Economic Survey 2025: Growth stable, inflation cooling despite global uncertainty– 10 key highlights

Economic Survey 2025: Union Finance Minister Nirmala Sitharaman tabled the Economic Survey in Parliament on Friday. According to the survey, India’s FY26 GDP growth is expected to be in the range of 6.3-6.8% amid global uncertainty. The survey expects inflation to remain under control and consumption to remain stable. It also expects rural demand to gain traction going forward. The survey was released just six months after the previous one was presented in July 2024, after the general election.

The Economic Survey is a compilation of the Indian economy’s performance, government policies, and outlook for the upcoming financial year. It is prepared by the economic division of the Department of Economic Affairs headed by the chief economic advisor (CEA).

Economic Survey 2025: 10 key highlights

Here are 10 key highlights of the Economic Survey 2025:

1. Indian economy to remain stable

The survey said despite global uncertainty, India’s real GDP growth of 6.4% in FY25 (as per first advance estimates) remains close to the decadal average.

“Keeping in mind the upsides and downsides to growth, real GDP growth in FY26 is expected to be between 6.3% and 6.8%. From an aggregate supply perspective, real gross value added (GVA) is also estimated to grow by 6.4% in FY25,” the survey said.

2. All sectors contributing to growth

The survey noted all sectors were performing well. “The agriculture sector remains strong, consistently operating well above trend levels. The industrial sector has also found its footing above the pre-pandemic trajectory. The robust growth rate in recent years has brought the services sector to its trend levels,” it said.

3. Inflation gradually coming under control

The survey pointed out that retail headline inflation softened from 5.4% in FY24 to 4.9% in April-December 2024 due to various government initiatives and monetary policy measures. It noted that supply chain disruptions, extreme weather conditions and consequent reduced harvests were key factors driving India’s food inflation.

The government’s proactive policy interventions, including strengthening buffer stocks for essential food items, periodic open market releases and efforts to ease imports during supply shortages, helped stabilise inflation, it noted.

“Despite challenges, there are positive signs for inflation management in India. The Reserve Bank of India and the International Monetary Fund (IMF) project that India’s consumer price inflation will gradually align with the target of around 4 per cent in FY26,” it said.

4. Financial sector stable

The survey highlighted a consistent decline in the gross non-performing assets (GNPA) ratio of commercial banks. “The gross non-performing assets ratio of scheduled commercial banks has declined consistently from its peak in FY18 to a low of 2.6% at the end of September 2024,” it said. It added that the credit-GDP gap narrowed to -0.3% in Q1FY25 from -10.3% in Q1FY23, indicating that the recent growth in bank credit was sustainable.

India’s insurance market continues its upward trajectory, with total insurance premiums growing by 7.7% to ₹11.2 trillion in FY24. The pension sector has also seen significant growth, with the total number of pension subscribers growing 16% year-on-year as of September 2024, the survey said.

5. External trade: FDI revival in FY25

According to the survey, India’s gross foreign direct investment inflows increased 17.9% from $47.2 billion in the first eight months of FY24 to $55.6 billion in the same period of FY25. 

It highlighted the resilience of the export sector, saying it has been on a steady upward trend in recent years despite global economic challenges. “Overall exports (merchandise + services) have grown steadily in the first nine months of FY25, witnessing a YoY growth of 6%. India’s external debt has remained stable over the past few years, with the external debt to GDP ratio standing at 19.4% at the end of September 2024,” said the survey.

6. Calls for deregulation

Highlighting the significance of deregulation in achieving the goal of ‘Viksit Bharat’, the survey called for assessing India’s medium-term growth outlook in the context of new global realities, such as geo-economic fragmentation and China’s manufacturing prowess and strategic dominance.

“The way forward for India is to reinvigorate the internal engines and domestic growth levers and focus on economic freedom. The focus of reforms and economic policy must now be on systematic deregulation as the key agenda under Ease of Doing Business 2.0,” the survey said.

7. Focus on investment and infrastructure

The survey noted that India’s growth plans for the next decade require large investments in infrastructure.

It said the union government’s capital expenditure on key infrastructure sectors grew 38.8% from FY20 to FY24, and that capex gained momentum between July and November 2024, after the general elections.

8. Electricity, construction drive industrial growth

According to the survey, the industrial sector grew 6.2% in FY25, as per the first advance GDP estimates, driven by robust growth in electricity and construction.

“In April-November of FY25, the country’s finished steel production registered growth of 4.6%. Indian automobile domestic sales grew by 12.5% in FY24,” it said.

“The domestic production of electronic goods has grown at a CAGR of 17.5% from FY15 to FY24. The exports of textiles and apparel, including handicrafts, were valued at $35.87 billion in FY24. The total annual turnover of pharmaceuticals in FY24 was ₹4.17 trillion, growing at an average rate of 10.1% over the past five years,” the survey said.

9. Skill development key for services

Underscoring the fact that the service sector’s contribution to total GVA has risen from 50.6 per cent in FY14 to 55.3 per cent in FY25, the survey emphasised prioritising skill development for the labour force and revising complex grassroots-level procedures and regulations as two key interventions for the growth of manufacturing and service sectors.

10. Focus on agriculture and food management sectors

Terming the agriculture and allied activities sector as the backbone of the Indian economy, the survey said it contributes about 16% of the country’s GDP for FY24 (PE) at current prices.

It highlighted government initiatives to boost the agriculture and food processing sector, such as increasing minimum support prices (MSP), providing credit support to all farmers through the Kisan Credit Card (KCC), the Modified Interest Subvention Scheme (MISS), and the Pradhan Mantri Kisan Sampada Yojana (PMKSY).

“Government initiatives like PM-KISAN, which provides direct income support to farmers, and PM-KISAN Maandhan Yojana, which offers pension schemes for farmers, have successfully contributed to bolstering farmers’ incomes and enhancing their social security safety nets. As of 31 October, over 11 crore farmers have benefitted under PM Kisan, while 23.61 lakh farmers are enrolled under PM Kisan Mandhan,” it said.

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