Economic Survey Projects India’s Real GDP to Grow by 6.4% in FY 2025

The Economic Survey, presented by Union Finance Minister Nirmala Sitharaman on 31 Jan 2025, estimates India’s real GDP to grow by 6.4 percent in the financial year 2025, with growth likely ranging between 6.3 and 6.8 percent in FY 2026.

The survey highlights that the fundamentals of the domestic economy remain robust, with steady growth supported by the agriculture and services sector. Rural demand is improving due to record Kharif production and favorable agricultural conditions. The manufacturing sector faced challenges due to weak global demand and seasonal conditions, but private consumption remained stable.

Fiscal discipline and strong external balance contributed to macroeconomic stability, supported by a services trade surplus and healthy remittance growth. The survey stresses the importance of improving global competitiveness through grassroots-level structural reforms and deregulation.

In Q1 of FY 2025, GDP grew by 6.7 percent, while Q2 saw a 5.4 percent growth, resulting in a real GDP growth of 6 percent in the first half of the fiscal year. The agriculture sector maintained steady growth, recording a 3.5 percent growth rate in Q2. The industrial sector grew by 6 percent in the first half of FY 2025, with a notable 8.3 percent growth in Q1. The services sector performed well, achieving a 7.1 percent growth in the first half of FY 2025.

Fiscal discipline has progressively improved, and retail headline inflation, measured by the Consumer Price Index, softened from 5.4 percent in FY 2024 to 4.9 percent from April to December 2024. Food inflation is expected to ease in Q4 of FY 2025. The unemployment rate for individuals aged 15 years and above has steadily declined from 6 percent in 2017-18 to 3.2 percent in 2023-24, according to the 2023-24 annual Periodic Labour Force Survey (PLFS) report.

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