This volume of EcoCapsule charts the evolution of growth drivers for the Indian economy from capex to consumption. It avers that three events in the past few weeks have the potential to turn the tide for the Indian economy – the direct tax cut could boost urban consumption and rural welfare schemes may help sustain rural exuberance, Union capex remains unfazed, and RBI’s rate cut and relaxation on key banking norms could boost credit growth. These will be the drivers for FY26. However, significant downside risks emanating from the global front are on the horizon. This includes extreme volatility across asset classes in the near term, and slower services exports in the medium term. In the long term, this could turn an advantage if Indian companies play it smartly and reorient supply chains towards themselves. In conclusion, a domestic orientation in the face global headwinds would be crucial to survive and thrive in FY26.
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