Budget 2025 Expectations Highlights: Economic Survey 2024-25 highlights government’s push for rural development

Friends,

Today, at the beginning of the budget session, I bow to Goddess Lakshmi, the goddess of prosperity. And on such occasions, for centuries, we have been remembering the virtues of Goddess Lakshmi:

सिद्धिबुद्धिप्रदे देवि भुक्तिमुक्तिप्रदायिनि। मंत्रपूते सदा देवि महालक्ष्मि नमोस्तुते।

Maa Lakshmi gives us success and wisdom, prosperity and well-being. I pray to Maa Lakshmi that every poor and middle class community of the country should be blessed with the special blessings of Maa Lakshmi.

Friends,

Our Republic has completed 75 years, and this is a matter of great pride for every citizen of the country, and this strength of India also creates a special place for itself in the democratic world.

Friends,

The people of the country have given me this responsibility for the third time, and this is the first full budget of this third term, and I can confidently say that in 2047 when the country will celebrate 100 years of independence, the resolution of a developed India that the country has taken, this budget session, this budget will create a new confidence, will give a new energy, that when the country celebrates 100 years of independence, it will be developed. 140 crore countrymen will fulfill this resolution with their collective efforts. In the third term, we are moving ahead in mission mode towards all-round development of the country, whether it is geographically, socially or in the context of different economic levels. We are moving ahead in mission mode with the resolution of all-round development. Innovation, inclusion and investment have constantly been the basis of the roadmap of our economic activity.

As always, this session will have many historic days. Tomorrow there will be discussions in the House and after a lot of deliberation, laws will be made that will increase the strength of the nation. Especially, to re-establish the pride of Nari Shakti, to ensure that every woman gets a respectable life without any discrimination of caste and creed and gets equal rights, many important decisions will be taken in this session in that direction. Reform, Perform and Transform. When we have to achieve a fast pace of development, the maximum emphasis is on reform. The state and central governments have to perform together and we can see transformation with public participation.

Ours is a young country, a youthful power and the youth who are 20-25 years old today, when they turn 45-50 years old, they will be the biggest beneficiaries of a developed India. They will be at that stage of their life, they will be sitting in that position in the policy making system, that they will proudly move forward with a developed India in the century that will begin after independence. And hence this effort to fulfill the resolution of a developed India, this immense hard work, is going to be a great gift for our teenagers, our young generation today.

Those who had joined the freedom struggle in 1930, 1942, the young generation of the entire country was spent in the freedom struggle, and its fruits were reaped by the generation that came after 25 years. The youth who were in that war got those benefits. Those 25 years before independence became an opportunity to celebrate independence. Similarly, these 25 years are the intention of the countrymen to achieve a prosperous and developed India through their resolve and reach the pinnacle through their achievements. And therefore, in this budget session, all the MPs will contribute towards strengthening developed India. Especially, it is a golden opportunity for the young MPs because the more awareness and participation they will have in the House today, the more fruits of developed India they will see right in front of their eyes. And therefore, it is a priceless opportunity for the young MPs.

Friends,

I hope that we will live up to the hopes and aspirations of the country in this Budget session.

Friends,

Today you must have noticed one thing, people in the media should definitely notice it. Perhaps since 2014, this is the first session of Parliament in which there has been no foreign spark a day or two before the session, there has been no attempt to ignite a fire from abroad. I have been observing for 10 years, since 2014, that before every session people used to sit ready to create mischief, and here there is no dearth of people who fan it. This is the first session I am seeing after the last 10 years in which there was no spark from any foreign corner.

Thank you very much, friends.

“As India strides toward its ambitious goal of becoming a $7 trillion economy by 2030, the logistics sector is poised to play a pivotal role in driving this transformation. The government’s record-breaking ₹11 lakh crore infrastructure investment has laid a robust foundation with initiatives like multi-modal transport systems, dedicated freight corridors, and enhanced connectivity. The next critical step is translating these efforts into a globally competitive logistics ecosystem. This requires an intensified focus on technology integration. Advanced supply chain solutions powered by AI can boost efficiency, optimize resources, and build more resilient networks.

The logistics industry is also a lifeline for MSMEs, the backbone of India’s economy, enabling them to reach markets efficiently and scale operations domestically and globally. Additionally, the rapid rise of e-commerce and quick commerce has further underscored the need for robust, tech-enabled logistics solutions to meet consumer expectations for faster deliveries and seamless experiences. Strengthening the last-mile delivery network and adopting predictive analytics for inventory and demand planning are crucial to sustaining this growth. Green logistics practices, such as sustainable last-mile delivery systems and LNG-fuelled trucking, offer opportunities to minimize the sector’s carbon footprint. As we approach the Union Budget, it is imperative to introduce measures that incentivize innovation, promote digitalization, and strengthen the foundation of India’s commerce. These initiatives will not only position the logistics sector as a key growth driver but also establish India as a global leader in supply chain excellence,” says Dr Ashvini Jakhar, Founder and CEO, Prozo.

