Key Highlights

The document outlines key highlights from the Economic Survey tabled by the FM ahead of the Union Budget for FY 2025-26.

Economic Growth and Projections

• India’s GDP is projected to grow at 6.4% in 2024-25, lower than last year’s estimate of 6.5-7%.
• Growth slowed in the second quarter due to weak manufacturing performance and a slowdown in capital expenditure.
• The services sector witnessed a slowdown, with business activity reaching a 14-month low in January.
• Inflation is expected to stabilize and gradually align with the RBI’s target of 4% by FY 2026.

Infrastructure Development and Investment Opportunities

• The government emphasizes public-private partnerships (PPPs) to finance and develop infrastructure projects.
• The National Infrastructure Pipeline and National Monetisation Pipeline have been introduced to facilitate private investment.
• In FY 2025, 5,853 km of National Highways were constructed, and 2,031 km of railway network was commissioned.
• The government’s capital expenditure in key infrastructure sectors grew at 38.8% between FY 2020 and FY 2024.
• Sovereign Green Bonds worth Rs 11,697.40 Cr have been raised, with an additional Rs 10,000 crore planned for H2 FY 2025.

Technology and Digital Economy

• India’s technology exports grew by 3.3% to nearly USD 200 Bn, while the domestic market expanded by 5.9%.
• Global Capability Centers (GCCs) in India increased from 1,430 in FY19 to over 1,700 in FY 2024, employing 1.9 Mn professionals.
• 5G services have been launched in all states and union territories, covering 779 out of 783 districts.
• AI is expected to disrupt industries, particularly impacting mid- and low-tier jobs, creating a mix of challenges and opportunities for businesses.

Regulatory Environment and Business Climate

• The government aims to foster economic freedom and business innovation through systematic deregulation.
• Reforms under Ease of Doing Business 2.0 focus on reducing bureaucratic hurdles and enabling a more business-friendly environment.
• Strategic deregulation is expected to enhance the competitiveness of SMEs, boosting long-term investment and employment.

Consumption and Market Trends

• India remains a consumption-driven economy; however, urban consumption has shown signs of slowdown.
• The displacement of workforce due to automation could impact overall consumption, affecting long-term growth trends.
• Mental well-being is increasingly being recognized as an economic issue, influencing workforce productivity and business performance.

Trade and Investment Climate

• India’s services trade surplus remains strong, positioning the country as the seventh-largest global services exporter.
• Forex reserves stand at USD 634.6 Bn, covering 90% of external debt and providing over ten months of import cover.
• The government remains committed to its fiscal consolidation plan, targeting a fiscal deficit below 4.5% of GDP by FY 2026.

Conclusion

The Economic Survey 2025 highlights significant investment opportunities in infrastructure, technology, and eased regulations. While challenges such as slowing consumption and job displacement exist, policy measures aimed at fostering private sector participation and improving the business environment offer promising prospects for investors and business founders.