India’s Growth Story In Numbers! Key Insights From The Economic Survey 2024-25

Economic Survey Budget 2025 Highlights: India’s Economic Survey 2024-25 emphasizes deregulation for growth, citing the impact of global uncertainties. Key highlights include a 6.4% GDP growth, resilient services sector, and improved rural demand. The survey stresses balanced energy transition, AI-driven skilling, and agricultural productivity. The banking sector shows asset quality improvement, with regulatory reforms and investment in infrastructure highlighted.

India’s Economic Survey for 2024-25 was tabled in Parliament today. Finance Minister Nirmala Sitharaman tabled the report in Lok Sabha before the Union Budget. The Survey reviews the current financial year’s economic performance and identifies national challenges. It also suggests future reforms and growth strategies. A team led by Chief Economic Adviser V Anantha Nageswaran prepare the document.

The Economic Survey prioritises deregulation as the driving force for India’s domestic growth and resilience in the face
of global economic and political shifts. Given the slowing pace of global trade, the survey emphasizes the importance of
domestic growth drivers. The survey advocates for a balanced approach to energy transition, promoting electric mobility
and public transport while also addressing the need for skilling and education to leverage technological advancements
like AI.

India’s Growth Story in Numbers!

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Key Insights from the Economic Survey 2024-25

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➤ Global Economic Overview:
– The global economy experienced steady but uneven growth in 2024, with a manufacturing slowdown.
– Geopolitical tensions, conicts, and trade policy risks add to global economic instability.
➤ India’s Economic Performance:
– India’s real GDP is estimated to grow by 6.4% in FY25, driven by agriculture and services.
– Rural demand improved due to record Kharif production.
– Manufacturing faced pressure from weak global demand.
– Macroeconomic stability was maintained through scal discipline and a strong external balance.
– Money supply (M3) growth moderated to 9.3% (YoY) as of December 2024.
– A higher money multiplier indicates increased liquidity in the economy
➤ Outlook for FY26:
– Balanced outlook with headwinds from global uncertainties and commodity price shocks.
– Domestically, investment pick-up, improved consumer condence, and corporate wage growth are key for promoting
growth.
– Rural demand and stable macroeconomic conditions oer upside potential.
– Need for structural reforms and deregulation to enhance global competitiveness.
➤ India’s Growth Drivers and the Need for Deregulation
– Regulatory compliance burden is seen as a major obstacle to economic freedom for individuals and small businesses.
– India should focus on domestic growth levers, given the changing global landscape.
– It advocates for policies that enhance economic freedom for individuals and organizations.
– Deregulation is presented as a key tool for achieving this, with a focus on digitisation, decriminalisation, and
divestment of unnecessary government functions.

➤ India’s Growth Drivers and the Need for Deregulation
– Regulatory compliance burden is seen as a major obstacle to economic freedom for individuals and small businesses.
– India should focus on domestic growth levers, given the changing global landscape.
– It advocates for policies that enhance economic freedom for individuals and organizations.
– Deregulation is presented as a key tool for achieving this, with a focus on digitisation, decriminalisation, and
divestment of unnecessary government functions.
1/31/25, 7:41 PM Economic Survey 2025 Highlights: Jobs, growth and economy — how India performed and the way ahead – The Economic Times
https://economictimes.indiatimes.com/news/economy/policy/economic-survey-2025-highlights-union-budget-check-the-key-pointer-indian-economy-growth-review-fiscal-deficit-income-tax-middle-class/… 3/14
– It suggests focusing on areas like land, labor, building regulations, and utilities. Examples of deregulation measures are
provided, including liberalizing standards and controls, setting legal safeguards for enforcement, reducing taris and
fees, and applying risk-based regulation.
– The report highlights past successes in structural reforms like GST and IBC, but stresses the need for continuous
modernization of the regulatory framework.
➤ China’s Dominance and the Energy Transition
– The Survey acknowledges China’s dominance in manufacturing and the energy transition ecosystem.
– It notes China’s strategic advantage in controlling key resources for global supply chains, particularly in critical
minerals essential for electric vehicles and renewable energy technologies.
– This dominance presents both opportunities and challenges for India, particularly in its pursuit of energy transition
goals.
➤ Performance ofthe banking sector and credit availability
– The banking sector witnessed improved asset quality, with declining GNPAs and rising CRAR. The GNPA ratio of SCBs
declined to a 12-year low of 2.6% at the end of September 2024.
– Bank credit growth has started converging towards deposit growth.
– Credit growth moderated across various sectors.
– Protability of SCBs improved during H1 of FY25.
➤ Eicacy ofInsolvency Law
The Insolvency and Bankruptcy Code (IBC) has signicantly impacted the health of the banking sector and redened the
debtor-creditor relationship. However, delays in the insolvency resolution process remain a concern.
➤ GlobalInation: Global food ination is declining, aided by improving supply conditions, but some emerging
economies like Brazil, India, and China show a contrasting pattern.
➤ Domestic Ination:
– India’s headline ination has moderated due to a signicant decrease in core ination and fuel price ination.
– Food ination is majorly driven by very few food items like vegetables and pulses.
– Extreme weather conditions impact vegetable production and prices
– Uneven monsoon-induced supply disruptions caused price pressures in tomatoes and onions. Onion production has
been lower in recent years, leading to sustained price pressures. Tomato prices uctuate seasonally, with higher prices
during the lean production season.
– Domestic household consumption is lower than production for both tomatoes and onions, suggesting that price
pressures are not solely due to production shortfalls but also post-harvest losses, seasonality, and regional dispersion.
– Trends in production and ination rate of tur: Tur dal has also contributed to food ination due to decient production
in recent years.
➤ Service Sector
– Global services activity is expanding, driven by emerging markets.
– India’s share in global services exports is steadily increasing.
– Public administration and IT-related services have shown signicant growth.
– The Purchasing Managers’ Index (PMI) indicates continued expansion in the services sector.
➤ State-wise Analysis of Service Sector Performance:
– Service sector activity is geographically dispersed across Indian states.
– Some states have high service intensity, while others have strong industrial sectors.
– Business reforms are essential for both industrial and service development.
– Two key transformations are reshaping India’s services landscape: technology-driven transformation of domestic

