{"id":36635,"date":"2025-02-01T19:17:43","date_gmt":"2025-02-01T13:47:43","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=36635"},"modified":"2025-08-05T15:32:56","modified_gmt":"2025-08-05T10:02:56","slug":"realistic-assessment-of-economic-survey-2024-25","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/01-02-2025\/realistic-assessment-of-economic-survey-2024-25","title":{"rendered":"Realistic Assessment of Economic Survey 2024-25"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Indian Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>Economic Survey 2024-25<\/strong> projects a GDP growth rate for the fiscal year 2025-26, offering a comprehensive and realistic assessment of India&#8217;s economic trajectory.<\/li>\n\n\n\n<li>This forecast is grounded in the current economic conditions and global uncertainties, providing a balanced outlook for the future.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>State of the Economy (Economic Survey 2024-25)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India&#8217;s real GDP<\/strong> and <strong>Real Gross Value Added (GVA) <\/strong>growth are estimated at 6.4% <strong>in FY25 <\/strong>(as per first advance estimates of national income), which <strong>equates nearly to its decadal average.<\/strong><\/li>\n\n\n\n<li>The <strong>real GDP growth in FY26<\/strong> is expected to grow between 6.3 and 6.8%, keeping in mind the upsides and downsides to growth.<\/li>\n\n\n\n<li>The current financial year\u2019s growth, as per the first advance estimates of the <strong>National Statistics Office (NSO)<\/strong>, is expected to be around 6.4%, which aligns with the <strong>lower end of Economic Survey (2023-24) projection of 6.5-7%<\/strong>.\n<ul class=\"wp-block-list\">\n<li>The global economy on an average grew by 3.3% in 2023 against the IMF projection of 3.2% growth in the next five years.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>Despite global economic challenges, India&#8217;s economy is expected to maintain a steady growth rate and <strong>aligns with forecasts from global institutions<\/strong> like the <strong>International Monetary Fund and the Asian Development Bank<\/strong>, both anticipating a 7% growth rate.\n<ul class=\"wp-block-list\">\n<li>The survey highlights the importance of leveraging India&#8217;s demographic dividend and implementing deregulation measures to sustain long-term growth.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"d0d8df\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"499\" height=\"588\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/02\/gdp-growth.png\" alt=\"gdp-growth - economic survey\" class=\"not-transparent wp-image-36637\" style=\"--dominant-color: #d0d8df; width:391px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/02\/gdp-growth.png 499w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/02\/gdp-growth-255x300.png 255w\" sizes=\"auto, (max-width: 499px) 100vw, 499px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Assessment &amp; Strategic Recommendations For India (Economic Survey 2024-25)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>For Viksit Bharat@2047: <\/strong>India needs to maintain a <strong>growth rate of 8% for the next two decades.<\/strong> It means India needs to accelerate the <strong>growth rate by 1.5-2 percentage points.<\/strong>\n<ul class=\"wp-block-list\">\n<li>To achieve the above, as the Economic Survey rightly notes, the <strong>investment rate in India<\/strong> will <strong>need to increase to about 35% of GDP from about 31% now.<\/strong><\/li>\n\n\n\n<li>It requires significant investment in infrastructure and continued reforms to improve the business environment.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Regulatory Reforms and Ease of Doing Business<\/strong>: The survey makes a strong case for enhancing the <strong>ease of doing business (EoDB) <\/strong>and positioning deregulation as a primary economic theme.\n<ul class=\"wp-block-list\">\n<li>While <strong>both the Union and state governments<\/strong> have taken steps to reduce regulatory bottlenecks, much work remains to be done.<\/li>\n\n\n\n<li>A key recommendation is that <strong>EoDB 2.0<\/strong> should be a state-led initiative targeting fundamental issues in the business environment. States regulate critical sectors such as <strong><em>land acquisition, labor laws, logistics, and infrastructure.<\/em><\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>On FDI &amp; FPI:<\/strong> Recent trends in <strong><a href=\"https:\/\/www.nextias.com\/blog\/foreign-direct-investment-fdi\/\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/blog\/foreign-direct-investment-fdi\/\">Foreign Direct Investment (FDI)<\/a><\/strong> and <strong>Foreign Portfolio Investment (FPI)<\/strong> suggest that relying on foreign savings to bridge the investment gap may <strong>not be viable.<\/strong>\n<ul class=\"wp-block-list\">\n<li>The <strong>survey warns<\/strong> that if capital flows remain constrained, the sustainable level of the current account deficit may be lower than the widely accepted range of 2.5-3% of GDP.&nbsp;<\/li>\n\n\n\n<li>Consequently, boosting domestic savings and reducing government dis-saving become imperative.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Global Headwinds and Trade Policy<\/strong>: The <strong>medium-term global growth outlook <\/strong>appears weaker compared to the first two decades of the 21st century.\n<ul class=\"wp-block-list\">\n<li><strong>Geopolitical tensions and fragmentation <\/strong>and <strong>China&#8217;s manufacturing prowess<\/strong> could dampen India\u2019s growth trajectory, particularly in exports\u2014a sector where India has traditionally lagged.<\/li>\n\n\n\n<li>The Economic Survey suggests that <strong>tariffs<\/strong>, if applied strategically, can foster industrial development in priority sectors.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Inflation and Inequality: <\/strong>Retail inflation decreased to 5.4% in FY24 from 6.7% in FY23, attributed to effective administrative and monetary policies.\n<ul class=\"wp-block-list\">\n<li>The Survey addresses income inequality, noting that the top 1% of Indians earn 6-7% of total incomes, while the top 10% account for one-third.<\/li>\n\n\n\n<li>The government aims to tackle this by creating jobs, formalizing the informal sector, and increasing female labor force participation.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Employment:<\/strong> The Survey underscores the necessity for India to generate approximately 7.85 million non-farm jobs annually until 2030 to accommodate the growing workforce.\n<ul class=\"wp-block-list\">\n<li>It points out that about half of Indian graduates are not immediately employable, emphasizing the need for skill development.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion and Way Forward<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Balancing Optimism with Caution:<\/strong> The Economic Survey 2024-25 recognizes the potential for growth while acknowledging the challenges that lie ahead.\n<ul class=\"wp-block-list\">\n<li>The survey&#8217;s recommendations focus on sustainable development, inclusive growth, and resilience to global economic shocks.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>The Economic Survey 2025 presents a <strong>realistic assessment of India&#8217;s growth path, balancing optimism with caution<\/strong>. It provides a roadmap for sustainable economic development by addressing both the challenges and opportunities.<\/li>\n\n\n\n<li>As India navigates the complexities of the global economy, the insights and recommendations from the survey will be crucial in shaping the country&#8217;s future.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q]<\/strong> How does the Economic Survey 2025&#8217;s realistic assessment of India&#8217;s growth path address the challenges and opportunities in achieving sustainable economic development?<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/www.business-standard.com\/opinion\/editorial\/the-growth-path-economic-survey-2025-presents-a-realistic-assessment-125013101884_1.html\" rel=\"nofollow noopener\" target=\"_blank\">Source: BS<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2025\/02\/UPSC-Editorial-Analysis-1-February-2025.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Economic Survey 2024-25 projects a GDP growth rate for the fiscal year 2025-26, offering a comprehensive and realistic assessment of India&#8217;s economic trajectory.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-36635","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=36635"}],"version-history":[{"count":6,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36635\/revisions"}],"predecessor-version":[{"id":50392,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/36635\/revisions\/50392"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=36635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=36635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=36635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}