India's Economy: Resilient Growth Driven by Public Investment, Private Sector Cautious

• India's economy projects 7.4% real GDP growth for FY 2025-26, positioning it as one of the fastest-growing major economies.
• Growth is primarily fueled by public infrastructure investment, with ₹11.21 lakh crore allocated for infrastructure in FY26 Union Budget.
• Private investment remains subdued due to global uncertainties, uneven demand recovery, and a preference for deleveraging over expansion.
• Indian corporates have strengthened balance sheets, with net profits tripling and debt-to-equity ratios improving, but bank credit to industry moderated.
• External headwinds like U.S. tariffs under President Trump and geopolitical risks pose challenges, while widening inequalities demand inclusive policies.

Why It Matters: India's economy shows strong growth driven by public investment, but private sector caution and global risks persist.