Summary of Economic Survey 2024-25

Terms of use

Terms of Use

The use of this site and the content contained therein is governed by the Terms of Use. When you use this site you acknowledge that you have read the Terms of Use and that you accept and will be bound by the terms hereof and such terms as may be modified from time to time.

All text, graphics, audio, design and other works on the site are the copyrighted works of nasscom unless otherwise indicated. All rights reserved.
Content on the site is for personal use only and may be downloaded provided the material is kept intact and there is no violation of the copyrights, trademarks, and other proprietary rights. Any alteration of the material or use of the material contained in the site for any other purpose is a violation of the copyright of nasscom and / or its affiliates or associates or of its third-party information providers. This material cannot be copied, reproduced, republished, uploaded, posted, transmitted or distributed in any way for non-personal use without obtaining the prior permission from nasscom.
The nasscom Members login is for the reference of only registered nasscom Member Companies.
nasscom reserves the right to modify the terms of use of any service without any liability. nasscom reserves the right to take all measures necessary to prevent access to any service or termination of service if the terms of use are not complied with or are contravened or there is any violation of copyright, trademark or other proprietary right.
From time to time nasscom may supplement these terms of use with additional terms pertaining to specific content (additional terms). Such additional terms are hereby incorporated by reference into these Terms of Use.

Disclaimer

The Company information provided on the nasscom web site is as per data collected by companies. nasscom is not liable on the authenticity of such data.
nasscom has exercised due diligence in checking the correctness and authenticity of the information contained in the site, but nasscom or any of its affiliates or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this site. The information from or through this site is provided "as is" and all warranties express or implied of any kind, regarding any matter pertaining to any service or channel, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement are disclaimed. nasscom and its affiliates and associates shall not be liable, at any time, for any failure of performance, error, omission, interruption, deletion, defect, delay in operation or transmission, computer virus, communications line failure, theft or destruction or unauthorised access to, alteration of, or use of information contained on the site. No representations, warranties or guarantees whatsoever are made as to the accuracy, adequacy, reliability, completeness, suitability or applicability of the information to a particular situation.
nasscom or its affiliates or associates or its employees do not provide any judgments or warranty in respect of the authenticity or correctness of the content of other services or sites to which links are provided. A link to another service or site is not an endorsement of any products or services on such site or the site.
The content provided is for information purposes alone and does not substitute for specific advice whether investment, legal, taxation or otherwise. nasscom disclaims all liability for damages caused by use of content on the site.
All responsibility and liability for any damages caused by downloading of any data is disclaimed.
nasscom reserves the right to modify, suspend / cancel, or discontinue any or all sections, or service at any time without notice.

For any grievances under the Information Technology Act 2000, please get in touch with Grievance Officer, Mr. Anirban Mandal at data-query@nasscom.in.

New

See all

No notification found.

Summary of Economic Survey 2024-25

Vertika Misra

@vertika@nasscom.in

January 31, 2025

Public Policy

The Economic Survey 2024-25 (Survey) was tabled in Parliament today by the finance minister Nirmala Sitharaman. The Survey presents a review of the developments in the economy over the last year. Despite global uncertainties, India demonstrated remarkable economic resilience and maintained steady growth momentum. The survey highlights the services sector’s pivotal role as the primary engine to drive global expansion, with notable resilience in India. We, at nasscom, are dedicated to fostering growth and innovation, driving reforms to simplify the business environment, ensuring tax certainty, and creating a high-growth ecosystem for the tech industry and start-ups in India. Many of these goals are in line with the priorities outlined in the Survey. The Survey's explicit recognition of business reforms as a cornerstone for both industrial and service sector development validates our long-standing position. This acknowledgment is particularly significant as it reinforces the need for continued policy evolution at both central and state levels to enhance ease of doing business, streamline regulatory compliance, and create an environment conducive to innovation and entrepreneurship.

Some of the key highlights from the survey are listed below:

Indian economy

In 2014, India was ranked as the tenth-largest economy in the world. In under a decade, India surpassed the UK to reach the fourth position. It is poised to be the third largest economy by 2030.
Despite global uncertainty, India's growth remains close to decadal average (at constant prices). The industrial sector is estimated to grow by 6.2% in FY25.
The real Gross Domestic Product (GDP) growth for FY25 is estimated to be between 6.3 and 6.8% in FY26.
Private Final Consumption Expenditure (PFCE) at constant prices is estimated to grow by 7.3%, driven by a rebound in rural demand.
PFCE as a share of GDP (at current prices) is estimated to increase from 60.3 in FY24%to 61.8% in FY25. This share is the highest since FY03.
Gross Fixed Capital Formation (GFCF) (at constant prices) is estimated to grow by 6.4%.
India's total exports (merchandise + services) have shown positive momentum in the first nine months of FY25, reaching USD 602.6 billion, witnessing a YoY growth of 6%.
A more significant increase in overall imports compared to exports led to a rise in the overall trade deficit from USD 69.7 billion during April-December 2023 to USD 79.5 billion in the corresponding period of FY25.

