Economic Survey 2024-25 Highlights

Economic Growth & GDP Outlook

• India’s GDP is projected to grow between 6.3% and 6.8% in FY26.
• Real GDP growth for FY25 is estimated at 6.4%, maintaining its decadal average.
• Real Gross Value Added (GVA) is expected to grow by 6.4% in FY25, driven by agriculture, industry, and services.
• Private consumption is expected to grow by 7.3%, boosted by rural demand recovery.
• India’s economic growth remains stable despite global uncertainties, including geopolitical tensions, global trade policies, and inflation fluctuations.

Capital Expenditure & Fiscal Health

• Capital Expenditure (CapEx) grew by 8.2% from July–November 2024 and is expected to accelerate further.
• Fiscal deficit has declined from 9.2% of GDP in 2020-21 to 5.6% in 2023-24.
• Gross tax revenue (GTR) increased by 10.7% YoY during April-November 2024.
• Union government’s net tax revenue remains stable, providing room for development-focused spending.
• State revenue expenditure grew by 12% YoY, with subsidies rising by 25.7%.
• The government advocates systemic deregulation to sustain long-term growth.

Inflation & External Sector

• Retail inflation eased to 4.9% in April-December 2024.
• Food inflation rose to 8.4%, mainly due to vegetables and pulses.
• India’s Consumer Price Inflation (CPI) is expected to align with the 4% target in FY26.
• Merchandise exports grew by 1.6% YoY in April-December 2024, while imports rose by 5.2%.
• Services exports grew by 12.8% during April–November FY25, up from 5.7% in FY24.
• India secured the 7th largest share in global services exports.
• Foreign Exchange Reserves at $640.3 billion (Dec 2024), covering 10.9 months of imports.

Foreign Direct Investment (FDI) & Financial Stability

• Gross FDI inflows increased from $47.2 billion in FY24 to $55.6 billion in FY25, growing 17.9% YoY.
• Foreign Portfolio Investments (FPI) were volatile due to global monetary policies and geopolitical events.
• Gross Non-Performing Assets (NPAs) in banks fell to 2.6%, a 12-year low.
• Capital-to-risk-weighted-assets ratio (CRAR) for Scheduled Commercial Banks at 16.7%, indicating strong financial health.

Sectoral Growth

Agriculture

• Expected growth rate of 3.8% in FY25.
• Kharif foodgrain production to reach 1,647.05 LMT, up by 89.37 LMT from the previous year.
• Horticulture, livestock, and fisheries identified as key drivers of growth.

Industry & Manufacturing

• Industrial sector estimated to grow at 6.2% in FY25.
• Manufacturing PMI remains in expansionary zone, driven by strong domestic demand.
• Challenges include slow global demand and geopolitical uncertainties.

Services Sector

• Growth at 7.2% in FY25, led by financial, real estate, and professional services.
• Service sector exports surged by 12.8%, reinforcing India’s position as a global service powerhouse.

Employment & Social Sector

• Unemployment rate declined from 6% in 2017-18 to 3.2% in 2023-24.
• Labour force participation rate (LFPR) and worker-population ratio (WPR) have increased.
• Government health expenditure increased from 29.0% to 48.0% between FY15 and FY22.
• Share of out-of-pocket expenditure on health dropped from 62.6% to 39.4%.
• Social services spending registered an annual growth rate of 15% from FY21-FY25.

Infrastructure Development

• Investment in infrastructure needs to continue for the next two decades to sustain high growth.
• 2,031 km of railway network was commissioned in April-November 2024.
• 17 new Vande Bharat Express trains introduced.
• Port capacity expanded, reducing turnaround time from 48.1 hours in FY24 to 30.4 hours in FY25.

Renewable Energy & Sustainability

• Solar and wind power capacity addition increased by 15.8% YoY.
• Government pushing for renewable energy expansion through schemes like PM-KUSUM and National Green Hydrogen Mission.

Ease of Doing Business & MSME Growth

• A ₹50,000 crore Self-Reliant India Fund launched to support MSMEs.
• Regulatory simplification under Ease of Doing Business (EoDB) 2.0 is crucial for future growth.
• States encouraged to lead regulatory reforms to reduce operational costs for businesses.

Future Economic Outlook & Challenges

• India’s economic growth outlook for FY26 remains positive but faces potential risks from:
  • Geopolitical and trade uncertainties.
  • Commodity price shocks.
  • Private investment translation from order books to actual investments.
  • Rural demand fluctuations due to food inflation.
• Structural reforms & deregulation are essential to enhance India’s global competitiveness.