Dear reader, as 2025, a year of global tumult and volatility, rolls by, Mint's reporters and columnists look around the corner on what is coming in 2026—to help you know what to expect and prepare for it. Tell us what you think at feedback@livemint.com.
As the year 2025 drew to a close, thousands of spectators braved Delhi’s foul air, made stagnant by the unyielding winter winds, to catch a glimpse of Lionel Messi. Not long back, it would have been a regular meet-and-greet for a legendary footballer. But this one was different. Fans booed the city-state’s chief minister for the poor air, a grievance likely unheard of in Messi’s home nation of Argentina, a fellow emerging economy.
Cut to 2026, three months in. India is expected to expand to $4 trillion in GDP by then, just $150 billion shy of beating Japan to become number four in the global pecking order. That will be a momentous milestone: the pandemic had dashed India’s national dream of reaching $5 trillion by 2025, and a success marker was long due. India will soon cross that goal, too.
Yet, as the confetti of success stories—and there are quite a few of them—settles, a more complex reality becomes evident, one that is represented more by the scenes at the Delhi stadium than by the accolades for milestones that are inevitable for our size. A nation of 1.45 billion is increasingly hungry for better lives.
That’s why many were not impressed when a top Niti Aayog official prematurely declared in May that India had already gone past Japan. Social media was flooded with sarcastic comparisons between the quality of life in the two countries.
Of course, India's structural problems and deep challenges cannot be addressed in a year or two. But each year can lead to incremental progress, as 2025 showed. And that’s where the test for 2026 lies.
Scale vs substance
India’s growth engine is running, and its passengers are looking to find a place on the development train. Psychological milestones help India on the world stage, and rapid growth keeps foreign investors hooked. But the central question for 2026 is no longer about the size of the pie, but about how it is sliced and whether there is enough for everyone.
At an individual level, Indians remain behind. Per capita GDP—the real deal—is estimated at $2,818 for 2025-26, and puts India among the 50 poorest countries. The climb up the individual prosperity ladder is steeper than what national-level figures suggest. “Faster (growth) for longer is the only mantra left,” said N.R. Bhanumurthy, director of Madras School of Economics.
India’s greatest asset is its crucial demographic dividend window, the stage when, by one definition, the working-age population exceeds two-thirds of the total. India entered this phase in 2019 and will be there until the early 2050s.
It’s during this window that several countries made the greatest progress, so the urgency to make it count is also growing stronger for India. The red flag is that Indian youth have yet to reach their full potential; many of the most educated ones are unemployed. This largely speaks to the mismatch between skills and available high-value roles in the labour market.
At independence, India was in tatters: 80% of its population faced extreme poverty. This share has dropped to only 5%, thanks to many factors, ranging from the land reforms of the 1950s and the green revolution of the 60s to the big-bang liberalization of the 90s.
Now, more efforts are needed, because the results so far weren’t equitable: the top 10% earn nearly 60% of the income, leaving the rest with limited means.
With India set to hit one milestone after another, the average citizen is no longer satisfied with mere survival. Three civic issues tested the country in 2025: air quality, public mobility, and the housing dream.
Gasping for air
Much of north India, primarily parts in and around Delhi, remains engulfed under a thick blanket of smog every winter. There is hardly any break from this curse, which threatens public health and stalls productivity. The protest at the Messi event, and another protest at India Gate last month, showed rising public frustration against quick fixes by governments.
But first, India needs a better system of measuring—and reporting—air quality accurately. The government caps the index reading at 500, so the average figure on the worst days is underplayed, as Mint has explained earlier. Since independent agencies keep no such cap, it can lead to widespread confusion and frustration over the true extent of pollution.
“Urban pollution and congestion cost 2–3% GDP annually—a silent health emergency,” said Lekha Chakraborty, a professor at the National Institute of Public Finance and Policy. India needs urgent reforms such as empowered metropolitan governance, AI-smart systems, scaling of electric vehicles and public transit, and priority for livability metrics, she added.
Fragile duopoly
Infrastructure has been the current national government’s loudest success story, from rapid highway expansion to a growing network of small-town airports. But has this kept pace with India’s rapid urbanization and growing needs?
Throughout 2025, the strains were visible: the year began with overcrowded trains and railway stations during the Mahakumbh, and ended with hundreds of thousands of passengers being stranded at India’s airports as just one airline descended into chaos.
A fragile duopoly in aviation does not serve a rising affluent class well when the only alternative is trains that are already notorious for running late.
The urban dream
In the 1970s, the slogan ‘roti, kapda aur makaan’ became a defining cultural phenomenon. About five decades later, roti (food) and kapda (clothes) are largely available, but makaan (house) has largely become out of reach for the average Indian.
As rapid progress for high earners propelled “premiumization”, especially in the post-pandemic era, affordable housing in large cities could be fading, as the 2025 data shows. As the markets tilt more towards luxury segments, many Indians feel left behind. Even the top earners who can afford a good life in India are often moving, or considering moving, out of India, to enjoy a better quality of life.
A number of small starts to address middle-class needs were made in 2025, the most significant one being the reformed labour codes.
For decades, experts have argued that India needs land and labour reforms to unlock its next level of growth potential. At least one got a push in 2025 and will likely become operational in the new year. Several other steps were taken to improve citizens’ lives, from massive tax cuts to the creation of an urban infrastructure fund.
In 2026, the growth engine may keep roaring, but there’s a need to ensure that prosperity feels reachable for everyone—a youth in Bihar, a techie in Bengaluru, and the farmer in Punjab alike. A country on the cusp of breaking into the ‘top three’ club needs to take full advantage of its demographic dividend phase.