service delivery and diversication of services exports.
– New risks have emerged in the growth of IT and professional services due to changes in global policies.
– The embedded service content of non-service economic activities has increased.
– Focus on appropriate skilling of the labor force and simplication of procedures are crucial for future growth.
➤ Employment
– Signicant improvements in labor market indicators, including a decline in the unemployment rate and a rise in labor
force participation.
– Positive trends observed across states, with increases in worker population ratios and labor force participation rates.
– Rise in self-employment and a decline in regular/salaried and casual work, indicating a preference for exible work
arrangements.
– Impact on omen: Women’s participation in regular wage/salaried jobs decreased, while self-employment and
contribution to household enterprises increased.
– Sectoral Distribution: Agriculture remains the dominant sector, followed by services and industry.
– Urban-Rural Divide: Shift towards non-agricultural sectors observed in rural areas, while urban areas show a decline in
female salaried employment.
– Rise in Female LFPR: Female labor force participation rate has been rising, driven by increased participation of rural
women.
Skill Development:
– Majority of the workforce possesses low-level skills due to limited educational attainment.
– Skill development and internship programs are crucial for creating a globally competitive workforce.
– Mismatch between education and occupation levels, leading to underemployment of graduates and postgraduates.
– Low percentage of the workforce receives formal vocational training.
– Tiered Skill Framework: Need for a layered approach to skill development, including advanced, intermediate, and
foundational skills.
-Industry Partnerships: Collaboration between government, industry, and academia is crucial for creating a skilled
workforce.
-International Mobility: International cooperation and mobility of skilled workers are important for leveraging India’s
demographic dividend.
➤ Agriculture Sector
– The agriculture sector recorded a growth rate of 3.5% in the second quarter of FY25, marking a recovery from the previous
four quarters.
– Assured Remunerative Prices: Government interventions like assured remunerative prices, improved access to
institutional credit, and crop diversication have played a crucial role in sustained growth.
– Floriculture: The oriculture industry, with its 100% export orientation, has emerged as a high-performing sector. It
oers higher returns per unit area compared to many traditional crops.
– Productivity Disparities: While India is a major global cereal producer, crop yields are lower than other leading
producers, highlighting the need for productivity improvements.
– Allied Sectors Driving Growth: High-value sectors like horticulture, livestock, and sheries are major contributors to
agricultural growth, with sheries showing the highest CAGR.
– Inter-state Variations: Andhra Pradesh leads in agricultural growth among major states, followed by Madhya Pradesh
and Tamil Nadu.
– Changing Dietary Preferences: Rising incomes are driving increased consumption of non-food grains, particularly
horticultural products, livestock, and sheries, necessitating robust post-harvest management and marketing
infrastructure.
– Irrigation Coverage: While irrigation coverage has increased, a signicant portion of agricultural land remains rain-fed,
making it vulnerable to weather uctuations

