Economic Survey 2024-25

Overview

Last updated: Jan, 2025

Introduction

Union Minister for Finance, Ms. Nirmala Sitharaman, presented the Economic Survey 2024–25 in the Parliament on January 31, 2025. The key highlights of the Economic Survey 2024–25 are as follows:

State of the Economy: Getting Back into the Fast Lane

The global economy grew by 3.3% in 2023, with the IMF projecting a growth rate of 3.2% for 2024 and 3.3% for 2025.
Growth was uneven across regions, with advanced economies (AEs) recording stable expansion while emerging markets and developing economies (EMDEs) reporting mixed trends.
Global manufacturing weakened, particularly in Europe and parts of Asia, due to supply-chain disruptions and reduced external demand.
The services sector remained resilient and contributed positively to economic activity.
Inflation pressures eased in most economies but remained persistent in the services sector.

Key geopolitical risks include the Russia-Ukraine conflict, the Israel-Hamas conflict, cyber threats and global trade route disruptions.
- United States: Growth was 2.8% in 2024, with a slight decline projected for 2025 due to moderation in consumption and exports.
- Euro Area: Growth is expected to improve from 0.4% in 2023 to 1.0% in 2025, supported by the services sector. However, manufacturing-intensive economies like Germany and Austria struggled due to weak demand.
- China: Growth weakened after Q1 FY24 due to sluggish private consumption, lower investment and a struggling real estate sector.
- Japan: Growth slowed due to domestic supply disruptions in early 2024.
- India: Estimated real GDP growth of 6.4% in FY25, supported by agriculture and services, with stable private consumption.
Manufacturing: The global Purchasing Managers’ Index (PMI) for manufacturing indicated contraction by mid-2024 after a brief expansion in early 2024. India’s PMI remained in the expansionary zone.
Services: The Global Services PMI Business Activity Index rose to 53.8 in December 2024, marking 23 consecutive months of expansion.
Inflation: Declined globally due to monetary tightening but remained high in services, driven by wage growth.
India’s Economic Performance:
- GDP Growth: Estimated at 6.4% for FY25, maintaining strong domestic economic momentum.
- Private Consumption: Grew by 7.3% YoY in FY25, contributing 61.8% to GDP, the highest since FY03.
- Investment: Gross Fixed Capital Formation (GFCF) grew by 6.4% YoY in FY25, reflecting steady investment trends.
- Agriculture: Grew by 3.8% in FY25, driven by record Kharif production, favourable monsoons and improved rural demand.
- Industry: Grew by 6.2% in FY25, with strong construction and utilities growth offsetting manufacturing slowdowns.
- Services: Expanded by 7.2% in FY25, led by financial services, IT and public administration.
- Trade Deficit: India’s merchandise imports grew by 5.2% YoY over April–December 2024, outpacing exports, leading to a widened trade deficit.
- Services Trade: The services trade surplus remained strong, stabilising the external sector.
- Remittances: India continued to be the world’s largest recipient of remittances, supported by strong job markets in OECD economies.
- Current Account Deficit (CAD): CAD remained manageable at 1.2% of GDP in Q2 FY25 due to robust remittance inflows and a services trade surplus.
- Retail Inflation: Averaged 4.9% over April–December 2024, down from 5.4% in FY24, but remained near the upper limit of the RBI’s tolerance band.
- Food Inflation: Increased to 8.4%, primarily driven by vegetables and pulses, due to supply disruptions and erratic weather patterns.
- Core Inflation: Declined, reflecting easing cost pressures in goods and services.
- Government Expenditure: Strong capital expenditure growth, especially in infrastructure, defence and transport sectors.
- Tax Revenue: Gross Tax Revenue (GTR) grew by 10.7% YoY during April–November 2024, supported by GST collections.
- Job Growth: Employment in services and manufacturing sectors improved, while rural employment benefited from a strong agricultural season.
- Growth Prospects: India’s growth outlook remains stable, supported by strong domestic consumption and investment trends.
- Private Investment: Expected to increase as capacity utilisation improves and corporate order books expand.
- Infrastructure Development: Continued focus on transport, energy and urban development to drive economic expansion.
- Macroeconomic Stability: Policy focuses on inflation control, fiscal discipline and structural reforms to sustain medium-term growth.

