Economic Survey 2024-25 Highlights: Stresses focus on impact of AI on labour force, mental health, workplace culture in private sector

The Congress slammed the BJP-led Centre on Friday (January 31, 2025) after the latest Economic Survey was tabled in Parliament, saying it calls for Ease of Doing Business 2.0 but is silent on a whole new GST 2.0 and an end to the “tax terrorism” unleashed over the last 10 years.

Congress general secretary in-charge communications Jairam Ramesh said the Economic Survey has little to say about an Ease of Living 1.0 to ensure that the public-health crisis caused by growing pollution and chemical contamination begins to be dealt with seriously.

The government must focus on a multi-pronged approach with stricter FSSAI labelling norms, higher GST, and awareness campaigns to curb consumption of ultra processed foods (UPFs), according to the pre-Budget document tabled in Parliament on Friday (January 31, 2025).

“A multi-pronged approach would be required to address the concerns emerging from the increased inclusion of UPFs in diets in India,” it said.

Focusing on climate adaptation as a key goal, the government in the 2024-25 Economic Survey, tabled in Parliament on Friday (January 31, 2025) said that India will need to continue “efforts to maximise the efficiency of its existing fossil fuel resources in the medium term”. The Survey pointed to developed countries prematurely shutting down thermal power plants without viable alternatives, and said that widespread adoption of renewable energy remains challenging.

The Economic Survey recognises air pollution as a major concern for north India, especially for people in the Delhi NCR region where unhealthy air has almost become a staple in the winter months. 

Chief Economic Advisor (CEA) V. Anantha Nageswaran in the Economic Survey tabled on Friday (January 31, 2025) observed that the Union Government’s indicators for determining fiscal discipline have improved “progressively”. Additionally, the CEA also noted that the overall tax revenue position of State governments appeared better as of November last year. This was on account of increased tax devolution by the central government. 

The Economic Survey 2025 has flagged achieving foundational numeracy literacy, early education, emotional learning, as well as the high cost of medical education in a section on education.

Noting that the expenditure on education has grown at a CAGR of 12% from ₹ 5.8 lakh crore in FY21 to ₹9.2 lakh crore in FY25 (BE), it said achieving the National Education Policy 2020 goal of 100% Gross Enrollment Ratio at primary was achievable

With a large part of the household savings heading to the stock market and increasingly retail investors taking charge at Dalal Street, excessive financialisation can hurt the economy and the costs may be particularly high for a low-middle-income country like India, the Economic Survey 2024-25 has cautioned. 

“One critical risk to guard against is the dominance of financial markets in shaping policy and macroeconomic outcomes, a phenomenon known as ‘financialisation.’” the Survey has flagged.

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), India’s health assurance scheme, providing financial protection for secondary and tertiary healthcare, has contributed to significant reductions in out-of-pocket expenditure through an increase in social security and primary health expenditure, with over ₹1.25 lakh crore in savings recorded, said the Economic Survey 2024-25, tabled in Parliament on Friday, January 31, 2025, by Union Minister of Finance Nirmala Sitharaman.

Stating that the AB-PMJAY initiative aligns with India’s commitment to the Sustainable Development Goals (SDGs), ensuring no one is left behind, the Survey notes that as of January 1 2025, over 36.36 crore Ayushman cards have been issued. 

Over 90% of the targeted capital expenditure on airports by private operators as well as state-owned Airports Authority of India between financial year 2020 and 2025 has been achieved, says the Economic Survey.

“Airport operators and developers, including the Airports Authority of India, are pursuing a capital expenditure plan exceeding ₹91,000 crore from FY20 to FY25. About 91% of this has been achieved by November 2024,” as per the report tabled in Parliament on Friday (January 31, 2025).

Gold prices are expected to decline in 2025 while silver prices may increase, according to Economic Survey 2024-25 tabled in Parliament on Friday (January 31, 2025).

Citing the World Bank’s Commodity Markets Outlook for October 2024, the economic survey highlighted that commodity prices are projected to decrease 5.1% in 2025 and 1.7% in 2026.

India’s textiles sector faces several challenges despite possessing a complete value chain, said the Economic Survey 2024-25, pointing out that the sector has attracted limited FDI, hindering technological advancements and leading to reliance on imported textile machinery.

The dominance of MSMEs limits the textile sector’s scale and efficiency, while its fragmented nature increases logistical costs, it said.

