Why Economic Survey talks about obesity, mobile addiction? AI With Sanket

Subhash Garg, former Finance Secretary, and Prof. Santosh Mehrotra, senior economist, unpack the Economic Survey 2025–26 and question its optimism on growth.

In the discussion on AI With Sanket, they probe what the survey highlights — and what it sidelines — from the rupee’s slide and weak private investment to the sharp debate over whether “digital addiction” and obesity belong in an economic policy document.

The panel begins with the core question of what the Economic Survey is meant to do: assess the state of the economy, outline projections, and identify challenges for the year ahead. But both speakers repeatedly return to a central theme — headline numbers and upbeat framing, they argue, do not resolve deeper concerns around demand, investment, jobs, and external confidence.

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They also dispute the Survey’s emphasis on behavioural issues such as smartphone addiction and ultra-processed foods. Garg calls this focus “diversionary”, while Mehrotra argues the survey fails to connect these issues to the economy in a rigorous way, including how inequality shapes health outcomes.

Potential growth

Garg rejects the Economic Survey’s framing of “potential growth”, describing the exercise as “dicey” and not grounded in “great parameters”. He argues that the focus should instead be on the current year’s growth and the projection for the next year.

He notes the Economic Survey uses the National Statistical Office estimate that the economy grew 7.4 per cent in the current year and roughly 8 per cent in nominal terms, calling that “good growth” by conventional standards, even if India’s ambitions would require 8-10 per cent growth to tackle poverty and low income.

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However, Garg says the more difficult question is how that growth looks in dollar terms — especially when national targets like becoming the third-largest economy or reaching multi-trillion-dollar milestones are typically framed in US dollar terms. He points to the combination of nominal growth and rupee depreciation against the dollar, arguing this sharply compresses dollar-denominated growth.

Rupee and external confidence

Garg says the “irony” is that India can be described as among the fastest-growing economies in real terms while appearing far weaker in US dollar growth terms. He also criticises what he views as the Economic Survey’s underplaying of the rupee’s depreciation, objecting to the Survey’s tone in treating the issue as minor.

On the broader growth narrative, Mehrotra says the projections are “not terribly impressive” and adds there are “questions about the growth rate itself”. He does not expand at length on measurement disputes but signals that many economists have raised concerns.

Mehrotra credits the Survey’s industry chapter for signalling, in his view, a shift towards thinking about a broader industrial policy. He highlights the emphasis on broad-basing manufacturing and a cluster development strategy, arguing that late-industrialisers — he cites Italy and China — used clusters effectively over long periods.

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He says the Survey’s focus on investing in “brownfield sites” rather than creating new clusters is significant, and notes that India has thousands of clusters. He argues targeted investments could help revive manufacturing, strengthen MSMEs, and generate jobs — outcomes he describes as urgent.

Demand and investment

Mehrotra says the Survey does not adequately recognise “tepid aggregate demand” across the economy. He links this to a prolonged period in which the investment-to-GDP ratio has remained stuck within a narrow range, contrasting it with earlier years when higher investment was associated, in his telling, with stronger job growth and real wage increases.

He argues that today, three conditions are missing: private investment is not rising sufficiently, non-farm job creation is inadequate, and real wage growth is not robust. This, he suggests, makes optimism about future growth hard to sustain.

When the discussion turns to the Chief Economic Adviser’s “buzzwords” — FDI and “Swadeshi” — Garg says India has both positive and negative indicators simultaneously. He acknowledges improvements in banking and the reduction of NPAs and calls headline growth “not bad”, but counters that FDI “is not coming”, portfolio flows are pulling out, the rupee is depreciating, and entrepreneurial talent is relocating abroad.

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Garg also argues the Economic Survey does not clearly lay out a credible “path forward”, suggesting the framing around “Swadeshi” and “Atmanirbharta” appears redefined in a way that tries to satisfy competing audiences, producing confusion rather than clarity.

China comparison

Responding to the argument that global uncertainty is deterring investment, Garg calls it a fair point but insists comparisons matter. He points to China’s export surplus rising from about US dollars 900 billion to about USD 1.2 trillion, arguing that the same global conditions apply and yet outcomes differ.

Garg says capital flows toward “future goods” and technologies — he lists energy transition, solar, computerisation, digital systems, and electric vehicles — and argues that China dominates these production systems while India does not. Without a clear proposition, he says, it is unrealistic to expect investment cycles to “turn” automatically in India’s favour.

Mehrotra reinforces this by returning to domestic fundamentals. He says private corporate investment has not revived despite robust corporate profits, and notes that private corporate investment has remained around a similar level for years. He argues that weak aggregate demand discourages investment, and questions why FDI would surge if domestic investors are not investing.

He also claims that even with manufacturing capacity utilisation around the mid 70 per cent range, investment has not picked up, and alleges that capital is moving abroad, framing it as a question the Economic Survey does not answer.

Behavioural focus

A major pivot in the discussion is the Economic Survey’s emphasis on obesity, ultra-processed foods, and digital addiction as economic risks. Garg calls this “amusing” and “diversionary”, arguing that the Survey does not establish a credible connection to economic growth. He also suggests that consumption — whether digital or fast food — adds to economic activity, and that the Chief Economic Adviser’s approach reads more like social commentary than economic analysis.

Garg argues such issues belong to health and psychological domains and says the Finance Ministry should focus on fiscal and financial priorities like expenditure, taxation, and deficits. He also questions why such themes are foregrounded in a finance document, suggesting other national forums are more appropriate.

Mehrotra takes a different route. He says he would have preferred the Survey to connect obesity and cardiovascular disease to the economy through the lens of class and inequality. He argues obesity is concentrated among the top slice of the population, while the majority lack the purchasing power for such consumption patterns and spend time doing physically demanding work. He calls rising obesity a “reflection” of rising inequality and says the Survey does not meaningfully address inequality.

Jobs and demographic window

Garg links the “digital addiction” debate to deeper structural conditions. He says India has a very large population but lacks sufficient work opportunities, leading to joblessness and underemployment. He also points to poor quality in education and skills, arguing that this leaves many young people with time but without productive avenues.

He adds that smartphones have become universally affordable and that data prices are among the lowest globally, creating ideal conditions for high-volume consumption of social media and entertainment content. The real policy question, he says, is whether India can engage young people in more productive education, skills, and work — solutions he argues are not clearly visible in the Survey.

Mehrotra argues growth is being sustained by consumption of the top 10-15 per cent of the population and says this cannot deliver the kind of long-term growth India needs. He claims India requires much higher average growth over long stretches to meet development ambitions and argues major international organisations are not projecting growth above a certain level through the 2030 horizon.

He also warns that India is “running out” of its demographic dividend by around 2040, describing a narrowing window. He says the Survey does not adequately recognise the risk of an ageing society alongside unmet job aspirations among the young, framing it as a future “double whammy” that the economy may struggle to absorb.

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