Economic Survey 2024-25: Key Points
Chapter 1: State of the Economy: Fast Recovery
India’s real GDP growth is projected at 6.4 per cent in FY25 (as per the first advance estimates of national income), which is almost the same as its decadal average.
Real gross value added (GVA) is also projected to grow by 6.4 per cent in FY25.
The global economy grew at an average of 3.3 per cent in 2023, while the IMF forecasts 3.2 per cent growth over the next five years.
Real GDP growth is expected to be between 6.3 and 6.8 per cent in FY26, noting that there could be both positive and negative aspects to growth.
The emphasis is on grassroots structural reforms and deregulation to strengthen the medium-term growth potential and boost the global competitiveness of the Indian economy.
Global political tensions, ongoing conflicts and global trade policy risks remain key challenges to the global economic outlook.
Retail headline inflation has declined from 5.4 per cent in FY24 to 4.9 per cent in April-December 2024.
Capital expenditure (CAPEX) has increased steadily from FY21 to FY24. Post the general elections, CAPEX increased by 8.2 per cent year-on-year during July-November 2024.
India contributes the seventh-largest share of global services exports, reflecting India’s global competitiveness in this sector.
During April-December 2024, non-petroleum and non-gems and jewellery exports grew by 9.1 per cent, demonstrating the resilience of India’s merchandise exports to global conditions.
Chapter 2: Monetary and Financial Sector Developments
Bank credit has grown at a stable rate and credit growth has caught up with deposit growth.
The profitability of scheduled commercial banks improved, reflected in a decline in gross non-performing assets (GNPAs) and an increase in capital-to-risk weighted assets ratio (CRAR).
Credit growth outpaced nominal GDP growth for two consecutive years. The credit-to-GDP gap narrowed to (-) 0.3 per cent in Q1 FY25 from (-) 10.3 per cent in Q1 FY23, reflecting stable bank credit growth.
The banking sector continues to witness improved asset quality, strong capital buffers and robust operating performance.
The gross non-performing assets (GNPAs) of scheduled commercial banks fell to a 12-year low of 2.6 per cent at end-September 2024.
Under the Insolvency and Bankruptcy Code (IBC), resolution of 1,068 schemes till September 2024 yielded a sum of ₹3.6 lakh crore. This is equivalent to 161 per cent of the manufacturing value of assets and 86.1 per cent of the fair value.
The Indian stock market performed at par with emerging markets despite the challenges of election market volatility.
The total resource mobilisation from primary markets (equity and debt) stood at ₹11.1 lakh crore from April to December 2024, up 5 per cent over FY24.
The BSE stock market capitalisation-to-GDP ratio stood at 136 per cent at end-December 2024, far higher than other emerging markets such as China (65 per cent) and Brazil (37 per cent).
India's insurance market continues its upward growth, with total insurance premiums rising 7.7 per cent to ₹11.2 lakh crore in FY24.
India's pension sector has witnessed significant growth, with the number of pension subscribers increasing 16 per cent (YoY) as of September 2024.
Chapter 3: External Sector: Channeling FDI in the Right Direction
India’s external sector shows resilience even amid global uncertainties and challenges.
Total exports (textiles + services) grew 6 per cent (YoY) in the first nine months of FY25. The services sector witnessed a growth of 11.6 per cent during this period.
India is the world’s second largest exporter of ‘telecommunications, computer and information services’ with a 10.2 per cent share in the global export market, as reported by UNCTAD.
India’s current account deficit (CAD) stood at 1.2 per cent of GDP in the second quarter of FY25, supported by rising net services receipts and a rise in private transfer receipts.
Total foreign direct investment (FDI) inflows witnessed a revival in FY25, growing from USD 47.2 billion in the first eight months of FY24 to USD 55.6 billion in the same period of FY25, showing a YoY growth of 17.9 per cent.
India's FOREX reserves stood at USD 640.3 billion as of end-December 2024, enough to cover 10.9 months of imports and about 90 per cent of the country's external debt.
India's external debt has remained stable over the past few years, and the external debt-to-GDP ratio stood at 19.4 per cent as of end-September 2024.
According to the MF, the global inflation rate is projected to decline to 5.7 per cent in 2024, from a peak of 8.7 per cent in 2022.
Retail inflation in India is projected to decline from 5.4 per cent in FY24 to 4.9 per cent in FY25 (April-December 2024).
The RBI and the IMF estimate that India's consumer price inflation will gradually reach the target of around 4 per cent in FY26.
The development of climate change-resilient crop varieties and improved agricultural practices is crucial to mitigate the impacts of extreme weather events and achieve long-term price stability.
Chapter 5: Medium Term Outlook: Deregulation to Boost Growth
The Indian economy is in the midst of a transformation that is presenting an unprecedented economic challenge.
Geo-economic fragmentation (GEF) is replacing globalization, resulting in the need for economic readjustment and restructuring.
To realize the dream of a developed India by 2047, India will have to achieve a growth rate of about 8 percent at constant prices for about one or two decades.
