Economic Survey 2024-25

Economic Survey 2024-25: India’s Path to a Resilient Future
The Economic Survey 2024-25, presented by Finance Minister Nirmala Sitharaman on January 31, 2025, offers a comprehensive analysis of India’s economic performance over the past year and provides projections for the upcoming fiscal year. Authored by Chief Economic Adviser V. Anantha Nageswaran, the survey highlights India’s resilience amidst global uncertainties and outlines key areas of focus to sustain and accelerate growth.
GDP Growth Projections
India’s real Gross Domestic Product (GDP) is estimated to have grown by 6.4% in the fiscal year 2024-25, aligning closely with the nation’s decadal average. Looking ahead, the survey projects GDP growth between 6.3% and 6.8% for 2025-26, emphasizing the need to bolster domestic growth drivers in light of global economic challenges.
Sectoral Performance
- Agriculture: The agricultural sector is anticipated to rebound with a growth rate of 3.8% in FY25. Key contributors to this growth include horticulture, livestock, and fisheries. Notably, the Kharif foodgrain production for 2024 is expected to reach 1,647.05 lakh metric tonnes, marking an increase of 89.37 lakh metric tonnes over the previous year.
- Industry: The industrial sector is estimated to grow by 6.2% in FY25, supported by robust activities in construction and utilities. Manufacturing has shown resilience, with a notable growth of 9.9% in FY24.
- Services: The services sector continues to be a significant driver of the economy, with an expected growth of 7.2% in FY25. This growth is propelled by strong performances in financial services, real estate, professional services, public administration, and defense.
Inflation and Fiscal Indicators
Retail inflation moderated to 4.9% during April-December 2024, with expectations to align around the 4% target in FY26. The fiscal deficit of the Union Government decreased from 6.4% of GDP in FY23 to 5.6% in FY24, reflecting prudent fiscal management.
Trade and Foreign Investment
Overall exports grew by 6.0% year-on-year during April-December 2024, with services exports experiencing a significant surge of 12.8% during April–November FY25. Gross Foreign Direct Investment (FDI) inflows increased by 17.9%, reaching USD 55.6 billion in the first eight months of FY25, indicating sustained investor confidence in India’s economic prospects.
Infrastructure and Capital Expenditure
Capital expenditure witnessed an 8.2% growth during July–November 2024 and is expected to gain further momentum. The government emphasizes the need for continued infrastructure investment over the next two decades to maintain high growth trajectories. A notable initiative is the launch of the ₹50,000 crore Self-Reliant India Fund, aimed at providing equity funding to Micro, Small, and Medium Enterprises (MSMEs).
Financial Markets and Regulatory Framework
The survey advocates for deregulation to accelerate and sustain economic growth. It recommends that financial regulators implement formal impact assessment processes to enhance transparency and responsiveness. The stock market capitalization-to-GDP ratio stood at 136% at the end of December 2024, significantly higher than countries like China (65%) and Brazil (37%), reflecting the robustness of India’s financial markets.
Social Indicators
Government expenditure on social services registered an annual growth rate of 15% between FY21 and FY25. Health expenditure by the government increased from 29.0% to 48.0%, while the share of out-of-pocket expenditure in total health expenditure declined from 62.6% to 39.4% between FY15 and FY22. The unemployment rate decreased to 3.2% in 2023-24 from 6.0% in 2017-18, indicating improvements in the labor market.
Global Context and Medium-Term Outlook
The global economy grew by 3.3% in 2023, with the International Monetary Fund projecting an average growth of around 3.2% over the next five years. The survey underscores the importance of strengthening domestic growth levers amidst global uncertainties, including geo-economic fragmentation and trade policy uncertainties. To achieve the aspirations of a developed India by 2047, the survey emphasizes the need for continued economic reforms and leveraging the nation’s young workforce.
In conclusion, the Economic Survey 2024-25 presents an optimistic yet cautious outlook for India’s economy. While acknowledging global challenges, it highlights the nation’s resilience and underscores the importance of strategic investments, regulatory reforms, and social development to sustain and accelerate economic growth.