President Droupadi Murmu expressed confidence that, due to the government's efforts, India is poised to become the world's third-largest economy. Highlighting the guiding principles of her administration, she reiterated the mantra: "Sabka Sath, Sabka Vikas, Sabka Vishwas, Sabka Prayas" (Together with all, development for all, trust of all, effort by all).

"The country has taken several historic steps to protect the country's borders and ensure internal security....The govt has also taken steps towards self-reliance in the defence sector. From Make in India, we have moved to make for the world..," she said.

"The country's aviation sector is progressing rapidly with the airline companies placing orders of 1700 new aircraft," she said.

Further, talking about the railway line that connects the north and the south, she said, "The Udhampur-Srinagar-Baramulla rail link project has been completed and now the country will be connected by railway line from Kashmir to Kanyakumari."

"India's metro rail network has now crossed the 1000-kilometre milestone. India has the world's third-largest metro network," she further noted.

"Today, India is making its presence felt as a major global player in the field of digital technology...Developed nations of the world are also impressed with the success of India's UPI transactions system...My Government has used digital technology as a tool for social justice and equality," she said.

"My government is continuously working towards ensuring efficiency in cyber security. Digital fraud, cybercrime and DeepFake are serious challenges to social, financial and national security," she added.

The India AI mission would be carried out by the Independent Business Division (IBD) under the Digital India Corporation (DIC). Key elements of the mission include IndiaAI Compute Capacity, the IndiaAI Innovation Centre, the IndiaAI Datasets Platform, the IndiaAI Application Development Initiative, IndiaAI FutureSkills, IndiaAI Startup Financing, and Safe & Trusted AI.

Piyush Goyal, the Union minister for commerce and industry, had said that the AI mission framework in India has been designed with a holistic approach to build a robust AI ecosystem. This vision aims to accelerate the adoption of AI, offer broader opportunities for innovators, and promote skill development in the field.

"My government believes in women-led development in the country...The government aims to have 3 crore 'Lakhpati didi'," she noted.

"It is a matter of great pride for the Parliament that today women in large numbers are flying fighter aircraft, joining Police and also leading corporates in the country...Our daughters are making the country proud by winning Olympic medals," she said.

"The historic Maha Kumbh is going on. It is a festival of our cultural traditions and social awakening. Crores of devotees from India and the world have taken a holy dip in Prayagraj. I express my condolences on the accident that occurred on Mauni Amavasya and pray for the speedy recovery of the injured," she said.

"Under the Ayushman Bharat Scheme, it has been decided to provide health insurance to six crore senior citizens aged 70 years and above," she said.

"The government has taken steps towards 'One Nation, One Election' and Waqf Amendment Bill," she said.

"My government has placed a special focus on the education of youth and creating new employment opportunities for them," she added.

"Two months ago, we celebrated the 75 years of adopting our constitution and a few days ago, we completed our journey of 75 years... On behalf of all Indians, I bow down to Babasaheb Ambedkar and all others in the Constitution Committee," she said.

Government is lifting millions out of poverty, she said.

"This is perhaps the first session of Parliament since 2014, in which no foreign spark has flared up a day or two before, no attempt has been made to ignite a fire from abroad. I have been observing since 2014 that before every session, people are ready to create mischief and here there is no dearth of people to support them," he said.

"This is the first session I am seeing after 10 years in which no spark was ignited from any foreign corner," he added.

The Economic Survey is expected to forecast GDP growth between 6.3 and 6.8 per cent for the upcoming fiscal year. The Survey 2024-25, prepared under the leadership of Chief Economic Advisor V Anantha Nageshwaran and his team, will be presented in Parliament later today.

The National Statistics Office estimates indicate that India's GDP will expand at 6.4 per cent during the current fiscal year, marking a four-year low, primarily due to subdued manufacturing activity and reduced investments.

This growth projection falls short of both the previous Economic Survey's forecast of 6.5-7 per cent and the Reserve Bank of India's estimate of 6.6 per cent.
The Economic Survey, which is traditionally presented one day before the Union Budget, provides a comprehensive overview of the current fiscal year's macroeconomic performance and offers insights into the anticipated economic trajectory for the forthcoming fiscal year.

PM Modi says, "I pray that Maa Lakshmi continues to bless the poor and middle class of our country. It is a matter of great pride that India completed 75 years as a democratic nation. India has established itself well on the global pedestal...This is the first complete budget of my third term. I can confidently say that in 2047, when India will complete 100 years of Independence, India will fulfil its aim of Viksit Bharat and this budget will give new energy and hope to the nation..."