India’s medium-term growth outlook must take into account the new global realities – GEF, China’s manufacturing capacity, and dependence on China in energy transition efforts.
India must focus on reviving domestic growth mechanisms and systematic deregulation to enable individuals and organizations to carry out legitimate economic activities easily.
Systematic deregulation or promoting economic freedom for individuals and small businesses can be considered the most important policy priority to strengthen the medium-term growth prospects of the Indian economy.
Now the focus of reforms and economic policies should be systematic deregulation and building India’s SME sector i.e. Mittelstand under Ease of Doing Business 2.0. As a next step, states should work on liberalising standards and controls, establishing legal safeguards, reducing levies and taxes, and implementing risk-based regulation.
Chapter 6: Investment and Infrastructure
The central focus of the government over the past five years has been to increase public spending on infrastructure and accelerate the pace of approvals and resource mobilisation.
The Union government’s capital expenditure in key infrastructure sectors grew by 38.8 per cent from FY20 to FY24.
Under railway connectivity, 2031 km of railway network was commissioned between April and November 2024 and 17 new Vande Bharat trains were introduced between April and October 2024.
Under road network, 5853 km of national highways were constructed in FY25 (April-December).
Under the National Industrial Corridor Development Programme, a total of 383 plots, comprising 3788 acres of land, have been allotted in Phase 1 for industrial use for various sectors.
Operational efficiency has improved, with average container turnaround time in major ports reduced from 48.1 hours in FY24 to 30.4 hours in FY25 (April-November), leading to significant improvement in port connectivity.
Increased energy capacity added has grown by 15.8 per cent year-on-year, particularly in solar and wind power, by December 2024.
The share of renewable energy in India’s total installed capacity is now 47 per cent.
Government schemes such as DDUGJY and SAUBHAGYA have improved electricity access in rural areas, electrifying 18,374 villages and providing electricity to 2.9 crore households.
The government’s digital connectivity initiatives have gained momentum, especially with the launch of 5G services in all states and union territories by October 2024.
Efforts to provide 4G mobile services in remote areas under the Universal Service Obligation Fund (now Digital India Fund) have made significant progress, with over 10,700 villages covered by December 2024.
Under Jal Jeevan Mission, over 12 crore households have got piped drinking water since its launch.
Under Phase II of Swachh Bharat Mission-Grameen, 1.92 lakh villages were declared ODF Plus in the model category between April and November 2024, taking the total number of ODF Plus villages to 3.64 lakh.
In urban areas, over 89 lakh houses have been constructed under the Pradhan Mantri Awas Yojana.
Transport networks in cities are expanding rapidly, with metro and rapid rail systems operational or under construction in 29 cities, covering more than 1,000 km.
The Real Estate (Regulation and Development) Act, 2016 ensured regulation and transparency of the real estate sector. As of January 2025, over 1.38 lakh real estate projects have been registered and 1.38 lakh complaints have been resolved.
India currently operates 56 active space assets. The government's Space Vision 2047 includes ambitious projects such as the Gaganyaan mission and the Chandrayaan-4 lunar sample return mission.
Public sector investment alone may not be enough to meet infrastructure requirements, and private sector participation will be crucial to bridge this gap.
The government has created schemes such as the National Infrastructure Pipeline and the National Monetisation Pipeline to promote private sector participation in infrastructure.
Chapter 7: Industry: All about business reforms
The industrial sector is expected to grow by 6.2 per cent in FY25 (First Advance Estimates), driven by strong growth in power and construction.
The government is actively promoting smart manufacturing and Industry 4.0, supporting the establishment of SAMARTH industry hubs.
In FY24, Indian automobile domestic sales grew by 12.5 per cent.
From FY15 to FY24, domestic production of electronic goods has grown at a CAGR (compound annual growth rate) of 17.5 per cent.
Now 99 per cent of smartphones are domestically manufactured, drastically reducing India’s dependence on imports.
In FY24, the total annual turnover of pharmaceuticals was ₹4.17 lakh crore, growing at an average rate of 10.1 per cent over the last five years.
The micro, small and medium enterprises (MSME) sector Services have emerged as a highly dynamic sector of the Indian economy.
To provide equity funding to MSMEs that have the potential for expansion, the government launched the Atmanirbhar Bharat Fund with a corpus of ₹50,000 crore.
The government is implementing the Micro and Small Enterprises-Cluster Development Programme to develop clusters across the country.
Chapter 8: New Challenges
The contribution of the services sector to total GVA has increased from 50.6 per cent in FY14 to 55.3 per cent in FY25 (First Advance Estimates).
The average growth rate of the services sector was 8 per cent in the pre-pandemic years (FY13–FY20). It was 8.3 per cent in the post-pandemic period (FY23–FY25).
India accounted for 4.3 per cent of global services exports in 2023, ranking it seventh worldwide.
India’s services exports grew 12.8 per cent during April–November FY25, up from 5.7 per cent in FY24.
Information and computer-related services grew at 12.8 per cent in the last decade (FY13–FY23), increasing their share in total GVA from 6.3 per cent to 10.9 per cent.
