Economic Survey for the year 2024-25

♦ Union Finance Minister Nirmala Sitharaman tabled the Economic Survey for the year 2024-25 in Parliament on 31 January 2025. Here is the key takeaways from the Economic Survey 2024-25:

♦ The Survey reports that India’s real GDP growth of 6.4% in FY25 remains close to the decadal average and projects real GDP growth for FY26 to range between 6.3% and 6.8%.

♦ The Economic Survey 2024-25 reports that food inflation, measured by the Consumer Food Price Index (CFPI), rose from 7.5% in FY24 to 8.4% in FY25 (April-December), driven mainly by rising prices of vegetables and pulses.

♦ Retail inflation, tracked by the Consumer Price Index (CPI), averaged 5.4% during the same period (2024-25). Food inflation, in particular, crossed 8% multiple times, largely due to supply disruptions affecting key commodities like onions, tomatoes, and pulses.

♦ The manufacturing sector, while steadily recovering, remains slightly below its pre-pandemic trajectory as it recovers from slowing global demand and supply chain disruptions, according to the Economic Survey 2024-25.

♦ The country’s foreign exchange reserves act as a means to service external debt and imports, maintain liquidity and plays an important role in monetary policy. As of December 2024, the reserve stood at 640.3 billion U.S. dollars as per the Survey. This amount will cover 90% of India’s external debt of 711.8 billion dollars as of September 2024, as per the document.

♦ India’s labour market has expanded in recent years, driven by post-pandemic recovery and greater formalisation, according to the Economic Survey 2024-25. The 2023-24 annual Periodic Labour Force Survey (PLFS) report shows that the unemployment rate for individuals aged 15 and above has declined steadily from 6% in 2017-18 to 3.2% in 2023-24.

♦ The value of exports and imports fell by 0.1% and 2.3% in FY24 when compared to FY23. But they have seen a rise in FY25 (April to December) by a 6.6% and 3%.

♦ UPI payments have seen an exponential growth since it was launched in FY2016. The total value of UPI payments almost touched Rs.2 lakh billion in FY24, and it has already surpassed Rs.1.9 lakh billion from April to December in FY25.

National Critical Mineral Mission (NCMM)

♦ The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved the launch of the National Critical Mineral Mission (NCMM) with an expenditure of Rs.16,300 crore and expected investment of Rs.18,000 crore by PSUs, etc.

♦ The mission will intensify the exploration of critical minerals within the country and in its offshore areas.

♦ The mission aims to encourage Indian public sector enterprises and private sector companies to acquire critical mineral assets abroad and enhance trade with resource-rich countries. It also proposes development of stockpile of critical minerals within the country.

♦ Till now, Geological Survey of India (GSI) has undertaken 368 exploration projects over the past three years, with 195 projects currently underway, and the mines ministry has auctioned off 24 critical mineral blocks.

IDFC FIRST Bank announced the launch of the UPI

♦ IDFC FIRST Bank announced the launch of the UPI enabled RuPay Credit Card called – FIRST EA₹N.

♦ The new card, which is the result of the bank's partnership with RuPay, is backed by fixed deposit (FD), enabling everyone to instantly avail the service online.

♦ It also offers cashback on UPI payments thus making the product rewarding for users.

Karnataka leads in coffee production

♦ The Ministry of Commerce and Industry stated that India is now the seventh-largest coffee producer globally with exports reaching USD 1.29 billion in financial year (FY) 2023-24.

♦ This is nearly double the 719 million dollars worth of exports in 2020-21. 

♦ In the first half of January 2025 India exported over 9,300 tonnes of coffee with top buyers including Italy, Belgium, and Russia.

♦ Meanwhile, Karnataka leads in coffee production, contributing 248,000 metric tonnes in 2022-23, followed by Kerala and Tamil Nadu. 