Talking about his government's commitment to 'Viksit Bharat', PM Narendra Modi said that the focus is on "Innovation, Inclusion, Investment". PM Modi's address to the media ahead of the Budget session also sets the tone on what to expect from FM Nirmala Sitharaman's Union Budget 2025 speech.

This Budget will give a new confidence, it will be centred on growth and Viksit Bharat, says PM Narendra Modi.

At the start of the Budget session, I bow to Goddess Lakshmi. May the goddess bless the poor and the middle class of this country, said PM Narendra Modi.

Growth: In FY2024, India’s GDP grew by 8.2 percent year over year.*Despite global geopolitical challenges, a significant portion of this growth was driven by strong domestic demand. Exports also saw a significant uptick in growth in the last quarter. India’s GDP is expected to grow by 6.5–6.7 percent in FY2025. In April, the IMF predicted the country to grow by about 6.8 percent in FY2025. Additionally, it expects India’s GDP to reach US$5 trillion by 2027, making it the world’s third-largest economy.

Sectoral growth: After contracting by -2.2 percent in the previous year, manufacturing growth remained strong at 9.9 percent this fiscal year. Services grew by 7.6 percent, but agriculture growth suffered a setback due to intertemporal and spatial rainfalls. All three sectors are expected to maintain the growth momentum, with the agriculture sector performing better due to an above-normal monsoon.

Robust infrastructure spending: The government has consistently increased budgetary allocation for infrastructure from 1.7 percent of GDP in FY2020 to 3.2 percent in FY2024. It is expected to increase up to 3.4 percent of GDP in FY2025. Calibrated policy actions are likely to reduce logistics costs and improve the supply chain.

Credit growth accelerating: Steady improvement in the bank’s balance sheets over the past couple of years and a decline in NPAs across sectors have led to increased lending by banks. Credit growth has recovered quickly after the pandemic and has been in double digits for the past two years. The services sector has witnessed the highest credit growth, followed by growth in personal and industry loans, says Dr. Rumki Majumdar, Economist, Deloitte India.

During July-September quarter of fiscal year 2024-25, the Indian economy registered a 5.4 per cent growth in real terms, falling considerably short of RBI's 7 per cent projection. Similarly, the April-June quarter witnessed GDP growth below the central bank's estimates.

The Reserve Bank revised downward India's growth forecast for 2024-25 to 6.6 per cent from the earlier 7.2 per cent in its recent monetary policy. The government's growth projection stands at 6.4 per cent.

The country maintained its position as the fastest-growing major economy, achieving a remarkable 8.2 per cent GDP growth in fiscal year 2023-24. The preceding years saw growth rates of 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.

The Economic Survey, presented in July 2024, provided a "conservative" real GDP growth projection of 6.5-7 per cent for 2024-25, whilst noting higher market expectations. Real GDP growth represents the inflation-adjusted economic growth figures.

Budget 2025 expectations live: The traditional 'halwa ceremony' serves as a crucial pre-budget ritual. This customary event, which signals the commencement of budget document printing, took place on January 24 this year.

Finance Minister Nirmala Sitharaman presided over the ceremony, accompanied by Minister of State Pankaj Chaudhary and various secretaries. The event included the presence of staff members and officers responsible for preparing and compiling the budget.

This ceremony holds particular importance as it initiates a lockdown period at the finance ministry. During this time, officials must remain within the ministry premises until the budget presentation in Parliament concludes. Since 1980, the Union Budget printing has consistently taken place in the North Block basement, establishing itself as a standard practice.

“The Indian growth story over the last decade has been one of resilience. The structural reforms undertaken by the Government of India since 2014 have put the economy firmly on a growth path, and India is soon set to become the third-largest economy in the world. In the medium term, the Indian economy can grow at a rate of 7 per cent plus on a sustained basis if we can build on the structural reforms undertaken over the last decade. Against this backdrop, the chapter identifies the areas of key policy focus as well as presents a six-pronged growth strategy to achieve this goal. The strategy elucidated in the chapter is premised on the understanding that the structural reforms of the last decade, focused on the supply side of the economy, have to give way to nextgen reforms that are bottom-up in nature to yield strong, sustainable, balanced, and inclusive growth,” said last year’s Economic Survey.

The Budget Session begins on Friday, featuring President Droupadi Murmu's address to the combined assembly of Lok Sabha and Rajya Sabha. The initial phase will end on February 13, followed by the second phase starting March 10. The entire session will draw to a close on April 4.

Finance Minister Sitharaman is set to present Modi 3.0 government's first comprehensive Budget, with anticipated changes to income tax brackets, significant support for infrastructure development, and increased funding for rural development and education sectors.