Monetary and Financial Sector Developments: The Cart and the Horse

Repo Rate: The Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.5% during April–December 2024. The stance shifted from ‘withdrawal of accommodation’ to ‘neutral’ in October 2024.
CRR Cut: In December 2024, the CRR was cut from 4.5% to 4%, injecting approximately Rs. 1,16,000 crore (US$ 13.39 billion) into the banking system.
Money Supply Growth:
- M0 (monetary base) grew by 3.6% YoY as of January 3, 2025 (down from 6.3% in the previous year).
- M3 (broad money) grew by 9.3% YoY as of December 27, 2024 (down from 11% in the previous year).
- Money Multiplier (MM) increased to 5.7 in December 2024 (up from 5.5 in the previous year), indicating higher liquidity.
Credit Growth: Bank credit grew at 7.7% YoY as of December 2024, moderating from 11.8% YoY in November 2023.
Sectoral Credit Growth (November 2024):
- Agriculture: 5.1% YoY.
- Industry: 4.4% YoY (up from 3.2% last year).
- MSMEs: 13% YoY.
- Large enterprises: 6.1% YoY.
- Services sector: 5.9% YoY.
- Personal loans: 8.8% YoY.
GNPA Ratio: Declined to 2.6% as of September 2024 (a 12-year low) from 3.9% in March 2023.
Net NPA Ratio: Declined to 0.6% in September 2024.
Capital-to-Risk Weighted Assets Ratio (CRAR): Increased to 16.7% in September 2024 (above regulatory norms).
RBI Financial Inclusion Index: Increased from 53.9 in March 2021 to 64.2 in March 2024.
Rise in Consumer Credit: Grew from 18.3% of total bank credit in FY14 to 32.4% in FY24.
Non-Bank Financing: Banks’ share in total credit fell from 77% in FY11 to 58% in FY22, with a rise in NBFC and bond market financing.
The number of IPOs rose sixfold between FY13 and FY24. India ranked first globally in IPO listings in FY24. IPO numbers increased by 32.1% YoY from 196 (2023) to 259 (2024). Funds raised via IPOs nearly tripled from Rs. 53,023 crore (US$ 6.12 billion) to Rs. 1,53,987 crore (US$ 17.78 billion).
Total bond issuance stood at Rs. 7,30,000 crore (US$ 84.27 billion) (April–December 2024). India’s corporate bond market is 18% of GDP, compared to 80% in Korea and 36% in China. Overall, 97% of corporate bonds issued were in the top three credit ratings (AAA, AA+, AA).
Development Financial Institutions (DFIs):
- Infrastructure Finance (IIFCL): Rs. 13,90,000 crore (US$ 160.45 billion) co-financed projects as of September 2024. 31,000 km highways (22% of India’s NH capacity), 95 GW energy capacity (23%), 22 GW renewable energy (11%) and 880 million tonnes of port capacity (35%).
- National Bank for Financing and Infrastructure Development (NaBFID): Sanctioned Rs. 1,30,000 crore (US$ 15.01 billion) loans as of September 2024. Targeting Rs. 3,00,000 crore (US$ 34.63 billion) in loans by FY26.
- Cyberattacks Reported to CERT-In: 11.6 lakh incidents in 2020, 14 lakh incidents in 2021 and 13.9 lakh incidents in 2022.
Financial Sector Outlook (2024–2028):
- Stock Market Strength: Driven by strong macro fundamentals, corporate earnings and institutional investments.
- Insurance Sector Growth: India projected to be the fastest-growing insurance market among G20 nations.
- Pension Market Expansion: Expected to grow as India transitions from a lower-middle-income to an upper-middle-income economy.

Prices and Inflation: Understanding the Dynamics

The Reserve Bank of India's commitment to price stability, coupled with the Central Government's policy actions, has enabled India to reduce retail inflation to 4.9% in FY25 (up to December), compared to 5.4% in FY24.
Core services inflation has declined by 0.9% between FY24 and FY25 (up to December).
India's CPI inflation is anticipated to ease to 4.7–4.8% for FY25, driven by declining food inflation and stable global commodity prices.
Assuming a normal monsoon and no further external or policy shocks, the RBI projects headline inflation to be 4.2% in FY26. Commodity prices are expected to decrease by 5.1% in 2025 and 1.7% in 2026.

