Economic Survey 2024-25 | How Indian economy performed in FY25—key takeaways

With the Union Budget set to be presented on February 1, Union Finance Minister Nirmala Sitharaman on Friday tabled the Economic Survey 2024-25, highlighting broad trends in the Indian economy.

India's economy grew at 6.4 per cent for FY25, driven by a rebound in rural demand, strong growth in construction and utilities, and solid performance in the services sector.

Retail headline inflation, meanwhile, softened from 5.4 per cent in FY24 to 4.9 per cent in April-December 2024, primarily due to a reduction in core inflation.

India's unemployment rate, meanwhile, has declined from 6 per cent in 2017-18 to 3.2 per cent in 2023-24, the document said, adding that labour force participation and worker-to-population ratio have both increased.

As for sectors, agriculture rebounded to record 3.8 per cent growth in FY25, while the industrial sector grew by 6.2 per cent, supported by growth in construction and utilities. The services sector, meanwhile, saw a growth of 7.2 per cent driven by growth in financial, real estate, and professional services.

India's current account deficit, meanwhle, remains relatively contained at 1.2 per cent of GDP, as of Q2 FY25.

Here are the other key takeaways from the pre-Budget document:

- Indian economy expected to grow at 6.3-6.8 per cent in FY26.

- Investment activity expected to pick up, supported by higher public capex and improving business expectations.

- Fundamentals of Indian economy remain robust with strong external account and stable private consumption.

- Food inflation likely to soften in Q4 FY25 with seasonal easing of vegetable prices, Kharif harvest arrivals.

- India's economic prospects for FY26 balanced. Headwinds to growth include elevated geopolitical, trade uncertainties.

- Navigating global headwinds will require strategic, prudent policy management and reinforcing domestic fundamentals.

- India needs to improve global competitiveness through grassroots-level structural reforms, and de-regulations.

- India needs to improve its global competitiveness through grassroots level structural reforms, deregulation.

- Inflation risk from higher commodity prices seems limited in FY26, geopolitical tensions still pose risk.

- Lack of appropriate governance framework for AI may lead to potential abuse or misuse of technology.

- Insolvency law's deterrent effect has led thousands of debtors resolving distress in early stages.

- Entry costs, information asymmetry, absence of secondary market must be addressed to boost liquidity in corporate bond market.

- Rupee depreciation in 2024 mainly due to strong US dollar amid geopolitical tensions, uncertainty around US election.

(With PTI inputs)