On Friday, January 31, 2025, Finance Minister Nirmala Sitharaman tabled the Economic Survey for the fiscal year 2025 in Parliament. The report forecasts India's GDP growth to range between 6.3% and 6.8%, projecting a stable outlook for the nation's economy despite global uncertainties.
The Economic Survey, presented just six months after the previous 2022-23 survey in July 2024, serves as a critical document analyzing India's economic performance, government policies, and growth expectations for the upcoming fiscal year. It is prepared by the Department of Economic Affairs (DEA) and overseen by Chief Economic Advisor (CEA) V. Anantha Nageswaran.
The survey is divided into two sections: Part A, which focuses on macroeconomic indicators and fiscal trends, and Part B, which examines socio-economic issues including poverty, education, climate change, GDP growth, inflation, and trade.
Key Highlights of the Economic Survey 2025:
- India’s Economy to Remain Stable: Despite global uncertainties, India’s real GDP growth in FY 2024-25 is expected to hold steady at 6.4%, aligning closely with the decadal average. The survey also predicts that real gross value added (GVA) will grow by 6.4% in FY 2025.
- Sector-wise Growth Contributions: The Economic Survey highlights that all major sectors of the economy are performing well. The agriculture sector continues to exceed expectations, the industrial sector has regained its pre-pandemic momentum, and the services sector is approaching trend levels following strong growth in recent years.
- Inflation Management: Retail headline inflation decreased from 5.4% in FY 2023-24 to 4.9% during April-December 2024. The Reserve Bank of India and the International Monetary Fund (IMF) project that India’s consumer price inflation will gradually align with the target of around 4% by FY 2026.
- Stable Banking and Insurance Sectors: The banking sector has seen a decline in gross non-performing assets (GNPA) from its peak in FY 2018 to a low of 2.6% as of September 2024. Credit growth for MSMEs (micro, small, and medium enterprises) has outpaced that of large enterprises, with MSME credit growing by 13% year-on-year in November 2024.
- Sustained Growth in MSME Credit: Bank credit to MSMEs has grown significantly, reflecting a positive trend for small enterprises. Meanwhile, credit growth in agriculture and industrial sectors also showed improvement, with credit to agriculture rising by 5.1%, and industrial credit growing by 4.4% in FY 2024-25.
The Economic Survey of 2025 paints an optimistic picture of India’s economy, underscoring the nation’s resilience amidst global challenges and highlighting key areas of growth, including agriculture, industry, banking, and MSMEs. The survey also underscores the government’s continued efforts to balance inflation control with economic growth and development.