Information Technology (IT) – IT enabled Services (ITeS)

Indian IT/ ITeS industry has a leading position globally and is a significant contributor to the growth of exports.
Estimated revenues of USD 254 billion, marking a 3.8% YoY growth in FY24 (excluding e-commerce).
Tech exports reached nearly USD 200 billion, reflecting a growth of 3.3%, while the domestic market is expected to expand by 5.9%, crossing USD 54 billion in FY24.
Added 60,000 employees to reach a workforce of 5.43 million in FY24.

Global Capability Centres (GCCs)

Growth of GCCS: The number of GCCs has grown from ~1430 in FY19 to over 1700 in FY24. As of FY24, GCCs in India employ nearly 1.9 million professionals.
Over the past five years, India has remained at the forefront of the global GCC expansion strategy with more than 400 new GCCs and around 1100 new units established.
Over the last five years, the setup rate of engineering Research & Development (R&D) GCCs has grown 1.3 times faster than the overall GCC setup, highlighting a continued shift towards high-value-added work.
Global roles within GCCs are expanding rapidly and are expected to grow from currently 6,500 to over 30,000 by 2030, supported by robust training programs to develop leadership.
Adoption of Artificial Intelligence (AI) and Machine Learning (ML) and establishment of AI centres of excellence enhance the GCC landscape by tapping into India's strong middle-management talent.

Startups

As of October 2024, 73,151 startups with at least one-woman director have been recognised under the Startup India Initiative (representing nearly half of 1,52,139 start-ups supported by government).
Start-up India Seed Fund Scheme (SISFS) approved INR 227.12 Cr in funding for 1,278 women-led startups since inception in 2021.
Women entrepreneurs have received 90% guarantees under credit guarantee scheme. The survey also highlighted that 63% of the 2.41 Cr enterprises formalised since January 2023 are owned by women
Improved ranking of India in the Global Innovation Index from 81st position in 2015 to 39th in 2024 among 133 economies.

Innovation

India holds 4th position in Science and Technology Cluster Ranking 2024 by WIPO with 4 cities among the world’s top 100 science and technology clusters
The gross expenditure on R&D has increased from ~ ₹60,196 crore in FY11 to ~ ₹127,381 crore in FY2021. Total expenditure on R&D as a percentage of GDP stands at 0.64%, which is comparatively lower than R&D focused countries.
India has witnessed a two-fold increase in patent filings, and a seventeen-fold increase in patent grants since 2014-15. A major portion of patent applications are coming from computer and electronics, mechanical and biomedical, and communication fields.
Patent filings by domestic educational institutes have tripled from 7405 in 2021-22 to 23306 in FY24.

Taxation

Implementation of GST generated a host of positive externalities through enhancement in ease of doing business, digitalisation, fostering economic integration via creation of a single market, and added to the buoyancy of revenue generation and collection.
For 23 States, GST was the main source of revenue amongst Own Revenue Receipts (ORR) with the greatest reliance thereon by Manipur and Nagaland at 78% and 72% respectively.
Room for improving tax certainty and tax stability in matters such as Advance Pricing Agreement
Abolition of angel tax (on investments made by investors in startups) is expected to boost the global innovation and entrepreneurial competitiveness.
Expansion in scope of safe harbour rules and streamlining transfer pricing assessment procedures are expected to make transfer pricing regime more attractive and competitive, boost IT exports, and ease business for GCCs and IT services industry.
Other reforms include abolition of 2% equalisation levy, reduction in tax deduction at source on payment made by e-commerce operators to e-commerce participants, relief from GST on data centre exports, reduction of rate of tax collection at source to be collected by e-commerce operators etc.

Labour

Effective implementation of Labour Codes will introduce flexible regulations and could lead to growth for firms, creating more employment opportunities and protection of labour rights.
On the scope of deregulation, while the union government sets the primary law, states have the option to deregulate by amending subordinate regulations. States may identify certain areas of regulations as a starting point to identify reform opportunities, like Rules under the Labour Codes and Shops and Commercial Establishment laws.
At present, states have restrictions which creates inflexible working hours, especially in small and medium enterprises, by restricting their ability to expand operations when needed compared to global peers. For instance, the average quarterly limit on overtime in terms of hours is 75 compared to 216 in Singapore, 240 hours in Japan, 352 hours in Germany, 364 hours in the UK and no limit in the U.S.
Female labour force participation rate has been rising for seven years, i.e., from 23.3 % in 2017-18 to 41.7 % in 2023-24, driven mainly by the rising participation of rural women.