Global Economic Prospects (GEP)

♦ According to the latest Global Economic Prospects (GEP) report of the World Bank, India is expected to remain the fastest growing among the major economies at a pace of 6.7% in both FY26 and FY27. 

♦ The GEP report is a flagship publication of the World Bank that examines global economic trends and challenges, particularly in emerging markets and developing economies.

♦ The January 2025 edition marks a milestone, providing a comprehensive review of these economies’ progress since 2000 and their prospects for the next quarter-century.

♦ The world's largest economy, the US, was estimated to have grown by 2.8 last year (2023) with the projected growth slowing down to 2.3 percent this year (2024) and 2 percent next year (2025).

International Monetary Fund (IMF)

♦ The International Monetary Fund (IMF) retained India's growth forcastat 6.5 percent for for fiscal 2026 and fiscal 2027, the global economic body said in its World Economic Outlook report.

♦ It predicts that growth in the second half of FY25 will be better than the first half.

♦ On the international front, the IMF forecasted that global growth is projected at 3.3 percent in both 2025 and 2026, below the historical (2000-19) average of 3.7 percent.

Indias Gross Domestic Product (GDP)

♦ According to a Crisil Intelligence report, India’s gross domestic product (GDP) growth is projected to improve to 6.7% in the next fiscal year (FY25).

♦ The report noted that a sustained decline in food inflation, combined with stable non-food inflation, could create room for a rate cut by the Reserve Bank of India (RBI) in the coming months.

♦ The Consumer Price Index (CPI) inflation cooled to 5.2% in December 2024, down from 5.5% in November 2024. Food inflation eased to 8.4% from 9%, while non-food inflation remained stable at 3.1%.

♦ The Index of Industrial Production (IIP) rose to 5.2% in November 2024, up from 3.7% in October (revised from an earlier estimate of 3.5%).

♦ This growth was primarily driven by strong performance in investment goods and consumer durables, aided by a low base effect.

♦ The National Statistical Office’s (NSO) first advance estimates indicate a moderation in GDP growth to 6.4% for the current fiscal, down from 8.2% last year (2024).

Union Government

♦ The Union Government has disbursed Rs.1,73,030 crore to state governments as part of tax devolution.

♦ This marks a rise from the Rs.89,086 crore distributed in December 2024.

♦ The increased devolution aims to support states in enhancing capital spending and funding development and welfare initiatives.

♦ Among the states, Uttar Pradesh received the highest allocation of Rs.31,039.84 crore, followed by Bihar with Rs.17,403.36 crore and West Bengal with Rs.13,017.06 crore.

♦ Maharashtra and Rajasthan were allocated Rs.10,930.31 crore and Rs.10,426.78 crore respectively. Smaller states such as Goa and Sikkim received Rs.667.91 crore and Rs.671.35 crore.

♦ For the period 2021 to 2026, the Finance Commission recommended maintaining the states’ share in central taxes at 41 percent, consistent with the 2020–21 ratio. 

Indias Index of Industrial Production (IIP)

♦ India’s Index of Industrial Production (IIP) recorded a growth of 5.2% in November 2024, marking the highest growth rate in the past six months.

♦ This increase follows a growth rate of 3.5% in October 2024, according to data released by the Ministry of Statistics. 

♦ The November performance represents an improvement over the 2.5% growth recorded in the same month in 2023.

♦ The manufacturing sector, which constitutes the largest share of the IIP, recorded a growth of 5.8% during November, compared to 4.1% in October.

♦ Eighteen out of 23 industry groups within the manufacturing sector showed growth during November when compared to the same period last year.

♦ Among these, the manufacture of basic metals grew by 7.6%, electrical equipment production rose by 37.2%, and other non-metallic mineral products saw a 12% increase.

♦ For the April-November period of the 2024-25 financial year, the industrial growth rate stands at 4.1%. 

Global economic growth

♦ According to a United Nations report released on 9 January 2025, Global economic growth is projected to remain at 2.8% in 2025.