The survey also flagged the reliance on cotton, unlike the global shift towards manmade fibre, which limits the domestic textile sector’s competitiveness in international markets, stressing the need to focus on manmade fibre along with cotton to improve its global competitiveness. - PTI

There are several effective mechanisms to promote low-carbon lifestyles and advance sustainable development with the Emissions Gap Report 2020 from the United Nations Environment Programme (UNEP) outlining key strategies for fostering meaningful lifestyle changes, the survey stated.

Read the full article here,

Economic survey 2025: Survey calls for tax breaks on EVs, subsidies on renewable energy for low-carbon lifestyles

Pre-budget survey 2024-25 highlights tax breaks on electric vehicles and renewable energy subsidies to promote low-carbon lifestyles.

Amid a debate over 70-90-hour work week, the pre-Budget Economic Survey 2024-25 cited studies to state that spending more than 60 hours a week on work could have adverse health effects.

Coordinated efforts from the government, private sector, academia, R&D institutions, and financial stakeholders are crucial for India to achieve its goal of becoming a manufacturing powerhouse amid an uncertain global environment, Economic Survey 2024-25 said on Friday.

The suggestion assumes significance because China is rising as a global manufacturing hub and its impact on the manufacturing aspirations of other nations, as well as the supply of minerals, materials, machinery, and equipment needed for energy transition, pose challenges. - PTI

Indian real estate market has performed well on strong demand from across the country driven by economic stability and creation of physical infrastructure like roads and metro networks, according to the Economic Survey. 

The document also highlights that the real estate law RERA and Goods and Services Tax (GST) have brought many benefits to the real estate sector.

The months-old Micro, Small and Medium Enterprises (MSME) Policy of Telangana which emphasises encouraging the enterprises to explore the e-commerce route for business growth and the State government’s women entrepreneurship focused initiative WE Hub, came for special mention in the Economic Survey 2024-25, writes N. Ravi Kumar

Hostile work cultures and excessive hours spent working at the desk can adversely affect mental well-being and ultimately put the brakes on the pace of economic growth, states the Survey while highlighting that lifestyle choices, workplace culture and family situations are critical for productivity. - Bindu Shajan Perappadan

Telangana continues to register impressive performance in the collection of its own tax revenues. Telangana State’s own tax revenue (SOTR) accounted to 88% of its total tax revenue, which is the highest among the States, according to the Economic Survey 2024-25. 

The State is closely followed by Karnataka and Haryana, each of which registered 86% of their total tax revenues through own taxes.

What more does the Survey say about Telangana? Read here. 

Private participation should accelerate in many critical infrastructure sectors in many ways — programme and project planning, financing, construction, maintenance, monetisation and impact assessment, notes the Survey

The Economic Survey 2024-25 underlines that extreme weather conditions — such as cyclones, heavy rains, floods, thunderstorms, hailstorms, and droughts — impact vegetable production and prices.

“To increase the production of pulses, oilseeds, tomato and onion, focused research is needed to develop climate-resilient crop varieties, enhancing yield and reducing crop damage,” the Survey has suggested. Read more

Praveen Chakravarty, Chairman - Professionals’ Congress & Data Analytics, recalls former Prime Minister Manmohan Singh’s article published in the Opnion pages of The Hindu in 2019 to highlight that the Economic Survey has echoed the same five years later. 

You can read Dr. Singh’s article here

According to the Survey, India’s colocation data centre capacity reached 977 MW in 2023. An additional capacity of 258 MW led to a 105% year-over-year growth. “The total capacity under construction for 2024-2028 is 1.03 GW, with an additional 1.29 GW planned,” the Survey said.

The document outlines three key policy shifts needed establishing market mechanisms for price risk hedging, preventing excessive fertiliser use, and discouraging production of water and power-intensive crops that are already in surplus.

Chief Economic Advisor said that lower mental health has correlation with overall productivity and workplace culture, working days, private sector attitude to ultra processed food, all these factors will determine whether India’s demographic dividend materialises or not apart from skilling and education. “We feel this is an important area where private sector can contribute,” he added. - The Hindu Bureau

Reading from chapter 11 of the Economic Survey, CEA Nageswaran talked about four particular variables affecting mental health. “Those who rarely use smartphone, those who are close to friends and relatives, and those who have social connect and physical activity and consume healthy food, they have very good mental score” said he. Ponting to an imperial finding he said people who are not close to relative, who consume junk food, don’t get enough free time their mental health score is low.- The Hindu Bureau

