Key Takeaways from the Economic Survey 2024-25

Sub : Eco

Sec : National Economy /Income

Why in News?

Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in Parliament.
It provides an overview of the Indian economy’s performance in FY24 and projections for FY25.
Prepared by the Department of Economic Affairs under the guidance of Chief Economic Advisor (CEA) V. Anantha Nageswaran.

Key Highlights & Context

Global Economic Concerns

Secular Stagnation: The Survey warns that global economic growth is slowing, with trade and investment stagnating.
China’s Dominance: China accounts for one-third of global manufacturing output, surpassing the next 10 largest economies combined.
Shift in Global Trade: Global trade has moved from globalization to protectionism, causing supply chain disruptions. The trend of outsourcing to China is being reconsidered due to economic fragmentation.

State of the Indian Economy

Real GDP Growth Projections:
- FY25: 6.4%
- FY26 (Forecast): 6.3% – 6.8%
Consumption Growth:
- Private Final Consumption Expenditure (PFCE) projected to rise from 60.3% (FY24) to 61.8% (FY25)—highest since FY03.
GVA Growth:
- Gross Value Added (GVA) is above pre-pandemic trends, reflecting economic resilience.
Inflation Trends:
- Core Inflation (excluding food & fuel) is moderating.
- Food Inflation surged from 7.5% (FY24) to 8.4% (FY25) due to supply chain disruptions & weather conditions.
Employment scenarios:
- Labour market metrics (Unemployment Rate, Labour Force Participation, Worker-to-Population Ratio) have improved, as per the PLFS 2023-24 report.

Key Recommendations

Deregulation for Economic Growth:
- Simplifying regulations to boost employment, income, & consumption.
- Focus on reducing business costs to encourage hiring & entrepreneurship.
Industry Reforms:
- Business Reform Action Plan (BRAP) aims to enhance industrial growth in emerging states.
Need for Infrastructure & Investment:
- India lacks capacity to produce critical goods at scale & quality, affecting economic expansion.