Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, presented the Economic Survey 2024-25 in Parliament, outlining India’s economic progress and future prospects. The survey highlights steady growth across key sectors, emphasizing resilience amidst global uncertainties.
India’s real GDP growth for FY25 is estimated at 6.4%, aligning with the country’s decadal average, with real gross value added (GVA) projected to grow at the same rate. The global economy recorded a growth rate of 3.3% in 2023, with the IMF projecting an average growth of 3.2% over the next five years. Looking ahead, India’s GDP growth for FY26 is expected to be in the range of 6.3% to 6.8%, depending on economic conditions and external factors.
In the monetary and financial sector, India witnessed sustained bank credit growth, with credit expansion aligning closely with deposit growth. The profitability of Scheduled Commercial Banks improved, driven by a decline in gross non-performing assets (GNPAs) and a rise in the capital to risk-weighted asset ratio (CRAR). Notably, credit growth outpaced nominal GDP growth for two consecutive years, with the credit-GDP gap narrowing to (-) 0.3% in Q1 FY25 from (-) 10.3% in Q1 FY23, signaling sustainable bank credit expansion.
The external sector remained strong, demonstrating resilience amid global challenges. Total exports, including merchandise and services, grew by 6% year-on-year in the first nine months of FY25, with the services sector alone growing at 11.6%. India now holds a 10.2% share in global exports of telecommunications, computer, and information services, ranking as the second-largest exporter in this category. The current account deficit (CAD) stood at 1.2% of GDP in Q2 FY25, supported by increased net services receipts and private transfers. Foreign Direct Investment (FDI) inflows showed a strong revival, rising from USD 47.2 billion in the first eight months of FY24 to USD 55.6 billion in FY25, marking a 17.9% YoY growth. Additionally, FOREX reserves reached USD 640.3 billion by December 2024, covering 10.9 months of imports and 90% of India’s external debt.
India’s medium-term outlook presents both challenges and opportunities, with global economic realignments shaping future policies. To achieve the vision of Viksit Bharat by 2047, the country needs to sustain an average growth rate of 8% at constant prices for the next two decades. Government policies are increasingly focusing on investment, infrastructure development, and deregulation to drive economic expansion.
Public spending on infrastructure has been a key priority, with capital expenditure on critical sectors growing at 38.8% from FY20 to FY24. Significant developments in railway connectivity include the commissioning of 2,031 km of new railway lines between April and November 2024, along with the introduction of 17 new pairs of Vande Bharat trains between April and October 2024.
The industrial sector is expected to grow by 6.2% in FY25, primarily driven by growth in electricity and construction. The government continues to promote Smart Manufacturing and Industry 4.0, supporting initiatives like SAMARTH Udyog centres to modernize production processes. Meanwhile, the automobile sector saw robust domestic sales growth of 12.5% in FY24.
The services sector remains a crucial driver of India’s economic expansion, with its contribution to total GVA rising from 50.6% in FY14 to 55.3% in FY25. The sector recorded an 8.3% growth rate in the post-pandemic period (FY23–FY25), slightly surpassing its 8% pre-pandemic average (FY13–FY20). India continues to strengthen its position in global trade, ranking seventh in global services exports with a 4.3% market share in 2023.
With steady economic growth, increasing investments, and a strong external sector, India remains well-positioned to navigate global economic challenges and maintain its growth trajectory in the years ahead.
