The Economic Survey 2024-25, tabled by Union Finance Minister Nirmala Sitharaman in Parliament on January 31, 2025, presents a comprehensive analysis of India’s economic performance and future outlook. Despite global uncertainties, India’s economy remains resilient, with real GDP growth estimated at 6.4% for FY25 and expected to range between 6.3% and 6.8% in FY26.
Macroeconomic Outlook
- GDP Growth: India’s real GDP growth is projected at 6.4% in FY25, aligning with its decadal average.
- GVA Growth: Real Gross Value Added (GVA) is estimated to grow at 6.4% in FY25.
- Investment & Capex: Capital expenditure grew 8.2% (July–November 2024) and is expected to accelerate further.
- Inflation Trends: Retail headline inflation softened to 4.9% (April-December 2024), with consumer price inflation targeted around 4% in FY26.
- Exports: Overall exports grew by 6% YoY (April-December 2024), with services exports surging 12.8% YoY.
- Foreign Direct Investment (FDI): Gross FDI inflows increased 17.9% YoY, reaching $55.6 billion in the first eight months of FY25.
- Forex Reserves: India’s foreign exchange reserves stood at $640.3 billion (Dec 2024), covering 10.9 months of imports and 90% of external debt.
Sectoral Performance
Agriculture & Allied Sectors
- Agriculture growth is estimated at 3.8% in FY25.
- Kharif foodgrain production is projected at 1,647.05 LMT, up by 89.37 LMT from the previous year.
- Key growth drivers: Horticulture, Livestock, and Fisheries.
Industrial & Services Sector
- The industrial sector is estimated to grow by 6.2% in FY25.
- Services sector growth is projected at 7.2%, driven by financial services, real estate, and professional services.
- The stock market capitalization-to-GDP ratio for India reached 136% (Dec 2024), significantly higher than China (65%) and Brazil (37%).
Infrastructure & Energy
- Solar and wind power capacity addition increased 15.8% YoY (Dec 2024).
- Continued infrastructure investments are critical for sustaining high growth over the next two decades.
Employment & Social Indicators
- Unemployment rate declined to 3.2% (2023-24) from 6.0% (2017-18).
- Government health expenditure increased from 29% to 48% (FY15-FY22), while out-of-pocket health expenses dropped from 62.6% to 39.4%.
- Social services expenditure registered an annual growth rate of 15% (FY21-FY25).
Key Policy Recommendations
- Deregulation to accelerate growth: The Survey advocates for systemic deregulation under Ease of Doing Business 2.0, enabling businesses to operate with fewer constraints.
- Infrastructure Expansion: The government aims to step up infrastructure investments over the next two decades to support sustained high growth.
- AI and Workforce Development: A collaborative approach between government, private sector, and academia is needed to manage AI’s societal impact.
- MSME Sector Boost: The ₹50,000 crore Self-Reliant India Fund was launched to provide equity funding to MSMEs.
Conclusion
The Economic Survey 2024-25 underscores India’s resilience amidst global challenges and highlights strong macroeconomic fundamentals. With a focus on deregulation, investment in infrastructure, and innovation, India is poised for sustainable growth, reinforcing its position as a leading global economy.
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