10 highlights from Economic Survey 2025 tabled by Nirmala Sitharaman
The Economic Survey is a compilation of the Indian economy's performance and government policies, as well as the outlook for the upcoming financial year
Economic Survey 2025: Finance Minister Nirmala Sitharaman has tabled the Economic Survey in Parliament on Friday, January 31, 2025.
The survey projects India's GDP to grow in the range of 6.3-6.8%.
The 2025 survey came within a span of six months from the previous 2022-23 survey which was presented in July 22, 2024 after the General Election.
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What is the Economic Survey?
The Economic Survey is a compilation of the Indian economy's performance and government policies, as well as the outlook for the upcoming financial year. It is prepared by the economic division of the Department of Economic Affairs (DEA) which is headed by Chief Economic Advisor (CEA). V. Anantha Nageswaran.
The economic survey is divided into two parts: Part A which analyses economic performance based on macroeconomic indicators and fiscal trends, and Part B which looks at socio-economic issues like education, poverty, climate change, and GDP growth outlook, inflation, and trade.
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10 key highlights of the Economic Survey 2025
The following are 10 key highlights of the Economic Survey 2025.
1. India's economy will remain stable
Despite global uncertainty, India's real GDP growth of 6.4% in the financial year 2024-25 (as per first advance estimates of national income) remains close to the decadal average, according to the survey.
As a result, "from an aggregate supply perspective, real gross value added (GVA) is also estimated to grow by 6.4 per cent FY25," the survey said.
2. All sectors will contribute to growth
All sectors are performing well, the Economic Survey document said. “The agriculture sector remains strong, consistently operating well above trend levels. The industrial sector has also found its footing above the pre-pandemic trajectory. The robust rate of growth in recent years has taken the services sector close to its trend levels.”
3. Inflation is coming under control
Retail headline inflation softened from 5.4% in the financial year 2023-24 to 4.9% during the April-December period of 2024-25, according to the survey.
"Despite challenges, there are positive signs for inflation management in India. 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 per cent in FY26," the survey read.
4. FPI positive overall, FDI shows signs of revival
Foreign portfolio investments (FPIs) have shown a mixed trend in 2024-25 so far. Uncertainty in the global markets and profittaking by foreign portfolio investors led to capital outflows. However, strong macroeconomic fundamentals, a favourable business environment, and high economic growth have kept FPI flows positive overall.
Meanwhile, gross foreign direct investment (FDI) inflows have shown signs of revival in the first eight months of 2024-25, though net FDI inflows declined relative to April-November 2023 due to a rise in repatriation/disinvestment.
5. Forex reserves are strengthening
The economic survey showed India's Forex reserves were at a high of $706 billion in September 2024 and stood at $640.3 billion by December 27, 2024, covering 89.9% of external debt.
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6. Banking and Insurance sector is stable
Commercial banks have reported a consistent decline in their gross non-performing assets (GNPA) ratio "from its peak in FY18 to a low of 2.6 per cent at the end of September 2024," according to the survey.
Apart from this, the credit-GDP gap also narrowed to 0.3% in the first quarter of 2024-25 from -10.3% in the same quarter of the previous year, which indicates that the recent growth in bank credit is sustainable.
Moreover, insurance premiums grew 7.7% in 2023-24, reaching ₹11.2 lakh crore and total number of pension subscribers grew by 16% year-on-year as of September 2024, according to the survey.
7. Exports are growing
India's total exports (merchandise and services) have registered a steady growth in the first nine months of FY25, reaching USD 602.6 billion (6 per cent). Growth in services and goods exports, excluding petroleum and gems and jewellery, was 10.4 per cent. Total imports during the same period reached USD 682.2 billion, registering a growth of 6.9 per cent on the back of steady domestic demand.
"The evolving global trade dynamics, marked by gradual shifts towards greater protectionism, require assessing the situation and developing a forwardlooking strategic trade roadmap. By adapting to these trends and leveraging its strengths, India can accelerate its growth and enhance its presence in global trade," the survey read.
8. MSME Credit growth remains strong, personal credit moderates
Sector-wise, the growth in agriculture credit as of 29 November 2024 in the current financial year was 5.1%. Meanwhile, the growth in industrial credit picked up and stood at 4.4% as of the end of November 2024, higher than 3.2% recorded a year ago.
Across industries, bank credit to micro, small, and medium enterprises (MSMEs) have been growing faster than credit disbursal to large enterprises.
As of the end of November 2024, credit to MSMEs registered a year-on-year growth of 13%, whereas it stood at 6.1% for large enterprises.
However, credit growth to the services and personal loans segments moderated to 5.9% and 8.8% respectively, as of the end of November 2024 in the current financial year. Amongst the services sector, the moderation has been driven by a slowdown in credit disbursal to NBFCs.
Vehicle and housing loans drove the moderation in the personal loans segment. In terms of increasing risk weights to NBFCs and credit cards, RBI's policy interventions contributed to the moderation of credit growth in those segments.
9. Deregulation needed for growth
The Economic Survey calls for deregulation to drive growth.
“A fundamental pre-requisite is to accelerate and amplify the deregulation agenda already underway in the last ten years and work towards giving people back their agency and enhancing the economic freedoms of individuals and organisations,” the survey read.
This is to upgrade the capacity and know-how of component manufacturers, increasing the availability of trained human resources, addressing resource bottlenecks and regulatory impediments to accelerate India's gross fixed capital formation."
10. Infrastructure sector a key focus, but private players must participate more
“Building infrastructure – physical, digital and social - has been a central focus area for the Government in the last five years. This has had various dimensions – increase in public spending on infrastructure, creation of institutions to de-bottleneck approvals and execution and innovative modes of resource mobilisation. In FY25, capital expenditure has gathered momentum postelections,” the survey read.
“The government has recognised the importance of continuing the pace of infrastructure building and the increasing need to promote sustainable construction practices,” it added.
However, “It is also clear that public capital alone cannot meet the demands of upgrading the country’s infrastructure commensurate with the requirements of Viksit Bharat@2047. We need to ensure increasing private participation in infrastructure by improving their capacity to conceptualise projects and their confidence in risk and revenue-sharing mechanisms, contract management, conflict resolution and project closure. The efforts of the Union Government would need to be supplemented with wholehearted acceptance of the need for public-private partnerships in infrastructure across the country.”
