Economic Survey 2024-25: Highlights 

Syllabus: GS 3/Economy 

In News

• Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman presented the Economic Survey 2024-25 in the Parliament.

About Economic Survey

• The Economic Survey is a comprehensive review of the country’s current economic state and future outlook.
• It is prepared by the Economic Division of the Department of Economic Affairs under the guidance of the Chief Economic Advisor. 

Major Highlights 

• State of the Economy: India’s real GDP growth estimated at 6.4% in FY25, aligning with its decadal average.
  • Global GDP grew 3.3% in 2023, slightly higher than IMF’s 3.2% forecast for the next five years.
  • FY26 GDP growth expected between 6.3% and 6.8%.
  • Retail inflation reduced to 4.9% in FY25 (April-Dec).
  • Capital expenditure (CAPEX) grew 8.2% YoY post-general elections in 2024.
  • India’s share in global services exports is 7th largest.
• Monetary and Financial Sector Developments:  Bank credit grew steadily; asset quality and profitability improved.
  • Gross non-performing assets (GNPAs) at a 12-year low (2.6% of gross loans).
    • ₹3.6 lakh crore realized from 1,068 insolvency resolutions.
  • India’s stock markets outperformed emerging market peers.
  • Resource mobilization from primary markets reached ₹11.1 lakh crore in FY25.
  • Insurance premiums grew by 7.7%, and pension sector subscribers rose 16%.
• External Sector:  Exports grew by 6%, with the services sector up 11.6% (April-Dec FY25).
  • India ranked 2nd in global telecommunications, computer & information services exports.
  • FDI inflows increased by 17.9% YoY to USD 55.6 billion in FY25.
  • Forex reserves stood at USD 640.3 billion, covering 10.9 months of imports.
• Prices and Inflation:  Global inflation moderated to 5.7% in 2024.
  • India’s retail inflation reduced to 4.9% in FY25.
  • RBI and IMF project inflation will align to around 4% by FY26.
• Medium-Term Outlook:  India aims for 8% growth to achieve ‘Viksit Bharat’ by 2047.
  • Focus on deregulation to empower growth and ease of doing business, particularly for SMEs.
• Investment and Infrastructure: Government capital expenditure grew by 38.8% from FY20 to FY24.
  • 5853 km of National Highways constructed in FY25 (Apr-Dec).
  • Renewable energy capacity grew by 15.8% YoY by Dec 2024.
  • Significant infrastructure projects, including metro expansion and electricity access for rural areas.
• Industry : Industrial growth projected at 6.2% in FY25, driven by electricity and construction.
  • Automobile sales up by 12.5% in FY24.
  • India ranks 6th in global patent filings.
  • The MSME sector is growing, with initiatives like the Self-Reliant India Fund.
• Services : Services sector contribution to GVA increased to 55.3% in FY25.
  • Services exports grew by 12.8% in FY25 (Apr-Nov).
    • Indian Railways and tourism sector show strong growth.
• Agriculture and Food Management:  Agriculture contributes 16% to GDP in FY24.
  • Kharif foodgrain production is expected to rise by 89.37 LMT in FY24.
    • Fisheries and livestock sectors show strong growth.
    • MSP increases for Arhar and Bajra by 59% and 77%, respectively.
• Climate & Environment: India’s non-fossil fuel power generation capacity reached 46.8% of total capacity.
  • LiFE initiative to drive sustainable living, with potential global savings of USD 440 billion by 2030.
  • India’s carbon sink increased by 2.29 billion tonnes CO2 equivalent.
• Social Sector :  Social services expenditure grew at 15% CAGR from FY21 to FY25.
  • Decline in income inequality, with improvements in rural and urban Gini coefficients.
  • Government health expenditure up from 29% to 48%, reducing out-of-pocket expenses.
  • Ayushman Bharat has saved over ₹1.25 lakh crore.
• Employment and Skill Development: Unemployment rate declined to 3.2% in FY24.
  • Government initiatives supporting women entrepreneurship, including credit and skill development.
  • Emerging sectors like the digital economy and renewable energy provide job opportunities.
  • EPFO payroll additions doubled in the last six years.
• Labour in the AI Era: AI expected to surpass human performance in key sectors but faces barriers like reliability and infrastructure.
  • India’s young, tech-savvy population is poised to leverage AI for enhanced productivity.
  • Collaboration between government, private sector, and academia is crucial to manage AI’s societal impact.

Issues and Concerns 

• Global challenges like trade tensions and rising commodity prices may still affect growth.
• Investment growth has slowed, with government and private sector capital expenditure weak, partly due to elections and global uncertainties.
  • This poses a challenge for economic expansion.
• Challenges faced by Micro, Small, and Medium Enterprises (MSMEs), including regulatory burdens that hinder formalization, productivity, and innovation.
• Employment has grown, particularly for women in agriculture, but wages have declined.
  • Many new jobs are low-skill, which limits overall economic progress.
• The services sector faces challenges from AI and skill gaps, with most workers having lower education levels and limited competencies.
  • Upskilling is crucial for future growth.
• The textiles sector, a key driver of employment, faces challenges in competitiveness, particularly compared to nations like China and Vietnam.
  • Simplifying export processes could enhance efficiency.

Conclusion and Way Forward 

• India is on a steady growth path, while globalisation is slowing down. This change brings both challenges and new opportunities. To keep growing, India must focus on economic reforms and take advantage of its young workforce.
• The Survey emphasizes the need for strategic investments, deregulation, and skill development to unlock India’s growth potential and achieve its long-term economic goals

Source :PIB