The legislative schedule encompasses 16 bills, with notable inclusions being the Waqf (Amendment) Bill and the Immigration and Foreigners Bill.

“Under the Prime Minister Narendra Modi, the Government of India has achieved significant milestones in housing through the Pradhan Mantri Awas Yojana (PMAY). Expanding the programme to include 2 crore additional rural houses and 1 crore urban houses by FY 2024-29 highlights the government’s dedication to uplifting marginalised communities.

Further policy interventions, such as enhanced subsidies for the Economically Weaker Section (EWS), can reduce financial barriers and improve access to quality housing. To advance the Government of India’s vision of ‘Housing for All,’ incorporating affordable housing for EWS under Schedule VII of the Corporate Social Responsibility (CSR) provisions in The Companies Act will empower corporate entities and foundations to contribute to affordable housing initiatives.

Encouraging public, private banks and financial institutions to prioritise affordable housing loans; introducing preferential interest rates and affordable repayment options (EMIs) for such loans will advance access to affordable housing. Additionally, blending CSR funds with government grants can address funding gaps.
We advocate for a Public Private People Partnership (P4) model to foster effective collaboration among stakeholders. This will accelerate progress toward ‘Housing for All’ and support inclusive, sustainable development aligned with the United Nations Sustainable Development Goals (SDGs,” says Anand Kumar Bolimera, National Director, Habitat for Humanity India.

“India’s calibrated response to the pandemic on the economic front included three salient components. The first has been the focus on public spending on infrastructure, which kept the economy afloat by creating a strong demand for jobs and industrial output and triggered a lagged yet vigorous private investment response. Stronger balance sheets of the financial and non-financial private sector helped, aided by a decade of supporting initiatives by the Government and the Reserve Bank of India. The second has been partly a natural response of business enterprise and public administration amidst adversities, i.e., digitalisation of service delivery.

The public policy focus and nurturing of processes and frameworks in digital technology greatly helped this irreversible and transformational change. The third has been embodied in the Atmanirbhar Bharat Abhiyan in terms of targeted relief to different sectors of the economy and sections of the population, and structural reforms that assisted a firm recovery and increased the medium-term growth potential. Global troubles, supply chain disruptions, and vagaries of monsoons intermittently stoked domestic inflationary pressures, which were, to a great extent, managed by administrative and monetary policy responses. The fiscal balances of the general government—central and State Governments taken together - have improved progressively despite expansionary public investment. Tax compliance gains driven by procedural reforms, expenditure restraint, and increasing digitisation helped India achieve this fine balance.

The external balance has been pressured by subdued global demand for goods, but strong services exports largely counterbalanced this. Global output is now somewhat more resilient than in 2022, inflationary pressures are shrinking, and trade is set to recover, should there be no further geo-political shocks or flare-ups. However, the chances of geopolitical disturbances and conflicts have only gone up in recent times.

The net impact of these developments has been that the Indian economy recovered and expanded in an orderly fashion in the last three years. The real GDP in FY24 was 20 per cent higher than its level in FY20, a feat that only a very few major economies achieved, while also leaving a strong possibility for robust growth in FY25 and beyond. Growth has been inclusive with a reduction in unemployment and multi-dimensional poverty and an increase in labour force participation. Overall, the Indian economy looks forward to FY25 optimistically, anticipating broad-based and inclusive growth,” said last year’s survey.

India's economic growth hit a seven-quarter low, registering a 5.4% year-on-year GDP growth in the September quarter, falling considerably short of analysts' projected 6.5%. This represents a notable deceleration from the 6.7% growth achieved in the June quarter, with reduced manufacturing output and consumer spending being the primary factors.

The manufacturing sector, which serves as a crucial economic indicator, witnessed a substantial slowdown with just 2.2% growth, down from 7% in the preceding quarter. Economic experts point to elevated inflation rates, stagnant real wages, and increased interest rates as the main factors behind the decline in urban consumer spending.

The Economic Survey is tabled by the Finance Minister as part of the Budget session. Parliament’s Budget session begins today and FM Nirmala Sitharaman is likely to table the economic Survey 2024-25 between 12:00 PM and 1:00 PM. Later the Chief Economic Advisor V Anantha Nageswaran will hold a press conference around 2:30 PM explaining the detailed document.

The Economic Survey represents an official report compiled by the Finance Ministry's Economic Division within the Department of Economic Affairs, with oversight from the chief economic adviser.

This annual assessment provides a comprehensive analysis of the nation's economic performance, financial indicators, and future projections. Additionally, it often serves as a preliminary indicator of the forthcoming policies and priorities that might feature in the Union Budget for 2025-26.