Vibhas Chhabra

Economic Survey 2024-25: Key Insights and Growth Prospects

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by

Vibhas
in

Introduction

The Economic Survey 2024-25 provides an in-depth analysis of India’s economic trajectory, highlighting its resilience amid global uncertainties and outlining key policy measures to sustain growth. It sets an ambitious vision of achieving Viksit Bharat (Developed India) by 2047 and emphasizes economic deregulation, investment in infrastructure, and leveraging domestic growth drivers.

Key Highlights of the Economic Survey 2024-25

1. India’s Growth Outlook

  • India needs to maintain an 8% growth rate at constant prices for the next two decades to reach its economic aspirations​.
  • The IMF projects India to become a USD 5 trillion economy by FY28 and USD 6.3 trillion by FY30, translating to a 10.2% nominal growth rate​.
  • The Ministry of Statistics and Programme Implementation (MoSPI) estimates GDP growth at 6.4% for FY25​.

2. Domestic Growth Drivers

  • Private Consumption: Expected to grow by 7.3%, with rural demand recovering due to improved agricultural performance​.
  • Gross Fixed Capital Formation (GFCF): Projected to grow by 6.4%, driven by investments in infrastructure and digital transformation​.
  • Employment Trends: The unemployment rate has declined from 6% in 2017-18 to 3.2% in 2023-24, reflecting increased formalization​.

3. External Sector Performance

  • Exports reached USD 602.6 billion, growing at 6% YoY, despite global economic headwinds​.
  • Foreign Direct Investment (FDI) inflows showed a mixed trend, with net FDI declining due to increased repatriation​.
  • India’s forex reserves stand at USD 640.3 billion, covering 90% of its external debt​.

4. Investment in Infrastructure

  • Power sector: Installed capacity grew 7.2% YoY, reaching 456.7 GW in November 2024​.
  • Renewable energy: India’s total installed renewable capacity increased by 15.8% YoY, reaching 209.4 GW​.
  • Transportation: The government is promoting inland waterways and improving rail-road connectivity to enhance logistics efficiency​.

5. Regulatory Reforms and Economic Deregulation

  • The survey underscores deregulation as a key driver of India’s medium-term growth​.
  • Reducing compliance burdens on businesses is a priority to stimulate economic activity.
  • The focus is on enhancing economic freedom, especially for MSMEs and small businesses, to encourage entrepreneurship.

Challenges and Risks

Despite strong growth projections, the survey identifies key risks:

  • Global Uncertainty: Geo-economic fragmentation due to trade restrictions and geopolitical tensions.
  • Inflation & Price Volatility: Supply chain disruptions affecting commodity prices​.
  • Current Account Deficit (CAD): Expected to rise to 2.2% of GDP by FY30​.

Conclusion

The Economic Survey 2024-25 reflects India’s strong economic fundamentals and resilience amid global challenges. Achieving sustained growth will require continued policy reforms, enhancing domestic growth drivers, and strengthening global trade relations. With a focus on economic freedom, deregulation, and infrastructure investments, India is well-positioned to achieve its long-term vision of becoming a developed economy.