External Sector: Getting FDI Right

Total exports (merchandise and services) registered a steady growth of Rs. 52,20,324 crore (US$ 602.6 billion), up 6% in the first nine months of FY25, with services and goods exports (excluding petroleum and gems and jewellery) rising 10.4%, while total imports reached Rs. 59,09,899 crore (US$ 682.2 billion), up 6.9% due to steady domestic demand.
India’s foreign exchange reserves stood at Rs. 55,46,919 crore (US$ 640.3 billion) as of the end of December 2024, sufficient to cover approximately 90% of the country’s external debt of Rs. 6,166,323 crore (US$ 711.8 billion) as of September 2024, reflecting a strong buffer against external vulnerabilities.
The share of CBAM exports in total Indian exports to the EU increased substantially from 6.3% in 2014 to 10.5% in 2023.
India's textile and apparel industry, which is the sixth-largest exporter globally, contributes 2.3% to GDP, 13% to industrial production, 12% to exports and employs over 45 million people, with exports reaching Rs. 2,94,542 crore (US$ 34 billion) in 2023.
A higher increase in overall imports than exports raised the trade deficit from US$ 69.7 billion over April–December 2023 to Rs. 688,709 crore (US$ 79.5 billion) in the same period of 2024–25.
India's services sector exports grew by 11.6% in the first nine months of FY25, with net services receipts increasing from Rs. 10,40,426 crore (US$ 120.1 billion) in the same period of FY24 to Rs. 11,37,452 crore (US$ 131.3 billion) in FY25.
India’s e-commerce industry is expanding rapidly, with the B2C e-commerce market expected to grow from Rs. 7,19,029 crore (US$ 83 billion) in 2022 to Rs. 12,99,450 crore (US$ 150 billion) by 2026. Exports in this sector are projected to increase from Rs. 34,652 - 43,315 crore (US$ 4–5 billion) in FY23 to Rs. 17,32,600 - 25,98,900 crore (US$ 200–300) billion by 2030.
India’s current account deficit (CAD) moderated slightly to 1.2% of GDP in Q2 of FY25, with private transfers (mainly remittances) growing from Rs. 2,43,430 crore (US$ 28.1 billion) in Q2 FY24 to Rs. 2,76,350 crore (US$ 31.9 billion) in Q2 FY25.
Foreign direct investment (FDI) inflows increased by 17.9% in the first eight months of FY25, reaching Rs. 4,81,663 crore (US$ 55.6 billion). Gross FDI inflows surpassed Rs. 86,63,000 crore (US$ 1 trillion) from April 2000 to September 2024.
ECBs' net inflows rose to Rs. 79,700 crore (US$ 9.2 billion) from April to October 2025, up from Rs. 24,256 crore (US$ 2.8 billion) in the same period last year.
NRI deposits' net inflows rose to Rs. 88,363 crore (US$ 10.2 billion) in H1 FY25, up from Rs. 46,780 crore (US$ 5.4 billion) in the same period last year.

