The Economic Survey 2025 was placed before Parliament by the Finance Minister Ms. Nirmala Sitharaman on January 31, 2025. According to the Economic Survey, the economy is likely to grow at a rate between 6.3% and 6.8% for FY 2025-26. The economic survey, under the team led by Chief Economic Advisor V. Anantha Nageswaran, provided an overview of the performance of the current fiscal year and mentioned that the economy sustained a stable trajectory despite the geopolitical risks and the turbulence of the global financial sector.
The survey showcased strong performance in industrial sectors-a stabilizing the production of agriculture, and the service sector gaining new strength, followed by the progress of India among the fastest-growing major economies in the world with expected economic growth at 6.4% for FY 24-25

Sector Wise Performance

The agricultural sector remains robust, consistently performing above average, resulting in increased rural demand. The industrial sector has stabilised and surpassed pre-pandemic levels, indicating a resilient recovery.

Meanwhile, the services sector, a major contributor to India’s GDP, has returned to pre-pandemic growth patterns, fueled by rising consumer demand and technological advancements. India’s share in global service exports steadily increased, especially in Public Administration and IT-related services. The Purchasing Managers Index indicates that expansion.

The banking sector witnessed a decrease in Gross Non-Performing Asset to a 12-year low of 2.6% and increased Capital to Risk Weighted Asset Ratio by the end of September 2024. Credit growth in Scheduled commercial banks has moderated with an increase in deposit growth, marking improved profitability.  

Between July and November 2024, capital spending increased by 8.2% year-over-year, signalling the government’s continued emphasis on infrastructure development. Foreign Direct Investment (FDI) revived, with inflows reaching $55.6 billion, reflecting renewed investor confidence in India’s economic landscape.

Employment showed an upward trend, with a decline in the unemployment rate and an increased participation of the labour force. There is an increase in the labour participation ratio and an increased preference for self-employment compared to salaried and casual work. Agriculture remains the dominant sector followed by service and industry. Urban areas notice a decrease in women salaried workers.

Inflation and Global Headwinds

Inflation, the long-standing concern of the last few years, has been seen to soften, with inflation rates in major economies near central bank target rates. The survey credits the decline to prudent monetary policies and global economic realignments. The report, however, cautions against lingering geopolitical risks, specifically those related to supply chain disruptions and energy security, that may affect future economic stability.

The survey is further optimistic about opportunities for India's economy, reaffirming that sustained policy interventions and regulatory reforms will be key. The Economic Survey also stated that such impact assessment procedures be put in place by financial regulators to ensure more transparency and better responsiveness to market evolution.

Looking Ahead

The Economic Survey sets the stage for the key policy signals that India would send ahead of the Union Budget 2025-26. It underlines the need to pummel domestic consumption, take upstream local production, and build on support mechanisms that introduce order in the fiscal arena toward sustaining the growth momentum.

Amid increasing growth optimism and a structural reform commitment, India's growth story continues to instil confidence in global investors and domestic stakeholders alike.