Economic Survey 2025: Sectors-wise Key Takeaways like AI, Education, Health, Agriculture and More

The Economic Survey is an annual report that assesses the performance of India’s economy and outlines the government’s policies and future outlook. Presented by the Finance Minister, it serves as a crucial document before the Union Budget. 

The survey is divided into two parts: Part A focuses on macroeconomic indicators, while Part B addresses socio-economic issues like education, health, and agriculture.

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In the Economic Survey 2025, key takeaways highlight growth across various sectors. The report anticipates GDP growth between 6.3% and 6.8% for the upcoming financial year. 

It emphasises advancements in artificial intelligence, improvements in education, healthcare developments, and robust agricultural performance.

In this article, we’ll discuss these sector-wise insights, elaborating on how each area contributes to India’s economic landscape and what challenges lie ahead.

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India’s Economic Growth in 2025: Key Highlights

The Economic Survey 2025, presented on January 31, 2025, outlines several key highlights regarding India’s economic performance and future outlook:

• GDP Growth: India’s real GDP is estimated to grow at 6.4% for FY25, with projections of 6.3% to 6.8% for FY26.
• Structural Reforms: Emphasis on grassroots-level structural reforms and deregulation aims to enhance medium-term growth potential and global competitiveness.
• Geo-Economic Fragmentation: The survey notes that geo-economic fragmentation is replacing globalisation, leading to necessary economic realignments.
• Infrastructure Investment: Private sector participation is crucial for meeting infrastructure requirements, with capital expenditure (capex) growing steadily.
• Inflation Management: Retail inflation decreased from 5.4% in FY24 to 4.9% in the first nine months of FY25, with expectations of aligning with a 4% target by FY26.
• Banking Sector Health: Gross non-performing assets (GNPA) of scheduled commercial banks fell to a 12-year low of 2.6%.
• Export Growth: Overall exports grew by 6%, with service exports rising by 11.6% in the first nine months of FY25.
• Digital Economy and AI: The growing digital economy presents opportunities for job creation, though barriers to large-scale AI adoption remain.
• Social Services Expenditure: This sector has seen an annual growth rate of 15%, indicating increased government focus on social welfare.
• Agricultural Performance: Kharif food grain production is projected to reach 1647.05 LMT, reflecting a strong agricultural sector.

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1) Artificial Intelligence (AI) and Technology: The Next Growth Drivers

• AI developers promise a future where most valuable economic tasks are automated.
• AI is expected to outperform humans in key areas like healthcare, research, justice, education, business, and finance.
• However, challenges like reliability, resource use, and lack of infrastructure slow down AI adoption.
• Since AI is still in its early stages, India has time to build a strong foundation and plan its approach.
• With a young and tech-savvy population, India can train its workforce to use AI for better productivity.
• The future will focus on “Augmented Intelligence,” where humans and machines work together to improve efficiency.
• This approach will enhance human skills while increasing overall job performance and societal benefits.
• Government, private companies, and educational institutions must collaborate to reduce AI’s negative impacts on society.

2) Education Sector Insights: Improving Quality and Employability

Government spending on social services has grown at an annual rate of 15% (for both the Centre and states) from FY21 to FY25.

The Gini coefficient, which measures inequality in consumption, has been declining, showing improved income distribution.

• Rural areas: Dropped from 0.266 in 2022-23 to 0.237 in 2023-24.
• Urban areas: Fell from 0.314 in 2022–23 to 0.284 in 2023–24.

This decline suggests that government policies are helping to reduce inequality.

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In school education, the government is implementing the National Education Policy (NEP) 2020 through various schemes.

