Economic Survey 2025 Preview: A look back at 7 key things from last year — 3.2% drop in unemployment, slow FDI inflow

Finance Minister Nirmala Sitharaman tabled the Economic Survey document for 2023-2024 in Parliament on Monday, July 22, 2024. The Economic Survey provides a snapshot of how the Indian economy has performed in previous years, the current condition, and the outlook for the upcoming financial year.

The Economic Survey 2023-2024 highlighted a decline in the unemployment rate and a resilient economy, among other findings. The survey said, “India’s real GDP grew by 8.2 per cent in FY24, posting growth of over 7 per cent for a third consecutive year, driven by stable consumption demand and steadily improving investment demand.”

Here's a brief look at the previous year's economic survey, which was released a day before the Budget.

1. Indian economy stands strong

The Indian economy grew over 7 per cent for the third time in a row, driven by stable consumption demand and steadily improving investment demand, stated the survey.

India's CAD (current account deficit) for the last financial year stood at 0.7 per cent of the GDP during FY24. This figure is significantly better as compared to the deficit of 2.0 per cent of GDP in FY23.

The Economic Survey further stated that by the end of March 2024, India’s forex reserves were sufficient to cover over 10 months of its projected imports for FY25 and 98 per cent of its external debt.

2. India's growth strategy

The Economic Survey 2023-2024 highlighted that job and skill creation should be a primary focus. Other key priorities included unlocking the full potential of the agriculture sector, addressing challenges faced by MSMEs, managing India’s green transition, strategically navigating the Chinese conundrum, expanding the corporate bond market, tackling inequality, and enhancing the health and well-being of India's young population.

3. FDI inflows slow down

Foreign direct investment (FDI) inflows slowed in the last financial year. As per the survey, net FDI inflows to India nosedived from $42 billion during FY23 to $26.5 billion in FY24. However, gross FDI inflows moderated only by 0.6 per cent from $71.4 billion in FY23 to just under $71 billion in FY24.

4. Decline in unemployment rate

The survey pointed out that Indian labour market indicators have improved in the last six years, with the unemployment rate declining to 3.2 per cent in 2022-23. Additionally, the net payroll additions under EPFO have more than doubled in the past five years, signalling healthy growth in formal employment.

According to the survey, the government has implemented measures to boost employment, foster self-employment, and promote worker welfare.

5. Core inflation goes down

According to the survey, core services inflation eased to a nine-year low in FY24, while the core goods inflation declined to a four-year low. The Central government's timely policies, and the Reserve Bank of India’s price stability measures helped maintain retail inflation at 5.4 per cent - the lowest level since the pandemic, driven by a fall in core inflation - both goods and services, stated the survey.

As per RBI's projections, inflation is expected to fall to 4.5 per cent in FY25 and 4.1 per cent in FY26, if there is a normal monsoon and no external policy shocks, added the survey.

6. Food inflation in the spotlight

Although retail inflation eased, food inflation was still a global concern over the past two years, mentioned the survey. Food inflation stood at 6.6 per cent in FY23 and increased to 7.5 per cent in FY24.

7. Agriculture and banking sector shines

Agriculture grew at 4.18 per cent annually over the past five years, industry grew at 9.5 per cent in FY24, and the services sector contributed 55 per cent to the economy in FY24, as per the survey.

The survey also added that India’s banking and financial sectors displayed a stellar performance with “double-digit and broad-based growth in bank credit” and “gross and net non-performing assets at multi-year lows”.

Economic Survey 2025

The Economic Survey 2025 will be released by Nirmala Sitharaman on Friday, January 31, ahead of the 2025 Budget. The Economic Survey is prepared by the economic division of the department of economic affairs under the guidance of the chief economic advisor (CEA). India's current CEA is V Anantha Nageswaran.

In a column in Mint, the CEA wrote that the “domestic context for the forthcoming Economic Survey” was more complex than at the time of the previous two surveys.