Delhi, January 31: The Economic Survey 2024-25, presented by Finance Minister Nirmala Sitharaman in Parliament, provides a comprehensive assessment of India’s economic performance and future prospects. The survey projects real GDP growth at 6.4% for FY25, which aligns closely with India’s decadal average, while the growth forecast for FY26 falls in the range of 6.3% to 6.8%, reflecting optimism despite global uncertainties. The survey highlights the government’s emphasis on grassroots-level structural reforms, deregulation, and policy interventions to enhance global competitiveness and drive medium-term growth.
The report acknowledges that the global economy grew at an average rate of 3.3% in 2023, and with the International Monetary Fund projecting global growth at 3.2% over the next five years, India continues to outpace most major economies. However, geopolitical tensions, ongoing conflicts, and shifting global trade policies pose risks to the economic outlook. At the domestic level, retail inflation moderated from 5.4% in FY24 to 4.9% in FY25 during the April–December period, and the Reserve Bank of India, along with the International Monetary Fund, projects that consumer price inflation will align with the target of 4% by FY26. A strong focus on agricultural productivity, climate-resilient crop varieties, and improved farming practices is expected to mitigate price fluctuations and ensure long-term food security.
India’s capital expenditure has shown sustained growth, with a notable increase of 38.8% from FY20 to FY24. The momentum continued after the general elections, with year-on-year CAPEX growth of 8.2% between July and November 2024. Infrastructure spending remains a priority, with key investments in roads, railways, energy, and digital connectivity. Over 2,031 kilometers of railway tracks were commissioned between April and November 2024, while 17 new pairs of Vande Bharat trains were introduced during the same period. In road infrastructure, 5,853 kilometers of national highways were constructed in FY25 up to December, significantly improving connectivity. The expansion of renewable energy has also been remarkable, with solar and wind power capacity increasing by 15.8% year-on-year, pushing the share of renewables in total installed capacity to 47%.
The financial sector continues to strengthen, with bank credit growing steadily and aligning with deposit growth. The gross non-performing assets (GNPA) of scheduled commercial banks fell to a 12-year low of 2.6%, reflecting improved asset quality and strong risk management. Under the Insolvency and Bankruptcy Code, Rs 3.6 lakh crore was realized from the resolution of 1,068 plans until September 2024, amounting to 161% of the liquidation value and 86.1% of the fair value of assets involved. The Indian stock markets outperformed their emerging market peers despite election-driven volatility, with total resource mobilization through equity and debt markets standing at Rs 11.1 lakh crore between April and December 2024, a 5% increase over the previous year. The Bombay Stock Exchange’s market capitalization-to-GDP ratio reached 136%, significantly higher than China’s 65% and Brazil’s 37%. The insurance sector also witnessed strong growth, with total insurance premiums increasing by 7.7% in FY24, reaching Rs 11.2 lakh crore. Additionally, India’s pension sector expanded rapidly, with the total number of subscribers rising by 16% year-on-year as of September 2024.
India’s external sector demonstrated resilience amid global uncertainties. Overall exports grew by 6% in the first nine months of FY25, while services exports surged by 12.8% year-on-year, underlining India’s strong position in the global services industry. The country is now the second-largest global exporter of telecommunications, computer, and IT services, according to UNCTAD. Foreign exchange reserves stood at $640.3 billion at the end of December 2024, sufficient to cover 10.9 months of imports and nearly 90% of India’s external debt. Foreign direct investment inflows also showed a strong revival, increasing by 17.9% year-on-year to $55.6 billion in the first eight months of FY25, compared to $47.2 billion in the same period of FY24.
The government has been pushing forward with its long-term space vision, which includes ambitious projects such as the Gaganyaan human spaceflight mission and Chandrayaan-4, which aims to bring lunar samples back to Earth. India’s push for technological self-reliance has yielded significant results, with 99% of smartphones now being manufactured domestically, drastically reducing import dependence. In the intellectual property sector, India ranks sixth globally in terms of patent filings, according to the World Intellectual Property Organization.
Employment and social development remain central to the government’s vision for Viksit Bharat. The unemployment rate declined to 3.2% in 2023-24 from 6% in 2017-18, signaling a steady improvement in labor market conditions. The growing digital economy and renewable energy sectors are providing enhanced opportunities for job creation. The government’s PM-Internship Scheme has emerged as a transformative catalyst for employment generation, offering youth practical experience in key industries. In addition to employment initiatives, social welfare programs have expanded significantly. Government health expenditure increased from 29% to 48% of total health spending, reducing out-of-pocket expenses for citizens from 62.6% to 39.4%. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) has played a decisive role in reducing financial hardship, with estimated savings exceeding Rs 1.25 lakh crore for beneficiaries.
The services sector remains a key driver of economic growth, contributing 55.3% to total gross value added (GVA) in FY25. Services exports grew by 12.8% during April–November FY25, up from 5.7% in FY24, demonstrating India’s global competitiveness in this sector. Information and computer-related services grew at an average rate of 12.8% over the past decade, increasing their share of overall GVA from 6.3% to 10.9%. The tourism industry’s contribution to GDP returned to its pre-pandemic level of 5% in FY23, highlighting a strong recovery.
Agriculture and allied activities accounted for approximately 16% of India’s GDP in FY24. Kharif foodgrain production is expected to reach 1,647.05 lakh metric tonnes, an increase of 89.37 lakh metric tonnes from the previous year. The fisheries sector recorded the highest compound annual growth rate (CAGR) at 8.7%, followed by livestock at 5.8%. Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, over 11 crore farmers have benefited, while 23.61 lakh farmers are enrolled under the PM Kisan Mandhan pension scheme.
India’s climate and environmental initiatives have gained momentum, with installed electricity generation capacity from non-fossil fuel sources reaching 2,13,701 megawatts, accounting for 46.8% of the total capacity. According to the Forest Survey of India 2024, an additional carbon sink of 2.29 billion tonnes CO2 equivalent has been created between 2005 and 2023. The India-led global movement, Lifestyle for Environment (LiFE), aims to enhance the country’s sustainability efforts, and by 2030, LiFE measures are expected to save consumers approximately $440 billion globally through reduced consumption and lower prices.
The Economic Survey also addresses the evolving role of artificial intelligence in India’s workforce. While AI has the potential to enhance productivity, challenges such as reliability concerns, resource inefficiencies, and infrastructure gaps remain barriers to widespread adoption. The government aims to leverage AI as a tool for “augmented intelligence,” integrating human and machine capabilities to maximize efficiency while minimizing societal risks. A collaborative effort between the government, private sector, and academia will be crucial in ensuring a smooth AI-driven transition in the job market.
The Economic Survey 2024-25 presents an optimistic outlook for India’s economic trajectory, underpinned by strong domestic growth, financial stability, infrastructure development, and technological advancements. As India progresses towards the vision of Viksit Bharat by 2047, systematic deregulation, enhanced ease of doing business, and targeted reforms will play a crucial role in sustaining long-term economic momentum.
