As India steps into the new calendar year, economists are assessing whether the economy is entering a so-called ‘Goldilocks phase’ — a period marked by steady growth, improving demand and manageable inflation. In this discussion, Saugata Bhattacharya, Senior Fellow at CPR and Member of the Monetary Policy Committee, explains how coordinated policy reforms undertaken in 2025 could begin delivering tangible results in calendar year 2026, even in the absence of major global trade tailwinds. He highlights the revival in private final consumption expenditure (PFCE), which has grown at 7.8%, signalling a reversal of the slowdown seen over the past few years and suggesting a transfer of income strength to households. Siddhartha Sanyal, Chief Economist at Bandhan Bank, adds that private consumption remains the bedrock of India’s growth model, typically contributing a large share to GDP expansion, and its renewed momentum provides a strong foundation for investment-led growth ahead. Together, they outline why the recovery in consumption, combined with reform-driven momentum, could shape India’s economic trajectory in 2026.