Major education initiatives include:

 

 

• The unemployment rate declined from 6.0% in 2017-18 to 3.2% in 2023-24, showing improvement in job opportunities.
• India has a large young population, with 26% of people aged 10–24 years, creating a demographic advantage.
• Women’s entrepreneurship is being promoted through easier credit access, marketing support, skill development, and startup support.
• The digital economy and renewable energy sectors are driving new job opportunities, supporting India’s Viksit Bharat vision.
• The government is developing a skilled workforce to adapt to automation, AI, digitalisation, and climate change.
• Various employment-boosting initiatives are in place, focusing on self-employment and worker welfare.
• The PM-Internship Scheme is proving to be a game-changer for job creation.
• EPFO payroll additions have more than doubled in six years, reflecting strong growth in formal employment.

3) Healthcare and Inflation: Addressing Affordability and Access

• Government health expenditure has increased from 29.0% to 48.0%.
• Out-of-pocket health expenses (money spent by people) declined from 62.6% to 39.4%, reducing the financial burden on households.
• Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) helped lower healthcare costs, saving over ₹1.25 lakh crore.

• The unemployment rate fell to 3.2% in 2023-24, down from 6.0% in 2017-18.
• Localisation of Sustainable Development Goals (SDGs) ensures that Gram Panchayat budgets are aligned with SDG objectives.
• The global inflation rate moderated to 5.7% in 2024 from 8.7% in 2022 (IMF). India’s retail inflation declined from 5.4% in FY24 to 4.9% in FY25 (April–December 2024). 
• Both RBI and IMF project that India’s consumer price inflation will align around 4% by FY26, reflecting effective monetary and fiscal measures.
• Climate-resilient crops and enhanced farming practices remain vital to long-term price stability and mitigating extreme weather impacts on food supply chains.

4) Climate & Environment: The Role of Adaptation

• India aims to become a developed nation by 2047, focusing on inclusive and sustainable development.
• As of November 30, 2024, India has installed 2,13,701 megawatts of electricity capacity from non-fossil fuel sources, which makes up 46.8% of the total capacity.
• According to the Forest Survey of India 2024, an additional carbon sink of 2.29 billion tonnes of CO2 equivalent has been created from 2005 to 2024.
• India has launched a global initiative called Lifestyle for Environment (LiFE) to boost sustainability efforts.
• By 2030, LiFE initiatives could help save consumers globally around USD 440 billion through reduced consumption and lower prices.

5) Agriculture Sector Performance: Growth, Challenges, and Government Initiatives

• Agriculture and allied activities contribute 16% to India’s GDP in FY24.
• Horticulture, livestock, and fisheries are key growth drivers in the agricultural sector.
• Kharif foodgrain production for 2024 is projected at 1647.05 LMT, an increase of 89.37 LMT from last year.
• Minimum Support Price (MSP) for Arhar and Bajra has increased by 59% and 77%, respectively, over production costs for FY 2024-25.
• The fisheries sector has the highest growth rate (8.7% CAGR), followed by livestock (8% CAGR).
• National Food Security Act (NFSA) 2013 and PMGKAY have transformed food security policies.
• PMGKAY’s free food grain scheme has been extended for another five years, reinforcing the government’s commitment to nutrition security.
• Over 11 crore farmers have benefitted from PM-KISAN, and 23.61 lakh farmers are enrolled in PM Kisan Mandhan.

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6) Manufacturing and Industry: The Role of PLI and Investments

• Public infrastructure spending has been a key focus, with a 38.8% growth in capital expenditure from FY20 to FY24.
• Railway expansion saw 2031 km of new network commissioned and 17 new Vande Bharat trains introduced.
• National Highway construction reached 5853 km in FY25 (April-Dec).
• Industrial growth: 383 plots (3788 acres) allotted for industrial use under the National Industrial Corridor Development Programme.
• Port efficiency improved, reducing container turnaround time from 48.1 hours (FY24) to 30.4 hours (FY25).
• Renewable energy capacity grew 15.8% YoY, raising its share in total installed capacity to 47%.
• Rural electrification via DDUGJY and SAUBHAGYA reached 2.9 crore households.
• Digital connectivity: 5G services rolled out across all states and UTs, and 10,700 villages gained 4G access.
• Water supply: 12 crore families now have piped drinking water under the Jal Jeevan Mission.
• Housing: 89 lakh houses completed under PM Awas Yojana.
• Urban transport: Metro and rapid rail expanded in 29 cities, covering 1000+ km.
• Real estate regulation: Over 1.38 lakh projects were registered, and 1.38 lakh complaints were resolved under RERA (2016).
• Space sector: India operates 56 active space assets and plans Gaganyaan and Chandrayaan-4 missions under Space Vision 2047.
• Private sector role: National Infrastructure Pipeline and National Monetisation Pipeline launched to attract investments.

