India’s economic growth is projected to accelerate at a rate of 6.3% to 6.8% in the financial year 2025-2026, according to the Economic Survey 2024-25, which was presented by Union Finance Minister Nirmala Sitharaman on Friday. However, the government has set a more ambitious target: India will need to sustain a growth rate of 8% for the next two decades to achieve the status of a developed nation by 2047. This ambitious projection underlines the scale of the economic challenge ahead as India aims to become a global economic powerhouse.
The Economic Survey, an annual report issued ahead of the Union Budget, offers a comprehensive review of the nation’s economic health and outlines its short-to-medium-term prospects. As the first part of the Budget Session of Parliament kicks off, the focus is clearly on laying the groundwork for sustainable and inclusive growth. The session will continue until February 13, with a reconvening in March to finalize budgetary matters.
In her address to Parliament, President Droupadi Murmu emphasized the government’s commitment to inclusive development, stressing that true national success can only be achieved by adhering to fundamental principles. A key area of focus in the Economic Survey is enhancing foreign direct investment (FDI) inflows into the country. The survey calls for the government to “pull out all the stops” in improving tax certainty and stability to attract more FDI, a crucial aspect of India’s long-term economic strategy. Despite global volatility—fueled by inflationary pressures, rising interest rates in developed economies, and geopolitical tensions—the survey maintains an optimistic outlook for India as an investment destination, citing its strong economic fundamentals, ongoing reforms, and an expanding consumer market.
The survey also highlights one of India’s persistent challenges: education. Although school dropout rates have been on a steady decline, with primary school dropout rates standing at 1.9%, there are still significant hurdles in terms of retention rates across all levels of education. For instance, retention rates fall to 45.6% at the higher secondary level, indicating that a substantial number of students are unable to complete their education. This is a key area for the government to address if it is to harness the full potential of its young population in the coming decades.
The economic outlook for India remains largely positive, but sustaining growth at 8% annually for the next 20 years is no small feat. While the government’s structural reforms and efforts to woo foreign investors are commendable, the challenge lies in translating these reforms into tangible outcomes, particularly in terms of job creation, infrastructure development, and educational outcomes. The focus on attracting FDI is crucial, but this must be coupled with targeted efforts to improve domestic consumption, reduce inequality, and address critical challenges in sectors like education and healthcare.
As India gears up for the next phase of its economic journey, it must find ways to strengthen its educational framework and make its growth more inclusive and sustainable. The stakes are high, and the coming years will be pivotal in shaping the country’s trajectory towards becoming a developed nation by 2047. Whether it can maintain the momentum needed for such ambitious growth will depend on its ability to overcome its internal challenges while navigating a complex global landscape.