Medium-term Outlook: Deregulation Drives Growth

The IMF projects India to become a Rs. 4,33,15,000 crore (US$ 5 trillion) economy by FY28, growing to Rs. 5,46,37,541 crore (US$ 6.307 trillion) by FY30 with a nominal annual growth rate of 10.2% from FY25 to FY30. In rupee terms, India's GDP is expected to grow at about 10.7% annually in the same period.
Global trade and investment landscapes are shifting, with an increase in trade-restrictive measures. The value of trade covered by new trade-restrictive measures rose to Rs. 76,90,145 crore (US$ 887.7 billion) between October 2023 and October 2024.
In rupee terms, India's nominal GDP grew at a compounded annual rate of 12.4% in the three decades ending FY24. In the next five years, the IMF projects that India's nominal GDP will grow at around 10.7% annually. So, in effect, given the projected growth rate of only 10.2% in dollar terms, the Fund expects the rupee to weaken, on average, only by 0.5% per annum in the next five years, compared to the 3.3% annual depreciation experienced in the three decades up to FY24.
The Fund also projects that India's current account deficit will rise gently and gradually to 2.2% of GDP by FY30.
The Ministry of Statistics and Programme Implementation reckons in the first advance estimate the economy will grow at 6.4% in constant prices.
India's shift towards renewable energy is critical, with an increasing share of solar and wind in its energy mix by 2030. China dominates the manufacturing of solar PV components and critical minerals essential for batteries in electric vehicles.
India’s economic strategy includes significant deregulation to boost growth, focusing on reducing compliance burdens and enhancing economic freedoms.
Systematic deregulation and reforms are essential for empowering small businesses and boosting job creation, particularly in the manufacturing sector.
With India sourcing a large portion of lithium-ion batteries and solar panel components from China, there is a strong focus on enhancing domestic manufacturing capabilities through initiatives like the PLI scheme.
The advancement in digital and green technologies is crucial for India’s growth, requiring substantial investment in innovation and infrastructure.
India needs to create 78.5 lakh new non-farm jobs annually until 2030 to sustain economic growth and development.
Ongoing efforts to simplify the regulatory framework are pivotal, with specific focus on MSMEs to reduce the compliance burden and facilitate easier business operations and growth.

Investment and Infrastructure: Keeping it Going

Infrastructure development is a key focus for the government to sustain long-term growth.
Capital expenditure increased significantly over the last five years, growing at 38.8% from FY20 to FY24.
The post-election period in FY25 saw a major boost in infrastructure spending, recovering from the slowdown due to elections.
National Infrastructure Pipeline (NIP) aims for Rs. 1,11,00,000 crore (US$ 1,281.31 billion) investment from FY20 to FY25.
National Monetisation Pipeline (NMP) targets Rs. 1,91,000 crore (US$ 22.05 billion) for FY25, focusing on monetising core infrastructure assets.
Vande Bharat trains expanded—17 new pairs introduced and 228 new coaches produced in FY25.
Mumbai-Ahmedabad High-Speed Rail Project has reached 47.17% completion with an investment of Rs. 67,486 crore (US$ 7.79 billion).
Dedicated Freight Corridors (DFCs): 96.4% of the planned 2,843 km network is complete, transforming logistics efficiency.
Station Modernisation: Over 1,337 stations being redeveloped under Amrit Bharat Station Scheme.
PPP in Railways: 17 projects completed worth Rs. 16,434 crore (US$ 1.90 billion) ; eight ongoing worth Rs.16,614 crore (US$ 1.92 billion).
Bharatmala Pariyojana: 34,800 km of highways planned, 76% awarded, 55% constructed.
Multi-Modal Logistics Parks (MMLPs): Six awarded so far; focus on improving logistics efficiency.
Rs. 91,000 crore (US$ 10.50 billion) capital investment in aviation from FY20 to FY25; 91% of this achieved by November 2024.
UDAN Scheme (Regional Connectivity): 619 routes operationalised, boosting domestic air travel.
Sagarmala Program: 98 projects completed, boosting coastal trade and port-led industrialisation.
PPP in Ports: 98 projects worth Rs. 69,800 crore (US$ 8.06 billion) approved; 56 projects operational.
Installed power capacity reached 456.7 GW, with renewable energy at 47% of total capacity.
Solar energy dominates—97.8 GW of installed capacity as of December 2024.
Power Sector Reforms: Rs. 3,00,000 crore (US$ 34.63 billion) allocated for Revamped Distribution Sector Scheme (FY22–FY26).
Growing telecom penetration: 5G rollout completed in 779 districts, with 4.6 lakh 5G towers installed. 2.14 lakh gram panchayats connected via broadband under BharatNet Project.
Jal Jeevan Mission: 79.1% of rural households now have tap water connections (up from 17% in 2019).
Swachh Bharat Mission: 3.64 lakh villages now ODF Plus (Open Defecation Free with waste management).
PMAY-U (Urban Housing): 1.18 crore houses sanctioned; 89 lakh completed.
Metro Expansion: 1,010 km operational in 23 cities; 980 km under construction.
Smart Cities Mission: 7,479 projects completed, covering urban mobility, e-governance and digital infrastructure.
Real Estate Regulatory Authority (RERA): 1.38 lakh projects registered; 95,987 agents licensed.
Tourism Development: Swadesh Darshan 2.0 and PRASHAD schemes launched to promote cultural tourism.
ISRO’s Gaganyaan & Chandrayaan-4 projects to enhance India’s space capabilities.
Bharti Antariksh Station (Space Station) announced, positioning India in global space leadership.
More private investment needed in highways, railways, power and telecom.
PPP models must evolve with better revenue-sharing and risk management frameworks.
Sustainability is key—climate-friendly infrastructure projects will be prioritised.
Multi-modal transport & logistics hubs will improve efficiency and reduce costs.

