DA Editorial Desk |Sara Debbarma
The International Monetary Fund has raised its forecast for India’s growth to 7.0 percent for 2026 and 2027, up 0.6 points from July for this year. Policymakers will be pleased, and they have earned some satisfaction. In a year when a war in the Middle East has pushed up energy costs and trimmed growth elsewhere, with China expected to slow to 4.5 percent, India’s resilient domestic demand and strong services sector stand out.
But a forecast is a compliment, not a plan. The same report expects India’s current account deficit to widen to 1.5 percent of GDP this year, from 0.7 percent in 2025. That is the cost of importing expensive oil, and it is the clearest sign of where the economy is exposed. The IMF itself warns that oil price swings and geopolitical uncertainty could still weigh on demand.
The government should use the good news to do the unglamorous work. First, reduce dependence on imported energy through faster investment in renewables, storage and domestic refining flexibility. Second, protect household budgets from fuel shocks in a targeted way, rather than through blanket subsidies that strain public finances. Third, turn services strength into broader job creation, because growth that does not reach manufacturing, small firms and young workers will not feel like 7 percent to most families.
There is also a lesson in humility. Forecasts move. In April the IMF was more cautious, and it may be again. Strong numbers are a reason to build buffers, not to relax. A country that grows at 7 percent while carrying an oil-shaped weakness has been given time, and time is only useful if it is spent.