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Economic Survey 2025 Key Highlights

01-02-2025

06:30 AM

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1 min read
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What’s in Today’s article?

  • Economic Survey 2024-25 Latest News
  • About Economic Survey
  • Preparation & Presentation
  • Significance
  • Key highlights of Economic Survey 2024-25
  • Economic Survey 2024-25 FAQs

Economic Survey 2024-25 Latest News

  • Economic Survey 2024-25 was tabled in Parliament by Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman.

About Economic Survey

  • The Economic Survey of India is an annual report released by the Finance Ministry that assesses the country’s economic performance over the past year.
  • It highlights macroeconomic indicators, economic progress, and potential challenges India may face.
  • The survey also suggests policy measures to address future economic challenges.

Preparation & Presentation

  • Prepared by the Economic Division of the Department of Economic Affairs, under the supervision of the Chief Economic Advisor (CEA).
  • Presented a day before the Union Budget each year.
  • The first Economic Survey was released for 1950-51 and was presented along with the Budget until 1964.

Significance

  • The survey’s recommendations are not binding on the Budget.
  • It is the most authoritative and comprehensive government analysis of the Indian economy.
  • Provides an official framework for economic policy discussions and decision-making.

Key highlights of Economic Survey 2024-25

1. State of the Economy: Back on the Fast Track

  • GDP Growth Outlook
    • Real GDP and GVA growth estimated at 6.4% in FY25, aligning with the decadal average.
    • FY26 GDP growth projected between 6.3%-6.8%, considering economic risks and opportunities.
  • Global & Domestic Challenges
    • Global economy grew 3.3% in 2023, IMF projects 3.2% average growth over the next five years.
    • Geopolitical tensions, conflicts, and trade risks continue to impact global economic stability.
  • Inflation & Investment
    • Retail inflation softened from 5.4% (FY24) to 4.9% (Apr-Dec 2024).
    • Capital expenditure (CAPEX) rose steadily from FY21-FY24, with an 8.2% YOY growth (Jul-Nov 2024) post-elections.
  • Trade & Global Competitiveness
    • India ranks 7th in global services exports, showcasing sectoral strength.
    • Non-Petroleum, non-Gems & Jewellery exports grew 9.1% (Apr-Dec 2024), reflecting resilience amid global volatility.

2. Monetary & Financial Sector: Stability & Growth

  • Banking Sector Performance
    • Credit growth steady, aligning with deposit growth.
    • GNPAs at a 12-year low (2.6%), with improved asset quality and strong capital buffers.
    • Credit-GDP gap narrowed to (-) 0.3% in Q1 FY25, indicating sustainable growth.
    • ₹3.6 lakh crore recovered under Insolvency and Bankruptcy Code from 1,068 resolutions (Sept 2024).
  • Stock Markets & Capital Mobilization
    • Indian stock markets outperformed emerging peers despite election volatility.
    • Primary market mobilization at ₹11.1 lakh crore (Apr-Dec 2024), a 5% increase from FY24.
    • BSE market cap to GDP at 136%, surpassing China (65%) & Brazil (37%).
  • Insurance & Pension Growth
    • Insurance premiums grew 7.7% (FY24), reaching ₹11.2 lakh crore.
    • Pension subscribers increased 16% YoY (Sept 2024).

3. External Sector: Resilient & Growing

  • Exports grew 6% YoY (FY25); services exports rose 11.6%.
  • India ranks 2nd globally in ‘Telecommunications, Computer & Information Services’ exports (10.2% market share).
  • Current Account Deficit (CAD) at 1.2% of GDP (Q2 FY25), supported by rising net services and private transfers.
  • FDI inflows up 17.9% YoY, reaching USD 55.6 billion (Apr-Nov FY25).
  • FOREX reserves at USD 640.3 billion (Dec 2024), covering 10.9 months of imports.
  • External debt stable, with a debt-to-GDP ratio of 19.4% (Sept 2024).

4. Prices & Inflation: Moderating Trends

  • Global inflation declined from 8.7% (2022) to 5.7% (2024) (IMF).
  • India’s retail inflation fell from 5.4% (FY24) to 4.9% (FY25, Apr-Dec 2024).
  • RBI & IMF project inflation to align with 4% target by FY26.
  • Climate-resilient crops & better farming practices key for long-term price stability.

