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India has displayed steady economic growth amid geopolitical tensions, ongoing conflicts, and trade policy risks that pose significant challenges to global economic stability, the Economic Survey 2024-2025 presented by the National Democratic Alliance government on January 31, 2025.
The Economic Survey presented a positive outlook for the Indian economy and also focused on key sectors like agriculture, industry and services. It also has a chapter on climate change and the environment.
“As per the first advance estimates of national accounts, India’s real GDP is estimated to grow by 6.4 per cent in FY25. Growth in the first half of FY25 was supported by agriculture and services, with rural demand improving on the back of record Kharif production and favourable agricultural conditions,” the document noted.
There were other reasons too for India’s growth in an economically unstable world.
The manufacturing sector faced pressures due to weak global demand and domestic seasonal conditions.
However, private consumption remained stable, reflecting steady domestic demand. Fiscal discipline and strong external balance supported by a services trade surplus and healthy remittance growth contributed to macroeconomic stability. Together, these factors provided a solid foundation for sustained growth amid external uncertainties,” stated the Survey.
The Survey also predicted a balanced outlook on India’s economic prospects for FY 2025-2026: “Rural demand backed by a rebound in agricultural production, an anticipated easing of food inflation and a stable macro-economic environment provide an upside to near-term growth. Overall, India will need to improve its global competitiveness through grassroots-level structural reforms and deregulation to reinforce its medium-term growth potential.”
The Survey also talked about inflationary trends.
Retail inflation in India eased in FY 2024-2025 due to timely interventions by the government and the Reserve Bank of India. Core inflation in the country reached its lowest point in a decade, while food inflation was affected by supply chain disruptions and adverse weather conditions.
It added that onion and tomato prices are affected by the decline in production, partly due to extreme weather conditions and monsoon-induced supply chain disruptions.
India also faces a major demand and supply gap in pulses despite being a major producer.
“The government has undertaken several measures to rein in the prices of vegetables like onion and tomato which included procurement and buffer stocking of onion under price stabilisation fund and subsidised sale of onion and tomato,” said the document.
Many administrative measures have been taken-up to address the price pressures in pulses such as subsidised retail sale, stock limits and easing imports, it noted.
The Survey presented a positive outlook for India, stating that the country’s retail price inflation will align progressively with the target: “Global commodity prices are expected to decline, potentially easing core and food inflation. Long-term price stability could be achieved by robust data systems for monitoring prices, developing climate-resilient crops, reducing crop damage and post-harvest losses.”
The Survey called agriculture and food management as the ‘sector of the future’.
“India’s agricultural sector, despite encountering various challenges, remains a crucial pillar for economic growth and ensuring food security for the nation,” it noted.
By tapping into allied sectors, such as animal husbandry, dairying, and fisheries, farmers can create additional streams of revenue that can buffer them against the inherent volatility of traditional crop production.
However, the sector is not without its challenges, warned the Survey. Issues like climate change and water scarcity present significant obstacles that require focused and targeted interventions.
The document recommended promoting agricultural production patterns and practices that align with the specific agro-climatic conditions and natural resource availabilities of different regions across the country.
“Investment in research and development, especially on climate-resistant varieties, improved agriculture practices, diversification to highyield and climate-resilient crops, and micro-irrigation, can yield sustainable long-term benefits. The widespread adoption of digital technologies in agriculture will unlock further possibilities for enhancing productivity,” it said.
“India needs to achieve robust economic growth to attain developed nation status by 2047, with a focus on inclusive and sustainable development. While the country has low per capita carbon emissions, it is committed to pursuing low-carbon growth. However, it faces challenges in deploying renewable energy, particularly due to a lack of storage technology and access to minerals,” the Economic Survey noted.
It added that given India’s vulnerability to climate change, a strong adaptation strategy is essential. The increase in adaptation expenditures from 3.7 per cent to 5.6 per cent of GDP between FY 2015-2016 and FY2021-2022 indicated the prominence adaptation and building resilience play in the development strategy.
“To strengthen its renewable energy initiatives, India must prioritise investment in extensive grid infrastructure improvements and the secure sourcing of critical minerals necessary for this transformative shift,” concluded the survey.