Dear Readers,

Introduction: We had a joyous occasion of Holi which is celebrated throughout the country. Colours were sprinkled all over. The occasion is a symbol of joy, love and harmony and a victory of good over evil.

According to Hindu mythology, Lord Vishnu incarnated as Lord Narsimha to kill evil king Hiranyakashipu. As the story goes, Prahlad was the son of king Hiranyakashipu, who never considered Lord Vishnu as the Lord of the Universe. But Prahlad was a great devotee of Lord Vishnu. Angry at his son’s devotion, Hiranyakashipu tried many times to kill his own son, Prahlad, and asked his sister Holika (who had a boon that fire could not burn her) to sit in a blazing fire with Prahlad on her lap. However, because Prahlad prayed sincerely, he was saved while Holika burned to ashes despite the boon on her. On being asked by his father if Lord Vishnu is in the nearby palace pillar, when Prahlada answered yes, the king struck the pillar. Lord Vishnu appeared as Narasimha who was half human and half Lion and was very fierce, and he killed Hiranyakashipu. Holi is also considered a religious function as well uniting all and symbolizing good over evil.

Indian Economy: The Indian economy remained resilient and grew steadily in January and February of 2026, keeping it among the world’s top economies with the fastest rates of development. High domestic demand, infrastructure investment, and the ongoing growth of the manufacturing and services sectors — particularly IT and digital services — supported the revised projections of 7.6% GDP growth in the fiscal year, inflation is expected to remain under control.

Despite global uncertainty, imposition of high tariff by President Trump of US, Indian economy grew by 7.8% in the third quarter of FY26.

India’s exports to US in FY25 was USD 86.5 billion and imports stood at around USD 45.3 billion. USA has imposed a steep 125.87% countervailing duty on crystalline silicon solar cells exported from India. Between April 2023 and November 2025, India exported cells and modules worth roughly Rs. 34,000 crore to the US. US accounted for over 95% of India’s solar export market. However, this trade faces disruption now. Modules from India could become at least 30% more expensive compared with US-made alternatives, rendering them commercially vulnerable. India’s trade with US may get affected.

Unemployment has slightly increased. Rapid development of AI is threatening multiple professions across various sectors. There can be more loss of employment in certain sectors.

The entrepreneurial ‘animal spirit’ of entrepreneurs has not fully revived so far. Lenders and government have not considered external factors namely changes in government regulations and administrative delays/no action; changes in banking regulations; global trade threats; springing up of new industries with large incentives by the government and others can affect an enterprise. Even long-standing profitable startups may become unprofitable under adverse conditions.

Despite the Supreme Court’s order that an enterprise unable to make payment in time due to external factors cannot be treated as fraud and this is against natural justice, lenders are making it difficult for the stressed borrowers thereby killing the animal spirit and wiping out the value creation ability of the entrepreneurs and also creating immense problems for their families. For continuous higher growth of more than 7.5% and continued employment, the government has to consider how they can incentivize the restructuring of debts.

India’s economy expanded by 7.8% in the October–December 2025 quarter (Q3 FY26), supported by a strong rebound in manufacturing, robust festive-season consumption and resilient demand for goods and services. Under the newly revised GDP series (base year 2022-23), full-year growth for FY2025-26 is now projected at 7.6 %, up from the earlier estimate of 7.4%. The sustained momentum reflects broad-based activity across key sectors.  

Global Economy: The global economy grew moderately and unevenly in January and February of 2026, with emerging markets continuing to grow more quickly while established economies stabilized following periods of high inflation. Tighter monetary policies helped several countries reduce inflation, but interest rates stayed high, in contrast, to China, which had slower development as a result of weaker domestic demand and difficulties in the real estate industry. United States demonstrated consistent consumer spending and employment growth. Although there was some improvement in international trade, geopolitical concerns and changes in oil prices created more uncertainty. However, immense uncertainty now looms over the global economy with the outbreak of a full-fledged conflict in the Middle East. This will have huge ramifications in terms of breakdown in global supply chains thereby pushing up commodity prices and therefore inflation and a turmoil in financial markets is also imminent.

Cover Story: Budget 2026-27 contains announcements for the manufacturing sector, various services sectors, as well as particular provisions to help labour- intensive sectors such as textiles and leather.

This year the Budget had not gone for big reforms, and has placed a decisive bet on strengthening India’s manufacturing base, with a sharp focus on strategic sectors such as semiconductors, electronics, biopharma, rare earths, textiles, transportation, energy storage and capital goods. In the revised estimate for 2025–26, the government has fixed its fiscal deficit target to 4.4% of GDP, exactly what was estimated at the time of presenting the budget. And now Finance Minister has projected a fiscal deficit at 4.3% of GDP for 2026–27. The budget also promotes ease of doing business by simplifying tax compliance norms and rationalizing certain TCS and TDS provisions. In social sectors, higher allocations are provided for agriculture, rural development, education, healthcare and skill development to strengthen human capital. Overall, Budget 2026–27 combines infrastructure-led growth, targeted industrial policy, social sector support and fiscal prudence to position the economy for sustained expansion in the coming years.

To strengthen external confidence in Public-Private Partnerships (PPP) in infrastructure, the Finance Minister of India has proposed creating an Infrastructure Risk Guarantee Fund. The objective is to provide structured risk mitigation and enhance investor trust in long-term infrastructure projects. While credit guarantees have been extended to lenders, private developers have not received adequate support for addressing payment delays. In several instances, payment delays have led lenders to classify accounts as fraudulent, further discouraging private participation. The proposed fund aims to reduce such uncertainties and revive private sector confidence in infrastructure financing. 

Conclusion: As of early 2026, the Indian economy continues to grow strongly, supported by domestic consumption, infrastructure investment, and expanding services and manufacturing sectors, while inflation remains under control thanks to the Reserve Bank of India. Overall, India in early 2026 demonstrates economic resilience, technological advancement, policy focus, and cultural vibrancy, positioning it for sustainable and inclusive growth.

Dr. H.P. Kanoria

Editor