India’s Economic Survey 2024-25: A Detailed Analysis

As India moves into 2024-25, its economic outlook remains one of the most promising globally, despite challenges such as geopolitical tensions, inflationary pressures, and global trade disruptions. The government's emphasis on deregulation, infrastructure development, and investment promotion is expected to sustain growth, particularly in industry and agriculture.

This article provides a comprehensive analysis of India’s economic growth prospects, industrial sector performance, and dairy industry trends, incorporating insights from the Economic Survey 2024-25 on the rising importance of livestock, dairy, and cooperative growth in the overall agricultural landscape.

Economic Growth: A Strong but Cautious Expansion 

India’s GDP growth rate is projected at 6.4% for FY25, supported by private consumption, rural demand recovery, and capital expenditure on infrastructure. Globally, economic growth is expected to remain modest at 3.2% in 2024 and 3.3% in 2025, with external risks still impacting trade and investment flows.

 Key Growth Drivers: 

1. Private Consumption & Rural Economic Recovery:
   1. Private consumption accounts for nearly 60% of India’s GDP, making it a crucial driver of economic expansion.
   2. Rural demand, which had slowed due to inflation and high input costs, is now recovering due to higher agricultural output and targeted government support.
   3. FMCG, consumer durables, and retail are expected to benefit from festive spending and urban demand expansion.

2. Investment & Infrastructure Development:
   1. The government’s capital expenditure (capex) has increased significantly, focusing on roads, railways, and digital infrastructure.
   2. Private investment in manufacturing and services is accelerating due to PLI incentives, tax reforms, and improvements in ease of doing business.

3. Inflation & Policy Response:
   1. Global inflation has moderated, leading to a more stable interest rate environment, which is favourable for India’s economy.
   2. India’s inflation remains under control, although food price volatility remains a risk.
   3. The Reserve Bank of India (RBI) is expected to adopt a balanced approach, supporting growth while controlling inflation.

4. External Risks & Global Trade Headwinds:
   1. Geopolitical uncertainties (Russia-Ukraine conflict, Middle East tensions, and China’s economic slowdown) could impact commodity prices and trade flows.
   2. Trade restrictions, including the European Union’s Carbon Border Adjustment Mechanism (CBAM), may challenge India’s export-driven industries.

Industry Growth: Opportunities and Structural Challenges 

The industrial sector is expected to grow at 6.2% in FY25, with infrastructure, energy, and manufacturing leading. However, global trade slowdowns and supply chain disruptions remain concerns.

1. Manufacturing Sector: Domestic Strength vs. Global Weakness
   1. Manufacturing growth has been moderate due to weak external demand, but domestic incentives and supply chain localisation support resilience.
   2. Pharmaceuticals, electronics, and textiles benefit from export diversification and PLI schemes.
   3. EV manufacturing and semiconductor production are key growth areas under "Make in India."

1. Food Processing Industry: A Growing Contributor to Industrial Growth
   1. The food processing sector employs over 12.41% of India’s organised manufacturing workforce, critical for employment generation and rural economic stability.
   2. PMKSY (Pradhan Mantri Kisan Sampada Yojana) and the PLI scheme for food processing are boosting investments in supply chain infrastructure and export competitiveness.

3. Steel & Cement: Infrastructure-Led Growth
   1. Government investments in roads, railways, and ports are driving demand for steel and cement.
   2. Energy costs and raw material volatility remain challenges, requiring better domestic resource management.

1. Automobile Industry: The EV Revolution
   1. The automobile sector saw a 12.5% rise in domestic sales in FY24, with electric vehicles (EVs) and hybrid models leading the transformation.
   2. PLI incentives for EV manufacturers and domestic battery production plans are creating a competitive manufacturing ecosystem.

5. Electronics Industry: India’s "Make in India" Success
   1. 99% of smartphones sold in India are now manufactured locally, drastically reducing import dependency.
   2. India is emerging as a semiconductor hub, with major global players investing in chip manufacturing facilities.

Dairy Sector Growth: A Key Pillar of Rural Economic Expansion 

India’s dairy industry is undergoing a transformative shift, moving from high-volume production to high-value-added dairy products.

1. Livestock & Dairy’s Expanding Economic Contribution
   1. The livestock sector now accounts for 30.23% of the Gross Value Added (GVA) in agriculture, up from 24.38% in FY15.
   2. The dairy industry alone contributed ₹11.16 lakh crore (US$133.16 billion) in FY23, surpassing the combined output value of staple crops like wheat and rice.
   3. The sector recorded a CAGR of 12.99%, making it one of the fastest-growing agricultural sub-sectors.

2. Government Initiatives Driving Dairy Growth
   1. Rashtriya Gokul Mission: Focuses on developing indigenous bovine breeds and increasing productivity.
   2. Multipurpose AI Technicians in Rural India (MAITRIs): Over 38,736 AI technicians were inducted to improve livestock breeding services.
   3. Financial Support for Dairy Cooperatives:
      1. 9,000+ new dairy cooperatives established to enhance market accessibility.
      2. RuPay Kisan Credit Cards are issued to dairy farmers to provide financial stability.

3. Premiumization & Value-Added Dairy Products
   1. Consumer preferences are shifting towards high-margin dairy products such as cheese, yoghurt, probiotics, and flavoured milk.
   2. Cold chain infrastructure and logistics modernization are becoming critical for reducing wastage and improving quality compliance.

4. Key Challenges Facing the Dairy Industry
   1. Rising input costs (fodder, veterinary services) are squeezing profit margins, requiring process efficiency improvements.
   2. Cold storage and supply chain inefficiencies remain major hurdles, impacting dairy farmers’ access to urban markets.
   3. Export restrictions and stringent quality regulations need policy support for global market competitiveness.

What to Expect in 2024-25? 

1. Economic Growth to Stay Robust but Cautious
   1. India is projected to be among the fastest-growing economies, but global risks require proactive fiscal and monetary policies.

2. Industrial Sector to Focus on Supply Chain Localization
   1. Reducing dependence on imported raw materials (e.g., semiconductors, EV batteries) is a strategic priority.
   2. PLI schemes and deregulation will support industrial resilience and competitiveness.

3. Dairy & Livestock Industry to Expand Further
   1. Higher milk production and dairy cooperative expansion will enhance rural economic growth.
   2. Investments in cold chain logistics and high-value dairy processing will be critical for profitability and efficiency.

Conclusion: A Year of Structural Transformation 

India’s 2024-25 economic landscape is set for steady growth, with domestic consumption, infrastructure investments, and industrial expansion leading the way. However, geopolitical uncertainties, supply chain challenges, and climate-related risks need continuous policy adaptation.

For the dairy sector, investment in value-added products, cooperative expansion, and supply chain resilience will be the key growth enablers, ensuring long-term sustainability and competitiveness in the global market.

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