On the 31st of January, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025 in Parliament. The survey provides a comprehensive analysis of India’s economic performance, key trends, and future outlook, projecting GDP growth in the range of 6.3% to 6.8%. The Economic Survey is an annual report that reviews the Indian economy’s performance and lays out expectations for the upcoming financial year. It is prepared by the economic division of the Department of Economic Affairs (DEA), led by the Chief Economic Advisor (CEA), V. Anantha Nageswaran. Here are the key takeaways from the Economic Survey 2025 —
1. Stable Economic Growth
Despite global economic uncertainty, India’s real GDP growth for FY 2024-25 is estimated at 6.4%, aligning with the decadal average. Real Gross Value Added (GVA) is also expected to grow by 6.4% during this period, highlighting overall economic resilience.
2. Sector-Wise Contributions
All key sectors of the economy are expected to contribute to growth:
- Agriculture remains strong and continues to operate above trend levels.
- Industrial sector has rebounded to surpass pre-pandemic levels.
- Services sector is closing in on its historical growth trajectory.
3. Inflation Under Control
Retail headline inflation has declined from 5.4% in FY 2023-24 to 4.9% in April-December 2024-25. Both the Reserve Bank of India (RBI) and the International Monetary Fund (IMF) project inflation to stabilise around 4% in FY 2026.
4. Foreign Investments and Capital Flows
- Foreign Portfolio Investment (FPI) has shown a mixed trend due to global uncertainty but remains positive overall due to India’s strong macroeconomic fundamentals.
- Foreign Direct Investment (FDI) inflows have shown signs of revival, despite a temporary dip due to increased repatriation and disinvestment.
5. Strengthening Forex Reserves
India’s Forex reserves reached $706 billion in September 2024 and stood at $640.3 billion by December 27, 2024, covering 89.9% of external debt.
6. Banking and Insurance Sector Stability
- The Gross Non-Performing Assets (GNPA) ratio of commercial banks has declined to 2.6% by September 2024, the lowest in years.
- Credit-GDP gap narrowed to 0.3% in Q1 2024-25, showing sustainable credit growth.
- Insurance premiums grew by 7.7% in FY 2023-24, and pension subscribers increased by 16% YoY as of September 2024.
7. Export Growth and Trade Outlook
Total exports (merchandise and services) grew by 6% in the first nine months of FY25, reaching $602.6 billion. Exports of goods (excluding petroleum and gems & jewelry) saw a robust growth of 10.4%.
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8. MSME Credit Growth
- Credit to Micro, Small, and Medium Enterprises (MSMEs) grew by 13% YoY as of November 2024, outpacing the 6.1% growth for large enterprises.
- However, credit growth for services and personal loans moderated to 5.9% and 8.8%, respectively.
9. Need for Deregulation to Boost Growth
The Economic Survey calls for accelerating deregulation efforts to enhance economic freedom and reduce bureaucratic bottlenecks. It stresses the importance of improving human resource training, resolving regulatory impediments, and increasing capital formation.
10. Infrastructure Development and Private Sector Participation
The government has prioritized infrastructure expansion, with a focus on sustainable construction practices and innovative financing models. However, the survey emphasizes the need for greater private sector participation to meet the ambitious infrastructure goals under Viksit Bharat 2047.
Economic Survey pdf can be availed by clicking here.