Industry: All About Business Reforms

The industrial sector faced a downturn in FY21 due to the pandemic; however, it has since demonstrated a robust recovery, achieving a 6.2% growth rate in FY25.
During FY25 (April-November), the nation witnessed a 3.3% increase in crude steel production. In comparison, finished steel production saw a more pronounced growth of 4.6% over the same timeframe.
Infrastructure development is propelling a robust expansion in India's steel demand. In FY24, the construction and infrastructure sectors were the major consumers of steel, accounting for an estimated 68% of total consumption, while the engineering and packaging industries and the automotive sector contributed 22% and 9%, respectively.
The chemicals and chemical products sector contributed 9.5% to the manufacturing sector's Gross Value Added (GVA) in FY23 (at 2011-12 prices).
The domestic production of electronic goods in India increased from Rs. 1,90,000 crore (US$ 21.93 billion) in FY15 to Rs. 9,52,000crore (US$ 109.89 billion) in FY24, growing at a CAGR of 17.5%.
The total annual turnover of pharmaceuticals in FY24 was Rs. 4,17,000 crore (US$ 48.14 billion), growing at an average rate of 10.1% in the last five years.
Underscoring its substantial role in the nation's economic growth and employment landscape, India's medium and small enterprise (MSME) sector had employed 232.4 million individuals as of November 26, 2024.

Services: New Challenges for the Old War Horse

The Global Services PMI Business Activity Index, which rose to a four-month high of 53.8 in December 2024, indicates expansion for the 23rd consecutive month. This expansion is supported by new orders and employment growth, with business sentiment also improving. However, global supply chains are still experiencing disruptions due to geopolitical uncertainties, including rising protectionism and climate-related challenges.
India's share in global services exports has been steadily increasing over the past two decades, helping to mitigate fluctuations in merchandise export shares. As of 2023, the United States leads in global services exports, followed by the United Kingdom, Germany, and Ireland, with India ranking seventh, holding a 4.3% share in global services exports.
In India, the services sector remains the most significant contributor to gross value added (GVA), increasing its contribution from 50.6% in FY14 to about 55% in FY25. The sector also employs around 30% of the workforce and contributes indirectly to GDP through the "servicification" of manufacturing.
The services sector in India demonstrated resilience during the COVID-19 pandemic, with a notable recovery post-pandemic. The average growth rate of services post-pandemic (FY23 to FY25) was 8.3%, compared to 8% before the pandemic.
Export Growth: 11% trend rate from FY14 to FY23 at constant prices. Services export growth accelerated to 12.8% from April-November FY25. Bank credit to services stood at 48.5 lakh crore as of November 2024.
FDI in the services sector was Rs. 49,379 crore (US$ 5.7 billion) in FY25 (April-September).
Indian Railways reported an 8% growth in passenger traffic and a 5.2% increase in freight in FY24.
E-ticketing in IR touched 86% in reserved sectors by October 2024.
Road transport contributes 78% to the transport services GVA, with initiatives moving towards digitized tolling and improving highway amenities.
Expected housing demand to reach 93 million units by 2036.
Employment in Tourism: Regained pre-pandemic levels with 7.6 crore jobs in FY23.
IT/ITeS industry revenues were estimated at Rs. 22,00,402 (US$ 254 billion) in FY24, while Tech exports neared Rs. 17,32,600 crore (US$ 200 billion), reflecting growth amidst global economic pressures.

