Economic Survey 2026 highlights strong State capacity as the foundation of India’s strategic resilience and growth. Fiscal consolidation, record capital expenditure, and massive infrastructure expansion are driving macroeconomic stability, competitiveness, and long-term development nationwide.
The Survey recognises that the ‘State capacity’ is the foundation on which strategic resilience is built and the pathway through which strategic indispensability becomes possible.
Strategic resilience is co-created through the everyday behaviour of the State, firms, and citizens, and rests on a shared obligation and a reciprocal contract across the three. This resonates with PM Narendra Modi’s call of ‘Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas’. The Survey has noted that the State-level deregulation drive is gaining momentum, in the spirit of cooperative & competitive federalism. With 36 States & UTs implementing 23 priority areas each, India has 828 actionable reforms. As of 23rd Jan 2026, 630 (76%) are completed, and 79 (10%) are under active implementation — accelerating ease of doing business nationwide.
“From Deficit Control to Infrastructure Boom: Survey Flags India’s Growth Engine”
Capex-Led Strategy, Fiscal Consolidation Strengthen India’s Economic Resilience
The Survey notes that the government’s calibrated fiscal strategy, anchored in credible deficit reduction, resilient revenue mobilisation, and a decisive reorientation of spending toward capital formation, has strengthened macroeconomic stability and supported growth in the post-pandemic period. Importantly, this fiscal resilience reflects prudent fiscal policy choices and careful fiscal management.
The govt. remains committed to fiscal consolidation without compromising on growth. The fiscal deficit target of 4.4% for the current FY 2026 is well on track, a feat recognised by 3 sovereign rating upgrades this financial year. • Our capital expenditure has risen by nearly 89% since FY22, reaching a budgeted ₹11.21 lakh crore in FY26. The effective capex has risen from 2.7% (pre-pandemic average) to 3.9% of the GDP (post-pandemic). We are building assets that serve as the economic arteries of an aspiring economy.
The national highway network has expanded by nearly 60%, rising from 91,287 km in FY14 to 1.46 lakh km by FY26, while operational high-speed corridors have grown almost tenfold to 5,364 km, sharply reducing freight bottlenecks. • Rail capacity creation has accelerated, with annual commissioning more than doubling over the last decade. Port infrastructure has expanded in tandem, with cargo handling increasing from 1,052 MMT to 1,602 MMT and total capacity reaching 2,771 MMT, alongside a reduction in average container vessel turnaround time from 43.44 hours to 30.88 hours.
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The strongest transformation is visible in Inland Water Transport, where cargo movement has surged from 18 MMT in 2013–14 to 146 MMT in 2024–25, signalling a structural shift toward cheaper, greener, and more efficient freight logistics.
The Survey has also highlighted that cities succeed not only through infrastructure but through trust, predictability, and civic cooperation.
