Economic Survey pegs FY25 GDP growth at 6.5-7%

Chief Economic Advisor V Anantha Nageswaran

India's real GDP is expected to grow between 6.5 percent and 7 percent in 2024-25, the Economic Survey tabled in Parliament by Union Finance Minister Nirmala Sitharaman on July 22 said.

The growth estimated by the Survey, released a day before Sitharaman presents the Budget for the ongoing financial year, is in line with the International Monetary Fund’s estimate of 7 percent.

One basis point is one-hundredth of a percentage point.

"The survey conservatively projects a real GDP growth of 6.5–7 per cent, with risks evenly balanced, cognizant of the fact that the market expectations are on the higher side," the survey said.

The survey attributes its estimate for India's resilient growth in FY25 to the prospects of a normal rainfall and its impact on the agriculture sector, and envisaged results from reforms such as the Goods and Services Tax (GST) and the IBC (Insolvency and Bankruptcy Code).

In fact, a few days before the interim Budget for 2024-25 was presented on February 1, the finance ministry came out with a report that estimated a GDP growth rate of close to 7 percent for FY25.

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The Survey, supervised by the chief economic adviser V Anantha Nageswaran, gives a detailed account of the state of the economy, prospects and policy challenges.

The Survey notes that though the Indian economy is on a "strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges," and has consolidated its post-Covid recovery, heavy lifting has to be done on the domestic front to sustain this recovery.

Nageswaran's survey adds that real GDP growth in FY24 is seen 20 percent higher than its level in FY20, while also leaving a strong possibility for robust growth in FY25 and beyond.

The statistics ministry’s latest estimate sees GDP growth at 8.2 percent in FY24. In June, the Reserve Bank of India revised the growth forecast for FY25 to 7.2 from 7 percent. The country has grown more than 7 percent over the last three years.

"Growth has been inclusive with a reduction in unemployment and multi-dimensional poverty and an increase in labour force participation. Overall, the Indian economy looks forward to FY25 optimistically, anticipating broad-based and inclusive growth," according to the survey.