Key Highlights of the Economic Survey 2025

1. India's Economy Remains Stable

Despite global uncertainty, India's real GDP is projected to grow at 6.4% in FY 2024-25, aligning with its decadal average. From an aggregate supply perspective, real Gross Value Added (GVA) is also expected to grow by 6.4%.

2. All Sectors Contributing to Growth

The Economic Survey highlights strong performance across sectors:

• Agriculture continues to operate well above trend levels.

• Industry has surpassed its pre-pandemic trajectory.

• Services are nearing their long-term growth trends.

3. Inflation Under Control

Retail headline inflation eased from 5.4% in FY 2023-24 to 4.9% during April-December 2024. Both the RBI and IMF project that consumer price inflation will align with the 4% target by FY26.

4. Foreign Investment Trends: FPI Positive, FDI Reviving

• Foreign Portfolio Investments (FPIs) showed mixed trends due to global uncertainty but remained positive due to India's strong fundamentals.

• Foreign Direct Investment (FDI) saw signs of revival in the first eight months of FY25, though net inflows declined due to increased repatriation and disinvestment.

5. Forex Reserves Strengthening

• India's Forex reserves peaked at $706 billion in September 2024 and stood at $640.3 billion by December 27, 2024.

• These reserves cover 89.9% of India's external debt.

6. Banking & Insurance Sector Stability

• The Gross Non-Performing Assets (GNPA) ratio declined to 2.6% in September 2024, its lowest level since FY18.

• The credit-GDP gap narrowed to 0.3% in Q1 FY25, reflecting sustainable credit growth.

• Insurance premiums grew 7.7% in FY24 to ₹11.2 lakh crore.

• Pension subscribers increased by 16% year-on-year as of September 2024.

7. Exports Continue to Grow

• Total exports (merchandise & services) rose 6% in the first nine months of FY25, reaching $602.6 billion.

• Exports of goods (excluding petroleum, gems, and jewelry) increased 10.4%.

• Imports reached $682.2 billion, growing 6.9%, driven by strong domestic demand.

• The report emphasizes the need for a strategic trade roadmap in response to rising global protectionism.

8. MSME Credit Growth Strong, Personal Credit Moderates

• Agriculture credit grew 5.1% as of November 29, 2024.

• Industrial credit rose to 4.4%, up from 3.2% a year ago.

• MSME credit grew by 13% YoY, outpacing the 6.1% growth for large enterprises.

• Personal loan growth slowed to 8.8%, impacted by RBI’s increased risk weights on NBFCs and credit cards.

9. Deregulation Essential for Growth

The Economic Survey emphasizes the need for further deregulation to enhance economic freedom, encourage investments, and accelerate India's Gross Fixed Capital Formation.

10. Infrastructure Growth Requires Private Participation

• Infrastructure development remains a key focus, with increased public spending, streamlined approvals, and innovative resource mobilization.

• However, public capital alone is insufficient. Private sector participation is crucial to achieving India's Viksit Bharat@2047 vision.

• Enhancing project conceptualization, risk-sharing mechanisms, contract management, and conflict resolution is essential to attract more private investment.