GDP expected to grow by 6.3-6.8 % in FY26 | Key highlights of Economic Survey 2024-25
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New Delhi: India's GDP is projected to grow between 6.3% and 6.8% in the financial year 2025-26, driven by strong economic fundamentals, fiscal consolidation, and stable private consumption, according to the Economic Survey 2024-25 tabled in Parliament on Friday. However, the growth rate is expected to decline to 6.4% in the current financial year, marking a four-year low.
Key Highlights of the report:
1. Infrastructure investment crucial for sustained growth
Investment in India's infrastructure sector must be continuously scaled up over the next two decades to sustain high growth. The first quarter of FY25 saw constraints on new approvals and spending due to the general elections, coupled with disruptions from heavy monsoons.
2. Policy shift to balance crop production
The government aims to discourage excessive cereal production while boosting the output of pulses and edible oils, which India currently imports. The survey emphasises the need for unhindered market-driven price signals while ensuring food security for vulnerable households.
3. Electronics industry: Progress in assembly, lag in manufacturing
Indigenous electronics production surged to Rs 9.52 lakh crore in 2023-24, but the sector remains largely focused on assembly, with limited advancements in design and component manufacturing.
4. Real estate growth driven by economic stability and infrastructure
The real estate sector has boomed due to economic stability and the expansion of infrastructure such as roads and metro networks. Reforms like RERA and GST have brought transparency, fuelling demand beyond Tier 1 and Tier 2 cities.
5. Private investment key to 'Viksit Bharat@2047'
Accelerating private investment is essential to achieve the Viksit Bharat@2047 vision, as government funding alone cannot meet the infrastructure needs for economic transformation.
6. Climate-resilient crops for price stability
Developing climate-resilient crop varieties is crucial to boosting the yield of pulses, oilseeds, tomatoes, and onions. These commodities significantly impact inflation, contributing 32.3% to overall food inflation in FY25 (April-December).
7. AI regulation to balance innovation and accountability
The regulatory framework for artificial intelligence needs to be updated to ensure responsible innovation. The survey highlights concerns about AI’s impact on employment, particularly in a country like India, which has a large workforce and low per capita income.
8. Collaborative effort needed to make India a manufacturing hub
|Achieving India’s goal of becoming a global manufacturing powerhouse requires coordinated efforts from the government, private sector, academia, and financial institutions. The report notes China’s dominance in manufacturing as a key challenge.
9. Financial sector: Striking a balance between stability and innovation
Financial regulators must balance stability with innovation to promote financial inclusion. The RBI, SEBI, IRDAI, PFRDA, and IBBI, under the oversight of the FSDC, play a crucial role in ensuring a well-regulated financial ecosystem.
10. Tap water connections in rural India cross 15 cr
Under the Jal Jeevan Mission, tap water connections in rural households have grown four-fold to 15.3 crore by November 2024. In August 2019, only 3.23 crore (17%) of rural households had access to tap water.