On January 31, 2025, Finance Minister Nirmala Sitharaman presented India's Economic Survey for 2024-25 to the Parliament, providing significant insights on the country's economic performance and setting expectations for the upcoming Union Budget. The report reflects on various aspects of the economy, spanning from growth figures and sectoral performances to key reforms enacted and future policy directions.
Highlighting the government's achievements, President Droupadi Murmu commended the rapid progress made during the current administration, stating, "The government's third term is progressing at three times the speed of previous administrations." This ambitious claim frames the broader narrative of India's economic resilience and proactive governance.
According to the Economic Survey, India recorded impressive economic growth at 6.4% for the fiscal year 2025, driven significantly by rising rural demand, substantial construction activity, and solid performance within the services sector. For the upcoming fiscal year, the survey projects growth to align within the range of 6.3% to 6.8%, echoing the International Monetary Fund's assessment of 6.5% but falling slightly short of the World Bank's higher projection at 6.7%.
The Economic Survey serves as the foundation for the Union Budget discussions scheduled for February 1, 2025. Notably, the document aims to outline effective reforms poised to tackle challenges surrounding infrastructure, investment, and technological advancement. It stresses the importance of giving businesses the space to innovate, with Sitharaman asserting, "Getting out of the way and allowing businesses to focus on their core mission is... significant to fostering innovation and enhancing competitiveness."
Investment figures showcase a revival of Gross Foreign Direct Investment (FDI) inflows, which increased dramatically from $47.2 billion during the initial months of FY24 to $55.6 billion for the same period this fiscal year—a growth of 17.9%. This surge indicates the resilience of India’s export sector too, with overall merchandise and services exports growing annually by 6% amid turbulent global economic conditions.
Additional key performance indicators reflect the government’s ambitious infrastructure agenda, as evidenced by substantial capital expenditure growth. The survey mentions, "The Union Government’s capital expenditure on key infrastructure sectors has grown at 38.8% from FY20 to FY24," demonstrating the commitment to bolstering the country’s infrastructure capabilities.
Inflation remained stable, with retail headline inflation softening to 4.9% between April and December of 2024, primarily due to strategic government interventions, including bolstered buffer stocks for food essentials and policies aimed at easing imports during supply shortages. Such measures have proved effective, and projections indicate consumer price inflation could gradually align with the target of around 4% for FY26.
Driving the narrative of technological advancement, the survey highlights the anticipated impact of artificial intelligence (AI) across various sectors, predicting it could surpass human performance and potentially lead to substantial workforce displacement, particularly affecting middle to lower wage earners. This point raises concerns about future job creation, as India is expected to generate approximately 78.5 lakh jobs annually by 2030 to meet rising workforce demands.
Alongside these economic forecasts, the survey addresses the urgent need to reshape job opportunities through the digital economy, emphasizing how new technology platforms have transformed traditional services and created flexible employment options. By 2030, the gig workforce is projected to grow to 23.5 crore, reshaping the dynamics of the labor market significantly.
Finally, the Economic Survey shines a spotlight on mental health as a pressing economic issue, recognizing the increasing prevalence of mental health problems and their potential impacts on productivity and overall economic growth.
With these comprehensive insights, the Economic Survey 2024-25 not only charts the course for the Union Budget but also sets the stage for informed economic policymaking aimed at fostering sustainable growth. The government's focus on inclusive growth and equitable opportunities highlights its commitment to not just economic performance, but improving the quality of life for all citizens.