Economic Survey 2024-25

- Summary

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GLOBAL ECONOMIC SCENARIO
Steady global growth and varied regional dynamics:
• The year 2024 has been
eventful, with over half
of the world's population
participating in major
elections.
• Meanwhile, conflicts
like Russia-Ukraine and
Israel-Hamas have
heightened regional
instability.
• Cyberattacks also
increased, posing
greater risks to people
and finances as critical
systems became more
digital.
• Global economic growth has been moderate, with an expected average of 3.2% over the next five years,
which is modest by historical standards.

Services sector growth steady; manufacturing faces challenges:

• The global composite
Purchasing Managers’
Index (PMI) has stayed in
the expansion zone for 14
consecutive months as of
December 2024.
o The services sector
remains strong,
while the
Manufacturing
Purchasing
Managers’ Index
(PMI) signals
contraction.
• India recorded the strongest manufacturing output expansion in December.

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• Global services saw growth, with the Services PMI Business Activity Index rising to a four-month high of
53.8 in December, marking the 23rd consecutive month of expansion. Business, consumer, and financial
services all grew, with financial services expanding the fastest.

Inflationary pressures have eased, but the risk of widespread price increases remains:
• Inflation rates have steadily
decreased, nearing central bank
target levels.
o Tighter monetary policies
worldwide and supply
chains adjusting to
economic uncertainty have
helped reduce inflation.
• In 2023, price pressures eased
due to lower fuel prices, and in
2024, a broad-based reduction
in goods inflation contributed
further.
• Major central banks are
lowering policy rates in
response to declining
inflation, with varying
speeds due to differing
economic conditions.

Geopolitical Risks
Threaten Global
Economy:
• High risks are reflected
in indices like the
Geopolitical Economic
Policy Uncertainty Index, which remains elevated amid global economic policy concerns.
• Indices like the Geopolitical
Economic Policy Uncertainty
Index show heightened risks
from global policy concerns.
• Import restrictions in G20
economies now cover 12.7% of
imports, over three times the
2015 level.

DOMESTIC ECONOMY
STABLE DESPITE GLOBAL
UNCERTAINTIES

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• According to the first advance estimates by the National Statistical Office (NSO), Ministry of Statistics &
Programme Implementation (MoSPI), real GDP growth for FY25 is projected at 6.4%.

Supply-Side Growth Projections for FY25:

• Real Gross Value Added (GVA) is estimated to grow by 6.4%.
• Agriculture sector is expected to rebound with 3.8% growth.
• Industrial sector is projected to expand by 6.2%, supported by strong growth in construction and utilities.
• Services sector is expected to grow 7.2%, driven by financial, real estate, public administration, and
professional services.

Improved agricultural prospects in FY25:

• Growth was supported by healthy Kharif production, above-normal monsoons, and adequate reservoir
levels.
• As per the first advance estimates for 2024-25, total Kharif food grain production is projected at a record
1,647.05 lakh metric tonnes (LMT), marking a 5.7% increase from 2023-24.
o Production is also 8.2% higher than the five-year average.
o The estimated increase is primarily driven by higher rice, maize, coarse grains, and oilseeds output.

Analysis of GDP by expenditure categories:

• India's GDP grew by 6.7% in Q1 FY25 and 5.4% in Q2 FY25 (at constant 2011-12 prices), resulting in an overall
6.0% growth in the first half of the fiscal year.
o The slowdown in real GDP growth in H1 FY25 is due to GFCF growth falling from 10.1% to 6.4%,
impacted by lower government capital expenditure during elections and subdued private investment
amid political and global uncertainties.
• Private Final Consumption Expenditure (PFCE) is estimated to grow by 7.3%, driven by a rebound in rural
demand.
• PFCE share of GDP (at
current prices) is expected
to rise from 60.3% in FY24
to 61.8% in FY25, the
highest since FY03.
• Gross Fixed Capital
Formation (GFCF) is
projected to grow by 6.4%
at constant prices.
• In H1 FY25, India's exports
of goods and non-factor
services grew by 5.6%,
while imports increased by
0.7% (at constant prices).

STABLE AND INCLUSIVE ECONOMY ACROSS MULTIPLE FRONTS

Improving public finances support macro stability:

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• Prudent fiscal management since COVID-19 has reduced general government dis-savings, helping sustain
overall economic savings and reducing dependence on foreign funding.
• Over the last four years, controlled
savings-investment gaps ensured
smooth financing of the current account
deficit, despite a moderation in household
savings.

Fiscal discipline of the union

government:
• The Union government's fiscal discipline
has improved, with a steady rise in capital
expenditure as a share of total spending
since FY21.

Varying patterns in state

finances:
• For the period April - November
2024, the Union’s Gross Tax
Revenue (GTR) and States’ Own
Tax Revenue (OTR) grew at a
similar pace, but states' overall tax
revenue was higher due to
increased tax devolution by the
Union government.
• For 15 states, OTR contributed
over 50% of total tax receipts, with
the highest in Telangana (88%),
followed by Karnataka (86%) and Haryana (86%).
• States with a higher ratio of own revenue receipts (ORR) to total revenue receipts also tended to have
relatively lower ratios of revenue deficit to total revenue receipts.
• GST was the main source of revenue among Own Revenue Receipts (ORR) for 23 states, with Manipur (78%)
and Nagaland (72%) having the highest
reliance.
• The highest shares in ORR for stamps
& registration, sales tax, and state
excise duties were in Maharashtra,
Tamil Nadu, and West Bengal,
respectively.
• Odisha had the highest share of non-
tax revenue in ORR, accounting for
49%.
• Revenue and Expenditure of States:

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 o Revenue expenditure of states grew by 12% YoY during April-November 2024, with subsidies
increasing by 25.7% and committed liabilities rising by 10.4%.
o Despite a 5.6% decline in capital expenditure, total expenditure grew by 9.5%, although 11 states saw
an increase in capital expenditure.
o In April-November 2024, 11 States maintained revenue surplus.
Inflation – a combination of low and stable core inflation with volatile food prices:
• Retail headline inflation, measured by the Consumer Price Index (CPI), decreased from 5.4% in FY24 to 4.9%
during April–December 2024.
o The decline was driven by reduction in core inflation (non-food, non-fuel) between FY24 and April–
December 2024.
o The CPI inflation, excluding TOP commodities, has been significantly lower, 4.5% in December 2024.
• Despite the overall decrease, monthly volatility in food prices and select commodities caused CPI inflation
to stay near the upper end of the tolerance band (4% ± 2%).
• Food price pressures have been influenced by factors such as supply chain disruptions and weather
conditions.
• Food inflation, measured by the Consumer Food Price Index (CFPI), rose from 7.5% in FY24 to 8.4% in FY25
(April-December), primarily due to increases in vegetables and pulses.

External sector stability safeguarded by services trade and record remittances:

• India's external sector showed mixed trends due to volatile global conditions.
• India's merchandise exports grew by 1.6% YoY during April–December 2024.
• Although merchandise imports exceeded exports, widening India's merchandise trade deficit, the services
trade surplus helped balance the overall
trade deficit.
o India's strong services exports have
helped it become the 7th-largest
exporter of services globally.
• In addition to the services trade surplus,
remittances from abroad led to a healthy net
inflow of private transfers.
• According to the World Bank, India was the
top recipient of remittances globally, driven
by increased job creation in OECD economies.
• These two factors helped keep India's current account deficit (CAD) relatively low at 1.2% of GDP in Q2
FY25.
• The capital account comfortably financed the CAD, ensuring stability in the external sector.
• Gross FDI inflows increased by 17.9% YoY in April-November 2024, surpassing levels seen in all previous
years except FY21.
o The net FDI inflow decreased during this period mainly due to an increase in repatriation.

