Economic Survey 2024-25: Key Highlights and Insights for India's Growth Trajectory

The Economic Survey 2024-25 was tabled in Parliament today by Finance Minister Nirmala Sitharaman, just ahead of the Union Budget. Prepared under the leadership of Chief Economic Adviser V. Anantha Nageswaran, the survey provides a comprehensive review of India's economic performance over the past year while outlining key reforms and growth strategies for the future. It evaluates macroeconomic trends, sectoral performances, and policy recommendations essential for achieving long-term economic goals, particularly in the context of the 'Viksit Bharat' vision for 2047. Here are the key highlights of the Economic Survey 2024-25:

Key Highlights of the Economic Survey 2024-25

1. Growth Target for 'Viksit Bharat' Vision

The survey projects India's GDP growth for FY26 in the range of 6.3% to 6.8%. However, to achieve the 'Viksit Bharat' vision by 2047, India must sustain an average annual growth rate of 8% over the next two decades. While domestic reforms remain crucial, global economic conditions will significantly influence the growth trajectory.

2. India Leads Global IPO Market Amid Strong Listing Momentum

India emerged as the leader in global IPO markets, contributing 30% of global listings in 2024, up from 17% in 2023. Strong investor confidence and favorable regulatory conditions have driven this momentum, positioning Indian stock exchanges as key players in global capital mobilization.

3. Corporate Debt Market Sees Strong Growth

India's corporate bond issuances surged to ₹7.3 lakh crore between April and December 2024, with average monthly issuances rising to ₹0.8 lakh crore. The dominance of private placements (99.1% of total issuances) underscores a shift towards corporate bonds as a preferred financing avenue.

4. Banking Sector Stability Amid Moderation in Credit Growth

India’s banking sector remains resilient and well-capitalized, despite a recent moderation in credit growth. The slowdown is attributed to a high base effect and regulatory tightening in specific sectors, ensuring financial stability while meeting economic financing needs.

5. Investment Slowdown Temporary as Capital Formation Strengthens

While investment activity slowed in early FY25, capital formation showed signs of recovery with an 8.2% rise in government capital expenditure between July and November 2024. Increased public spending is expected to accelerate the investment cycle, aiding infrastructure development.

6. Growth in Formal Employment and EPFO Subscriptions

The formal sector experienced robust expansion, with net Employees’ Provident Fund Organisation (EPFO) subscriptions doubling from 61 lakh in FY19 to 131 lakh in FY24. In April-November 2024 alone, 95.6 lakh new subscriptions were added, with 47% from the 18-25 age group, indicating rising youth employment.

7. Strong FDI Revival with 17.9% Growth in FY25

FDI inflows rebounded significantly, growing from USD 47.2 billion in the first eight months of FY24 to USD 55.6 billion in FY25, marking a 17.9% year-on-year increase. This reflects India's growing attractiveness for foreign investment amid global economic shifts.

8. Domestic Economy Resilient Amid Global Uncertainties

India’s real GDP growth for FY25 is projected at 6.4%, supported by a 7.3% rise in private final consumption expenditure (PFCE) and a 6.4% growth in gross fixed capital formation (GFCF). Rural demand recovery is a key driver of private consumption.

9. India’s Rising Role in Global Services Trade

The survey highlights India's increasing global influence in services, though China remains dominant in high-tech manufacturing. India's strategic focus on service exports is positioning it as a global hub in key industries such as IT and digital services.

10. Agriculture's Growing Role in GDP Expansion

Agriculture has the potential to add 0.75%-1% to GDP growth, supported by policy measures like micro-irrigation expansion and land pooling. State-level initiatives are driving productivity, making agriculture a key pillar for future economic growth.

11. Shifting Global Trade Landscape and Strategic Competition

The survey underscores the rapid rise in global trade restrictions, with trade under new import barriers surging from $170 billion in 2014-15 to over $1.3 trillion. This evolving landscape requires India to strategically navigate trade and investment flows to maintain its global competitiveness.

12. Inflation Under Control with Positive Outlook for FY26

Retail inflation moderated from 5.4% in FY24 to 4.9% in April-December 2024, aided by government interventions and monetary policies. Food inflation remains a concern, but measures such as buffer stock management and import adjustments have helped stabilize prices. Inflation is expected to align with the RBI’s 4% target by FY26.

13. FPI Inflows Surge Post JP Morgan Index Inclusion

Foreign portfolio investors (FPI) poured Rs 62,431 crore into Indian government bonds following India's inclusion in the JP Morgan index. The Fully Accessible Route (FAR) for government securities has strengthened India’s integration into global debt markets.

14. India's Data Centre Market to Reach USD 11.6 Billion by 2032

Driven by rising digital demand, India's data centre market is projected to grow from USD 4.5 billion in 2023 to USD 11.6 billion by 2032 at a CAGR of 10.98%. This reflects the increasing importance of data infrastructure in India’s digital economy.

Conclusion

The Economic Survey 2024-25 provides an optimistic outlook on India's economic trajectory, emphasizing sustained growth, investment revival, and resilience in key sectors. While challenges such as inflation control, global trade shifts, and credit moderation exist, policy reforms and strategic interventions are expected to drive long-term economic expansion. The survey’s insights set the stage for the upcoming Union Budget 2025-26, shaping India's economic roadmap toward the ambitious 'Viksit Bharat' vision.