Agriculture and Food Management: Sector of the future

The agriculture sector in India has demonstrated a robust average growth rate of 5.0% per year over the last five years from 2020, indicating a positive trend in agricultural productivity and output.
The agriculture and allied activities sector contribute approximately 16% of the country’s GDP for FY24 at current prices and supports about 46.1% of the population.
During FY24, India’s floriculture exports reached 19,678 metric tonnes, generating earnings of Rs. 750.48 crore (US$ 86.63 million).
There were significant increases in Minimum Support Price (MSP), demonstrating the government's commitment to supporting farmers by ensuring they receive a fair return on their produce, promoting sustainable farming practices, and encouraging the cultivation of key crops.
The livestock sector's contribution to the Gross Value Added (GVA) of agriculture and related sectors surged from 24.3% in FY15 to 30.2% by FY23.
The fisheries sector has experienced impressive growth, with exports rising from Rs. 46,694 crore (US$ 5.39 billion) in FY20 to Rs. 60,554 crore (US$ 6.99 billion) in FY24, reflecting a growth of 29.7%.

As of March 2024, India has 7.75 lakh crore operational KCC accounts with a loan outstanding of Rs. 9,82,384 crore (US$ 113.4 billion).
As of October 31, 2024, over 110 million farmers have benefited from the PM-KISAN direct income support scheme, while 2.36 million have enrolled in the Pradhan Mantri Kisan Maandhan Yojna (PMKMY) pension scheme, significantly enhancing their financial and social security.

Climate And Environment: Adaptation Matters

Per capita carbon emissions are one-third of the global average.
Adaptation expenditure increased from 3.7% of GDP (FY16) to 5.6% of GDP (FY22).
Climate action financing is primarily domestic; international finance remains inadequate.
Developed nations fell 38% short of their Nationally Determined Contributions (NDCs).
COP29 (Baku, November 2024) proposed Rs. 25,98,900 (US$ 300 billion) per year by 2035, far below the estimated Rs. 4,41,81,300 - 5,89,08,400 (US$ 5.1 - 6.8 trillion) needed by 2030.
MISHTI program (2023-28): Targets 540 sq. km of mangrove restoration, creating 22.8 million man-days of employment and a carbon sink of 4.5 million tons CO₂.
Water Management Initiatives: Jal Shakti Abhiyan (2019): Water conservation and rainwater harvesting. Smart Laboratory on Clean Rivers (SLCR) to rejuvenate the Varuna River.
Installed electricity generation capacity (as of Nov 2024): Coal (46.2%), Solar (20.6%), Wind (10.5%), Hydro (10.3%), Nuclear (1.8%).
Energy generation from non-fossil fuels (FY23 provisional data): 22.8% of total electricity (Hydro: 8.81%, Nuclear: 2.49%, Renewables: 11.52%).
India’s coal reserves are 10% of global coal reserves but only 0.7% of natural gas reserves.
Green Hydrogen Mission: Targets five million metric tons per year by 2030, 125 GW renewable energy capacity, and 50 million metric tons CO₂ reduction.
PM - Surya Ghar: Muft Bijli Yojana: Targets 30 GW residential rooftop solar capacity by 2027.
Offshore Wind Energy Viability Gap Funding: Rs. 7,453 crore (US$ 860.33 million) for one GW projects in Gujarat and Tamil Nadu.
Green Energy Corridor Projects: GEC-I: 9,136 circuit km transmission lines and 21,413 MVA substations. GEC-II: Expanding across seven states.
Solar Parks and Ultra-mega Solar Power Projects: 40,000 MW target; 12,200 MW commissioned.
BRSR Core Reporting: Mandatory for top 500 companies from FY26, top 1000 by FY27.
Green debt securities: Rs. 6,128 crore (US$ 707.38 million) issued as of March 2024.
Sovereign Green Bonds: Rs. 16,000 crore (US$ 1.85 billion) issued in FY23. Rs. 20,000 crore (US$ 2.31 billion) in FY24. FY25 target: Rs. 21,697 crore (US$ 2.50 billion) (including Rs. 11,697 crore (US$ 1.35 billion) already raised).
RBI’s Green Deposits Framework (2023): Encourages lending to renewable energy.
Global impact of lifestyle changes: A 13% change in global lifestyle can reduce emissions by 20%. Reducing food waste can avoid 90 kg per person annually. Carpooling could eliminate 780,000 daily rides, saving 380 million liters of fuel.
Waste management challenges: Solar panel waste in California landfills highlights poor planning. AI and data centers are expected to consume 1,000 TWh by 2026 (~6% of US power).