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• The inclusion of India's sovereign government securities (G-secs) in the JP Morgan EM Bond Index led to
increased activity in the debt segment of FPIs.
• Due to stable capital flows, India's foreign exchange reserves rose from USD 616.7 billion in January 2024
to USD 704.9 billion in September 2024.
o India’s forex reserves are enough to cover 90% of external debt and provide an import cover of over
10 months, helping safeguard against external vulnerabilities.

Financial Sector Outlook Amid Slower Credit Growth:

• The banking and financial sector remains stable, well-capitalized, and continues to meet the economy's
financing needs.
o The banking sector's stability is highlighted by decreasing asset impairments, strong capital
buffers, and good operational performance.
• While credit disbursal by scheduled commercial banks (SCBs) is growing in double digits, there has been a
slowdown in growth in recent months.
o Besides personal loans, credit to the services sector is a key driver of growth in gross bank credit.
• According to the RBI’s Financial Stability Report (FSR) of December 2024, gross non-performing assets
(NPAs) have dropped to a 12-year low of 2.6% of gross loans and advances.
• While the banking system’s long-term stability is secure, there was concern about the short-term issues
caused by the mismatch between credit and deposit growth rates.
• Another concern in the banking system is the pressure on unsecured credit, such as personal loans and
credit cards.
• As of September 2024, 51.9% of the new NPAs in the retail loan portfolio came from defaults in the
unsecured loan segment.

Employment trends:
• India's labor market growth in recent
years has been driven by post-
pandemic recovery and greater
formalization.
• The formal sector in India has grown
significantly, with net EPFO
subscriptions more than doubling
from 61 lakh in FY19 to 131 lakh in FY24.
o Between April and November
2024, net additions reached
95.6 lakh, with 47% of the new
payroll additions coming from
workers aged 18-25 years.

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MONETARY DEVELOPMENTS
• Monetary base (M0), the most liquid form of money, recorded a year-on-year (YoY) growth of 3.6% as of 3
January 2025, compared to 6.3% a year ago.
• Excluding the impact of the merger of a non-bank with a bank (effective from 1 July 2023), M3 grew by 9.3%
YoY as of 27 December 2024, compared to 11% a year earlier.
o Aggregate deposits were the main contributor to M3 expansion, with bank credit to the commercial
sector being a key source of growth.

Money Multiplier (MM4) Trends and Influencing Factors:

• Money multiplier (MM4), the ratio of M3 to M0, stood at 5.7 as of 27 December 2024, compared to 5.5 a
year earlier.
o MM in a country is influenced by 2 main factors: the amount of cash held by individuals and
businesses, and the reserves maintained by banks.
▪ The money multiplier measures the maximum amount of money that a banking system
generates with each unit of central bank money.
o A higher money multiplier (MM) means the banking system is creating more money from the central
bank's supply.
• MM has generally increased over the years, dropping during the COVID-19 pandemic due to higher cash
holdings, but has resumed growing after FY22, indicating improved liquidity generation.

FINANCIAL INTERMEDIATION
Performance of the banking sector and credit availability:
• The GNPA ratio of SCBs has steadily fallen from its peak in FY18 to a 12-year low of 2.6% by September
2024.
o This decrease is due to fewer slippages and a reduction in GNPAs through recoveries, upgradations,
and write-offs.
• Lower GNPAs and higher provisions in recent years also helped reduce net NPAs to around 0.6% by
September 2024.
• By September 2024, the CRAR of SCBs was 16.7%, with all banks meeting the CET-1 requirement of 8%.

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• Despite a decrease in Net Interest Margin (NIM), both return on equity (RoE) and return on assets (RoA)
ratios improved by September 2024.
• As GNPAs and slippages declined,
the provision coverage ratio
increased to 77% by September
2024, up from 74.9% in March 2023.

Trends in bank credit:

• Despite the recent monetary policy
tightening in India, bank deposits
continue to show double-digit
growth.
• However, the focus has shifted
towards schemes offering higher
returns, with growth in term
deposits outpacing current and
savings account deposits.
• By the end of November 2024, the growth in overall bank credit slowed to 11.8% YoY, down from 15.2% in
the same period last year.
• In the December 2024 MPC, the RBI raised the interest rate ceiling on Foreign Currency Non-Resident
(FCNR(B)) deposits with maturities of 1-3 years and 3-5 years.
• The RBI linked the foreign exchange retail platform with Bharat Connect to boost MSMEs' access to foreign
exchange.
• A key measure to improve credit access for small and marginal farmers is raising the limit for collateral-free
agricultural loans from ₹1.6 lakh to ₹2 lakh.
• The credit/GDP ratio is a useful measure to assess an economy's position in the financial cycle.
o A ratio significantly higher than its trend may signal stress in the lending sector, while a lower ratio
suggests room for growth.
o In India, a positive credit/GDP gap from 2006 to 2012 indicated excessive credit growth.
o After overcoming the COVID-19 pandemic, the credit/GDP ratio has shown an upward trend, with the
gap steadily closing.
• India's credit landscape reflects recovery, with the RBI's Financial Inclusion Index rising from 53.9 in March
2021 to 64.2 in March 2024.

Rural Financial Institutions:

• This multi-agency system includes Regional Rural Banks (RRBs), Rural Cooperative Banks (RCBs), SCBs,
Small Finance Banks, NBFCs, Micro Finance Institutions, and local area banks.
Regional Rural Banks (RRBs):
• RRBs were established in 1975 under the Regional Rural Banks Act of 1976, starting with five banks.

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 o As of 31 March 2024, there
were 43 RRBs, sponsored by
12 SCBs.
• The consolidated CRAR of RRBs rose
from 13.4% in March 2023 to an all-
time high of 14.2% by March 31, 2024.
o The GNPA ratio of RRBs
improved from 7.3% in FY23 to
6.1% in FY24, the lowest in the
past 10 years.
o Net NPAs decreased from 3.2%
in FY23 to 2.4% in FY24.
• All RRBs met the RBI's regulatory targets and sub-targets under the Priority Sector Lending (PSL) guidelines
in FY24.

Development Financial Institutions:

• Their main objective is to drive economic growth by providing financial and technical support for
infrastructure development across various sectors.
• Institutions such as Infrastructure Development Finance Company (1997), India Infrastructure Finance
Company Limited (IIFCL) (2006), and more recently, the National Bank for Financing and Infrastructure
Development (NaBFID) (2021) have focused on funding infrastructure development.
Establishment of NaBFID:
• NaBFID was established through the NaBFID Act, 2021, as an infrastructure-focused DFI with both financial
and developmental objectives, providing long-term capital across various sectors.
o Financial Objective: To lend or invest, directly or indirectly, in infrastructure projects, attracting
private sector and institutional investment to promote sustainable economic development in India.
o Developmental Objective: To coordinate with central and state governments, regulators, financial
institutions, institutional investors, and other stakeholders.
• It was granted 'All India Financial Institution' (AIFI) status by the RBI on 8 March 2022, becoming the fifth
AIFI after NABARD, SIDBI, NHB, and Exim Bank.

Efficacy of Insolvency Law:

• The Insolvency and Bankruptcy Code, 2016 (IBC) established a modern insolvency framework, improving
the banking sector's health and redefining debtor-creditor relationships by addressing financial distress and
NPAs.
o As of September 2024, 1,068 resolution plans under the Code have led to creditors recovering ₹3.6
lakh crore, 161% of the liquidation value and 86.1% of the fair value. Out of the 12 large accounts
referred by the RBI for resolution under the Code, 10 have been successfully resolved.

Development in capital markets:

• Investor participation has increased from 4.9 crore in FY20 to 13.2 crore as of 31 December 2024.
• India's share in global IPO listings rose to 30% in 2024, up from 17% in 2023, making it the leading contributor
to primary resource mobilization globally.