Industrial Growth & Manufacturing Highlights

• Industrial sector growth is projected at 6.2% in FY25, driven by electricity and construction.
• Smart Manufacturing & Industry 4.0 initiatives supported through SAMARTH Udyog centres.
• Automobile sector: Domestic sales grew by 12.5% in FY24.
• Electronics manufacturing: Domestic production grew at a 17.5% CAGR (FY15-FY24).
• Smartphone industry: 99% of smartphones are now manufactured domestically, reducing import reliance.
• Pharmaceutical sector: ₹4.17 lakh crore annual turnover (FY24), with a 10.1% CAGR over five years.
• Patent filings: India ranks 6th globally in WIPO Report 2022.
• The MSME sector is recognised as a key driver of economic growth.
• Self-Reliant India Fund launched with a ₹50,000 crore corpus to fund scalable MSMEs.
• The MSME Cluster Development Programme was introduced to enhance regional industrial growth.

7) Services Sector Growth: IT, Exports, and Economic Contribution

• The service sector’s share in total GVA rose from 50.6% (FY14) to 55.3% (FY25).
• Pre-pandemic (FY13–FY20) service sector growth: 8%, compared to 8.3% in post-pandemic years (FY23–FY25).
• Global ranking: India held a 4.3% share in global services exports (2023), ranking 7th worldwide.
• Services export growth: 12.8% (Apr–Nov FY25), up from 5.7% in FY24.
• Information & computer services: 12.8% trend growth (FY13–FY23), with a share in GVA increasing from 6.3% to 10.9%.
• Indian Railways:
• Passenger traffic: 8% growth in FY24.
• Freight revenue: 5.2% growth in FY24.
• Tourism sector: Contribution to GDP restored to 5% (FY23), pre-pandemic levels.

8) Monetary and Financial Sector Strengthening

• India’s banking sector has displayed sustained growth, with credit growth aligning with deposit growth. 
• Profitability has improved, as evidenced by a decline in gross non-performing assets (GNPAs) to a 12-year low of 2.6% as of September 2024, along with a rise in capital adequacy (CRAR). 
• Bank credit growth has consistently outpaced nominal GDP growth, and the credit-GDP gap has narrowed to (-) 0.3% in Q1 FY25 from (-) 10.3% in Q1 FY23, signifying a sustainable credit environment.
• Under the Insolvency and Bankruptcy Code (IBC), ₹3.6 lakh crore was realised across 1,068 resolution plans by September 2024, amounting to 161% of the liquidation value and 86.1% of the fair asset value. 
• The Indian stock market remains robust, outperforming its emerging market peers despite election-driven volatility.
• The primary markets (equity and debt) saw a total resource mobilisation of ₹11.1 lakh crore from April to December 2024, 5% higher than FY24. 
• Additionally, BSE’s market capitalisation to GDP ratio stood at 136% (December 2024), surpassing China (65%) and Brazil (37%), reflecting India’s growing financial market depth. 
• The insurance market expanded, with total premiums reaching ₹11.2 lakh crore in FY24, a 7.7% increase, and pension subscribers grew by 16% year-on-year as of September 2024.

