What we read from the Economic Survey 2024-25

3 Feb 2025 , 09:44 AM

LOOKING BACK AT 2024-25

Here are the key highlights of the Economic Survey assessment of 2024-25, till date.

• GDP growth for FY25 expected at 6.4%, close to its decadal average. FY26 GDP growth likely at 6.3% to 6.8% range. In Apr-Nov period of FY25, capex growth bounced to 8.2% and retail inflation sobered to 4.9%. Inflation expected to align to 4.0% by FY26.
• For the nine months to FY25, overall exports grew 6.0% yoy, largely helped by a 12.8% growth in services exports. Gross FDI flows in first 8 months of FY25 stood at $55 billion, compared to $47 billion last year. Forex chest at $640 billion covers 11 months imports.
• Kharif production for 2024 expected to touch 1,647.05 LMT, higher by 89.37 LMT over last year. Industrial growth expected at 6.2% in FY25. Key primary sector drivers to be horticulture, livestock, and fisheries. Fiscal deficit as share of GDP is sharply down.
• Social spending in FY25 up 15% over FY21. Total health expenditure growth still needs a push. Unemployment rate has fallen from 6.0% in FY19 to 3.2% in FY25. Centre plans government, private sector, academic collaboration to handle AI related challenges.

Let us now turn to the agenda laid out in the Economic Survey for FY26.

BANKING AND CAPITAL MARKETS WERE THE BIG STORIES OF 2024-25

According to the Economic Survey 2024-25, the area of progress was the banking and the capital markets segment. Here is a quick dekko.

• Gross NPAs of scheduled commercial banks (SCBs) fell from 7.3% to 2.1% between March 2021 and September 2024. As a result, the return on assets (ROA) of banks improved from 0.7% to 1.4% in the same period.
• Bank credit growth has improved from 6.1% in FY20 to 14.4% as of September 2024. In FY25, the overall bank credit has been steady due to internal restrictions on consumer loans and the slow growth in deposits. However, growth is still in double digits.
• Primary markets (equity and debt) saw ₹11.1 Trillion raised in 9 months of FY25; 5% more than FY24. IPO collections in calendar 2024 were above ₹1.60 Trillion. However, the market cap / GDP (Buffet Ratio) has been a concern at over 140%.
• On the retail participation and financialization of markets, number of demat accounts grew 33% to 18.5 crore as of December 2024. Between FY21 and FY25, unique mutual fund investors doubled to 5.6 crore investors.

It has been a tough year, but the takeaways are still favouring the positive side of the story.