Climate Change Impacts: Climate change is exacerbating weather variability, with increased frequency of dry spells
and intense short wet spells.
➤ Education
– Integrating innovative solutions like new teaching methods, peer learning, and life skills training improving
educational outcomes.
– Focus on preventive healthcare, mental health, and leveraging technology can reduce healthcare costs.
– Increased spending reecting the sector’s growing importance. SSE grew at a CAGR of 15% from FY21 to FY25 (BE).
– Declining Urban-Rural Gap: Consumption growth momentum in rural areas, narrowing the gap in MPCE to 70% in
2023-24 from 84% in 2011-12.
– Impact of elfare Schemes: Fiscal policies and welfare schemes contribute to reducing inequality and increasing
consumption spending.
– Higher Education: Aordability and geographical reach remain key challenges. Addressing challenges in medical
education required along with promotion of multidisciplinary institutions.
– Healthcare Advancements: Disruptive technologies like telemedicine and AI are improving healthcare delivery.
– Rural Development:Infrastructure development, housing, and localizing SDGs are key focus areas.
– Mental ell-being: Addressing the impact of lifestyle and work culture on mental health and productivity.
– Tim Tim Tare Initiative:Imparting essential life skills to adolescent students.
– Ayushman Bharat: Expanding health coverage to vulnerable populations and senior citizens.
– U-IN Portal: Digitizing vaccination records and improving immunisation eorts.
– Ultra-Processed Foods (UPFs): Raising awareness about their negative health impacts and promoting healthier food
choices.
– Regulatory Reforms: Moving towards a ‘light but tight’ regulatory model to foster innovation and improve outcomes in
education and health.

➤ Climate Change Issues:
-India’s vulnerability to climate change necessitates urgent adaptation measures.
– Adaptation in coastal regions includes mangrove conservation and restoration, building sea walls and articial reefs,
beach nourishment, and dune planting. The Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI)
promotes mangrove conservation and restoration.
– India’s growing energy needs require a balanced approach to energy transition.
– Experiences of developed economies highlight the risks of prematurely phasing out conventional energy sources
without viable alternatives.
– India needs to leverage its resources and technologies to ensure a stable energy supply while pursuing a low-carbon
pathway.
➤ Risks pertaining to India’s nancial sector
While the Indian nancial sector has shown resilience, potential risks include high US stock market valuations,
increased retail participation in Indian markets, and the dominance of nancial markets in shaping policy.
➤ GIFT City
GIFT IFSC is playing a pivotal role in India’s nancial sector, attracting global nancial institutions and fostering a
robust FinTech ecosystem. The banking and asset management ecosystem in GIFT City is expanding rapidly.
➤ Developments in the insurance sector
India’s insurance market continues to grow, driven by increasing premium income and penetration. However, challenges
remain in terms of closing the coverage gap and addressing evolving customer expectations and emerging risks.
➤ Developments in the pension sector
The pension sector has grown signicantly, with increasing subscribers in NPS and APY. However, there is potential for
further expansion, particularly in terms of coverage and accessibility for the informal sector.
➤ Financial sector regulators
Independent regulators play a key role in ensuring the stability and development of the nancial sector. Strengthening
regulatory impact assessments is crucial for improving the quality and eectiveness of regulations.
➤ Cybersecurity aspects ofIndia’s nancial sector
The increasing digitalization of the nancial sector has enhanced eiciency but also increased exposure to cyber threats.
India has strengthened its cybersecurity framework and ranks high in the Global Cybersecurity Index.
trends and policy changes in monetary policy and the nancial intermediation ecosystem in India.
➤ India’s Industrial Landscape: A Mied Bag of Opportunities and Challenges
– High-income countries have lost manufacturing share, primarily to upper-middle-income countries, largely due to
China’s growth.
– India improved its share but remains signicantly smaller than China’s, presenting a substantial growth opportunity.
– India’s industrial sector rebounded after the pandemic but experienced a slowdown in Q2 FY25 due to export
challenges, monsoon impacts, and festival timing variations.
– Core InputIndustries: Cement production near self-reliance; steel sector showing sustained growth driven by
infrastructure projects. Chemical sector remains a net importer.
– Capital and Consumer Goods: Capital goods production picking up but faces import dependency.
– Automobile sector shows mixed growth trends.
– Electronics production robust, but design and component manufacturing lag.
– Textiles face challenges despite being a major employment generator.
– Pharmaceutical sector strong but R&D spending needs a boost.
– R&D and Innovation:India’s R&D spending lags behind other countries, with a need for greater private sector
involvement. Intellectual property lings are growing rapidly, indicating a strengthening innovation ecosystem.
➤ Investment and Infrastructure
– Capex saw a signicant uptick post-elections in FY25, with a trend rate increase of 38.8% from FY20 to FY24 across
major infrastructure sectors.
– National Monetisation Pipeline (NMP): The NMP, targeting ₹6.0 lakh crore from FY22 to FY25, has seen transactions
worth ₹3.86 lakh crore.
– Railways saw increased rolling stock additions, while highway construction continued at a comparable pace to the
previous year.
– Civil Aviation: Capital expenditure in the aviation sector is nearing its target.
– Power Sector:Installed power capacity increased by 7.2% year-on-year, with a growing reliance on renewable energy
sources.
– Urban Infrastructure:Initiatives like the Smart Cities Mission, AMRUT, and PMAY-U are driving urban
transformation, focusing on housing, transportation, and service delivery.
➤ India’s Domestic Macroeconomic Situation:
– Resilient recovery with aggregate GVA exceeding pre-pandemic trends.
– Agriculture sector performed strongly.
– Industrial sector recovery varied across sub-sectors.
– Uneven recovery in the services sector.
– GDP growth driven by agriculture and services in H1 FY25.
– Improved agricultural prospects in FY25.
– Moderating manufacturing sector growth with positive expectations.
– Robust growth in the services sector.
– Private consumption expenditure rmed up Moderation in real GDP growth due to softening of investment activity.
– External sector stability supported by services trade and record remittances.
– Employment trends show improvement.
➤ Labour in the AI Era: Crisis or Catalyst?
– Estimates from international organizations and private sector rms predict signicant job displacement due to AI.
These anxieties are not unfounded, as history shows technological revolutions can lead to long-lasting societal and
economic damage. India’s services-driven economy and large workforce make it particularly vulnerable.
➤ The Need for RobustInstitutions:
– Complacency about the potential negative impacts of AI would be costly for India. Policymakers, academia, and the
private sector must work together to build capacity and institutions.
– Minimizing the negative eects of AI requires a societal response, including the creation and strengthening of
institutions.
– India’s young, dynamic population and services-driven economy oer a fertile ground for leveraging AI’s benets.
– High elasticity sectors, like nance and healthcare, may see employment gains due to increased productivity.
– India’s services sector presents ample opportunities for enhancing productivity with AI. Focus should be on both
foundational skills and specialized tech skills.
– The R&D nature of AI gives India a chance to catch up and prepare its workforce. If demand elasticity is high,
technological change can lead to increased employment

