Economic Survey 2025: Key Highlights

The Economic Survey 2024-25, tabled in Parliament on January 31, 2025, by Finance Minister Nirmala Sitharaman, outlines India’s economic trajectory, highlighting growth prospects, sectoral performance, and policy priorities for the upcoming fiscal year.

Economic Growth Projections

India’s economy is projected to expand by 6.6% in 2025, driven by robust private consumption and investment. The Economic Survey estimates GDP growth for FY 2025-26 in the range of 6.3% to 6.8%, citing strong economic fundamentals, a resilient external account, fiscal consolidation, and stable private consumption as key growth drivers.

Agriculture: Unlocking Growth Potential

Despite steady growth, India’s agriculture sector holds “significant untapped growth potential”, according to the Survey. It calls for three key policy shifts:

• Market mechanisms for price risk hedging
• Measures to prevent excessive fertilizer use
• Discouraging surplus production of water and power-intensive crops

The sector has demonstrated resilience, maintaining an average annual growth rate of 5% from FY 2017 to FY 2023.

Inflation and Monetary Policy

Retail inflation showed a declining trend, reducing from 5.4% in FY24 to 4.9% in April–December 2024. The banking sector remains stable, with Gross Non-Performing Assets (GNPAs) at a 12-year low of 2.6% by September 2024. Credit growth continues to outpace nominal GDP growth, reinforcing a sustainable lending environment.

Investment and Infrastructure Development

The government’s focus on infrastructure has led to 38.8% growth in capital expenditure from FY 2020 to FY 2024. Major developments include:

• 2,031 km of new railway lines and 5,853 km of national highways constructed in 2024.
• Renewable energy capacity growth of 15.8% YoY, with renewables accounting for 47% of India’s total installed power capacity.
• Expansion of 5G networks and rural electrification programs to boost digital and energy accessibility.

External Sector: Trade and FDI Performance

India’s trade sector demonstrated resilience despite global uncertainties:

• Overall exports grew by 6% YoY in the first nine months of FY25, with services exports rising by 11.6%.
• Foreign Direct Investment (FDI) inflows surged by 17.9% YoY to $55.6 billion between April and December 2024.
• Forex reserves stood at $640.3 billion, covering 10.9 months of imports and 90% of external debt.

Industry and Services Sector Performance

• Industrial growth is expected at 6.2% in FY25, driven by electricity, construction, and electronics manufacturing.
• MSME growth is accelerating, with the government’s INR 500 billion Self-Reliant India Fund supporting expansion.
• The services sector remains the largest economic contributor (55.3% of GVA), with strong growth in IT, tourism, and financial services.

India’s Medium-Term Outlook: Policy Focus on Deregulation

The Survey underscores the need for systemic deregulation and ease of doing business to maintain India’s high growth trajectory. The government aims to sustain an 8% annual growth rate to achieve the ‘Viksit Bharat 2047’ vision. Key structural reforms include labor law simplification, tax rationalization, and digital governance initiatives to boost productivity and attract investment.

The Economic Survey 2024-25 provides a strategic roadmap for India’s growth, emphasizing structural reforms, infrastructure expansion, and private sector-driven growth. With a stable macroeconomic outlook, India remains one of the fastest-growing major economies, positioning itself as a key global investment hub.