Economic Survey 2024-25: India’s GDP Expected to Grow Between 6.3-6.8% in FY26
Real GDP for FY25 Pegged at 6.4%, Inflation Eases to 4.9%
New Delhi, Jan 31: The Economic Survey 2024-25, tabled in Parliament today by Finance Minister Nirmala Sitharaman, projects India's GDP growth at 6.4% for FY25, with an estimated range of 6.3% to 6.8% in FY26. The survey highlights strong economic momentum, infrastructure expansion, and steady employment growth despite global uncertainties.
Economic Highlights:
Real GDP expected to grow at 6.4% in FY25, close to its decadal average.
GVA growth pegged at 6.4%, driven by industrial and services sectors.
Retail inflation softened to 4.9% (April-December 2024), expected to align with 4% target by FY26.
Exports grew 6% YoY (April-December 2024), while services exports surged by 12.8%.
Foreign direct investment (FDI) inflows rose 17.9% YoY to $55.6 billion in the first eight months of FY25.
Forex reserves stood at $640.3 billion, covering 10.9 months of imports.
Capex, Infrastructure, and Industry Drive Growth
The government’s capital expenditure (capex) grew by 8.2% (July-November 2024), indicating sustained investment in infrastructure. The survey emphasizes the need for two decades of infrastructure spending to maintain high growth.
Railways: 2031 km of railway network added; 17 new Vande Bharat trains introduced.
Ports: Container turnaround time reduced from 48.1 hours to 30.4 hours.
Renewable Energy: Solar and wind power capacity increased 15.8% YoY in December 2024.
The industrial sector is estimated to grow at 6.2% in FY25, while agriculture is set to expand by 3.8%, supported by strong Kharif production (estimated at 1647.05 LMT, up 5.7% YoY).
Employment & Social Welfare: Unemployment Rate Drops to 3.2%
A key highlight of the survey is the decline in unemployment to 3.2% in 2023-24, down from 6% in 2017-18. The Labour Force Participation Rate (LFPR) and Worker-to-Population Ratio (WPR) also saw improvements.
On social services, the government’s expenditure has grown at 15% CAGR (FY21-FY25). Notably, government health spending increased from 29% to 48% between FY15 and FY22, while out-of-pocket health expenses dropped from 62.6% to 39.4%.
AI, MSMEs, and Regulatory Reforms for Future Growth
The survey stresses systematic deregulation as the key to sustained economic expansion. It suggests a three-step process for states to review business regulations under Ease of Doing Business (EoDB) 2.0.
A ₹50,000 crore Self-Reliant India Fund has been launched to support MSMEs, recognizing them as crucial for economic growth.
The survey also highlights Artificial Intelligence (AI) adoption as an opportunity and challenge, urging government-private-academia collaboration to minimize AI’s societal impact on jobs.
Global Context & Future Outlook
The survey notes that global GDP grew by 3.3% in 2023, with the IMF projecting 3.2% average growth over the next five years.
India, despite global trade uncertainties and geopolitical tensions, remains one of the fastest-growing economies.
Looking ahead, India's growth will depend on private sector investment, consumer confidence, rural demand, and policy stability. The government aims to reduce regulatory burdens, improve ease of doing business, and boost infrastructure investment to achieve its vision of Viksit Bharat by 2047.
Bottom Line: Despite global challenges, India’s economic fundamentals remain strong, with robust GDP growth, easing inflation, rising exports, and increasing capital investment.
The focus now shifts to deregulation, digital adoption, and infrastructure expansion to sustain long-term growth.