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• The total resource mobilization from primary markets (equity and debt) stands at ₹11.1 lakh crore from April
to December 2024, which is 5% higher than the amount mobilized during the entire FY24.
o This also amounts to 25.6% of gross fixed capital formation of private and public corporations during
FY24.
• The number of IPOs increased by 32.1% to 259 during April to December 2024, compared to 196 in the same
period of the previous year, while the amount raised almost tripled from ₹53,023 crore to ₹1,53,987 crore in
the same period.
• Reflecting strong market conditions, Qualified Institutional Players (QIPs) became the preferred equity
fundraising mechanism for corporates in FY25.
• The debt market in India remains undercapitalized compared to the equity market.
o The corporate bond market in India is only 18% of GDP, much lower than 80% in Korea and 36% in
China.

Secondary Market: Positive performance amidst volatility:

• India’s weight in the MSCI-EM index reached a new high of 20% in July 2024, settling at 19.4% by December
2024, ranking 3rd after China and Taiwan.
• On 23 May 2024, the total market capitalisation of BSE-listed stocks closed above the USD 5 trillion
milestone for the first time.
• India’s market capitalization to GDP ratio stood at 136% at the end of December 2024, significantly higher
than other Emerging Market Economies (EMEs).

Rise in investor participation in capital markets:

• The number of demat accounts increased by 33% to 18.5 crore at the end of December 2024, showing a
sharp year-on-year growth.
• The rise in retail participation through mutual funds is evident as the number of unique investors doubled
from 2.9 crore in FY21 to 5.6 crore by December 2024.
o The surge in participation and strong market performance led to a 25.3% growth in mutual funds'
assets under management (AuM), reaching ₹66.9 lakh crore by December 2024.
• The mutual fund segment now has over 10 crore Systematic Investment Plan (SIP) accounts, with
cumulative SIP inflows of ₹10.9 lakh crore since inception.
• Monthly average gross SIP flows have more than doubled in the last three years, rising from ₹0.10 lakh crore
in FY22 to ₹0.23 lakh crore in FY25.
• The financial sector is experiencing positive changes, including a rise in consumer credit.
o Between FY14 and FY24, the share of consumer credit in total bank credit increased from 18.3% to
32.4%.
o Banks' share in total credit has declined from 77% in FY11 to 58% in FY22, reflecting a rise in non-
bank-based financing.
o Equity-based financing has gained popularity, with IPO listings growing six times between FY13 and
FY24, making India rank first globally in IPO listings in FY24.
• A report by the NSE notes that the proportion of young investors increased from 23% in March 2018 to 40%
in September 2024.

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Developments in the insurance sector:
• India's insurance market continued to grow, with total premiums increasing by 7.7% in FY24 to ₹11.2 lakh
crore, despite a slight decline in insurance penetration from 4% in FY23 to 3.7% in FY24.
o Insurance penetration rate is below the global average of 7%.
▪ Insurance penetration is calculated as the percentage of insurance premiums paid in a year
to the country's gross domestic product.
• Insurance density in India saw a modest increase from USD 92 in FY23 to USD 95 in FY24.
o This growth in insurance density has been on an upward trajectory since FY17.
o Insurance density in India is relatively low compared to global standards.
▪ Insurance density is calculated as the ratio of insurance premium to population (calculated in
USD for international comparison).
• The Swiss Re Institute projects India’s insurance sector to grow at 11.1% and become the fastest-growing
market among G20 nations from 2024 to 2028.

Developments in the pension sector:

• The World Economic Forum (WEF) has noted that, for the first time in history, the global population of people
aged 65 and over has surpassed that of children aged five and younger.
• Pension assets, including EPFO, account for 17% of India's GDP, with NPS contributing an additional 4.5%.
In contrast, average pension assets in OECD countries exceed 80% of their GDP.
India's pension sector has grown significantly since the introduction of the National Pension System (NPS) and
Atal Pension Yojana (APY).
• As of September 2024, the total number of subscribers reached 783.4 lakh, showing a 16% year-on-year
growth from 675.2 lakh in September 2023.
• The number of APY subscribers, which includes its earlier version, NPS Lite, rose from 538.2 lakh in March
2023 to 629.1 lakh in September 2024.
• APY subscribers make up approximately 80.3% of the overall pension subscriber base.
• The share of female subscribers in APY increased from 37.9% in FY16 to 52% in FY24.
• The share of APY subscribers aged 18-25 increased from 29.2% in FY16 to 45.5% in FY24.
• However, 93.7% of APY accounts are for a pension of ₹1,000 per month, and 3.7% are for ₹5,000.
• The overall pension coverage for these 2 schemes increased from 0.95% of the population in FY16 to 5.3%
in FY24, while their AuM as a proportion of GDP rose from 0.86% in FY16 to 4% in FY24.

Indicators for Monitoring Global Risks and Economic Uncertainty:

• To monitor global risks and uncertainties, several key indicators are used to measure the impact of policy-
related uncertainty on global economic activity. These include:

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 o Geopolitical Risk (GPR) Index: Tracks adverse geopolitical events through newspaper articles.
o Trade Policy Uncertainty (TPU) Index: Monitors the frequency of articles mentioning trade policy
uncertainty and heightened trade tensions.
o Global Economic Policy Uncertainty (GEPU) Index: A GDP-weighted average of national Economic
Policy Uncertainty (EPU) indices for 21 countries.
• These indices capture changes occurring in economies that constitute about 71% of global output.
• As of November 2024, both the GEPU and TPU indices remain high, reflecting ongoing global economic
policy concerns and rising trade tensions since December 2023.
• The RBI has developed a policy uncertainty index for India, using Google Trends data to assess domestic
and international events, with real-time updates.

GLOBAL TRADE DYNAMICS

• Since late 2022, there has been a rise in the political proximity of trade, favoring bilateral trade between
countries with similar geopolitical stances, such as friend-shoring and nearshoring.

• Friend-shoring is determined by trade between countries with similar political stances, measured by how
closely their voting patterns align in the United Nations.

• Nearshoring refers to relocating production or trade closer to a country, and it's measured by the average
distance between trading partners, where shorter distances indicate nearshoring.

Global trade performance in 2024:

• According to the latest UNCTAD trade update, global trade has continued to rise from H2 of 2023 into 2024.
o The WTO data shows a 3.5% YoY growth in global merchandise exports and 3% growth in imports in
Q3 of 2024.
o Global services exports and imports grew by 7.9% and 6.7% YoY, respectively, during the same period.

Tariff policies:
• The number of regional trade agreements (RTAs) has risen from 22 in 1990 to 369 as of August 2024.
• Between 2000 and 2024, India's average tariff rates on dutiable items dropped from 48.9% to 17.3%.

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• Between 2012 and 2022, Most Favoured Nation (MFN) and preferential tariffs decreased in agriculture,
manufacturing, and natural
resources.

Non-tariff measures:
The global decline in tariffs has been
accompanied by an increase in Non-
Tariff Measures (NTMs) across
countries.
• The Global Trade Alert database
shows that between 2020 and 2024,
over 26,000 new trade and
investment-related restrictions were
imposed globally.
• Sectors most affected by NTMs
include agriculture, manufacturing,
and natural resources.

• Climate change-related NTMs account for 2.6% of the total measures.

TREND IN INDIA’S TRADE PERFORMANCE

• India's total exports (merchandise + services) reached USD 602.6 billion in the first 9 months of FY25,
showing a 6% YoY growth.
o Total imports during April-December 2024 reached USD 682.2 billion, with a 6.9% YoY growth.
o The rise in imports compared to exports increased the trade deficit from USD 69.7 billion in April-
December 2023 to USD 79.5 billion in the same period of FY25.
o During April-December 2024, non-petroleum exports increased by 7.1%, while non-petroleum and
non-gems and jewellery exports rose by 9.1%.
• Merchandise exports grew by 1.6% YoY, mainly due to a decline in petroleum product exports caused by
falling international commodity prices.
• Merchandise imports grew by 5.2%
during April-December 2024, driven by a
rise in non-oil, non-gold imports,
reflecting a rebound in domestic
consumption despite inflation.
• The faster increase in merchandise
imports compared to exports widened the
merchandise trade deficit to USD 210.8
billion in April-December 2024, from USD
189.7 billion last year.
• India is a top exporter of shipping vessels
with nearly 33% market share and a
leading exporter of iron and steel alloys,
a market it entered after 1994.