9) External Sector and FDI Resilience

• Despite global uncertainties, India’s external sector remains resilient. Overall exports (merchandise + services) grew by 6% YoY in the first nine months of FY25, with services exports growing by 11.6% during the same period. 
• India ranks as the second-largest global exporter in ‘Telecommunications, Computer, & Information Services’ with a 10.2% share, according to UNCTAD.
• The current account deficit (CAD) stood at 1.2% of GDP in Q2 FY25, driven by rising net services receipts and increased private transfer receipts. 
• Gross FDI inflows rebounded in FY25, rising 17.9% year-on-year from USD 47.2 billion (first eight months of FY24) to USD 55.6 billion in FY25.
• India’s FOREX reserves remained strong at USD 640.3 billion (December 2024), covering 10.9 months of imports and 90% of external debt. 
• The external debt-to-GDP ratio remained stable at 19.4% as of September 2024, reflecting sound debt management practices.

10) Medium-Term Economic Outlook and Systematic Deregulation

• India’s economic transformation presents both challenges and opportunities, requiring strategic realignments amid global economic fragmentation (GEF). 
• Achieving Viksit Bharat by 2047 will necessitate an 8% growth rate at constant prices over the next two decades.
• India’s medium-term growth must account for China’s manufacturing prowess and energy transition dependencies, positioning deregulation as a critical economic driver. 
• Systematic deregulation will reinvigorate domestic economic levers, empowering businesses and individuals while fostering Ease of Doing Business 2.0. 
• The focus must be on creating a thriving Mittelstand (SME sector), supported by liberalized standards, risk-based regulation, reduced tariffs, and streamlined enforcement mechanisms at the state level.

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India’s Economic Trajectory Towards Sustainable Growth

India’s economic growth is firmly on an upward trajectory, with real GDP estimated at 6.4% in FY25, aligning closely with its decadal average. 

The real gross value added (GVA) is also projected to grow by 6.4%, demonstrating broad-based economic resilience. 

Despite global economic growth averaging 3.3% in 2023 and the IMF projecting 3.2% growth over the next five years, India’s real GDP growth for FY26 is expected to range between 6.3% and 6.8%, maintaining a strong growth outlook.

The government’s continued focus on structural reforms and deregulation is aimed at enhancing India’s global competitiveness. 

However, geopolitical tensions, ongoing conflicts, and global trade policy risks remain key challenges. Inflation has softened from 5.4% in FY24 to 4.9% (April–December 2024), reflecting effective monetary policies. 

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Capital expenditure (CAPEX) has also witnessed consistent improvement, growing 8.2% year-on-year during July–November 2024, particularly after the general elections.

The service sector continues to be a dominant contributor, with its share in total GVA rising from 50.6% in FY14 to 55.3% in FY25. 

The sector’s growth remained strong at 8.3% in the post-pandemic period (FY23–FY25), reinforcing its critical role in India’s economy. 

India’s global services export share stood at 4.3% in 2023, ranking seventh worldwide, with services export growth surging to 12.8% during April–November FY25, up from 5.7% in FY24. 

Information and computer-related services have been a major driver, growing at a trend rate of 12.8% over the last decade, increasing their GVA share from 6.3% to 10.9%.

Infrastructure and logistics are also witnessing significant growth. Indian Railways recorded an 8% growth in passenger traffic in FY24 while revenue-earning freight increased by 5.2%. The tourism sector has rebounded, contributing 5% to GDP in FY23, reaching pre-pandemic levels.

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Final Thoughts

India’s economy is at an inflexion point, combining strong domestic growth, robust financial markets, external sector resilience, and progressive regulatory reforms. 

The government’s continued thrust on deregulation, infrastructure expansion, and innovation-driven policies will be instrumental in sustaining long-term growth. 

While geopolitical risks, trade policy uncertainties, and inflationary pressures remain challenges, India’s resilient economic framework, strengthened financial sector, and rising global competitiveness position it favourably for the coming years.

With strategic policymaking, enhanced ease of doing business, and an emphasis on sustainable growth, India is well on track to becoming a leading global economic powerhouse by 2047.

Source: https://dinhtienhoang.edu.vn
Category: Optical Illusion