“Private sector needs to weigh the benefits of AI against social cost which may be subterranean in nature and can surface over a longer period. “ says Chief Economic Advisor. AI will augment labour and will deliver broad based social benefits. He said the chapter 13 on AI in the Economic Survey has been written keeping in mind the opportunities and threat technology poses for augmenting labour or displacing labour. - The Hindu Bureau

CEA Nageswaran said that deployment of AI poses both challenges and opportunities and he points out that the country needs supporting institutions to train the work force and change in academic curriculum. He said that workplace practices have to change. “Technological transitions was not painless during past three industrial revolutions in the western world. We need to learn from them”, said he. - The Hindu Bureau

As per Economic Survey, the Total Health Expenditure (THE) in FY22 is estimated to be ₹9,04,461 crore (3.8 per cent of GDP and ₹6,602 per capita at current prices).

The Survey says the AB-PMJAY has revolutionised healthcare by providing health coverage to bottom 40% of India’s most vulnerable populations. As of 15 January 2025, more than 40 lakh senior citizens have been enrolled in the scheme.

The report credits AB-PMJAY for reducing the Out-of-pocket expenditure, thus saving₹1.25 lakh crore. - The Hindu Bureau

Referring to the impact of China’s emergence as a manufacturing colossus on global firms’ competitiveness, the CEA said this is ‘no less’ a challenge for India too. 

“Several solar equipment manufacturers in the country significantly depend on Chinese supply chains and related services. The single-source concentration risk in several product areas exposes India to potential supply chain disruptions, price fluctuations and currency risks,” he added. 

- The Hindu Bureau

India remained amongst the top five major countries in terms of growth in services exports in FY25 (April-September). India’s services export growth accelerated to 12.8% in April-November FY25 from 5.7% in FY24. 

Computer services and business services exports account for around 70% of India’s services exports. In April-November FY25, services imports grew by 13.9%, in contrast to a decline of 2.9% during the same period in FY24. - The Hindu Bureau

India’s services sector has been the steadiest contributor to the Gross Value Added (GVA) in the economy. Its contribution to the total GVA at current prices has increased from 50.6% in FY14 to about 55% in FY25. The service sector also provides employment to approximately 30% of the workforce. - The Hindu Bureau

Acknowledging the importance of the Service Sector, it has been termed as ‘Old War Horse’ in the Economic Survey 2024-25. 

In FY25 so far, services propped up GDP growth when manufacturing has been affected by dampening global merchandise trade. The critical role of services exports in strengthening India’s external balance and the increasing ‘servicification’ of the industrial sector adds to its importance to the Indian Economy’, highlights the Survey. - The Hindu Bureau

Economic Survey report points out that the formal sector in India has seen significant growth, with net Employees’ Provident Fund Organisation (EPFO) subscriptions more than doubling from 61 lakh in FY19 to 131 lakh in FY24. 

In April -November 2024, net additions reached 95.6 lakh, driven largely by youth. Workers aged 18-25 years contributed to 47% of the net payroll additions. This indicates a growing trend towards formal employment. - The Hindu Bureau

On employment the Economic Survey has mentioned that India’s labour market growth in recent years has been supported by post-pandemic recovery and increased formalisation.

As per the 2023-24 annual Periodic Labour Force Survey (PLFS) report, the unemployment rate for individuals aged 15 years and above has steadily declined from 6% in 2017-18 to 3.2% in 2023-24. 

The labour force participation rate (LFPR) and the worker-to-population ratio (WPR) have also increased. 

In Q2 FY25, the urban unemployment rate for people aged 15 years and above improved slightly to 6.4% compared to 6.6% in Q2 FY24. Both LFPR and WPR also increased during this period. - The Hindu Bureau

Raising India’s growth average in the next two decades will require reaping the demographic dividend through a deregulation stimulus, Mr. Nageswaran said, pointing to the Spartans’ apparent belief “the more you sweat in peace, the less you bleed in war”. 

“This Economic Survey is all about that, or so we would like to believe,” he said in the preface, cautioning that ‘Business as usual’ carries a high risk of economic growth stagnation, if not economic stagnation for the country. - The Hindu Bureau

“Navigating global headwinds will require strategic and prudent policy management and reinforcing the domestic fundamentals,” the Survey asserted, with Chief Economic Adviser V. Anantha Nageswaran emphasising that globalisation is in retreat and the era of rapid world trade growth clouds the outlook for India’s export growth so domestic growth drivers will be more critical in coming years. 

