Capital Spending, Rare Earth Focus Key To 'Viksit Bharat' Vision: EY Report

A critical component of this resilience lies in achieving self-reliance in critical minerals, resources essential for economic development and national security

Global uncertainties, such as persistent supply chain disruptions, evolving tariff policies in major economies like the US, and geopolitical instability, are contributing to a cautious growth outlook

Source : ABPLIVE AI

An increase in capital expenditure coupled with a strategic focus on rare earth minerals could play a pivotal role in India's journey toward becoming a developed nation under the "Viksit Bharat" vision, according to the latest EY Economy Watch report.

The report stressed the need for a balanced policy approach, one that supports consumption while simultaneously ramping up capital investments. This dual strategy, EY suggests, will be essential for sustaining growth and building long-term economic resilience.

A critical component of this resilience lies in achieving self-reliance in critical minerals, resources essential for economic development and national security. These include inputs vital to sectors like defence, agriculture, energy, pharmaceuticals, and telecommunications.

India identified 30 such critical minerals in June 2023 and has since launched a National Critical Mineral Mission in 2025 to address supply risks. However, EY stresses that success will depend on coordinated efforts from both public and private sectors. Additionally, forging strategic partnerships with mineral-rich countries could help India secure rare earth supplies and reduce global supply chain vulnerabilities.

India Remains One Of The Fastest-Growing Major Economies

Despite an expected moderation in GDP growth for FY26, India remains one of the fastest-growing major economies, driven by robust domestic demand, easing inflation, and an accommodative monetary policy that may stimulate a revival in private investment, the report noted.

Global uncertainties, such as persistent supply chain disruptions, evolving tariff policies in major economies like the US, and geopolitical instability, are contributing to a cautious growth outlook.

To maintain economic momentum, EY recommends a balanced mix of monetary and fiscal measures. On the monetary front, a continuation of the rate-cut cycle could boost consumption and investment. On the fiscal side, reviving the pace of public investment, especially capital expenditure, which slowed in FY25 will be vital.

DK Srivastava, Chief Policy Advisor at EY India, said, “While India's medium-term prospects remain strong, current global headwinds and domestic challenges call for supportive fiscal and monetary policies. Over the long run, sectors linked to technology and clean energy will play a key role in driving sustainable growth. Building resilience through self-reliance in critical minerals, especially in rare earths, can help India move closer to its Viksit Bharat aspirations.”