Skilling

Most of the current skill policies are focused on re-skilling and up-skilling for AI jobs and roles or training on the use of AI. Under the FutureSkills Prime programme, 1.27 lakh individuals have been trained in various AI related courses and provided training to 1,236 government officials and 292 trainers.
The skilling strategy needs to adopt a layered approach to address diverse industry demands and workforce needs effectively. For instance, AI skills could be provided through 3 tiers foundational skills (AI literacy for all), intermediate skills (specific target groups) and advanced skills (leadership roles).
PM Internship Scheme (PMIS), scheme's pilot phase, launched on 3 October 2024. PMIS aims to benefit 1.25 lakh youth in FY25. So far over three lakh candidate profiles have been created and 6.5 lakh applications submitted.

Artificial Intelligence (AI)

Key initiatives include establishing AI Centres of Excellence at top educational institutions and a ₹1 lakh crore financing corpus to catalyse private sector innovation and R&D in sunrise sectors.
Some fears of employment disruption might be misplaced. Analysis of real-world challenges including institutional needs, infrastructure, resources, and reliability in the context of AI and its impact on labour markets has been put forth.
RBI established a regulatory sandbox and announced a committee for Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) to address risks from the use of AI/ML in banking use-cases.
In 2023, 34% of healthcare organisations were piloting AI projects, while 16% had implemented generative AI initiatives. Challenges include lack of specialised talent (both technical and domain specific), data complexities, and scaling difficulties. This requires attention going forward.

Cybersecurity

India's Tier 1 ranking in the Global Cybersecurity Index (GCI) 2024, with a commendable score of 98.49 out of 100, signifies a significant milestone in its cybersecurity journey. This recognition places India among the world's 'role-model' nations in cybersecurity.
The digital transformation of India's financial sector has increased exposure to cyber threats such as phishing, ransomware, DDoS attacks, and malicious mobile applications has considerably increased. According to CERT-In, the number of observed and handled cybersecurity incidents were 11.6 lakh in 2020, 14 lakh in 2021, and 13.9 lakh in 2022.

e-commerce

- Global B2C e-commerce market is expected to grow from USD 5.7 trillion in 2022 to USD 8.1 trillion by 2026 at a CAGR of 9.1%. Correspondingly, India's B2C e-commerce market is anticipated to grow to USD 150 billion by 2026 (from USD 83 billion in 2022), at a CAGR of 15.9%.
- By current market size, India’s e-commerce market makes up a small fraction, about 1.5% of global market, and it is projected to stay around 2% in the coming years. These exports generated an estimated USD 4 to 5 billion in exports during FY23 and are expected to increase to USD 200 to USD 300 billion by 2030.
AI is impacting e-commerce services since it enables personalised marketing, inventory management, and customer experience enhancement.
The central government’s E-Commerce Export Hub (ECEH) initiative aims to revolutionise India’s cross-border e-commerce.
- Recognising the relevance of e-commerce exports, the Foreign Trade Policy (FTP) 2023 has laid down provisions for fostering cross-border digital trade and promoting e-commerce and other emerging export channels.
- Further, the GST regime offers the benefit of zero-rated supplies, and e-commerce exporters are eligible for GST refunds.
- State governments in collaboration with e-commerce market players organised e-export Haat and signed Memorandum of Understanding (MoU) with leading e-commerce players to drive e-commerce exports, etc.
- The Uttar Pradesh government has recently implemented measures to enhance packaging and export capabilities by leveraging design, technology, and market access. The government is also planning to set up e-commerce hubs to facilitate small producers to sell to aggregators.
- The government of Telangana has announced a new MSME policy which, inter-alia, envisages an increase in e-commerce penetration in MSMEs by encouraging the participation of sellers on the ONDC portal and GeM portal.

ONDC

ONDC recorded more than 14 million transactions in the month of November 2024 across 1100+ cities. 7 lakh+ sellers and service providers are active on ONDC network spread across 600+ cities and towns across India. 190+ network participants are live on the network.
Presently, over 7000 farmer producer organisations, 400 self-help groups, micro-entrepreneurs, and social sector enterprises have been onboarded on the network.
Mobility through ONDC network is live in 15+ cities with around 5.45 lakh taxi and auto drivers onboarded. e-commerce exports
The platform today has 10 active domains, 110 network participants, and close to 6.5 lakh sellers/service providers. In the retail category, the platform has seen over 4.4 crore orders transacted, across 814 districts and with 2.83 lakh sellers involved.

