The Economic Survey will be presented first in the Lok Sabha at 12 noon, followed by the Rajya Sabha at 2 PM, in line with parliamentary procedures. This document, compiled by the Economic Division of the Department of Economic Affairs under the supervision of the Chief Economic Adviser, offers a detailed review of India’s economic performance over the previous financial year (April-March 2024-25) and provides an outlook for the next fiscal year.

The Economic Survey is crucial as it not only outlines key economic indicators and trends but also sets the stage for the Union Budget, offering valuable clues about the government’s fiscal policy, potential reforms, and the budget’s broad focus areas.

The History and Significance of the Economic Survey

The Economic Survey has been an integral part of India’s budgetary process since its inception in 1950-51. Initially included as part of the Union Budget documents, the Survey was separated from the Budget in the 1960s and presented a day before the Union Budget. Over the years, it has evolved into a comprehensive and data-driven document that provides an assessment of the country’s economic health and growth prospects.

The Survey has also had a tradition of adopting central themes that highlight critical issues affecting the economy. For instance, in 2022, the theme was ‘Agile Approach’, reflecting India’s adaptive economic strategies in response to the COVID-19 pandemic. In 2023, the theme was ‘Recovery Complete’, celebrating the broad-based recovery from the pandemic’s economic shock. Last year, the 2024 Survey focused on ‘Economic Resilience’, emphasizing India’s ability to withstand external challenges like global inflation and geopolitical tensions.

This year, attention will be focused on the central theme of the Economic Survey, which could signal the government’s strategy for addressing weaker GDP growth and consumption concerns. India’s GDP growth slowed to 5.4% in the July-September quarter of 2024-25, lower than expected, with forecasts for the full year now revised to 6.4-6.6%. The Economic Survey will provide insights into how the government plans to address these economic headwinds in the upcoming Budget.

Economic Context and the Road to Budget 2025

As the Indian economy grapples with slow growth, consumption challenges, and global uncertainties, the Budget 2025 will be scrutinized for measures to revitalize growth. India’s economy had registered impressive growth rates of 8.2% in 2023-24 and 8.7% in 2021-22, but the pace has cooled down recently. The Reserve Bank of India (RBI) has downgraded its growth forecast for 2024-25 to 6.6%, while the government’s estimate is slightly more optimistic at 6.4%.

Despite these challenges, India remains one of the fastest-growing major economies. The government’s strategies and fiscal policies for sustaining this growth will be under the spotlight in the Budget, particularly in light of weak consumption data and weaker-than-expected GDP numbers.

Key Traditions: The Halwa Ceremony and Budget Session

An important tradition preceding the Budget presentation is the ‘Halwa Ceremony’. This year, the event took place on January 24, marking the beginning of the printing process for the budget documents. The ceremony is a symbolic gesture to kick-start the preparations for the Union Budget and signifies the lockdown at the Ministry of Finance, where officials involved in budget preparation are not allowed to leave the compound until the documents are presented in Parliament.

The Budget session of Parliament is scheduled to begin on January 31 and will run until April 4, 2025, with a break from February 14 to March 10. On January 31, President Droupadi Murmu will address the joint sitting of both Houses of Parliament, outlining the government’s priorities for the upcoming year. The Union Budget will then be presented by Finance Minister Nirmala Sitharaman on February 1, with a speech detailing fiscal policies, revenue, expenditure proposals, and taxation reforms.

The Road Ahead: Scrutiny and Implementation

Once presented, the Union Budget will undergo detailed debate and discussions in Parliament, with lawmakers examining its provisions and proposing amendments. After approval by both Houses, the Budget will set in motion the implementation of the government’s fiscal roadmap for 2025-26. Key measures outlined in the Budget will be vital in shaping India’s economic trajectory, particularly in the face of global uncertainties and domestic growth concerns.

For Finance Minister Nirmala Sitharaman, this will be her seventh presentation of the Union Budget, surpassing the record set by former Prime Minister Morarji Desai, who presented five full budgets and one interim budget. The Budget 2025 will also be delivered in a paperless format, continuing the digital tradition of recent years.

