Economic Survey 2025: Nirmala Sitharaman Tables the 2024-25 Report – A Detailed Analysis

The Economic Survey 2024-25, prepared by the Ministry of Finance, Government of India, provides a comprehensive analysis of India’s economic performance, key sectoral developments, and policy recommendations. Below is a chapter-wise summary of the survey.

Here’s a detailed chapter-wise summary of the Economic Survey 2024-25:

Chapter 1: State of the Economy

The global economy in 2024 experienced uneven growth across regions, with manufacturing slowing in Europe and Asia due to supply chain disruptions, while the services sector held up growth in several economies. Inflation pressures eased globally, but uncertainties like geopolitical tensions persist. India maintained steady growth with real GDP projected to grow by 6.4% in FY25. Growth in the first half was driven by agriculture and services, while manufacturing struggled. India’s strong external balance, fiscal discipline, and service sector trade surplus support macroeconomic stability. Food inflation may ease, supported by strong Kharif harvests and improving agricultural conditions​​.

Chapter 2: Monetary and Financial Sector Developments

India’s monetary policy remained stable, with the RBI holding the policy repo rate at 6.5% for most of FY25, before shifting to a neutral stance and cutting the CRR to 4%, injecting ₹1.16 lakh crore into the banking system. Bank credit grew steadily, with non-performing assets (NPAs) falling and banks’ profitability rising. The capital market performed well, with more IPOs, increased investor participation, and improved financial inclusion​.

Chapter 3: External Sector: Getting FDI Right

India’s trade performance was strong in FY24 despite global uncertainties. Export promotion schemes and efforts to improve ease of doing business have supported growth in trade. India continues to focus on attracting Foreign Direct Investment (FDI) to boost manufacturing and technology sectors. The balance of payments remains resilient, with a surplus in the services sector offsetting challenges in the goods trade​​.

Chapter 4: Prices and Inflation

Global inflation peaked at 8.7% in 2022 but declined to 5.7% in 2024. In India, retail inflation moderated to 4.9% in FY25 due to government measures and supply chain stabilization. Food inflation was driven by fluctuations in onion and tomato production, but timely interventions, such as buffer stocking, helped mitigate price increases. India’s inflation outlook remains positive, supported by stable core inflation and expected easing of global commodity prices​​.

Chapter 5: Medium-Term Outlook: Deregulation Drives Growth

India’s medium-term growth potential hinges on regulatory reforms and deregulation to boost economic freedom and ease of doing business. To achieve the goal of becoming a Viksit Bharat by 2047, India needs to grow at 8% annually for the next two decades. The IMF projects India to become a $5 trillion economy by FY28 and reach $6.3 trillion by FY30. The chapter emphasizes the importance of removing regulatory burdens to drive medium-term growth​​.

Chapter 6: Investment and Infrastructure

This chapter highlights the significant improvement in infrastructure investment post-election. A key driver has been public capital expenditure (capex) aimed at enhancing connectivity across various sectors. The chapter covers the power sector, where reliance on renewable energy sources has grown. It also discusses advancements in digital, urban, and rural infrastructure, including improvements in tourism and space infrastructure. There is an emphasis on continued public and private investment to sustain growth in the infrastructure sector​.

Chapter 7: Industry: Business Reforms and Growth

The Indian industrial sector has performed well, particularly in core industries such as steel, cement, and chemicals. The chapter emphasizes the importance of deregulation and business-friendly reforms for growth. Innovations in capital goods, consumer goods, and R&D have accelerated, with the Micro, Small, and Medium Enterprises (MSMEs) sector seeing significant growth due to policy interventions. The production-linked incentive (PLI) schemes, particularly in air conditioners, are cited as a success story of indigenization​​.

Chapter 8: Services Sector: New Challenges

India’s services sector continued its strong performance, driven by industries like IT, business services, and logistics. FDI inflows into the services sector have been steady. The chapter also highlights improvements in physical connectivity services like railways, airways, and waterways, boosting domestic tourism. There is a significant focus on state-wise variations in service sector performance and the role of services in the overall economic structure​.

Chapter 9: Agriculture and Food Management

Agriculture has grown steadily, supported by government interventions like PM-KISAN and the Pradhan Mantri Kisan Maandhan Yojna. Despite challenges in productivity, especially in pulses and oilseeds, the sector remains crucial for food security. There is a push towards sustainable farming practices to balance water and fertilizer usage while ensuring soil health. The chapter suggests policy changes to shift farmers’ focus away from overproduced crops and toward higher productivity​.

Chapter 10: Climate and Environment: Adaptation Matters

This chapter discusses India’s strategy to tackle climate change, focusing on adaptation measures. It explores lessons learned from global energy transitions, particularly in Europe and China, and their relevance for India. The government emphasizes the need for energy transition without compromising India’s energy security. The chapter concludes with an analysis of the Lifestyle for Environment (LiFE) initiative, which promotes sustainable practices​​.

Chapter 11: Social Infrastructure, Employment, and Human Development

India’s investment in social infrastructure has improved with a focus on health, education, housing, and sanitation. The government’s rural connectivity and microfinance initiatives have improved the quality of life in rural areas. Efforts toward boosting gender equality and creating sustainable employment growth are emphasized. Regulatory reforms in health and education are suggested to reduce compliance burdens, allowing outcomes to take precedence over rigid input-based regulations​​.

Chapter 12: Employment and Skill Development

India’s labour market has seen a significant recovery post-pandemic, with the unemployment rate declining from 6% in 2017-18 to 3.2% in 2023-24. The labour force participation rate (LFPR) and worker-to-population ratio have also shown improvements. The government is focused on reskilling, upskilling, and new-skilling the workforce to meet global demand, aligning with the ambitions of Viksit Bharat by 2047. The chapter highlights employment trends and the ongoing efforts to promote inclusive growth and high-quality job creation​.

Chapter 13: Labour in the AI Era: Crisis or Catalyst?

This chapter explores the impact of artificial intelligence (AI) on labour markets, stressing the need for inclusive institutions to manage disruption. While AI presents significant opportunities, challenges such as resource inefficiencies and infrastructure gaps hinder large-scale adoption. India is positioned to benefit from AI with strategic investment in education and workforce skills, ensuring AI serves as a catalyst for equitable economic transformation​​.

Economic Survey 2024-25: Key Takeaways

• India’s economy remains strong, with 6.5% growth expected in FY25.
• Inflation is under control, but food prices require monitoring.
• FDI reforms and trade expansion are improving the external sector.
• Deregulation and business-friendly policies are driving industry and services.
• Infrastructure, agriculture, and digital transformation will lead medium-term growth.
• AI, automation, and climate policies will shape India’s future workforce and economy.