Opinion | How The Indian Economy Is In The 'Goldilocks' Phase Under PM Modi |
An 8.2 percent GDP growth in Q2FY26 amid global policy uncertainty, high commodity prices, and geo-economic fragmentation is extraordinary by any metric.
This level of growth is reminiscent of China’s peak years. India’s success is even more impressive given that it has thrived despite two Black Swan events — the Covid-19 pandemic and the Russia-Ukraine conflict.
Tariffs under Trump 2.0 have not deterred India’s entrepreneurial spirit. While China often had surpluses and excess capacity, India has avoided this issue.
The International Monetary Fund (IMF) debt sustainability analysis shows that under almost any stress scenario, except a permanent 300 bps growth shock, India’s debt remains sustainable. Even in that extreme case, the required adjustment is modest compared to historical emerging market (EM) crises.
Potential growth estimates are being revised upwards, with Goldman Sachs, Morgan Stanley, and JP Morgan now estimating growth closer to 8 percent. Continuous above-potential growth without overheating indicates an expanding potential, supported by TFP gains from digitalisation, formalisation, and infrastructure upgrades — key elements of ‘Modinomics’.
The IMF has recognised India’s dramatic improvement in the ease of doing business (EODB) ranking, jumping from 142nd in 2014 to 44th in 2024 in the World Bank index. Foreign direct investment (FDI) equity inflows reached $82 billion in FY25.
India exceeded its 2020 Paris climate commitments by eight years and is on track for 500 GW non-fossil capacity by 2030. The IMF’s new Climate Policy Diagnostic rates India as one of the few large EMs with a “coherent and ambitious" nationally determined contribution, highlighting Prime Minister Narendra Modi’s commitment to “green growth".
Leading indicators for Q3 and Q4 of FY26 remain robust. From April to November 2025, cumulative GST collections reached Rs 14.76 lakh crore, an 8.9 percent year-on-year (YoY) growth. Railway freight traffic hit record levels, and bank credit growth stands at a healthy 11 percent.
An analysis of 3,906 listed companies showed a 7.5 percent YoY rise in total income in the September quarter, the strongest revenue growth in four quarters, and a 34 percent jump in........