Why in news?

Economic Survey 2024-25 was tabled in Parliament by Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman.

What’s in today’s article?

• Economic Survey
• Key highlights of Economic Survey 2024-25

About Economic Survey

• The Economic Survey of India is an annual report released by the Finance Ministry that assesses the country’s economic performance over the past year.
• It highlights macroeconomic indicators, economic progress, and potential challenges India may face.
• The survey also suggests policy measures to address future economic challenges.
• Preparation & Presentation
  • Prepared by the Economic Division of the Department of Economic Affairs, under the supervision of the Chief Economic Advisor (CEA).
  • Presented a day before the Union Budget each year.
  • The first Economic Survey was released for 1950-51 and was presented along with the Budget until 1964.
• Significance
  • The survey’s recommendations are not binding on the Budget.
  • It is the most authoritative and comprehensive government analysis of the Indian economy.
  • Provides an official framework for economic policy discussions and decision-making.

Key highlights of Economic Survey 2024-25

• Here are the key highlights of the Economic Survey 2024-25:

1.State of the Economy: Back on the Fast Track

• GDP Growth Outlook
  • Real GDP and GVA growth estimated at 6.4% in FY25, aligning with the decadal average.
  • FY26 GDP growth projected between 6.3%-6.8%, considering economic risks and opportunities.
• Global & Domestic Challenges
  • Global economy grew 3.3% in 2023, IMF projects 3.2% average growth over the next five years.
  • Geopolitical tensions, conflicts, and trade risks continue to impact global economic stability.
• Inflation & Investment
  • Retail inflation softened from 5.4% (FY24) to 4.9% (Apr-Dec 2024).
  • Capital expenditure (CAPEX) rose steadily from FY21-FY24, with an 8.2% YOY growth (Jul-Nov 2024) post-elections.
• Trade & Global Competitiveness
  • India ranks 7th in global services exports, showcasing sectoral strength.
  • Non-Petroleum, non-Gems & Jewellery exports grew 9.1% (Apr-Dec 2024), reflecting resilience amid global volatility.

2. Monetary & Financial Sector: Stability & Growth

• Banking Sector Performance
  • Credit growth steady, aligning with deposit growth.
  • GNPAs at a 12-year low (2.6%), with improved asset quality and strong capital buffers.
  • Credit-GDP gap narrowed to (-) 0.3% in Q1 FY25, indicating sustainable growth.
  • ₹3.6 lakh crore recovered under Insolvency and Bankruptcy Code from 1,068 resolutions (Sept 2024).
• Stock Markets & Capital Mobilization
  • Indian stock markets outperformed emerging peers despite election volatility.
  • Primary market mobilization at ₹11.1 lakh crore (Apr-Dec 2024), a 5% increase from FY24.
  • BSE market cap to GDP at 136%, surpassing China (65%) & Brazil (37%).
• Insurance & Pension Growth
  • Insurance premiums grew 7.7% (FY24), reaching ₹11.2 lakh crore.
  • Pension subscribers increased 16% YoY (Sept 2024).

3. External Sector: Resilient & Growing

• Exports grew 6% YoY (FY25); services exports rose 11.6%.
• India ranks 2nd globally in ‘Telecommunications, Computer & Information Services’ exports (10.2% market share).
• Current Account Deficit (CAD) at 1.2% of GDP (Q2 FY25), supported by rising net services and private transfers.
• FDI inflows up 17.9% YoY, reaching USD 55.6 billion (Apr-Nov FY25).
• FOREX reserves at USD 640.3 billion (Dec 2024), covering 10.9 months of imports.
• External debt stable, with a debt-to-GDP ratio of 19.4% (Sept 2024).

4. Prices & Inflation: Moderating Trends

• Global inflation declined from 8.7% (2022) to 5.7% (2024) (IMF).
• India’s retail inflation fell from 5.4% (FY24) to 4.9% (FY25, Apr-Dec 2024).
• RBI & IMF project inflation to align with 4% target by FY26.
• Climate-resilient crops & better farming practices key for long-term price stability.

5. Medium-Term Outlook: Growth Through Deregulation

• Geo-Economic Fragmentation (GEF) replacing globalization, driving economic realignments.
• India needs ~8% annual GDP growth to achieve Viksit Bharat 2047 vision.
• Global challenges include GEF, China’s manufacturing dominance, and energy transition dependencies.
• Systematic deregulation key to boosting domestic growth and economic freedom.
• Ease of Doing Business 2.0 & SME sector (Mittelstand) crucial for sustained growth.
• States must liberalize regulations, set legal safeguards, and adopt risk-based policies.

6. Investment & Infrastructure: Sustaining Growth

• Public infrastructure spending surged, with 38.8% capex growth (FY20-FY24).
• Railways: 2031 km commissioned; 17 new Vande Bharat trains added.
• Roads: 5853 km of National Highways built in FY25 (Apr-Dec).
• Industrial Growth: 383 plots (3788 acres) allocated under the National Industrial Corridor.
• Ports: Container turnaround time reduced from 48.1 to 30.4 hours.
• Renewables: 15.8% YoY growth; renewables now 47% of installed capacity.
• Rural Electrification: 18,374 villages, 2.9 crore households electrified.
• Digital Expansion: 5G rolled out nationwide; 4G in 10,700 remote villages.
• Water & Sanitation: 12 crore families got piped water; 3.64 lakh villages ODF Plus.
• Urban Housing: 89 lakh houses completed under PMAY.
• Mass Transit: Metro & rapid rail in 29 cities, covering 1,000+ km.
• Real Estate: RERA ensured transparency; 1.38 lakh projects registered.
• Space Vision 2047: 56 active assets, projects like Gaganyaan & Chandrayaan-4.
• Private Sector Role: National Infra & Monetisation Pipelines launched to boost investment.