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India’s e-commerce exports:
• India's e-commerce market currently makes up about 1.5% of the global market and is projected to remain
around 2% in the coming years.
• E-commerce exports generated an estimated USD 4 to 5 billion in FY23 and are expected to grow to USD
200 to 300 billion by 2030.

Services trade remained resilient amidst global challenges:

• Services grew by 11.6% in the first nine months of FY25 despite unfavorable geopolitical conditions, with net
services receipts increasing from USD 120.1 billion in FY24 to USD 131.3 billion in FY25.
• India's share in global services exports more than
doubled, rising from 1.9% in 2005 to around 4.3% in
2023.
• India ranks as the 2nd-largest global exporter in
“Telecommunications, Computer, & Information
Services”, commanding 10.2% of the global market.
• India is the 3rd-largest exporter in the "Other
Business Services" sector, holding 7.2% of the global
market, fueled by its expertise in professional and
consulting services.
• India ranks 6th in 'Personal, Cultural, & Recreational'
services and 8th in 'Construction services,' highlighting its competitive edge in cultural exports and
international infrastructure projects.

EASE OF DOING BUSINESS INITIATIVES FOR EXPORTERS:

Trade Connect e-Platform:
• Launched by the Directorate General of Foreign Trade (DGFT), this single-window platform helps Indian
exporters, especially MSMEs, access new markets and boost international trade.
• The platform, developed with key partners like the Ministry of MSME, EXIM Bank, Department of Financial
Services, and the Ministry of External Affairs, aims to address information gaps.
• This e-platform will connect more than 6 lakh Importer Exporter Code holders, over 180 Indian Mission
officials, and over 600 Export Promotion Council officials, along with officials from the Directorate General of
Foreign Trade, Department of Commerce, banks, and other entities.

DGFT Trade Facilitation Mobile App:

• It provides information on Foreign Trade Policy (FTP) updates, import/export policies, statistics, and
application status.
• Offers 24×7 virtual assistance and auto-generation of electronic Importer Exporter Code (e-IEC),
eliminating approval wait time.

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• IEC details are automatically validated with the Central Board of Direct Taxes (CBDT), Ministry of Corporate
Affairs (MCA), and Public Financial Management System (PFMS).

BALANCE OF PAYMENTS: RESILIENCE AMID CHALLENGES

• Despite external trade uncertainties, India's Balance of Payments (BoP) remains stable, supported by strong
services exports, lower crude oil prices, foreign portfolio inflows, and revived FDI flows.

Current account:
• India’s current account deficit (CAD) moderated to 1.2% of GDP in Q2 FY25, down from 1.3% in Q2 FY24.
o The rise in CAD is due to an increase in the merchandise trade deficit.
o The rising net services receipts and increase in private transfer receipts cushioned the expansion
in the merchandise trade deficit.
• Compared to other G20 economies like Brazil and Australia, India's CAD remains relatively contained despite
similar external pressures such as rising commodity prices and weak global demand.
• Private transfers, mainly driven by remittances from Indians employed overseas, formed the bulk of net
transfers and showed steady growth.

Capital and Financial Account:

• The Capital and Financial Account plays a key role in financing the CAD and boosting foreign exchange
reserves.

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• India has mostly recorded capital account
surpluses from Q1 FY23 to Q2 FY25, driven
by strong FDI, FPI, and external loan inflows.

Performance of FDI flows:

• FDI saw a revival in FY25, with gross inflows
increasing from USD 47.2 billion in the first 8
months of FY24 to USD 55.6 billion in the
same period of FY25, registering a 17.9%
year-on-year growth.
• From April 2000 to September 2024,
cumulative FDI inflows, including equity
inflows, reinvested earnings, and other
capital, surpassed USD 1 trillion (USD
1,033.4 billion).
• In FY24, net FDI stood at USD 10.1 billion,
with the last two years witnessing higher
repatriation from India.
• Since developed countries are also
competing for investments, India is not
just competing
with other
emerging
economies.
Thus, India has
two options:
o India
must aggressively attract FDI by making itself more appealing to foreign investors, with most sectors
already open under the automatic route.
▪ Improving tax certainty and stability, including Advance Pricing Agreement (APA), can further
enhance investor confidence.
o If the investment rate cannot increase due to capital constraints, investment efficiency must
improve.
▪ Deregulation and 'Ease of Doing Business' play a key role in this, making deregulation the main
theme of this Survey.

Performance of Portfolio flows:

• Net Foreign Portfolio Investment (FPI) inflows into India declined to USD 10.6 billion from April to December
2024, compared to USD 31.7 billion in the same period of the previous year.
• The inclusion of Indian Government Bonds (IGB) in global indices, especially JP Morgan's index in October
2023, boosted FPI debt inflows to ₹1.1 lakh crore (Oct 2023–June 2024).
o FPI investment in Fully Accessible Route (FAR) securities crossed USD 20 billion within nine months
of the JP Morgan EM Bond Index announcement.

India’s Foreign Exchange Reserves:

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• Foreign exchange reserves comprise foreign currency assets (FCA), gold, special drawing rights (SDRs)
and reserve tranche position (RTP) in the IMF.
• These reserves can cover 89.9% of external debt (USD 711.8 billion as of September 2024), providing a
strong buffer against external risks.
• India became the world's 4th largest foreign exchange reserve holder in 2024, after China, Japan, and
Switzerland.
• Forex reserves rose by USD 27.1 billion in 2024, driven by net positive capital inflows, with Foreign Currency
Assets (FCA) contributing the most to
this increase.
• India's import cover stood at 10.9
months as of December 2024,
reflecting strong external sector
stability.
o This significantly exceeds the
IMF's three-month import
cover recommendation for
emerging economies, ensuring
better resilience against
external shocks.
o A BoP surplus, along with a
modest valuation gain, was the
key driver of this improvement.

External debt position:

• The external debt to GDP ratio rose slightly from 18.8% of the GDP at the end of June 2024 to 19.4% at the
end of September 2024.
• As of September 2024, short-term debt accounted for 18.8% of total external debt and 18.9% of forex
reserves.
• India’s external debt was primarily in US Dollars (53.4%), followed by Indian Rupees (31.2%), Special Drawing
Rights (SDR) (5%), and Euros (3%).

DOMESTIC INFLATION
Softening core inflation cools headline inflation:
• India's headline inflation (CPI) moderated in FY25 (April-December) compared to FY24, mainly due to a 0.9%
drop in core inflation.

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 o The sharp decline in core
inflation was largely
driven by core services
inflation, which was
lower than core goods
inflation.
• Lower fuel price inflation helped
moderate headline inflation,
easing household budgets.

Food Inflation is majorly driven by very few food items:

• India’s food inflation remained high over the past two years, unlike the global trend of stable or declining
food prices.
o This was driven by supply chain disruptions, extreme weather events, and lower harvests of certain
food items.
• Food inflation (CFPI) in FY25 (April-December) was mainly driven by vegetables and pulses.
o Despite having an 8.42% weight in the CPI basket, vegetables and pulses contributed 32.3% to overall
inflation during this period.
o Excluding vegetables and pulses, average food inflation in FY25 (April-December) was 4.3% (4.1%
lower than overall food inflation), while headline inflation stood at 3.2% (1.7% lower than actual
headline inflation).
• Excluding the 3 most price-
sensitive vegetables -
tomato, onion, and potato
(TOP) - from the CPI basket,
average food inflation in
FY25 (April-December) was
6.5%, 1.9% lower than
current food inflation.
o Average headline
inflation stood at
4.2% when
excluding TOP,
0.7% lower than the
current headline inflation.
Note:
• Tomato production is mainly concentrated in states such as Madhya Pradesh, Andhra Pradesh, Karnataka,
Gujarat and Odisha.
• Over the past 3 years, domestic household consumption of tomatoes and onions has been lower than
production.