♦ The report said U.S. growth was expected to moderate from 2.8% last year to 1.9% in 2025 as the labour market softens and consumer spending slows.

♦ India is forecast to grow by 6.6% in 2025 and 6.8% in 2026, driven by robust private consumption and investment.

♦ It said growth in China was estimated at 4.9% for 2024 and projected to be 4.8% this year with public sector investments and a strong export performance partly offset by subdued consumption growth and lingering property sector weakness.

GDP growth

♦ The GDP growth is expected to be about 6.3 percent in the current fiscal year (2024-25), SBI research report said on 8 January 2025.

♦ According to the first advance estimates (FAE) of National Income for 2024-25 released by the National Statistics Office (NSO), released on January 7, India's economic growth rate is estimated to slip to a four-year low of 6.4 percent in 2024-25. 

♦ The difference between the estimates of the Reserve Bank of India (RBI) and the NSO is always in the range of 20-30 bps and hence the 6.4 percent estimate for the 2024-25 fiscal year is along expected and reasonable lines, the SBI's research report 'Ecowrap' said.

♦ We, however, believe that GDP (gross domestic product) growth for FY25 could be around 6.3 percent, with downward bias, it said.

National Statistical Office

♦ The National Statistical Office (NSO) released the first advanced estimates of GDP for the fiscal year 2024-25 on 4 January 2025. According to this, India’s Gross Domestic Product (GDP) is projected to grow at 6.4 percent in the fiscal year 2024-25. This number was 7% and 8.2% in 2022-23 and 2023-24. 

♦ The 2021-22 GDP growth of 9.7% is misleading because it came on the back of a -5.8% number in 2020-21.

♦ The real Gross Value Added (GVA) in the Indian economy is reckoned to rise 6.4% as well, relative to a 7.2% uptick in 2023-24, with Agriculture GVA growth surging to 3.8% from 1.4% last year (2023-24).

♦ The estimates highlighted that real GVA of agriculture and allied sectors is estimated to grow by 3.8 percent, a marked increase from the previous year’s 1.4 percent. 

♦ Apart from agriculture, the only other sector expected to record an improvement in GVA growth this year is Public Administration, Defence and Other Services, which the NSO said will rise 9.1% from 7.8% last year.

♦ Manufacturing GVA growth is expected to nearly halve from 9.9% in 2023-24 to 5.3% this year, while GVA in Mining and Quarrying is estimated to rise just 2.9% from 7.1% a year ago.

State Bank of India (SBI)

♦ According to the State Bank of India (SBI) research report, India’s rural poverty has declined significantly to 4.86 percent in the financial year 2023-24. It stood at 25.7 percent in the financial year 2011-12. 

♦ The urban poverty has fallen to 4.09 percent from 13.7 percent over the last twelve years (2011-12 to 2023-24).

♦ The poverty line, originally defined in 2011-12 and adjusted for inflation, now stands at Rs 1,632 for rural areas and Rs.1,944 for urban areas.

♦ Using this benchmark and fractile distribution data, poverty rates were calculated at 4.86% for rural areas and 4.09% for urban areas in FY24.

Indias Goods and Services Tax

♦ India’s Goods and Services Tax (GST) collections rose to Rs.1.77 lakh crore in December 2024, a 7.3% increase compared to Rs.1.65 lakh crore in December 2023. The breakdown of December’s GST collections includes Rs.32,836 crore from the Central GST, Rs.40,499 crore from the State GST, Rs.47,783 crore from the Integrated GST, and Rs.11,471 crore from cess. Revenue from domestic transactions grew by 8.4% to Rs.1.32 lakh crore, while tax collections from imports increased by 4% to Rs.44,268 crore during the month.

♦ In November 2024, the GST revenue stood at Rs.1.82 lakh crore, marking an 8.5% year-on-year growth. The highest-ever GST collection was recorded in April 2024, exceeding Rs.2.10 lakh crore.