India's Finance Minister Nirmala Sitharaman presented the Economic Survey 2024-25, revealing India's economic trajectory and policies for FY 2025-26. The survey forecasts 6.4% real GDP growth for 2024-25, aligning with the decadal average. India's commitment to structural reforms and deregulation for growth is underscored. Despite challenges like geopolitical tensions, positive indicators include decreasing inflation and increased capital expenditure. The financial sector remains robust, with rising exports and FDI inflows, emphasizing the importance of infrastructure and reforms for sustained growth and investor appeal.
India’s Minister of Finance and Corporate Affairs, Nirmala Sitharaman, unveiled the Economic Survey 2024-25 in Parliament today, shedding light on India’s economic path and policy roadmap for the fiscal year 2025-26. The survey delves into various aspects such as growth trends, monetary policies, external trade, infrastructure development, and industry performance, offering a detailed analysis of the nation's economic landscape.
The Economic Survey of India 2024-25 paints a picture of accelerating growth amidst challenges. Projections indicate that India’s real GDP growth for FY 2024-25 is set at 6.4 percent, in line with its decadal average, with the real gross value added (GVA) expected to mirror this growth. Despite global economic growth hovering around 3.3 percent in 2023, the IMF foresees a 3.2 percent increase in the next five years. Looking ahead to FY 2025-26, India’s GDP growth is estimated to range between 6.3 percent and 6.8 percent, contingent on external factors. The survey underscores India’s commitment to structural reforms and deregulation to fortify its medium-term growth potential.
While acknowledging the presence of geopolitical tensions, global trade risks, and ongoing conflicts as significant concerns, the survey notes positive trends such as a decreasing inflation rate and enhanced capital expenditure post-general elections. India continues to hold its ground as the world's seventh-largest services exporter, showcasing robust competitiveness in the sector.
Private consumption and investment emerge as pivotal drivers of economic expansion, with rural demand rebounding on the back of increased agricultural output and governmental support. Urban consumption remains strong, propelled by rising disposable incomes, a flourishing services industry, and improved job prospects. Emphasis on government spending in social infrastructure like healthcare and education underscores a commitment to fostering inclusive growth.
The financial sector portrays stability and strength, with the Indian banking industry displaying resilience through steady credit growth and improved profitability. Stock markets have outperformed peers, primary market mobilization has seen an uptick, and the insurance and pension markets have witnessed steady growth. The burgeoning fintech ecosystem is enhancing financial inclusivity, with digital transactions witnessing exponential growth across urban and rural areas.
Despite global uncertainties, India’s external sector remains steadfast, with exports showing growth and foreign direct investment (FDI) inflows on an upward trajectory. The government’s focus on infrastructure development is evident, with notable progress in rail and road connectivity, renewable energy capacity expansion, and initiatives like the Green Hydrogen Mission.
The industrial, services, and real estate sectors continue to be key contributors to India’s economic landscape, with promising growth trajectories. The survey highlights the significance of structural reforms, emphasizing the need for deregulation to bolster long-term growth prospects.
In conclusion, the Economic Survey 2024-25 offers a strategic outlook on India’s economic journey, showcasing resilience, growth potential, and a conducive investment climate. The sustained focus on policy reforms, infrastructure development, and sector-specific initiatives positions India as an attractive destination for foreign investors seeking opportunities across diverse industries. By leveraging the insights from the survey, international businesses can navigate India’s evolving business environment with informed strategies for sustainable growth and success in this dynamic economy.
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