The finance minister has presented the Economic Survey 2024-25 before the Parliament. It is a report card of India’s economic performance which gives the current and expected direction of government policies.

Economic survey: Recovery, resilience and renewal in 2025

2024 was underpinned by macroeconomic headwinds across regions, as well as elections in major democracies, including India and the U.S. Despite challenges, the Indian economy saw steady growth, with a forecasted 6.4 per cent rise in real GDP by 2025. Stable domestic demand and growth in core sectors like agriculture and services have driven growth, despite muted manufacturing as a result of reduced global demand and domestic seasonality. The growth prediction for FY’26 stands at 6.3–6.8 per cent, aligning with the International Monetary Fund's (IMF) projection of a 6.5 per cent GDP growth rate between FY’26 and FY’30 at constant prices. As we look ahead, focus on India's domestic engines assumes criticality for addressing growth, employment, and broader development concerns.

Key themes covered in the economic survey

Deregulation strategy: A pathway to economic growth and empowerment

The survey fortifies the need for a deregulation agenda with a focus on economic freedom for individuals and businesses, further amplifying its importance for Micro, Small and Medium Enterprises (MSMEs). Continuous reform implementation by both union and state governments is necessary for fast tracking economic growth through regulatory rationalisation. It reinforces the country’s need to prioritise systematic deregulation. Ease of Doing Business (EoDB) 2.0 should prompt state governments to rectify primary business challenges and focus on liberalising standards and controls, setting legal safeguards, reducing tariffs and fees, and applying risk-based regulation.

Bridging environment and economy

The survey underscores India's Viksit Bharat@2047 objective to meld economic growth and carbon neutrality. India is navigating renewable energy scaling challenges through a series of initiatives, with FY24 witnessing holistic undertakings (LiFE scheme and National Adaptation Plan) in addition to targeted initiatives (AMRUT 2.0, Smart City Mission, Urban River Management Plan, Bhu-Neer portal, 'Jal Sanchay Jan Bhagidari' initiative). The need for a multi-pronged stance, tailored strategies, infrastructural resilience, research and development, and financial resource procurement underpins India’s ambition for a sustainable and progressive future.

Strategic initiatives in education: Key to India's economic development

Education expenditure has seen a 12 per cent CAGR growth, rising from INR5.8 lakh crore to INR9.2 lakh crore from FY’21 to FY’25 budget estimate (BE). The survey indicates that in order to achieve 100 per cent literacy and establish quality education institutions, India will require constructing large-scale, future-proof infrastructure. Various government initiatives, including Samagra Shiksha Abhiyan and its ancillary schemes, aim to fulfil National Education Policy (NEP) 2020's objectives. Additionally, it is critical to have a strategic skills and education plan for the demographic dividend and to accomplish goals outlined in Viksit Bharat 2047. The government, via schemes to incentivise practical job experience, aims to plug the skill gap, generate jobs, align the workforce to international standards and promote labour flexibility. Prioritised skill development for women and entrepreneurial support, alongside sectors such as digital economy and renewable energy, are expected to boost job creation.

Building a technologically empowered India

The Economic Survey 2024-25 outlines the necessity for driving synergy between the government, private sector, and academia to create a societal infrastructure that harnesses the power of innovation for inclusive growth. Within the expanding purview of artificial intelligence (AI), the survey emphasises the need for social infrastructure that enhances workforce skills, enabling AI to complement rather than replace human efforts. The future, as envisioned in the survey, is marked by 'Augmented Intelligence', seamlessly integrating human and machine capabilities. With its dynamic and technologically adept population, India is poised to equip its workforce with AI, improving work efficiency and driving the nation towards a technologically advanced future.

India's external sector stands resilient amidst global uncertainties

The survey highlights the resilience of India's external sector amid global uncertainties. Total exports (goods and services) demonstrated steady growth in FY25's initial nine months, hitting USD602.6 billion or 6 per cent growth, while total imports recorded a growth of 6.9 per cent. Despite increasing global protectionism, India’s strategic approach to reduce trade-related costs and enhance export facilitation resulted in a vibrant export sector, thereby strengthening its presence in global trade. The foreign portfolio investments (FPIs) followed a mixed pattern in FY’25 due to global market uncertainties. However, India's strong macroeconomic fundamentals and investment attractiveness across sectors ensured overall positive FPI inflows. While the Gross Foreign Direct Investment inflows showed revival signs, net foreign direct investment (FDI) inflows saw a dip due to a rise in repatriation/disinvestment. By December 2024, India's foreign exchange reserves stood robust at USD640.3 billion, offering a cushion against its external debt. The survey underscores India's potential to tackle global economic challenges and calls for a continued strategic and proactive approach for promoting consistent progress.

Structural reforms reframing India’s economic trajectory

The survey highlights the dual strategy powering India’s industrial growth - foundational sectors like steel, cement, chemicals, and petrochemicals providing stability, and consumer-centric sectors like automotive, electronics, and pharmaceuticals driving growth. Emphasising infrastructure-led growth, initiatives like smart manufacturing and Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) udyog centres aim to integrate manufacturing industries, particularly Small and Medium Enterprises (SMEs), into emerging technological trends. Government programmes like Make in India and Digital India have further fortified domestic manufacturing, making it an attractive arena for foreign investment. To bolster innovation, the survey underscores initiatives promoting research and development (R&D) investments and enhancing intellectual property (IP) protection. Credit accessibility for MSMEs is being improved via a restructured Credit Guarantee Scheme for Micro and Small Enterprises (MSEs). Concurrently, the MSE-Cluster Development Programme is being implemented for nationwide business cluster growth.