GS II : Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Performance of Indian Economy

• From the crisis of 1991 came liberalisation and from the COVID-19 pandemic came a digital surge.
• Consider the latest GDP numbers. Real GDP grew 7.8% in Q1 FY 2025-26, a five-quarter high.
• Gross Value Added is up 7.6%, with manufacturing 7.7%, construction 7.6%, and services approximately 9.3%.
• Nominal GDP expanded 8.8%.
• It reflects rising consumption, robust investment, and the payoff from steady public capex and logistics reforms that reduce costs across the economy.
• India is now the world’s fourth-largest economy, and the fastest-growing major one, outpacing even the first and second largest, the United States and China.
• India is poised to overtake Germany and become the third-largest economy in market exchange terms before the decade ends.
• India already contributes over 15% of incremental world growth.
• Rating agency S&P Global delivered India’s first sovereign rating upgrade in 18 years, citing robust growth, monetary credibility and fiscal consolidation. That upgrade lowers borrowing costs and widens the investor base.

Social security

• In the last 10 years, 24.82 crore Indians moved out of multidimensional poverty.
• That shift rides on basic-services delivery at scale — bank accounts, clean cooking fuel, health cover, tap water — and on direct transfers that empower the poor to make choices.

Energy security

• India, today, stands as the third largest energy consumer, fourth largest refiner, and fourth largest liquefied natural gas importer in the world.
• India operates over 5.2 million barrels per day of refining capacity.
• India’s energy demand, which is projected to double by 2047, will account for nearly a quarter of incremental global demand.
• Exploration acreage has expanded from 8% of sedimentary basins in 2021 to over 16% in 2025, with a target of covering one million square kilometres by 2030.
• New gas pricing reforms linking prices to the Indian crude basket and offering 20% premiums for deepwater and new wells have spurred investment.
• Ethanol blending has surged from 1.5% in 2014 to 20% today, saving over Rs 1.25 lakh crore in foreign exchange and paying more than Rs 1 lakh crore directly to farmers.
• Over 300 compressed biogas plants are being rolled out under Sustainable Alternative Towards Affordable Transportation, with a 5% blending mandate targeted by 2028.
• India has been the fourth-largest exporter of petroleum products for decades — long before the Ukraine conflict.
• Exports keep supply chains functioning. Indeed, Europe itself turned to Indian fuels after banning Russian crude.
• The world’s second-largest producer supplying nearly 10% of global oil.
• Equally important, India acted decisively to shield its citizens when global prices spiked after the Ukraine conflict. Oil PSUs absorbed losses of up to Rs 10 per litre on diesel; the government cut central and State taxes and export rules mandated that refiners selling petrol and diesel abroad must sell at least 50% of petrol and 30% of diesel in the domestic market.

Industrialisation

• ‘Made in India’ causes the new industrial revolution taking shape in India. This spans semiconductors, electronics, renewables & defence etc.
• The Cabinet recently approved four additional semiconductor manufacturing projects under the India Semiconductor Mission.
• The Prime Minister’s visit to a semiconductor facility in Japan and renewed Japanese investment commitments, underline a shared road map for resilient, trusted tech supply chains.