Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in Parliament on Friday, drafted under the guidance of Chief Economic Adviser Anantha V Nageswaran.
The survey projects India’s real GDP growth at 6.4 per cent in FY25, marking a slowdown after three consecutive years of above 7 per cent growth. In FY24, real GDP growth stood at 8.2 per cent. Retail headline inflation has softened from 5.4 per cent in FY24 to 4.9 per cent in April – December 2024.
A major theme of the Survey is deregulation, which Nageswaran emphasised as a crucial factor for growth and broader economic expansion. “Thrust on grassroots-level structural reforms and deregulation to reinforce the medium-term growth potential and boost global competitiveness of Indian economy,” said the survey.
Released a day before the Union Budget, the Economic Survey outlines key economic trends, helping assess resource mobilisation and allocation in the upcoming budget.
The Economic Survey 2024-25 presents a cautiously optimistic outlook, projecting GDP growth while acknowledging global uncertainties. Economists said that there is a need to strengthen the domestic economy through investment, skilling, and deregulation to enhance competitiveness and attract foreign capital. The Survey also stressed the importance of sectoral reforms, particularly in areas facing production constraints, to ensure sustainable growth. With expectations of a pickup in consumption and investment, the upcoming Union Budget 2025 is likely to align fiscal planning with a nominal GDP growth assumption of around 10 per cent, balancing growth priorities with fiscal prudence.
Economists’ Take on Economic Survey 2024-25
Indranil Pan, Chief Economist, YES Bank, discussed the Survey’s cautious optimism, saying that while GDP growth for FY26 is projected at 6.3-6.8 per cent, the government must focus on strengthening the domestic economy amid global uncertainties.
By providing a range, the Survey accounts for external risks like potential Trump-era policies, deglobalisation, and geo-fragmentation. The priority now is to fortify the domestic economy through investments in education, healthcare, skill development, and social infrastructure, as global policy shifts could impact external trade.Indranil Pan
He also pointed out that investment activity is expected to pick up alongside a rebound in the rural economy. Meanwhile, the Survey stresses the importance of deregulation, employment, and skilling as ‘existential priorities’, which could enhance India’s global competitiveness and attract foreign capital.Pan further added that some critical sectors still face production constraints, citing the high import dependency in EV manufacturing and limited domestic capacity in solar energy production.
“The government must expand its focus beyond roads and railways and address these sectoral challenges to achieve sustainable growth,” he added.
Radhika Rao, Executive Director & Senior Economist, DBS Bank, stated that the leitmotif of the Survey revolved around the need to revive private sector investments while building resilience against external uncertainties.
There is ground for the FY26 Budget to retain a supply-side push i.e. infrastructure focus and promote manufacturing as well as export capabilities, but also focus on demand-side measures including tax breaks, improving the mechanism of employment-linked schemes, and investments into human capital.Radhika Rao
Despite these wide-ranging priorities, we expect an uncompromising focus on fiscal consolidation, Rao added.
Madan Sabnavis, Chief Economist, Bank of Baroda, pointed out that the Survey’s 6.3-6.8 per cent GDP growth projection for FY26 is likely to guide the Union Budget 2025’s fiscal planning.
The Economic Survey highlights uncertainties in the global economic order and recommends further reforms, especially in ease of doing business, to drive growth. It remains optimistic about consumption and investment picking up in the second half of FY25, stabilising further in FY26.Madan Sabnavis
Aditi Nayar, Chief Economist & Head of Research & Outreach, ICRA, emphasised that the Survey’s projections suggest that the Union Budget 2025 is likely to assume a nominal GDP growth of around 10 per cent for FY26.
We believe tax revenue assumptions in the upcoming Budget will align with this nominal GDP estimate, guiding fiscal policy for the year ahead.Aditi Nayar
