Key Highlights of the Economic Survey 2025: What You Need to Know

economic survey

On January 31, 2025, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2025 in Parliament, providing a detailed analysis of India’s economic performance, government policies, and projections for the upcoming fiscal year. The survey, prepared by the Department of Economic Affairs under the leadership of Chief Economic Advisor V. Anantha Nageswaran, offers insights into macroeconomic trends and socio-economic issues that are shaping the country’s future.

Here are the 10 key highlights from the Economic Survey 2025:

1. India’s Economy Remains Stable

Despite global uncertainty, India’s real GDP growth for FY24-25 is projected at 6.4%, aligning closely with the decadal average. The survey also notes that real gross value added (GVA) is expected to grow by 6.4% in FY25, reflecting stable and sustainable economic expansion.

2. Growth Across All Sectors

India’s key sectors—agriculture, industry, and services—are all performing well:

  • Agriculture remains robust, consistently operating above trend levels.
  • Industry has regained momentum, surpassing pre-pandemic levels.
  • Services have achieved growth close to their long-term trend levels, reflecting overall economic dynamism.

3. Inflation Under Control

Retail inflation has eased from 5.4% in FY23-24 to 4.9% in FY24-25. The Reserve Bank of India (RBI) and the International Monetary Fund (IMF) predict that India’s inflation will align with the 4% target by FY26, signaling effective inflation control mechanisms in place.

4. FPI Positive Overall, FDI Shows Signs of Revival

Foreign Portfolio Investments (FPI) have shown a mixed trend due to global market uncertainty, yet FPI flows remain positive overall. Foreign Direct Investment (FDI) is showing signs of revival, although net FDI has declined slightly due to higher repatriation and disinvestment.

5. Forex Reserves Strengthen

India’s foreign exchange reserves reached a high of $706 billion in September 2024 and stood at $640.3 billion by December 2024, covering 89.9% of the country’s external debt, offering a strong cushion against external economic challenges.

6. Stable Banking and Insurance Sectors

  • The Gross Non-Performing Asset (GNPA) ratio in commercial banks has fallen to 2.6%, signaling improved asset quality.
  • Credit growth in FY24-25 remains sustainable, with a noticeable decline in the credit-GDP gap.
  • The insurance sector saw 7.7% growth in premiums in FY23-24, indicating stability and growth in the sector.

7. Exports Show Steady Growth

India’s total exports reached USD 602.6 billion in the first nine months of FY25, marking a 6% increase. Exports of goods and services, excluding petroleum and gems, grew by 10.4%, reflecting strong demand for Indian products in global markets.

8. MSME Credit Growth Strong, Personal Credit Moderates

  • MSME credit registered a 13% year-on-year growth, highlighting robust support for small and medium enterprises.
  • However, personal credit growth moderated to 8.8% as the housing and vehicle loan segments slowed down.
  • The services sector saw slower credit disbursal, particularly to NBFCs.

9. Deregulation Needed for Growth

The Economic Survey calls for further deregulation to foster economic growth. The government is urged to enhance economic freedoms for individuals and organizations, reduce regulatory bottlenecks, and promote a more dynamic business environment to accelerate India’s gross fixed capital formation.

10. Infrastructure Sector a Key Focus

Building infrastructure—physical, digital, and social—has been a key government priority, with increased public spending post-election. However, the survey emphasizes the need for private sector participation to meet the demands of Viksit Bharat 2047 (India’s vision for a developed nation by 2047). The government aims to strengthen public-private partnerships (PPP) to drive sustainable infrastructure growth.

Wrapping Up

The Economic Survey 2025 presents a positive outlook for India’s economy, supported by stable growth, controlled inflation, and robust performance across key sectors. While challenges remain in terms of global uncertainties and sectoral imbalances, the government’s focus on deregulation, infrastructure development, and fostering private sector participation will play a crucial role in sustaining economic momentum. With these efforts, India aims to maintain steady growth and position itself as a global economic leader in the coming years.