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Administrative measures to control food inflation:

INDIA'S MEDIUM-TERM OUTLOOK

• To achieve its Viksit Bharat goal by India's centenary of independence, the country needs an average growth
rate of 8% at constant prices for a decade or two.
• The IMF's World Economic Outlook (WEO) October FY25 projects India to become a USD 5 trillion economy
by FY28 and reach USD 6.307 trillion by FY30.
o This implies an annual nominal growth rate of 10.2% in USD terms from FY25 to FY30.
o Over 30 years from FY94 to FY24, India's GDP in USD terms grew at a compounded annual rate of
8.9%.
o India's nominal GDP grew at a 12.4% CAGR in rupee terms over the three decades ending FY24.

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• The IMF projects India's nominal GDP to
grow at 10.7% annually over the next five
years.
• The Ministry of Statistics and Programme
Implementation (MoSPI) estimates 6.4%
GDP growth at constant prices in the first
advance estimate for FY25.
• For FY26, the Economic Survey projects
GDP growth between 6.3% and 6.8%.
o This aligns with the IMF's projection
of India's GDP growth at 6.5%
(constant prices) between FY26
and FY30.

GEO-ECONOMIC FRAGMENTATION – THIS TIME MAY BE DIFFERENT

Globalization and Economic Transformation Since the 1980s:
• Global trade expanded significantly, rising from 39% of world GDP in 1980 to 60% by 2012, reflecting deep
market integration.
• Foreign Direct Investment (FDI) surged, growing from USD 54 billion in 1980 to over USD 1.5 trillion in 2019,
highlighting multinational corporations' role.
• The global economy grew from USD 11 trillion in 1980 to over USD 100 trillion in 2022, demonstrating strong
economic expansion.
• Extreme poverty rates (those living on less than USD 2.15 a day) dropped from 42% of the global population
in 1981 to 8.4% in 2019, driven by rapid economic growth in China and India.

Global population and urbanisation:

• The global population increased from 4.4 billion in 1980 to 8 billion in 2022, while urbanization rose from
39% to 57% in same period, boosting economic activity and connectivity.
• Internet penetration: In 1980, internet connectivity was nearly nonexistent, but by 2022, 5.3 billion people
(66% of the global population) had internet access.

THE ELEPHANT AND THE DRAGON

IN THE ROOM
• Between 2020 and 2024, over 24,000
new trade and investment restrictions
were imposed globally, slowing trade
growth and signaling secular stagnation
in the global economy.
• According to UNIDO, China's share in
global manufacturing surged from 6% in
2000 to a projected 45% thirty years
later, giving it unprecedented
dominance in manufacturing and energy
transition.
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 o This level of manufacturing dominance has been seen only twice before - by the UK at the start of
the Industrial Revolution and by the US just after World War 2.

IMPLICATIONS FOR INDIA'S GROWTH PROSPECTS:

• Viksit Bharat@2047 aims to make India a developed nation by 2047, requiring an increase in the investment
rate to 35% of GDP from the current 31%.
o India must create 78.5 lakh non-farm jobs annually till 2030, achieve 100% literacy, enhance
education quality, and build future-ready infrastructure.
o Additionally, strengthening manufacturing and investing in AI, robotics, and biotechnology will be
crucial.
• Over the last decade, India implemented major structural reforms:
o Goods and Services Tax (GST) created a unified tax system, improving ease of doing business and
boosting revenue collection.
o Insolvency and Bankruptcy Code (IBC) accelerated NPA resolution, strengthening the banking sector
and investor confidence.
o Real Estate Regulation Act (RERA) helped regulate and clean up the real estate sector.
o India Stack (Unique Identification (UID), Unified Payments Interface (UPI), Direct Benefit Transfer
(DBT)) transformed digital infrastructure.
o Digital Public Infrastructure (DPI) improved service accessibility and enhanced economic efficiency
across sectors.
• India’s growth should be driven by internal engines, focusing on economic freedom for individuals and
organizations to pursue legitimate activities.

REINVIGORATING THE INTERNAL ENGINES OF GROWTH - ENHANCING ECONOMIC

FREEDOM THROUGH DEREGULATION
Deregulation and economic freedom: A catalyst for growth:
• Many regulations are gold-plated, meaning they are unnecessarily strict and based on unrealistic compliance
capacity, and can be simplified to match global standards.
• Regulations should be rationalized to be minimal yet effective, ensuring they are achievable within the
limited managerial and financial resources of SMEs.
States can deregulate systematically by reviewing regulations for cost-effectiveness in three steps:
• Identifying areas for deregulation:
o Ease of Doing Business (EoDB) 2.0 should be state-led, addressing the root causes of business
challenges.
o When the Union Government makes the main laws, states can simplify rules by changing related
regulations.
• Thoughtfully comparing the regulations with other states and countries:
o States should use inter-state and inter-country comparisons to identify growth-inducing reforms,
learning from deregulation experiences and creative solutions.
• Estimating the cost of each of these regulations on individual enterprises:

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 o Regulations impose monetary, opportunity, and enforcement costs, requiring businesses to spend
money and sacrifice entrepreneurial opportunities.
o States should assess the unit-level impact of each regulation before implementation to ensure
balanced compliance and enforcement.

The following can be pursued in Phase 2 of Ease of Doing Business (EoDB):

• Liberalizing standards and controls by adopting a "minimum necessary, maximum feasible" approach to
regulations.
o Removing prohibitions on women from working in factory processes.
o Rationalise parking norms to
reduce land loss in industrial
and commercial plots.
• Setting legal safeguards for penalties
and enforcement to ensure due
process and fact-based dispute
resolution.
o Adding safeguards to reduce
chances of arbitrary
administrative action
• Reducing tariffs and fees to eliminate
unnecessary utility costs.
• Using risk-based regulation by
tailoring legal norms to business risk
profiles and involving third parties in
enforcement.
• Systematic deregulation is as crucial as
infrastructure investment and innovation incentives in building a strong SME sector (Mittelstand) in India.

Key Benefits of Deregulation:

• Deregulation boosts confidence and trust in governance, improving compliance and strengthening the
partnership between the government and businesses.
• Removing some regulations makes it easier to simplify others, like peeling an onion, revealing further
opportunities for reform.
• Deregulation can trigger a 'butterfly effect,' where small policy changes lead to significant economic impacts,
fostering entrepreneurship, investment, innovation, and growth.

The government has introduced various mechanisms to speed up project planning, approvals, and execution:

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• National Infrastructure Pipeline (NIP): It currently covers 9,766 projects across 37 sub-sectors, ensuring
efficient tracking through the India Investment Grid (NIP-Project Monitoring Group) portal to expedite
execution.
• National Monetisation Pipeline (NMP): It set a ₹6 lakh crore target (FY22-FY25) to unlock value from core
infrastructure assets.
o By FY24, ₹3.86 lakh crore was achieved against the ₹4.30 lakh crore target, with roads, power, coal,
and mining leading the progress.
o For FY25, the aggregate monetization target is set at ₹1.91 lakh crore.
• The Union Government's capital expenditure on major infrastructure sectors grew at a 38.8% trend rate
from FY20 to FY24, reflecting its commitment to development.
• The Union Government's capital expenditure for FY25 is budgeted at 3.3 times the capex for FY20.

