Union Finance Minister Nirmala Sitharaman on Friday tabled the Economic Survey 2024-25 in Parliament and highlighted the country’s economic performance and shaping expectations for the upcoming Union Budget. FM Sitharaman in the survey projected India’s economy to grow between 6.3 per cent and 6.8 per cent in FY26.
The survey said the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On balance of these considerations, we expect that the growth in FY26 would be between 6.3 and 6.8 per cent.
It flagged the need for “deregulation and reforms at the grassroots level” and the requirement for “economic freedom of individuals and organisations to pursue legitimate economic activity” to improve the overall competitiveness of the economy and to lift trend growth rates.
For India to achieve its stated goal of Viksit Bharat by 2047, the economy will need to grow at the rate of around 8 per cent at constant prices, on an average, for about a decade or two. “Viksit Bharat@2047 envisions India as a developed nation by 2047, the centenary of our independence. This would entail sustained economic growth of close to 8 per cent every year for at least a decade,” the Survey stated.
To achieve this growth, the investment rate must rise to approximately 35 percent of GDP, up from the current 31 per cent. Additionally, it will be essential to develop the manufacturing sector further and invest in emerging technologies such as AI, robotics, and biotechnology, it said.
India will also need to create 78.5 lakh new non-farm jobs annually till 2030, achieve 100 percent literacy, develop the quality of our education institutions, and develop high-quality, future-ready infrastructure at scale and speed, the Survey said.
The survey noted that food inflation is expected to ease in Q4 FY25 due to the seasonal decline in vegetable prices and the arrival of the Kharif harvest. A good Rabi production is also expected to help keep food prices in check in the first half of FY26. However, adverse weather conditions and rising international agricultural prices pose risks to inflation.
Meanwhile, global energy and commodity prices have softened, making the core inflation outlook stable. However, uncertainties in the global political and economic environment remain a challenge.
The survey also added that India’s foreign exchange reserves remain strong, covering 90 per cent of external debt and providing an import cover of over ten months. The reserves increased from USD 616.7 billion in January 2024 to USD 704.9 billion in September 2024 before moderating to USD 634.6 billion as of January 3, 2025. The stability in capital flows has played a key role in supporting India’s external strength.
