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India needs to achieve an average growth rate of around 8 per cent at constant prices for about a decade or two to realise its economic aspirations of becoming Viksit Bharat by 2047, the Economic Survey 2024-25, released on Friday, said.
“To achieve this growth, the investment rate must rise to around 35 per cent of gross domestic product (GDP) from the current 31 per cent. Additionally, it will be essential to develop the manufacturing sector further and invest in emerging technologies such as artificial intelligence (AI), robotics, and biotechnology,” the Survey said.
It further added that India will also need to create 7.85 million new non-farm jobs annually till 2030, achieve 100 per cent literacy, improve the quality of education institutions, and develop high-quality, future-ready infrastructure at scale and speed.
The NITI Aayog, however, in July last year, said India needs to grow at a sustained pace of 7-10 per cent for 20-30 years to escape the middle-income trap and become a developed nation with a per capita income of $18,000 per annum and the size of a $30 trillion economy by 2047. For FY26, the Survey projected a growth rate between 6.3 per cent and 6.8 per cent.
“This is in line with the Fund's (International Monetary Fund) projection of the growth rate of India's GDP at constant prices at around 6.5 per cent between FY26 and FY30,” the Survey said.
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The National Statistics Office (NSO) has estimated GDP growth of 6.4 per cent for FY25.
On the domestic front, the Survey said rebounding rural demand augurs well for consumption. “Investment activity is expected to pick up, supported by higher public capex and improving business expectations. Capacity utilisation in manufacturing remains above the long-term average, and private sector order books have shown steady growth, alongside a rise in investment intentions. However, these gains could be tempered by the global excess capacities in sectors such as steel, leading to aggressive trade policies in search of demand,” it added.
The Survey highlighted the need for India to improve its global competitiveness through grassroots-level structural reforms and deregulation to reinforce its medium-term growth potential.
Amid the new and emerging global reality, the Survey said the best way to succeed is to start relying on the internal engines and domestic levers of growth, focusing on a central element – the economic freedom of individuals and organisations to pursue legitimate economic activity.
“Unburdened by licensing, inspection and compliance requirements, the people and small enterprises of India, with their high aspirations and intrinsic inventiveness, will find answers to the pressing challenges of growth, employment and development. Accelerating and amplifying the deregulation agenda, already underway in the last 10 years, is the need of the hour,” it added.
The Survey said faster economic growth that India needs is only possible if the Union and state governments continue to implement reforms that allow small and medium enterprises to operate efficiently and compete cost-effectively.
“Regulations must be rationalised to ensure that the regulation is the minimum necessary to achieve its objectives and the maximum feasible given the limited managerial and other resources at the disposal of small and medium enterprises. The focus of reforms and economic policy must now be on systematic deregulation,” it added.
Atul Pandey, partner, Khaitan & Co, said the Survey rightly underscores the need for deregulation, particularly from a regulatory compliance standpoint.
“While the government has introduced several reforms to enhance ease of doing business, the reality remains that many companies continue to struggle with compliance at the local level. This, in turn, escalates compliance costs — an issue that is particularly critical for MSMEs,” he added.
