Economic Survey 2024-25 Highlights: Global Challenges and India’s Steady Growth

Finance Minister Nirmala Sitharaman presented the Economic Survey for 2024-25 in Parliament on Friday. The report, prepared by the Department of Economic Affairs under the guidance of Chief Economic Advisor (CEA) V. Anantha Nageswaran, provides an in-depth analysis of the Indian economy’s performance in the current financial year and outlines key challenges and opportunities ahead.

Global Economic Context: Key Concerns

The Survey highlights two major concerns impacting the global economy.

Unfavorable Global Economic Environment: CEA Nageswaran noted that the global economic landscape has become increasingly challenging, with global trade and investment slowing significantly. The Survey points out that the shift from globalization to rising trade protectionism has introduced greater uncertainty, leading to a slowdown in global trade growth. It also warns of emerging signs of "secular stagnation" in the global economy.

China’s Manufacturing Dominance: China remains the world’s manufacturing superpower, accounting for a third of global production. Its output surpasses that of the next 10 largest manufacturing nations combined. However, the Survey suggests that the era of outsourcing manufacturing to China, a hallmark of globalization, may be undergoing a reset due to global economic fragmentation and geopolitical upheaval.

State of the Indian Economy: Resilience Amid Global Uncertainties

Despite global headwinds, the Indian economy has demonstrated resilience and stability. Key highlights include:

Real GDP Growth: The Survey projects India’s real GDP growth at 6.4% for the current financial year (FY25), with expectations of growth ranging between 6.3% and 6.8% in FY26. This reflects sustained economic momentum despite external challenges.

Private Consumption Expenditure: Private final consumption expenditure, a measure of consumer demand, is estimated to rise from 60.3% of GDP in FY24 to 61.8% in FY25. This marks the highest share since FY03, indicating robust domestic demand.

Gross Value Added (GVA): On the supply side, India’s GVA growth remains close to its decadal average. The Survey notes that aggregate GVA surpassed its pre-pandemic trend in the first quarter of FY25 and continues to remain above this trend, signaling a strong recovery.

Inflation Trends: Headline inflation is moderating, driven by a decline in core inflation (which excludes food and fuel). However, food inflation has risen from 7.5% in FY24 to 8.4% in FY25, attributed to supply chain disruptions and adverse weather conditions.

Conclusion

The Economic Survey 2024-25 underscores India’s ability to maintain steady economic growth despite a challenging global environment. While global trade dynamics and China’s manufacturing dominance pose significant challenges, India’s domestic economy remains resilient, supported by strong consumer demand and a robust supply-side recovery. The Survey’s insights provide a roadmap for navigating uncertainties and sustaining growth in the years ahead.