PHYSICAL CONNECTIVITY
Railways:
• Between April and
October 2024, 17 new
Vande Bharat train
pairs were added,
and 228 coaches
were produced.
Recent developments in
railways:
• Gati shakti multi-
modal Cargo
Terminal (GCT): 91 GCTs commissioned and 234 locations approved by October 31, 2024.
• Net zero carbon emission: Indian Railways targets 30 GW of renewable energy by 2029-30, with 375 MW
of solar and 103 MW of wind commissioned as of October 2024.
• Major economic corridors: 434 projects valued at ₹11.17 lakh crore have been identified under 3 railway
corridors, mapped on the PM GatiShakti portal.
• Major Projects:
o Mumbai-Ahmedabad High-Speed Rail (508 km) sanctioned in December 2015, supported by Japan,
with a ₹1.08 lakh crore revised cost; 47.17% completed as of October 2024.
o Dedicated Freight Corridors (DFCs): 2,741 km (96.4%) of the 2,843 km network commissioned by
November 2024.
Steps for enhancing passenger amenities in railways:
• Under the Amrit Bharat Station Scheme, 1,337 railway stations were identified for redevelopment.
• Pradhan Mantri Bhartiya Janaushadhi Kendras (PMBJKs) were started at 50 railway stations, with 18 more
inaugurated in November 2024, to provide affordable medicines and healthcare services.
• One Station One Product Scheme operates at 1,900 stations with 2,163 outlets, benefiting 79,380 local
artisans by providing sales opportunities.

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Road transport:
• India's total road network spans 63.4 lakh km, including a National Highway (NH) network of 1,46,195 km.
o Despite being just 2% of the total road network, NHs carry about 40% of overall road freight traffic,
serving as the arterial backbone of transportation.
• The National Industrial Corridor Development Programme aims to develop advanced industrial cities,
making India a key manufacturing and investment hub.
o Industrial development is underway in 4 cities/townships: Dholera (Gujarat), Shendra Bidkin
(Maharashtra), Greater Noida (Uttar Pradesh), and Vikram Udyogpuri (Madhya Pradesh).
o Work has started in another 4 cities: Tumakuru (Karnataka), Krishnapatnam (Andhra Pradesh), Nangal
Choudhary (Haryana), and Dadri (Uttar Pradesh).
• An additional 12 new industrial cities have been approved, integrating Industry 4.0 standards, alongside 8
previously approved projects.
• Bharatmala Pariyojana, launched in October 2017, aims to develop 34,800 km of National Highways, with
76% (26,425 km) awarded and 18,926 km constructed by 2024.
• Multi-Modal Logistics Parks (MMLP): Till December 2024, 6 MMLPs in Chennai, Indore, Nagpur, Jalna,
Jogighopa and Bangalore have been awarded.
• Ropeways projects development: 15 projects are in progress, with Varanasi, Dhosi Hill, Bijli Mahadev, and
Ujjain awarded, while 10 more are under bidding.

Civil aviation:
• Under the Regional Connectivity Scheme (UDAN), 619 routes connecting 88 airports, including 2 water
aerodromes and 13 heliports, have been
operationalised so far.

Ports and shipping:

• Port-Led Industrialisation: The Union Cabinet
approved 12 new industrial smart cities with
a ₹28,602 crore investment across 10 states,
along with 8 additional sanctioned projects.
• International Linkages:
o Chabahar Port & International North-
South Transport Corridor (INSTC): Shahid Beheshti Port at Chabahar connects Mumbai to Eurasia,
cutting transport costs and time, leading to a 43% rise in vessel traffic and 34% growth in container
traffic in FY24.
o Sittwe Port, Myanmar (Kaladan Project): Provides an alternative route to Northeast India, reducing
transport costs between Kolkata and Mizoram.
• In October 2024, the National Maritime Heritage Complex in Lothal was approved, featuring 14 museum
galleries, the tallest lighthouse museum, India's largest Navy gallery, and themed amusement parks.
• The International Container Transshipment Port at Galathea Bay, Great Nicobar Island, is planned to boost
cargo transshipment from Indian East Coast ports and neighboring countries.
• Urban Waterways Projects, valued at ₹1,303 crore, are underway.

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Inland Waterways Transformation: Key Projects and Initiatives:
• Harit Nauka Guidelines (Jan 2024): Aims to green 1,000 inland vessels over the next 10 years.
• Cargo Promotion Scheme: Encourages shifting cargo transport from rail and road to waterways, promoting
sustainability.
• River Cruise Tourism: Improved waterways have benefited both cargo and tourism.
• Jal Marg Vikas Project on NW-1: Enhances cargo transport on the Ganga-Bhagirathi-Hooghly river system,
achieving 65% progress with a revised cost of ₹5,061.15 crore.
• Jal Marg Vikas Project II (Arth Ganga): Focuses on sustainable development, including community jetties
and navigation improvements, with 49 out of 60 jetties already commissioned.

POWER SECTOR:
• The power sector expanded, with installed capacity reaching 456.7 GW in November 2024, a 7.2% year-
on-year increase.
• By December 2024, India's renewable energy capacity grew 15.8% year-on-year, reaching 209.4 GW, up
from 180.8 GW in December 2023.

Government Initiatives for Improving Power Supply and Distribution Infrastructure:

• Under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY - launched in 2014), the Integrated Power
Development Scheme (IPDS) (launched in 2014), and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana
(SAUBHAGYA) (introduced in 2017), a total investment of ₹1.85 lakh crore has been made to improve
distribution infrastructure across states.
o As a result, 18,374 villages have been electrified under DDUGJY, and 2.9 crore households have
gained access to electricity through SAUBHAGYA.
• Additionally, the Revamped Distribution Sector Scheme, launched in July 2021, aims to improve the quality
and reliability of power supply.
o With a total outlay of ₹3.0 lakh crore and a gross budgetary support of ₹97,631 crore for the period
from FY22 to FY26.

DIGITAL CONNECTIVITY:
• By October 31, 2024, 5G services were launched in all states and union territories, and are currently available
in 779 out of 783 districts.

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• In August 2024, the Universal Service
Obligation Fund, which supports telecom
services and subsidizes mobile, broadband, and
infrastructure in rural areas, was renamed
Digital Bharat Nidhi (DBN).
• The BharatNet Project aims to connect all Gram
Panchayats and villages with broadband.
o As of December 2024, 6.92 lakh km of
Optical Fibre Cable (OFC) has been laid,
and 2.14 lakh Gram Panchayats are
service-ready.
• The Government of India Cloud initiative,
MeghRaj, is a key part of India's IT strategy, focused on delivering ICT services through cloud computing to
Central and State/UT Departments.

RURAL INFRASTRUCTURE:
Rural Drinking Water and Sanitation
:
• The Jal Jeevan Mission (JJM),
launched in August 2019, aims to
provide reliable access to safe piped
drinking water for rural households.
o At the time of launch, only
3.23 crore (17%) rural
households had tap water
connections.
o By November 26, 2024, over
12.06 crore households have
been added, bringing the total
to 15.30 crore (79.1%) out of
approximately 19.34 crore
rural households.
o 8 states, namely, Arunachal Pradesh, Goa, Haryana, Himachal Pradesh, Gujarat, Punjab, Telangana
and Mizoram, and 3 union territories, namely, Andaman & Nicobar Islands, Dadra Nagar Haveli &
Daman Diu and Puducherry have achieved 100% coverage.
o At the time of launch, over 75.2 lakh households in quality-affected areas lacked safe drinking water;
however, since implementation, 69.23 lakh households now receive safe piped water supply.

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• The Swachh Bharat Mission–Grameen
(SBM-G) achieved open defecation-free
(ODF) status in its first phase.
o Phase II of SBM-G, implemented
from 2020-21 to 2024-25,
focuses on converting villages
from ODF to ODF Plus.

URBAN INFRASTRUCTURE
Swachh Bharat Mission-Urban:
• Building on the success of the Open
Defecation Free (ODF) nation
through the Swachh Bharat
Mission (SBM-U), SBM-Urban
2.0 was launched in 2021.
o According to the 78th
round report of NSS
(2015), 97% of
households in urban
areas have access to
toilets.
o The NITI Aayog Sector
Report (2021) stated
that SBM-U was well-
aligned with sustainable
development goals and
national priorities, and was effectively implemented.

