Budget 2025: Finance Minister Nirmala Sitharaman Tables Economic Survey 2024-25 - Check Key Highlights

Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in both houses of the Parliament today on January 31. The Economic Survey highlights the past year's economic performance, and the challenges faced in various sectors and provides a roadmap for overcoming challenges and other hurdles to growth.

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The Economic Survey 2024-25 was prepared by a team led by Chief Economic Adviser V Anantha Nageswaran. The Economic Survey was tabled a day before the Union Budget presentation on February 1. Here’s a look at some highlights from the Economic Survey for 2025

Indian Economy Stable Amid Global Instability

The Economic Survey highlighted that the global economy has managed to exhibit ‘steady yet uneven’ growth in 2024. Additionally, the risk of a synchronised price rise still looms over the global economy as per the survey.

“The global economy exhibited steady yet uneven growth across regions in 2024. Inflationary pressures eased in most economies. However, service inflation has remained persistent. Although commodity prices have stabilised, the risk of synchronised price increases persists,” the survey said.

The survey also mentioned that India’s economy remains robust on the back of factors such as a strong external account, calibrated fiscal consolidation and stable private consumption. The Economic Survey also projected that the GDP growth for FY26 is expected to range between 6.3 per cent and 6.8 per cent.

“The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On the balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 per cent,” the survey projected.

All Sectors Performing Well

The Economic Survey mentioned that presently all sectors remain strong and are operating above trend levels. The survey also noted that the industrial sector is also back on its pre-pandemic trajectory.

“The agriculture sector remains strong, consistently operating well above trend levels. The industrial sector has also found its footing above the pre-pandemic trajectory. The robust rate of growth in the recent years has taken the services sector close to its trend levels,” the survey noted.

Retail Headline Inflation Softening

The economic survey stated that the retail headline inflation has decreased by 50 bps to 4.9 per cent in the April-December period from 5.4 per cent in FY24. The survey claimed that the softening of inflation was caused by a reduction in core (non-food, nonfuel) inflation.

“Retail headline inflation, as measured by the change in the Consumer Price Index (CPI), has softened from 5.4 per cent in FY24 to 4.9 per cent in April – December 2024. The decline is attributed to a 0.9 percentage point reduction in core (non-food, nonfuel) inflation between FY24 and April – December 2024,” the survey stated.

Even as headline inflation has softened, food price inflation has increased to 8.4 per cent in the April to December period. The survey attributed the increase to factors such as supply chain disruptions and vagaries in weather conditions.

“Pressures in food prices have been driven by factors such as supply chain disruptions and vagaries in weather conditions. Food inflation, measured by the Consumer Food Price Index (CFPI), has increased from 7.5 per cent in FY24 to 8.4 per cent in FY25 (April-December), primarily driven by a few food items such as vegetables and pulses,” the survey stated.

FDI Revival And FPI Flows Positive

The survey stated that while Foreign Portfolio Investments witnessed capital outflows in FY25, key factors such as robust macroeconomic fundamentals, favourable business environment, and high economic growth have kept FPI flows positive.

“On the capital front, foreign portfolio investments (FPIs) have shown a mixed trend in FY25 so far. Uncertainty in the global markets and profit-taking by foreign portfolio investors led to capital outflows. However, strong macroeconomic fundamentals, a favourable business environment, and high economic growth have kept FPI flows positive overall,” the survey said.

As per the survey, the gross FDI is also on the path to revival for the first time in eight months even as net FDI inflows declined.

“Gross foreign direct investment (FDI) inflows have shown signs of revival in the first eight months of FY25, though net FDI inflows declined relative to April-November 2023 due to a rise in repatriation/disinvestment,” the survey stated.

Forex Reserves Witnessing An Increase

The survey found that India’s foreign exchange reserves increased by over 14 per cent to $704.9 billion in September 2024 from $616.7 billion in January 2024. As of January 3, 2025, the foreign reserves reduced to $634.6 billion. However, the survey also mentioned that the present forex reserves can cover 90 per cent of the country’s external debt and provide import cover of over ten months.

“As a result of stable capital flows, India’s foreign exchange reserves increased from $616.7 billion at the end of January 2024 to $704.9 billion in September 2024 before moderating to $634.6 billion as of 3 January 2025. India’s forex reserves are sufficient to cover 90 per cent of external debt and provide an import cover of more than ten months, thereby safeguarding against external vulnerabilities,” the survey stated.

Banking And Insurance Growing With Upward Trend

As per the economic survey, the banking and financial sector is expected to remain stable despite moderation in the growth of credit disbursal by scheduled commercial banks.

“The banking and financial sector remains stable and well-capitalised and is catering to the financing needs of the economy. While credit disbursal by scheduled commercial banks (SCBs) is growing in double-digits, there has been a moderation in the growth in recent months. This is on the back of a high base and also due to regulatory tightening in sectors where high growth was observed. However, expansion in the segment continues to be broad-based, with housing loans as the major contributor,” the survey stated.

The survey also stated that the insurance market in India also witnessed an upward trajectory of growth, increasing 7.7 per cent in FY24. However, the insurance penetration in the Indian market has dropped by 30 bps to 3.7 per cent in FY24 compared to 4 per cent in FY23. Notably, the penetration of life insurance dropped by 20 bps and non-life insurance penetration remained stable between FY23 and FY24.

“India’s insurance market has also continued its upward trajectory. Total insurance premiums grew by 7.7 per cent in FY24, reaching Rs 11.2 lakh crore, despite a slight decline in insurance penetration from 4 per cent in FY23 to 3.7 per cent in FY24. Life insurance penetration dropped marginally from 3 per cent in FY23 to 2.8 per cent in FY24, while non-life insurance penetration remained stable at 1 per cent,” the survey said.

Economic Survey’s Outlook For India

Earlier on January 31, PM Modi addressed the media before the tabling of the Economic Survey and emphasised his mission to make India a developed economy by 2047 the 100th year of India’s economic independence. The Economic Survey stated that to achieve the holistic goal of Viksit Bharat by 2047, the economy will need to grow at  a rate of around 8 per cent at constant prices, on average, for the next one or two decades.

“To realise its economic aspirations of becoming Viksit Bharat by the time of the centenary of independence, India needs to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two. While the desirability of this growth rate is unquestionable, it's important to recognise that the global environment political and economic – will influence India's growth outcomes,” the survey read.

The International Monetary Fund’s World Economic Outlook estimates that India will become a $5 trillion economy by FY28 and a $6.307 trillion economy by FY30. The Economic Survey added that to achieve the $6.307 trillion the economy will need to have an annual nominal growth rate of nearly 10.2 per cent.

“The IMF WEO projects India to become a $5 trillion economy by FY28 and reach a size of $6.307 trillion by FY30. This translates into an annual nominal growth rate of nearly 10.2 per cent in USD terms for FY25 to FY30. To put this in context, in the thirty years between FY94 and FY24, India's dollar gross domestic product (GDP) grew at a compounded annual rate of 8.9 per cent. So, the IMF expects India to grow at a significantly higher rate of 10.2 per cent in dollar terms in the next five years,” the survey said.