“... Historically, India’s export growth has been a high beta play on global export growth. This means domestic growth levers will be relatively more important than external ones in the coming years,” he averred in his preface to the Survey. - The Hindu Bureau

India’s economy is expected to grow in the range of 6.3% and 6.8% in 2025-26, the Economic Survey for 2024-25, tabled in Parliament on Friday reckoned, arguing that the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. 

While there are upsides to domestic investment, output growth and disinflation in the coming year, these are peppered with equally strong, prominently extraneous, downsides, the Survey’s authors stated, referring to significant global political and economic uncertainties as a key risk. - The Hindu Bureau

Here are the 13 chapters:

1. State of the economy: Getting back into the fast lane
2. Monetary and financial sector developments: The cart and the horse
3. External sector: Getting FDI right
4. Prices and inflation : Understanding the dynamics
5. Medium term outlook : Deregulation drives growth
6. Investment and infrastructure : Keeping it going
7. Industry: All about business reforms
8. Services: New challenges for the old war horse
9. Agriculture and food management: Sector of the future
10. Climate and environment: Adaptation matters
11. Social sector: Extending reach and driving empowerment
12. Employment and skill development: Existential priorities
13. Labour in the AI era: Crisis or catalyst

The Economic Survey was tabled in the Lok Sabha by Union Finance Minister Nirmala Sitharaman. Shortly after, the House was adjourned until 11 a.m. on February 1.

The ​rupee traded in a narrow range and depreciated 3 paise​ to 86.65 against the U.S. dollar in early trade on Friday (January 31, 2025), ahead of the release of Economic Survey 2024-25. 

Finance Minister Nirmala Sitharaman will table Economic Survey 2024-25 on Friday (January 31, 2025), providing an official assessment of the performance of the economy in the ongoing financial year, and list out the challenges being faced by the nation. 

“The Economic Survey is likely to project a 6.3-6.8% GDP growth for the next fiscal year,“ sources said.

The Survey 2024-25, authored by Chief Economic Advisor V. Anantha Nageshwaran and his team, will be tabled in Parliament this afternoon. 

India’s GDP is projected to grow at a 4-year low pace of 6.4% in the current fiscal on weak manufacturing and investments, as per estimates of the National Statistics Office.

This is lower than the growth projected in last year’s Economic Survey of 6.5-7% and the Reserve Bank of India’s 6.6% estimate.

- PTI

​

It has been what one may call, a bittersweet year for the economy, with a sweet first half, when growth surprised everyone, including the government. And a difficult latter half by the end of which the Reserve Bank of India (RBI) and Finance Ministry mandarins are sparring, as diplomatically as possible, over who is to be blamed for sputtering growth, a persistently resurgent inflation trajectory and the flux this creates for policy making. 

Vikas Dhoot explains why inflation will matter more in 2025 here

Ahead of the presentation of the FY 2025-26 Budget, President Droupadi Murmu will commence the Budget session of the Parliament on Friday (January 31, 2025), with an address to a joint sitting of both Houses. 

Following this, Union Finance Minister Nirmala Sitharaman will table the Economic Survey 2024-25 in both Lok Sabha and Rajya Sabha, providing an official assessment of the performance of the economy in the ongoing financial year. 

Follow the live updates ​here​

At the start of 2024, there was a lot of excitement about the Indian economy - the country was one of the fastest growing economies in the world and there was anticipation that India will become a $4 trillion economy in 2024-25 and become the world’s third-largest economy by 2027. The consensus was that the Indian economy was expected to grow at an impressive 7%. 

​Read the whole story here​

In the U.N. World Economic Situation and Prospects 2025 report, released by the United Nations on Wednesday (January 8, 2025), the Indian economy is projected to expand by 6.6% in 2025, primarily supported by robust private consumption and investment.

Indian economy grew by 6.8% in 2024 and is forecast to expand by 6.6% in 2025. The Indian economy is projected to return to a 6.8% growth in 2026.

The report also said economic growth in South Asia is expected to remain robust this year mainly driven by the “strong performance” in India.

The Indian economy is going through a rough patch as was evident from the recently released provisional estimates of its Gross Domestic Product (GDP). The underlying growth rate is lower than what was expected and estimated by the government earlier.

What is surprising is that, as noted in the last Economic Survey, this slowdown is despite the rising capital expenditure in various budgets under this regime. To understand the current predicament of the government, it may help to take a longue duree of the Indian economy.