Union Finance Minister Nirmala Sitharaman presented the Economic Survey for 2024-25 on the first day of the Budget session. The Economic Survey is an important document that reviews the country’s economic progress and challenges. It was prepared by the Chief Economic Adviser (CEA), V Anantha Nageswaran, and his team.

The survey predicts that India's economy will grow between 6.3% and 6.8% in FY26. Nageswaran highlighted that while India is on a stable growth path, globalisation is slowing down. This shift brings both challenges and new opportunities. To continue growing, India needs to focus on economic reforms and make the most of its young workforce. Despite global economic challenges, India's economy is staying strong. The survey shows that India's financial and corporate sectors are doing well. The economy is being supported by effective government policies, consistent private spending and fiscal discipline. However, a decline in globalisation could create risks down the line.

In the first half of FY25, India's economy grew by 6.2%. Growth was strong in Q1 FY25 at 8.3% but slowed down in Q2 FY25 due to problems in the industrial sector. The agriculture and services sectors did well, but manufacturing struggled because of lower global demand and disruptions in supply chains. The economy slowed down in Q2 FY25 due to three main factors: first, lower exports, as demand for Indian goods dropped because of trade restrictions and weak global markets; second, the monsoon, which was beneficial for agriculture but caused disruptions in mining, construction, and some manufacturing sectors; and third, the timing of festivals, as some major ones were celebrated later than usual, affecting economic activity in Q2. India's GDP grew by 6.7% in the first quarter of FY25, but the growth slowed to 5.4% in the second quarter. As a result, the overall growth for the first half of FY25 stood at 6%, reflecting a mixed performance despite a strong start.

According to the Economic Survey, India’s share in global IPO listings grew to 30% in 2024, up from 17% in 2023, highlighting India’s rising significance in global finance. Additionally, the Nifty 50 index has delivered an 8.8% annual return over the past decade, making India’s stock market one of the top performers worldwide. India aims to become a developed nation (Viksit Bharat) by 2047, which requires a growth rate of 8 per cent per year for the next 20 years. However, this goal could be affected by global factors such as trade policies and economic uncertainty. India’s economy is growing due to improvements in digital infrastructure, economic reforms and strong business performance. By December 2024, India’s share in the MSCI Emerging Markets Index rose to 19.4%, showing its rising importance in global markets. While India has performed better than China’s Shanghai Composite Index, it still trails behind the US NASDAQ and Dow Jones in terms of returns. Despite the positive economic outlook, India needs to be ready for global challenges that could impact its growth in the future.

The Economic Survey highlights how recent labour reforms have positively impacted both business conditions and worker rights. These changes are designed to create more job opportunities and promote steady growth in employment. India's economy benefits from the money that Indians working abroad send back home. Remittances increased from $28.1 billion in Q2 FY24 to $31.9 billion in Q2 FY25. These inflows play a key role in keeping India's economy stable, even amid global uncertainties. The Chief Economic Advisor (CEA) highlighted that creating jobs is crucial for driving economic growth. He also mentioned that high electricity prices in India put businesses at a disadvantage, especially when compared to countries like Vietnam and Bangladesh, where the cost of electricity for industries is lower.

Infrastructure development in FY25

• India has made significant progress in infrastructure over the last decade such as new trains and airports, faster port operations (turnaround time reduced from 48 hours to 30 hours)

• More power capacity and lower data costs

• Improved telecom networks

These developments are making India’s economy more competitive on the global stage. The Economic Survey 2024-25 gives a positive but careful view of India’s future. While India has a solid economy, there are still global challenges and trade issues to consider. To keep growing, the country needs to focus on making policy changes, improving infrastructure and creating jobs, while also staying ready to face risks from outside.