technologies guidelines.
Chapter 15: Urbanization - Making Cities Work for Citizens [1:18:04]
Chapter fifteen focuses on urbanization, highlighting that India is now more of an urban economy than a rural economy. By 2036, India's towns and cities will be home to 600 million people, or 40% of India's population. The chapter proposes that every million-plus city should have a 20-year city spatial and economic plan, updated every five years, with non-negotiable elements like transport network plans, housing supply plans, and land value capture frameworks.
Chapter 16: Indigenization - Strategic Resilience and Indispensability [1:23:42]
Chapter sixteen discusses indigenization, emphasizing that while import substitution is not always feasible, strategic resilience and indispensability are crucial. It proposes a three-tiered framework for indigenization, focusing on critical vulnerabilities, economically feasible capabilities, and low-cost substitutions. The chapter examines a national input cost reduction strategy, recognizing affordable and reliable inputs as foundational to manufacturing exports. It also highlights the importance of reducing compliances and deregulation initiatives.