As the nation looks ahead to the Union Budget, all eyes will be on the Economic Survey for clues about the government’s fiscal priorities and its vision for India’s economic future. The next few days will be crucial as the Survey and Budget presentations unfold, offering a glimpse into the economic direction for India in 2025-26.

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Finance Minister Nirmala Sitharaman will lead the ceremony, with Minister of State Pankaj Chaudhary and other senior officials from the Finance Ministry in attendance. The ceremony is attended by officers and staff involved in the exhaustive process of budget preparation, compiling, and finalization.

The Halwa ceremony holds deep significance in Indian government practices. The event sees the preparation of the sweet dish Halwa in a large ‘kadhai’ at the North Block, where the Finance Minister ceremoniously stirs the mixture. As part of the tradition, the minister serves the Halwa to everyone participating in the budget-making process, honoring their dedication and hard work.

The event also marks the commencement of the “lock-in” period for officials working on the budget. During this time, the Finance Ministry is essentially under lockdown, with officials not permitted to leave the ministry compound until the budget is formally presented in Parliament. This security measure ensures confidentiality during the crucial stages of finalizing the budget documents. The printing of the Union Budget takes place in the basement of the North Block, a practice that has been in place since 1980.

The Budget session of Parliament will begin on January 31, with the Union Budget scheduled for presentation on February 1. The session will run until April 4, with an inter-session break between February 14 and March 10. This year’s budget presentation will be Finance Minister Nirmala Sitharaman’s seventh, making her the longest-serving Finance Minister in terms of budget presentations. She has surpassed the previous record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964.

This year’s budget, like its predecessors, will be delivered in a paperless format, and much anticipation surrounds the key announcements, particularly as the country grapples with weaker-than-expected GDP growth. The Indian economy grew by just 5.4% in the July-September quarter of 2024-25, falling short of the Reserve Bank of India’s forecast of 7%. As a result, the RBI has revised India’s growth forecast for 2024-25 down to 6.6% from an earlier estimate of 7.2%.

The Economic Survey, tabled earlier this year, projected India’s GDP growth for 2024-25 at 6.5-7%, acknowledging that expectations were higher due to recent slower growth. Despite the slowdown, India remains one of the fastest-growing major economies, having recorded an impressive 8.2% GDP growth for the fiscal year 2023-24.

As the countdown to the Budget presentation continues, all eyes are on the upcoming announcements, which are expected to outline the government’s economic vision and guidance for the remainder of the Modi 3.0 tenure. The 2025 Budget is expected to tackle current economic challenges and set the stage for future growth amidst a backdrop of weaker consumption and economic performance.

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In the report, the global financial institution emphasized that India’s economic growth is expected to remain robust, with a 6.5% growth rate in 2025 and 2026, which aligns with the country’s potential. However, the IMF also highlighted that the pace of India’s GDP growth has slowed more than anticipated, primarily due to a sharper-than-expected deceleration in industrial activity.

India’s economic performance faced a slowdown in the second quarter of the current fiscal year, with GDP growth dropping to 5.4% compared to 6.7% in the same period the previous year. Despite this moderation, India remains the world’s fastest-growing major economy, with a recorded GDP growth rate of 8.4% for fiscal year 2024.

The Finance Ministry’s November economic review noted that while there are new uncertainties surrounding global trade for fiscal year 2026, India’s economic outlook remains cautiously optimistic. The report suggested that growth in the second half of fiscal year 2025 is expected to outperform the first half, buoyed by promising indicators in key sectors during the third quarter.

Additionally, the report pointed out challenges posed by the strong US dollar and potential policy rate adjustments in the United States, which are exerting pressure on emerging market currencies, including India’s.

On a global scale, the IMF has forecasted a modest global growth rate of 3.3% for both 2025 and 2026, which is below the historical average of 3.7% observed between 2000 and 2019. This projection remains largely unchanged from the October 2024 WEO, with the upward revision in the US economy offsetting downward revisions in other major economies.

As global growth prospects remain subdued, India’s economic resilience continues to be a focal point in the global landscape.

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