• India
  • Jan 31
  • Sreesha V.M

Highlights of Economic Survey 2024-2025

• Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in the Lok Sabha in Parliament on January 31.

• The Economic Survey presents a comprehensive overview of India’s current economic performance and future outlook, highlighting key trends, challenges, and opportunities for growth:

Key points: 

• GDP Growth: India’s GDP is expected to grow at 6.4 per cent in FY25, close to its decadal average. For FY26, growth is projected to be between 6.3 per cent and 6.8 per cent.

• Agriculture: The agricultural sector is expected to grow by 3.8 per cent in FY25, driven by robust Kharif production. Total Kharif food grain production for 2024 is expected to reach a record 1647.05 lakh metric tonnes.

• Industrial Growth: The industrial sector is estimated to grow by 6.2 per cent in FY25, supported by construction and utility services, though manufacturing exports have slowed due to weak global demand.

• Services Sector: Services exports surged by 12.8 per cent between April–November FY25, showcasing strong performance in sectors like finance, real estate, and public administration.

• Inflation: Retail inflation softened to 4.9 per cent in April–December 2024, with food inflation rising slightly to 8.4 per cent. Inflation is expected to align with the 4 per cent target by FY26.

• Capital Expenditure (Capex): Government capex grew by 8.2 per cen in July–November 2024, and continued infrastructure investments are seen as key to sustaining growth.

Other Notable Developments:

• Exports: Overall exports grew by 6 per cent during April-December 2024, with services exports leading the charge.

• Foreign Direct Investment (FDI): Gross FDI inflows increased by 17.9 per cent year-on-year, reaching $55.6 billion.

• Foreign Exchange Reserves: As of December 2024, India’s forex reserves were $640.3 billion, enough to cover 10.9 months of imports.

• Unemployment: India’s unemployment rate decreased to 3.2 per cent in 2023-24 from 6 per cent in 2017-18.

Structural Reforms and Future Prospects:

• Deregulation and Economic Freedom: The Survey advocates for systematic deregulation and reform of the Ease of Doing Business (EoDB) framework to boost India’s SME sector and improve competitiveness.

• Infrastructure: Continued investment in infrastructure is crucial to sustain high growth. Notable improvements were made in railway connectivity and port capacity in FY25.

• Green Energy: Capacity additions in solar and wind power increased by 15.8 per cent year-on-year in December 2024, underscoring the government’s commitment to renewable energy.

Social Sector:

• Health and Education: Government expenditure on health has risen, with a decrease in out-of-pocket health expenses. The education sector is focused on achieving the goals set by the National Education Policy 2020 through various initiatives.

• MSMEs: A Rs 50,000 crore Self-Reliant India Fund was launched to provide equity funding to MSMEs, encouraging growth and scalability.

Challenges and Risks:

• Global Economic Environment: Global uncertainties, such as geopolitical risks and commodity price fluctuations, remain a challenge for growth.

• Internal Risks: Domestic factors, such as the pace of capital goods sector investments and rural demand recovery, will play a critical role in sustaining growth.

• India’s economic outlook for the next few years is positive, driven by steady growth in sectors like agriculture, industry, and services, alongside strong foreign investment and improving inflation. 

• The government’s focus on infrastructure, renewable energy, and economic reforms is crucial for sustaining high growth, with deregulation and enhancing competitiveness being central to India’s long-term economic vision.

(The author is a trainer for Civil Services aspirants.)

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