The Economic Survey for 2024-25 was presented in Parliament on Friday. Finance Minister Nirmala Sitharaman tabled the report. This annual survey reviews the state of India’s economy as the financial year comes to an end.
Who Prepares the Economic Survey?
The Economic Survey is prepared by the Department of Economic Affairs. It works under the Union Finance Ministry. The Chief Economic Advisor (CEA) guides the process.
Global Economic Challenges
The Survey has raised two key concerns. CEA V Anantha Nageswaran introduced the report by highlighting these issues.
He said the global economic environment is becoming more challenging. Global trade and investment have slowed significantly.
Changing Global Trade Dynamics
The Survey points out a major shift in global trade. Earlier, globalization promoted free trade. Now, trade protectionism is rising.
This means countries are focusing more on their own industries. They are imposing restrictions on imports and foreign investments.
Trade and Investment Have Slowed
The Survey states that global trade has nearly come to a standstill. Businesses are facing more uncertainty. Investments are slowing down across the world.
Warning Signs for the Global Economy
The Survey mentions “secular stagnation.” This term means long-term economic slowdown. Growth in global trade is now much weaker than before.
How Does This Impact India?
India is part of the global economy. If trade slows down worldwide, India will feel the effects. Less global investment could also impact India’s economic growth.
India’s Strategy Moving Forward
Despite challenges, India continues to focus on economic growth. The government is looking for ways to strengthen domestic industries. Reducing dependence on global trade is a key goal.
Why This Survey Matters
The Economic Survey provides important insights. It helps policymakers plan the upcoming Union Budget. The findings will shape India’s financial policies for the next year.
Key Points
GDP and Economic Growth
- India’s GDP is projected to grow between 6.3% and 6.8% in FY26.
- Real GDP growth for FY25 is estimated at 6.4%, close to its decadal average.
- Real GVA (Gross Value Added) is also expected to grow by 6.4% in FY25.
Investment and Inflation Trends
- Capital expenditure grew 8.2% between July–November 2024 and is expected to accelerate further.
- Retail headline inflation softened to 4.9% in April–December 2024.
- India’s consumer price inflation is projected to align with the 4% target in FY26.
Trade and Foreign Investments
- Overall exports grew 6.0% YoY during April–December 2024.
- Services exports surged 12.8% in April–November FY25, up from 5.7% in FY24.
- Gross FDI inflows increased 17.9% YoY, reaching $55.6 billion in the first eight months of FY25.
- Forex reserves stood at $640.3 billion as of December 2024, covering 10.9 months of imports and 90% of external debt.
Renewable Energy and Stock Market
- Capacity addition in solar and wind power increased 15.8% YoY in December 2024.
- BSE stock market capitalization-to-GDP ratio reached 136% at the end of December 2024, surpassing China (65%) and Brazil (37%).
Government Policies and Economic Reforms
- Economic Survey recommends deregulation to accelerate and sustain economic growth.
- Continued infrastructure investment is crucial for maintaining high growth over the next two decades.
- The ₹50,000 crore Self-Reliant India Fund was launched to provide equity funding to MSMEs.
Agriculture and Industrial Growth
- Agriculture is expected to grow at 3.8% in FY25.
- Kharif foodgrain production for 2024 is projected at 1647.05 LMT, an increase of 89.37 LMT from the previous year.
- Key drivers of agricultural growth include horticulture, livestock, and fisheries.
- The industrial sector is estimated to grow by 6.2% in FY25.
Social Sector and Employment
- Social services expenditure grew at an annual rate of 15% between FY21 and FY25.
- Government health expenditure increased from 29% to 48%, while out-of-pocket expenditure declined from 62.6% to 39.4% between FY15 and FY22.
- Unemployment rate declined to 3.2% in 2023-24 (July–June) from 6.0% in 2017-18.
FAQs
1. What is the Economic Survey?
It is an annual report on India’s economy, presented before the Union Budget.
2. Who prepares the Economic Survey?
The Department of Economic Affairs, under the guidance of the Chief Economic Advisor.
3. What are the key concerns in the 2024-25 Economic Survey?
The survey warns about slowing global trade and rising trade protectionism.
4. How does global economic slowdown affect India?
India may see reduced foreign investment and slower trade growth.
5. Why is the Economic Survey important?
It helps the government plan financial policies and prepare the Union Budget.