International Financial Service Centre (IFSC)

GIFT-IFSC has continued its ascent as a leading IFSC, improving its rank by five places in the ‘Global Financial Centres Index 36’ (GFCI 36), rising to 52nd position. It also achieved a notable jump in the FinTech rankings, climbing four places to rank 45.
As of September 2024, the total asset size of IFSC Banking units crossed USD 70 billion, and the cumulative value of transactions undertaken by IBUs crossed USD 975 billion. Credit exposure of IBUs stands over USD 51 billion as of September 2024, covering countries like the US, UK, Singapore, UAE, etc., apart from India.
The asset management ecosystem in IFSC comprises 128 fund management entities, 168 Alternative Investment Funds (AIFs), and 3 investment advisors. By September 2024, AIFs had raised total commitments of USD 12.1 billion.
As of September 2024, 60 entities had registered as FinTechs or TechFins in GIFT-IFSC
IFSCA conducted 13 hackathons and received 152 applications from 14 jurisdictions under its FinTech Entity framework, showcasing its commitment to innovation.

Data centres (DC) and cloud

India’s DC market is forecasted to grow from US$ 4.5 billion in 2023 to US$ 11.6 billion by 2032 at a CAGR of 10.98%.
Drivers for India’s DC market’s growth include lower construction costs, a well-established IT and digital services ecosystem, and relatively affordable real estate compared to other global locations.
India’s colocation data centre capacity reached 977 MW in 2023, which reflects a year-on-year growth of 105%. The projected capacity under construction from 2024 to 2028 is 1.03 GW, with additional planned capacity of 1.29 GW.

Telecom

India's telecom sector is expanding with the smartphone boom, surging data consumption, and the advent of technologies like 5G.
India is the 2^nd largest telecommunications market, with over 1.18 billion telephone subscribers, an overall teledensity of 84%, and 941 million broadband users16 as of 31st October, 2024.
Currently, 5G services are available in 779 out of 783 districts. Over 4.6 lakh 5G Base Transceiver Stations (BTSs) have been installed nationwide.
As of December 2024, 6.92 lakh km of Optical Fibre Cable (OFC) has been laid, 2.14 lakh Gram Panchayats are service-ready (including 5,032 via satellite, 12.04 lakh FTTH connections have been installed.

Drones

As of October 31, 2024, India has seen a notable rise in drone activities, with 140 remote pilot training organisations, 18,862 remote pilot certificates issued, 26,659 registered drones, and 82 approved drone models (DGCA type certificates). About ₹ 60.6 crore have been disbursed under the PLI scheme to support drone manufacturing.
As of November 30, 2024, 32 aircraft leasing entities (including provisional) have registered in the GIFT-IFSC, leasing 105 aviation assets, including 53 aircraft and 52 engines.
On July 12, 2024, the government announced a uniform 5% integrated GST on imported aircraft parts and tools, applicable regardless of HSN classification.
The government has promoted a recently approved scheme aimed at providing drones to Women SHGs, targeting 15000 selected Women SHGs to offer rental services to farmers for agricultural purposes, including for the application of fertilisers and pesticides. Central financial assistance of 80 % of the drone's cost and related ancillary charges, up to a maximum of ₹8 lakh, will be granted to the women SHGs for drone purchases.
The WEF launched the project ‘Medicines from the Sky’ in collaboration with the government of Telangana for Arunachal Pradesh. As of October 2024, there were over 650 drone flights 10,000+ medical products were delivered covering 15,000 kms.
The project ‘i-DRONE’ (ICMR’s Drone Response and Outreach for North East) was launched under the aegis of the MoHFW. Progress includes 130 hours flight time, 65 Health Centres connected, 22,000 medical essentials delivered covering 7,700 kms.

Fintech/ Financial sector

RBI, in collaboration with sectoral regulators like Insurance Regulatory and Development Authority of India and PFRDA, oversees the cybersecurity preparedness of the financial sector through regular IT examinations and monitoring of compliance with established guidelines.
GIFT-IFSC has continued its ascent as a leading IFSC, improving its rank by five places in the ‘Global Financial Centres Index 36’ (GFCI 36), rising to 52nd position. It also achieved a notable jump in the FinTech rankings, climbing four places to rank 45.
As of September 2024, 60 entities had registered as FinTechs or TechFins in GIFT-IFSC, reflecting the region’s dynamic FinTech landscape. IFSCA has conducted 13 hackathons and received 152 applications from 14 jurisdictions under its FinTech Entity framework, showcasing its commitment to innovation.

A study based on fintech data for 114 economies worldwide by Loko and Yang (2022) states that fintech adoption significantly improves female employment and reduces gender inequality. Similar findings from other studies highlight the role that fintech advancements and the digital economy play in creating an enabling environment for women, promoting economic participation and reducing systemic barriers to access to finance.

Disclaimer

That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.

Vertika Misra

Director - Public Policy