Social Sector: Extending Reach and Driving Empowerment

India’s growth strategy emphasizes inclusivity and welfare through education, healthcare, skill development, and social infrastructure.
General Government Social Services Expenditure (SSE) Growth:
- FY21: Rs. 14,80,000 crore (US$ 170.84 billion)
- FY25 (BE): Rs. 25,70,000 crore (US$ 296.66 billion)
- CAGR (FY21-FY25): 15%
Education Expenditure CAGR: 12% (Rs. 5,80,000 crore (US$ 66.95 billion) in FY21 → Rs. 9,20,000 crore (US$ 106.20 billion) in FY25).
Health Expenditure CAGR: 18% (Rs. 3,20,000 crore (US$ 36.94 billion) in FY21 → Rs. 6,10,000 crore (US$ 70.41 billion) in FY25).
Average Monthly Per Capita Expenditure (MPCE) 2023-24: Rural: Rs. 4,122 (US$ 47.58) → Rs. 4,247 (US$ 49.03) (including free items). Urban: Rs. 6,996 (US$ 80.76) → Rs. 7,078 (US$ 81.71) (including free items).
Urban-Rural MPCE gap reduced: 2011-12: 84%. 2023-24: 70% (showing a narrowing disparity).
Inequality (Gini Coefficient): Rural: 0.237 (2023-24) (down from 0.266 in 2022-23). Urban: 0.284 (2023-24) (down from 0.314 in 2022-23).
Growth in MPCE (Bottom 5% of the population, 2022-24): Rural: +22%. Urban: +19%.
Ration card holders: 84% of the population.
Active PDS/PMGKAY beneficiaries: 74% of the population.
Food subsidy impact: Equivalent to 4% of household MPCE (post-subsidy). Higher impact on lower-income groups (7% for rural bottom 20%).
Survey in Bihar, Jharkhand, MP, UP (2024): 59% of women said DBTs improved their quality of life. 19% gained more time for economic activities. 77% of households received cash transfers.
SHG Loan Usage:
- 34% - Household consumption.
- 22% - Health expenses.
- 19% - Business startup.
- 19% - Agriculture.
School Education
- India’s school education system (2023-24): Students: 24.8 crore. Schools: 14.72 lakh. Teachers: 98 lakh.
- School Types: Government Schools: 69% of total, 50% of students. Private Schools: 22.5% of the total, 32.6% of students.
- Gross Enrolment Ratio (GER) Targets for 2030: Primary: 93% achieved. Secondary: 77.4%. Higher Secondary: 56.2%.
- Dropout Rates (2023-24): Primary: 1.9%. Upper Primary: 5.2%. Secondary: 14.1%.
- Retention Rates: Primary: 85.4%. Elementary: 78%. Secondary: 63.8%. Higher Secondary: 45.6%.
- India’s Higher Education System (2021-22): Students: 4.33 crore (26.5% increase from 2014-15). Gross Enrolment Ratio (GER, ages 18-23): 28.4% (target 50% by 2035).
- Institutional Growth (2014-2024): IITs: 16 → 23. IIMs: 13 → 20. Medical Colleges: 387 → 780. Universities: 723 → 1,213. Higher Education Institutions (HEIs): 51,534 → 58,643.
- MBBS Applicants: 16 lakh (2019) → 24 lakh (2024).
- Medical Colleges: 499 (FY19) → 780 (FY25).
- MBBS Seats: 70,012 (FY19) → 1,18,137 (FY25).
- Postgraduate Seats: 39,583 (FY19) → 73,157 (FY25).
- Doctor Availability Ratio (2024): 1:1263, projected to meet the WHO norm of 1:1000 by 2030.
- Medical Education Costs: Private medical college fees range from Rs. 60 lakh (US$ 69,263.64) to Rs. 1 crore (US$ 1,15,439.40).
- Private College Seats: 48% of MBBS seats are in private colleges. Foreign Medical Education: Thousands of Indian students go abroad (China, Russia, Ukraine) due to high domestic fees.
- Rural vs. Urban Internet Search Capability: Rural Men: 63% vs. Urban Men: 74%. Rural Women: 55% vs. Urban Women: 69%.
- Key Digital Education Initiatives: DIKSHA, SWAYAM, PMGDISHA, PM e-Vidya. TeacherApp launched for digital learning with 900 hours of resources.
- Enrolment (2023-24): Elementary Level: 16.8 lakh CwSN. Secondary Level: 2.87 lakh CwSN. Higher Secondary: 1.18 lakh CwSN.
- Infrastructure Improvements: Ramps in 11.35 lakh schools. Handrails in 7.7 lakh schools. Accessible toilets in 5.1 lakh schools.
- Disability Screening (PRASHAST app): 10 lakh users, 61.57 lakh screenings since 2022.