5. Medium-Term Outlook: Growth Through Deregulation

  • Geo-Economic Fragmentation (GEF) replacing globalization, driving economic realignments.
  • India needs ~8% annual GDP growth to achieve Viksit Bharat 2047 vision.
  • Global challenges include GEF, China’s manufacturing dominance, and energy transition dependencies.
  • Systematic deregulation key to boosting domestic growth and economic freedom.
  • Ease of Doing Business 2.0 & SME sector (Mittelstand) crucial for sustained growth.
  • States must liberalize regulations, set legal safeguards, and adopt risk-based policies.

6. Investment & Infrastructure: Sustaining Growth

  • Public infrastructure spending surged, with 38.8% capex growth (FY20-FY24).
  • Railways: 2031 km commissioned; 17 new Vande Bharat trains added.
  • Roads: 5853 km of National Highways built in FY25 (Apr-Dec).
  • Industrial Growth: 383 plots (3788 acres) allocated under the National Industrial Corridor.
  • Ports: Container turnaround time reduced from 48.1 to 30.4 hours.
  • Renewables: 15.8% YoY growth; renewables now 47% of installed capacity.
  • Rural Electrification: 18,374 villages, 2.9 crore households electrified.
  • Digital Expansion: 5G rolled out nationwide; 4G in 10,700 remote villages.
  • Water & Sanitation: 12 crore families got piped water; 3.64 lakh villages ODF Plus.
  • Urban Housing: 89 lakh houses completed under PMAY.
  • Mass Transit: Metro & rapid rail in 29 cities, covering 1,000+ km.
  • Real Estate: RERA ensured transparency; 1.38 lakh projects registered.
  • Space Vision 2047: 56 active assets, projects like Gaganyaan & Chandrayaan-4.
  • Private Sector Role: National Infra & Monetisation Pipelines launched to boost investment.

7. Industry: Driving Business Reforms

  • Industrial Growth: Expected at 6.2% in FY25, driven by electricity and construction.
  • Smart Manufacturing & Industry 4.0: Promoted through SAMARTH Udyog centres.
  • Automobile Sales: Domestic sales grew by 12.5% in FY24.
  • Electronics Production: Grew at 17.5% CAGR (FY15-FY24); 99% of smartphones made domestically.
  • Pharmaceuticals: Turnover of ₹4.17 lakh crore in FY24, growing at 10.1% over five years.
  • Patent Filings: India ranks 6th globally (WIPO Report 2022).
  • MSME Sector: Emerged as vibrant; Self-Reliant India Fund launched with ₹50,000 crore corpus.
  • Cluster Development: Micro and Small Enterprises-Cluster Development Programme for nationwide cluster growth.

8. Services: New Challenges for the Old War Horse

  • Contribution to GVA: Service sector's share rose from 50.6% (FY14) to 55.3% (FY25).
  • Growth Rate: Services grew at 8% pre-pandemic and 8.3% post-pandemic (FY23–FY25).
  • Global Services Exports: India held 4.3% share in 2023, ranking 7th worldwide.
  • Export Growth: Services exports surged 12.8% during April–November FY25.
  • Information Services: Grew at 12.8% over the last decade, increasing share of GVA from 6.3% to 10.9%.
  • Indian Railways: Passenger traffic grew 8% in FY24, while freight revenue grew by 5.2%.
  • Tourism: Contributed 5% to GDP in FY23, returning to pre-pandemic levels.

9. Agriculture and Food Management: Sector of the Future

  • Contribution to GDP: Agriculture and allied activities contribute 16% to India's GDP (FY24).
  • Growth Drivers: High-value sectors like horticulture, livestock, and fisheries are key growth drivers.
  • Kharif Food grain Production: Expected to reach 1647.05 LMT in 2024, an increase of 89.37 LMT from last year.
  • MSP Increases: MSP for Arhar and Bajra raised by 59% and 77%, respectively, in FY24-25.
  • Sector Growth: Fisheries grew at 8.7% CAGR, and livestock at 8% CAGR.
  • Food Security Programs: PMGKAY and NFSA mark a shift in food security approach. Free food grains under PMGKAY extended for five years.
  • Farmer Support: 11 crore farmers benefited under PM-KISAN, and 23.61 lakh enrolled in PM Kisan Mandhan.