Progress under various initiatives:

• PMAY-U 2.0 was launched in
September 2024 to support an
additional one crore households.
o 29 states and union
territories have signed
agreements to
implement PMAY-U 2.0,
with approval granted for
6 lakh houses in FY25.
• In 2021, AMRUT 2.0 was
introduced to expand coverage
to all statutory towns and cities,
with an allocation of ₹2.77 lakh
crore during FY22 to FY26.

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Real Estate Development:
• Rules under the Real Estate (Regulation & Development) Act, 2016 (RERA) have been notified in all States
and Union Territories except Nagaland, with various regulatory authorities established.

Initiatives driving urban transformation:

• Climate Smart Cities Assessment Framework (CSCAF): Launched in 2019 to assess climate-sensitive
development in cities. CSCAF 2.0 evaluated 126 cities in 2020, and the upcoming CSCAF 3.0 is currently
being developed.
• DataSmart Cities Strategy: Focuses on data-driven governance to assess cities' readiness for data
solutions across various sectors.
• National Urban Innovation Stack: Supports collaboration within urban ecosystems and promotes data-driven
governance.
• National Urban Learning Platform: A scalable platform to build capacity among urban local bodies for
improved management.
• City Investments to Innovate, Integrate, and Sustain Challenge: Supports urban projects with significant
funding for innovation and climate-resilient infrastructure. The 2nd phase was approved in 2023 to fund
climate-resilient infrastructure in a maximum of 18 cities.
• Urban Learning Internship Programme (TULIP): Launched in 2020, TULIP connects local bodies with youth
for internships to enhance urban transformation skills.

• National Urban Digital Mission: Aims to establish shared digital infrastructure across cities to enhance
citizen-centric governance and service delivery by 2024.

SPACE INFRASTRUCTURE:
• India currently operates 56 active space assets, including 19 communication satellites, 9 navigation satellites,
4 scientific satellites, and 24 earth observation satellites.

Space-based Infrastructure Monitoring Platforms:

• ISRO’s Bhuvan Platform: Helps monitor infrastructure under schemes like MGNREGA and the watershed
component of PMKSY at various stages.
• Electrical Infrastructure Management: Facilitates the management of electrical infrastructure in
Maharashtra and Telangana using Web-GIS portals.
• NyayaVikas Portal for Judicial Infrastructure: Developed in collaboration with the Department of Justice,
this portal monitors judicial projects using Web GIS and mobile geotagging to track progress.
• Urban Geospatial Databases for AMRUT Cities: ISRO has created 2D urban geospatial databases for 238
AMRUT cities, supporting the development of GIS-based master plans for urban planning.

India’s Space Vision 2047:

The Union Cabinet has approved 4 key projects:
1. The Gaganyaan follow-on mission will pave the way for the establishment of the first module of the
Bhartiya Antariksh Station
2. The Chandrayaan-4 Lunar Sample Return Mission
3. The Venus Orbiter Mission

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 4. The development of the Next Generation Launch Vehicle

• High-income countries have lost a significant share in global manufacturing over the last decade, mostly
gained by upper middle-income countries, particularly China.
• The share of lower middle-income economies, in general, did not increase, yet India managed to improve its
share and global presence in manufacturing.
o However, with 2.8% of the global share in manufacturing, compared to China’s 28.8%, India has a
large opportunity to climb up the ladder.
o India has significant potential to increase the industrial sector's contribution to GDP compared to its
comparator countries.
• Global trends suggest that, due to high commodity prices, consumption is shifting from manufactured
goods to services.

RECENT DOMESTIC DEVELOPMENTS:

• Industrial growth in FY25 is expected to be higher than the previous 5-year average, with a 6.2% increase
driven by strong growth in electricity and construction.

CORE INPUT INDUSTRIES:

Cement:
• Currently, India is the 2nd largest
cement producer in the world after
China.
• Most cement plants in India are
located near raw material sources,
with 87% of the industry
concentrated in states like
Rajasthan, Andhra Pradesh,
Telangana, Karnataka, Madhya
Pradesh, Gujarat, Tamil Nadu,
Maharashtra, Uttar Pradesh,
Chhattisgarh, Odisha, Meghalaya,
and West Bengal.

Steel Industry:
• In April-November FY25, India's crude steel production grew by 3.3% and finished steel production by 4.6%,
showing an overall upward trend despite some monthly fluctuations.
• India has been a net importer of steel from April to November FY25.
• In FY24, construction and infrastructure accounted for an estimated 68% of total steel consumption.

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Chemical and Petrochemical
Sector:
• India is a net importer of these
products, relying on imports for
about 45% of petrochemical
intermediates.

PERFORMANCE OF CAPITAL
GOODS AND CONSUMER
GOODS INDUSTRIES:
Capital goods:
• The production of capital goods
varied between FY20 and FY23,
but showed strong growth in
FY24.
• The government has launched Phase II of the Scheme for Enhancement of Competitiveness of the Capital
Goods Sector to further enhance the impact of Phase I on the sector.
• The government has been promoting Smart Manufacturing and Industry 4.0 by supporting the
establishment of Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) Udyog
centres at various institutions.

Electronics Industry:
• India has significantly reduced its reliance on smartphone imports, with 99% now being manufactured
domestically.
o In FY24, around 33 crore mobile phone units were produced, with over 75% of the models being 5G
enabled.

Textiles:
• The textile industry is a key employment generator, contributing about 11% to India’s manufacturing GVA.
o India is a leading producer of jute and ranks 2nd globally in cotton, silk, and man-made fibre
production.
o India is the 6th largest exporter of textiles and apparel, with a 4% share of global trade in this segment.
o In FY24, textiles,
apparel, and handicrafts
made up about 8% of
India’s total
merchandise exports.
• India's export of textiles and
appare l, including handicrafts,
stood at USD 35.87 billion in
FY24, down from USD 36.69
billion in FY23, after reaching a
high of USD 44.44 billion in
FY22.
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• India's technical textile industry is rapidly growing, ranking 5th globally, and the country is a net exporter of
technical textiles.

Pharmaceuticals:
• The Indian pharmaceutical industry is the world’s 3rd-largest by volume.
o Exports account for 50% of the total turnover.
• India holds a 1.5% share of the global medical devices market and ranks 4th in Asia, behind Japan, China,
and South Korea, while being recognized as one of the top 20 medical device markets globally.
• As noted by the United Nations Industrial Development Organization (UNIDO), among the top 5
pharmaceutical producers, the United States led with significant growth, followed by Japan and China, while
Switzerland and India experienced a decline.
• In October 2023, India made significant progress in cell and gene therapy with the approval of its first
indigenously developed CAR-T cell therapy by the Central Drugs Standard Control Organisation.

FLOURISHING INNOVATIONS AMIDST ASPIRATIONS OF ENHANCED R&D:

• As per the World Intellectual Property Organization (WIPO) Report 2022, India ranks 6th globally in patent
filings, with applications mainly in computer & electronics, mechanical & biomedical, and communication
fields.
• The Patent (Amendment) Rules 2024 has further
simplified patent processing, filing and
maintenance.
• India ranks 7th in intangible asset intensity,
outpacing many high-income economies and
matching the intangible investment intensity of
Germany and Japan as a share of GDP.
• India’s rank in the Global Innovation Index has
improved to 39th in 2024 among 133 economies,
up from 81st in 2015.
o It ranks 1st among 38 lower middle-income
economies and 1st among 10 economies in
Central and Southern Asia.

R&D in India:
• India lags in R&D, with the gross expenditure on research and development (GERD) at 0.64% of GDP, which
is low compared to many leading countries in R&D.
o The funding for R&D in India is predominantly sourced from government entities.
o The R&D sector-wise share In India is 43.7% for the central sector, 36.4% for the state sector, 8.8%
for the private sector, 6.7% for the public sector, and 4.4% for higher.
o In developed and emerging economies, business enterprises contribute over 50% to GERD, with
countries like China, Japan, South Korea, and the USA exceeding 70%.
• In India, industrial R&D is not only low but also concentrated in specific sectors, with drugs and
pharmaceuticals leading, followed by information technology, transportation, defence, and biotechnology.

