India stands out for purposeful policymaking in a choppy world

Steady, pragmatic and long-horizon policies have been giving our economy the strength to convert volatility into possibility

- V. ANANTHA NAGESWARAN

Seventeen months into the current government's third term, India finds itself with something increasingly rare among major economies: sustained momentum in a turbulent global environment.

Growth across much of the world has been muted by the aftershocks of the pandemic, chronic supply disruptions, inflation and rising geopolitical contestation. Yet, India has navigated these shifts with surprising strength and has treated adversity not as an obstacle, but as an opportunity to reinforce its economic foundations.

Over the past 17 months, the economy has continued to expand at a healthy clip, recording 6.5% growth in constant prices in 2024-25, following three previous years of strong expansion. This sustained performance compares favourably with most major economies. Crucially, India has kept inflation under control even while the economy has grown briskly—a reflection of strengthened supply capacity and consistent macro economic management.

The fiscal anchor has been restored. From the peak of 9.2% during the pandemic years, the fiscal deficit is poised to fall to 4.4% of GDP this year, reaffirming the government's commitment to long-term sustainability. Markets have recognized this discipline: India secured its first sovereign credit rating upgrade from a major rating agency in over a decade, and long-term borrowing costs have fallen significantly. These are not mere financial statistics but critical enablers of productive investment and social spending.

This stability has been matched by the visible transformation of physical infrastructure. Highways, urban mobility networks and logistics corridors have expanded at unprecedented speed, reducing bottlenecks that once burdened businesses and raised prices. This deeper, broader supply base has meant that growth today no longer generates the overheating pressures that once lurked behind every uptick in demand.