Employment and Skill Development: Existential Priorities

India's unemployment rate saw a notable decline of 3.2% in 2023-24, reflecting improvements in the labour market.
In urban areas, the unemployment rate dropped slightly from 6.6% in Q2 FY24 to 6.4% in Q2 FY25, marking a steady recovery.
Of the 36 states and Union Territories, 14 states have seen a significant increase of over 10% points in their WPR, and 11 states have achieved a similar rise in their LFPR compared to 2017-18.
The female labour force participation rate increased from 23.3% in 2017-18 to 41.7% in 2023-24, especially in rural areas, indicating enhanced engagement of women in the workforce.
By 2029-30, the number of gig workers is projected to reach 23.5 million, constituting 6.7% of the non-agricultural workforce, compared to 2.6% in 2020-21.
The Government of India has allocated a substantial budget for initiatives such as the India AI Mission to foster technological advancements and innovation.
Clean energy initiatives, including the Global Energy Alliance for People and Planet (GEAPP) in India, are expected to support 100,000 women-led enterprises by 2027 and 500,000 by 2030.
Net payroll additions under organizations like the Employees’ Provident Fund Organisation demonstrated significant growth, reaching 9.56 million in FY24 (April–November), highlighting an increase in formal employment.
Wage growth in rural areas has outpaced that in urban areas, reflecting broader economic shifts.
There has been a substantial increase in the engagement of apprentices under national schemes, indicating a focus on practical training and skill development. Participation of women under the National Apprenticeship Promotion Scheme (NAPS) has risen from 7.7% in 2016-17 to 22.8% in 2024-25 (up to October 31, 2024).

Labour in the AI Era: Crisis or Catalyst?

AI development has accelerated rapidly in the last four years, raising concerns about its impact on labour markets.
OpenAI expects ‘AI workers’ to be office-ready by the end of 2025.
AI is beginning to outperform humans in decision-making in healthcare, criminal justice, education, and finance.
Goldman Sachs estimates that 300 million full-time jobs are exposed to AI-driven automation.
AI R&D is controlled by a few large firms, creating a winner-takes-all risk for developed countries.
75 million global jobs are at risk of automation due to AI (ILO estimate); 7% of UK jobs are at high risk of automation, rising to 18% in a decade
57% of occupations in emerging economies will be impacted by AI; India’s white-collar workforce survey (IIM Ahmedabad, 2024) shows 68% expect their jobs to be partially or fully automated within five years
40% believe AI will make their skills redundant; India needs to create 7.85 million (78.5 lakh) non-farm jobs annually until 2030.
Strong Institutions Needed to Minimise AI-Induced Disruption - Types of institutions include enabling institutions to equip workers with new skills, ensuring institutions provide safety nets and reduce economic inequality, and stewarding institutions to regulate AI, balancing innovation with social welfare.
AI has demonstrated impressive breakthroughs but is still in an experimental stage.
Generative AI models lack reliability, and human oversight is required in real-world applications.
Cooling AI data centers requires over one billion liters of water daily, straining water resources.
India’s AI market is expected to grow at a CAGR of 25-35% by 2027 (NASSCOM).
Sectors with high demand elasticity in India: Financial services (1.86), Health & social work (1.3), Retail & wholesale trade (1.2), Business services (1.08).
Technology-driven job displacement is mitigated when demand elasticity is high as new tasks emerge.
Collaboration between the public and private sectors is essential to steer AI adoption towards equitable economic transformation.