10. Climate & Environment: Adaptation Matters

  • Sustainable Development: India aims for developed nation status by 2047 with a focus on inclusive and sustainable growth.
  • Non-Fossil Fuel Capacity:46.8% of India's electricity generation comes from non-fossil fuels (2,13,701 MW capacity as of November 2024).
  • Carbon Sink Creation:2.29 billion tonnes CO2 equivalent additional carbon sink created from 2005 to 2024.
  • LiFE Movement: India leads the Lifestyle for Environment (LiFE) initiative to promote sustainability.
  • Global Impact of LiFE: By 2030, LiFE could save USD 440 billion globally through reduced consumption and lower prices.

11. Social Sector: Extending Reach and Driving Empowerment

  • Expenditure Growth: Social services expenditure (Centre + States) grew at 15% CAGR from FY21 to FY25.
  • Declining Inequality: Gini coefficient (measuring income inequality) declined in both rural (0.237 in FY24) and urban areas (0.284 in FY24), indicating reduced inequality.
  • Government Health Expenditure: Health expenditure share increased from 29% to 48%, reducing out-of-pocket expenditure from 62.6% to 39.4%.
  • Ayushman Bharat Impact: Over ₹1.25 lakh crore savings through the AB PM-JAY scheme, significantly reducing financial strain on households.
  • Localization of SDGs: The Localisation of SDGs strategy aligns Gram Panchayat budgets with Sustainable Development Goals.

12. Employment and Skill Development: Existential Priorities

  • Unemployment Decline: Unemployment dropped to 3.2% in 2023-24 (July-June) from 6.0% in 2017-18 (July-June).
  • Youthful Demographics:26% of India’s population is aged 10-24, positioning it as one of the youngest nations globally.
  • Women’s Entrepreneurship: The government has launched initiatives to support women entrepreneurs with access to credit, marketing, skill development, and startup support.
  • Job Creation: The digital economy and renewable energy sectors are crucial for job growth, aligning with the Viksit Bharat vision.
  • Skilled Workforce: The government is building a skilled ecosystem to adapt to global trends like automation, AI, digitalization, and climate change.
  • PM-Internship Scheme: This initiative is acting as a transformative catalyst for employment generation.
  • Formal Employment Growth: EPFO payroll additions have more than doubled in the past six years, signaling robust formal employment growth.

13. Labour in the AI Era: Crisis or Catalyst?

  • AI Revolution: AI promises to automate valuable work, surpassing human performance in critical decision-making across sectors like healthcare, research, education, and finance.
  • Barriers to AI Adoption: Challenges like reliability, resource inefficiencies, and infrastructure deficits hinder large-scale AI adoption, providing policymakers time to act.
  • India's Advantage: As AI is in its early stages, India can strengthen its foundations and harness its young, tech-savvy population to integrate AI into the workforce, boosting productivity.
  • Augmented Intelligence: The future lies in combining human and machine capabilities, enhancing human potential and improving job efficiency.
  • Collaborative Effort: Governments, the private sector, and academia must work together to mitigate the societal impacts of AI-driven transformation.

Economic Survey 2024-25 FAQs

Q1. What is the economic situation in India in 2024? 

Ans. India’s economy is growing steadily with GDP growth at 6.4% and moderate inflation, facing global challenges.

Q2. What is the real GDP of India in 2024?

Ans. India’s real GDP growth is estimated at 6.4% for FY25, aligning with the decadal average.

Q3. What is the economic survey of India?

Ans. An annual report by the Finance Ministry assessing India’s economic performance, challenges, and policy recommendations. 

Q4. What is the ranking of India's economy in 2024?

Ans. India is the largest democracy and the 5th largest economy in the world.

Q5. Who publishes the economic survey?

Ans. The Ministry of Finance, specifically the Economic Division under the Chief Economic Advisor, publishes the Economic Survey.

Source: PIB | Ministry of Finance