The Economic Survey 2024-25, presented by Finance Minister Niramala Sitharaman today, has projected that India’s gross domestic product (GDP) will grow between 6.3% and 6.8% in the next fiscal year.
What Economic Survey 2024-25 Says About India's Growth
As a share of gross domestic product (GDP) at current prices, PFCE is estimated to increase from 60.3% in FY24 to 61.8% in FY25
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“The fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption," the report authored by by Chief Economic Advisor (CEA) V Anantha Nageswarana and his team of officials read.
According to the first advance estimates (FAE) released by the government, the real gross value added (GVA) growth for FY25 is estimated to be 6.4%.
"To realise its economic aspirations of becoming Viksit Bharat by the time of the centenary of independence, India needs to achieve a growth rate of around 8% at constant prices, on average, for about a decade or two," the report noted.
Inflation and Consumption
On the inflation front, the report suggested that it is likely to be moderate in Q4FY25 with the seasonal easing of vegetable prices and Kharif harvest arrivals. Good Rabi production is also likely to contain food prices in the first half of FY26.
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The survey highlighted that private final consumption expenditure (PFCE) at constant prices is estimated to grow by 7.3%. It said that this growth will be primarily driven by a rebound in rural demand.
As a share of gross domestic product (GDP) at current prices, PFCE is estimated to increase from 60.3% in FY24 to 61.8% in FY25.
"January 2025 round of NABARD’s Rural Economic Conditions and Sentiments Survey, where 78.5% of rural households reported an increase in their consumption expenditure during the last year," said the report.
Growth Across Sectors
"Aggregate GVA surpassed its pre-pandemic trend in Q1 FY25, and it now hovers above the trend in the H1 FY25," it added.
Gross fixed capital formation (GFCF) (at constant prices) is estimated to grow by 6.4%, said the survey.
"On the supply side, real GVA is also estimated to grow by 6.4% in FY25. The agriculture sector is expected to rebound to a growth of 3.8% in FY25. The industrial sector is estimated to grow by 6.2% in FY25," the report highlighted.
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Furthermore, the report noted that growth in the services sector is expected to remain robust at 7.2%. It will be driven by healthy activity in financial, real estate, professional services, public administration, defence, and other services.
A strong growth rate will also be observed in construction activities and electricity, gas, water supply and other utility services, which will eventually expected to support industrial expansion. The industrial sector grew by 6% in H1FY25.
Meanwhile, the union government capital expenditure is up 8.2 per cent in July – November 2024 and is expected to pick up further pace.
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