A Pivotal Moment for India’s Growth
The Economic Survey 2024-25 provides an in-depth analysis of India’s economic trajectory, highlighting its strengths, challenges, and opportunities. As India aspires to become a global economic powerhouse, the survey underscores the need for strategic investment attraction, supply chain diversification, and a robust employment ecosystem. One of the key takeaways from the survey is India’s dependence on China for critical imports, which poses significant risks. To mitigate these risks and sustain long-term growth, India must go all out in attracting both domestic and foreign investments.
Addressing the China Risk: The Need for Investment and Diversification
India’s reliance on China for several critical goods, particularly in infrastructure and solar equipment, presents a “single-source concentration risk.” This over-dependence can lead to potential supply chain disruptions, price fluctuations, and currency risks. The Economic Survey stresses that India must boost domestic production capabilities to reduce this vulnerability and ensure a stable and self-reliant economy. Encouraging investments across various sectors will help India build resilient supply chains, fostering economic security and technological advancement.
Projected Growth: A Promising Outlook for India’s GDP
According to the first advance estimates (FAE) released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s real Gross Value Added (GVA) growth for FY25 is expected to be 6.4%. The survey projects that India’s economy will expand between 6.3% and 6.8% in FY26, citing strong domestic fundamentals, a resilient external account, calibrated fiscal consolidation, and stable private consumption. These projections reflect India’s steady economic recovery and long-term growth potential.
Strengthening the Banking Sector: A Positive Shift
India’s banking sector has shown remarkable improvement, with gross non-performing assets (NPAs) declining to a 12-year low of 2.6% of gross loans and advances. This signifies stronger financial stability and better credit discipline, enabling banks to support growth-oriented sectors effectively. A healthy banking system will further encourage lending, entrepreneurship, and industrial expansion, propelling India’s economy forward.
The Construction Boom: A Pillar of Economic Growth
One of the standout sectors in India’s economic resurgence is construction, which has experienced a 15% surge above pre-pandemic levels. This sector’s rapid expansion signifies robust infrastructure development, increased employment opportunities, and enhanced urbanization, contributing significantly to India’s overall economic strength.
Ensuring Workplace Safety and Ethical Business Practices
The Economic Survey emphasizes the importance of workplace safety and ethical business practices. It advises Indian corporations to prioritize employee well-being, stating that ensuring a safe and fair workplace is not only an ethical responsibility but also a strategic move for long-term productivity and employee morale. As India continues its industrial growth, fostering fair and transparent business practices will be crucial to sustaining economic success.
Employment Recovery: A Transformational Shift in India’s Workforce
The Periodic Labour Force Survey (PLFS) for 2023-24 highlights key employment trends, reflecting India’s post-pandemic recovery and evolving job market. Some notable trends include:
- Declining Unemployment Rates – India’s unemployment rate has steadily dropped from 6% in 2017-18 to 3.2% in 2023-24, showcasing a resilient labor market.
- Rising Labor Force Participation – Increased workforce involvement across both urban and rural areas indicates improved job availability and economic engagement.
- Growth in Worker-to-Population Ratio – Employment opportunities have surged in 14 states, reflecting a positive trend in job creation.
- Urban Employment Stability – The unemployment rate in urban areas has improved from 6.6% in Q2 FY24 to 6.4% in Q2 FY25.
- Surge in Self-Employment – The share of self-employed individuals has grown from 52.2% in 2017-18 to 58.4% in 2023-24, highlighting a shift toward entrepreneurship.
- Decline in Casual Employment – The proportion of casual workers has decreased, signaling a transition to more structured job opportunities.
- Women’s Employment Trends – Although women’s participation in salaried jobs has declined, their role in self-employment and household enterprises has increased, particularly in rural areas.
- Family-Oriented Economic Activities – More women are engaging in family-run businesses, underscoring a shift in traditional employment patterns.
- Post-Pandemic Employment Adjustments – The pandemic has reshaped job trends, leading to more flexible work arrangements, especially for women balancing caregiving responsibilities.
- Government Initiatives Fuelling Entrepreneurship – Programs like Mudra Yojana, Skill India, and Start-Up India have played a crucial role in fostering self-reliance and sustainable employment.
A Bright Future: India’s Path to Global Economic Leadership
The Economic Survey 2024-25 presents a roadmap for India’s future, outlining both challenges and opportunities. While India faces risks associated with external dependencies, the survey underscores the importance of proactive investment policies, workforce transformation, and financial stability to drive long-term growth.
With a projected GDP growth rate between 6.3% and 6.8%, a thriving banking sector, booming construction, and a resilient labor market, India is on a path to becoming a formidable global economic force. By strengthening domestic production capabilities, ensuring sustainable employment, and fostering ethical business practices, India is well-positioned to achieve its vision of becoming a developed and self-reliant economy.
The journey ahead is promising, and with strategic planning and bold economic policies, India is set to shape the global economic landscape in the years to come.
(With inputs from agencies)