India will also need to create 78.5 lakh new non-farm jobs annually till 2030-32, achieve 100 per cent literacy, develop
the quality of our education institutions, and develop high-quality, future-ready infrastructure at scale and speed
➤ Infra-related ministries used 60% of budgeted capex in Apr-Nov
➤ Food ination likely to soften in Q4 FY25 with seasonal easing of vegetable prices
➤ FY26 GDP growth seen in 6.3-6.8% range
➤ The Economic Survey prioritizes deregulation as the driving force for India’s domestic growth and resilience in the
face of global economic and political shifts.
➤ The survey acknowledges the impact of elections in major democracies, economic instability in Europe, China’s
economic slowdown, and the strength of the US dollar.
➤ Given the slowing pace of global trade, the survey emphasizes the importance of domestic growth drivers.
➤ The survey advocates for a balanced approach to energy transition, promoting electric mobility and public transport
while also addressing the need for skilling and education to leverage technological advancements like AI.
➤ It calls for increased productivity in the agricultural sector and a reduction in government intervention in the
economy.
➤ Specic policy recommendations are outlined for women, farmers, youth, and the poor, focusing on empowerment
and targeted support.
➤ The survey delves into the impact of work culture on mental health and explores the complex relationship between
renewable energy and coal consumption.
➤ It also highlights the need for front-of-pack labelling for ultra-processed foods due to health concerns.
➤ The survey includes chapters on the industrial sector, employment and skill development, and external sector
developments, featuring a special essay on AI and its implications.
➤ It discusses restrictive trade policies and their potential impact on India, showcasing the success of the ProductionLinked Incentive Scheme.
➤ Furthermore, the survey emphasizes the importance of building trust within Indian society for economic growth and
underscores the need for scale prudence and a reassessment of India’s sustainable current account decit.