Indian Railways recorded an 8 per cent growth in passenger traffic in FY24. Revenue-earning freight traffic grew by 5.2 per cent in FY24.
The tourism sector’s contribution to GDP returned to the pre-pandemic level of 5 per cent in FY23.
Chapter 9: Agriculture and Food Management: The Sector of the Future
The ‘agriculture and allied activities’ sector contributes about 16 per cent of the country’s GDP in FY24 (PE), at current prices.
High-value sectors such as horticulture, animal husbandry and fisheries have become key drivers of overall agricultural growth.
The 2024 Kharif foodgrain production is estimated at 1647.05 lakh metric tonnes (LMT), an increase of 89.37 LMT from the previous year.
For the financial year 2024-25, the MSP of tur and bajra has been increased by 59 per cent and 77 per cent of the average cost of production, respectively.
The fisheries sector showed the highest collective annual growth rate (CAGR) of 8.7 per cent, followed by animal husbandry at a CAGR of 8 per cent.
The National Food Security Act (NFSA) 2013 and the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) brought about a fundamental shift in the approach to food security.
The provision of providing free foodgrains for the next five years under PMGKAY reflects the government's long-term commitment to food and nutrition security.
As of October 31, over 11 crore farmers have benefited under the PM-KISAN scheme, while 23.61 lakh farmers are registered under the PM Kisan Maandhan Yojana.
Chapter 10: Climate and Environment
India’s goal of becoming a developed nation by 2047 is based on a vision of inclusive and sustainable development.
India has installed 2,13,701 MW of electricity generation capacity from non-fossil fuel sources as on 30 November 2024, which is 46.8 per cent of the total capacity.
According to the Forest Survey of India 2024, an additional carbon sink of 2.29 billion tonnes of CO2 equivalent has been created between 2005 and 2024.
The global movement led by India, ‘Lifestyle for Environment’ (LiFE), aims to boost the country’s sustainability efforts.
By 2030, it is estimated that LiFE measures could save consumers about US$440 billion globally by reducing consumption and lowering prices.
Chapter 11: Social Sector – Expanding Reach and Promoting Empowerment
The government’s social service expenditure (combined Centre and states) has grown at an annual growth rate of 15 per cent from FY21 to FY25.
The Gini coefficient, a measure of inequality in consumption expenditure, is declining. For rural areas it has declined from 0.266 in 2022-23 to 0.237 in 2023-24, and for urban areas it has declined from 0.314 in 2022-23 to 0.284 in 2023-24.
The government’s various fiscal policies are helping to reshape the income distribution.
Government health expenditure has increased from 29.0 per cent to 48.0 per cent; the share of expenditure by households in total health expenditure has declined from 62.6 per cent to 39.4 per cent, reducing the financial burden on households.
Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) has played a key role in registering savings of ₹1.25 lakh crore.
A strategy of localisation of Sustainability Development Goals (SDGs) has been adopted so that budgets at the Gram Panchayat level are aligned with SDG objectives.
Chapter 12: Employment and Skill Development: Priorities for Survival
Indian labour market indicators have improved, and the unemployment rate is projected to decline from 6.0 per cent in 2017-18 (July-June) to 3.2 per cent in 2023-24 (July-June).
India has a population in the age group of 10-24 years with nearly 26 per cent, making it one of the youngest countries in the world, and is on the threshold of a unique demographic opportunity.
The government has launched several initiatives to promote women entrepreneurship, including easy access to credit, marketing support, skill development and support to women startups.
The growing digital economy and renewable energy sector are providing great opportunities for job creation, which are essential to achieve the vision of a ‘Developed India’.
The Government is establishing a strong and responsive skills ecosystem to keep pace with global trends such as automation, generative AI, digitization and the impacts of climate change.
The Government has taken steps to increase employment, encourage self-employment and promote the well-being of workers.
The recently launched PM-Internship Scheme is emerging as a transformational catalyst for job creation.
Net payroll additions under EPFO have doubled in the last six years, indicating healthy growth in formal employment.
Chapter 13: Labor in the AI Age: Crisis or Catalyst?
Developers of Artificial Intelligence (AI) promise to usher in a new era where most economically valuable work will be automated.
AI is expected to surpass human performance in making critical decisions in various sectors such as health care, research, criminal justice, education, business, and financial services.
Currently, there remain some barriers to large-scale AI adoption, including reliability, resource inefficiencies, and infrastructural deficiencies. These challenges and the experimental nature of AI provide an opportunity for policymakers to act.
Fortunately, since AI is still in its infancy, India is getting the time it needs to strengthen its foundations and mobilise a nationwide institutional response.
Leveraging its young, dynamic and technologically capable population, India has the potential to create a workforce that can use AI to enhance its work and productivity.
The future revolves around ‘Augmented Intelligence’, where the workforce integrates both human and machine capabilities. This approach aims to enhance human potential and improve overall efficiency in job performance, which will ultimately benefit society as a whole.
Collaborative efforts between the government, private sector and academic institutions are essential to mitigate the adverse societal impacts of AI-induced change.
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