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Government Initiatives to Encourage IP Protection:
• Expedited Patent Examination: For start-ups, SMEs, women inventors, government departments, and
academic institutions.
• Simplified Patent Procedures: Includes easier disclosure requirements, reduced the timeline for examination
from 48 months to 31 months, certificates of inventorship, and a grace period for prior disclosed inventions.
• Simplified Trademark Procedures: Reduced the number of trademark forms from 74 to 8, streamlining the
registration process.
• Fee Reduction: Lower fees for start-ups, MSMEs, and educational institutions for patent, design, and
trademark filings.
• Start-Up Intellectual Property Protection Scheme: Provides financial and technical assistance to start-ups
for patent, design, and trademark filings, extended till March 2026.
• IP Saarthi Chatbot: Offers instant guidance on IP registration and grant processes.
• Technology Transfer Organizations: Promotes R&D and IP commercialization, with 34 Technology and
Innovation Support Centres established across the country.

MICRO SMALL AND MEDIUM ENTERPRISES (MSME):

• As of November 26, 2024, MSMEs have reported employing 23.24 crore individuals.
• To simplify MSME registration and enhance ease of doing business, the government launched the Udyam
Registration Portal in July 2020.
• To formalize Informal Micro Enterprises (IMEs), the government, in collaboration with SIDBI, launched the
Udyam Assist Platform (UAP) in January 2023.
o The UAP has formalized over 2.39 crore informal micro enterprises, making them eligible for priority
sector lending benefits.
• Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE): In FY23, 11.65 lakh guarantees
totaling ₹1 lakh crore were provided under the scheme.
• The government launched the Self-Reliant India (SRI) Fund with a ₹50,000 crore corpus.
• In addition to easy credit, the government addresses MSME issues through initiatives like MSME Samadhan
and the CHAMPIONS portal.
• To deal with the issues of delayed payments, MSE suppliers may approach the Micro and Small Enterprises
Facilitation Council (MSEFC).
• The government is implementing the Micro and Small Enterprises-Cluster Development Programme (MSE-
CDP) to develop clusters nationwide, with Common Facility Centres (CFCs) addressing common issues.

TReDS: Transforming MSME Financing Through Timely Payments:

• TReDS, regulated by the RBI, is a marketplace that allows buyers like government departments, public sector
undertakings, and corporates to make timely payments to MSME suppliers as per the MSMED Act 2006.
• With the Government of India's mandate for companies with a turnover above ₹250 crore to join the
platform, more corporates are expected to onboard.

POLICIES TO PROMOTE GREATER EQUITY IN STATE-WISE INDUSTRIAL PRODUCTION:

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• In FY23, 84.7% of GVA at constant prices was
generated by industrial and service activities, with
interstate variation.
• Gujarat, Maharashtra, Karnataka, and Tamil Nadu
account for about 43% of the total industrial
Gross State Value Added (GSVA).

• 6 Northeast states (excluding Sikkim and Assam)

contribute only 0.7% to industrial GVA,
highlighting the need for tailored industrial
strategies for the region.

• Only a few states like Gujarat, Uttarakhand, and

Himachal Pradesh effectively leverage their dependence on the industrial sector to generate reasonable
income levels for their people.
• Some states have high dependence on the industrial sector but generate low income, while states in the
eastern and northern regions are the least industrialized.
• The mining sector contributes about 8% to the total industrial output.Mining activity is highly concentrated
in Assam, Chhattisgarh, Gujarat, Maharashtra, and Odisha, which together account for about 60% of the all-
State mining Gross State Value Added (GSVA).
• The Annual Survey of Unincorporated Manufacturing Enterprises (ASUSE) for FY23 shows significant
inter-state disparities, with Tamil Nadu having the highest concentration of factories per person, followed
by Gujarat, while Bihar has hardly any factories and Uttar Pradesh has hardly any smaller enterprises.
• The Business Reform Action Plan (BRAP) by the Department for Promotion of Industry and Internal Trade
aims to improve ease of doing business across states, categorizing them into four groups: top achievers,
achievers, aspirers, and emerging business ecosystems.
o There is a positive link between business reforms and industrial activity, highlighting the need for
deregulation and enterprise-friendly reforms in aspiring and emerging states.

• Services value added accounts for about 62% of global GDP.

o Services have driven growth in middle-income countries like China, Thailand, and India over the last
decade.
• The Global Services PMI Business Activity Index reached a four-month high of 53.8 in December 2024,
indicating expansion for the 23rd consecutive month.
• In 2023, the United States led global services exports with a 13% share, followed by the UK (7.4%), Germany
(5.5%), and Ireland, China, and France (around 5% each).
o India ranked 7th with a 4.3% share.

SERVICES SECTOR PERFORMANCE IN INDIA:

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• India’s services sector has consistently contributed to the gross value added (GVA) in the economy,
increasing its share from 50.6% in FY14 to around 55% in FY25.
o The services sector provides employment to about 30% of the workforce.
• Services contribute indirectly to GDP through the servicification of manufacturing, involving the increased
use of services in manufacturing and post-production value addition.
• The growth in the service sector, measured by the YoY change in real GVA, has been above 6% annually
for the last decade, except during the Covid-19
pandemic in FY21.
o The average services growth rate before
the pandemic was 8%, and it has
increased to 8.3% in the post-pandemic
years (FY23 to FY25).
• Information and computer-related services had
the maximum buoyancy among services,
growing at 12.8% and increasing their share in
overall GVA from 6.3% in FY13 to 10.9% in
FY23, showing resilience during and
after the pandemic.
o While public administration
services contributed 11-12% to
total services GVA from FY13 to
FY23.
• India's rising share in global services
exports over the last two decades has
helped offset fluctuations in its share of
global merchandise exports.

Purchasing manager’s index (PMI)-

services:
• HSBC’s India Services PMI shows that the service sector has remained in the expansionary zone for 41
consecutive months since August 2021.

Trade in the services:

• The export of services grew at a trend rate of 11% during FY14 to FY23, at constant prices.
o Computer services and business services exports account for around 70% of India’s services
exports.
• India remained among the top five countries in terms of growth in services exports in FY25 (April-
September).

SOURCES OF FINANCING: BANK CREDIT AND FDI:

• Within the service sector, computer software and professional services recorded the highest YoY credit
growth at 22.5% and 19.4%, respectively.

• In FY25 (April-September), insurance services received the highest FDI inflows of over 62%, followed by
the financial sector, which received over 18% of the total FDI equity inflows to the services sector .
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STRATEGY FOR SERVICES – MULTI-DIMENSIONAL ANALYSIS:

PROGRESS IN LOGISTICS AND PHYSICAL CONNECTIVITYBASED SERVICES:

Indian Railways: Indian Railways (IR) is the 4th largest network in the world.
Road transport:
• Road transport generated the highest GVA within transport services, accounting for 78% of the total GVA in
FY23.

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• The government has shifted to digitized tolling with FASTag, reducing the average waiting time at toll plazas
from 734 seconds to 47 seconds.
• The government aims to implement barrier-free tolling on all four-lane and high-speed corridors by FY29.
• The government plans to establish over 1000 wayside amenities in the next five years, offering world-class
facilities every 40-60 km along NHs on both sides.
• A cashless treatment scheme for road accident victims has been launched, along with driving training
centres at the state/district level.
• The government is promoting road safety through initiatives like the Abhay project for truck driver health and
providing eye tests and health checks for drivers.

Aviation: flying high:

• India is the fastest-growing aviation market globally, with Indian airlines placing some of the largest aircraft
orders to accommodate the significant growth in air traffic.
• The PM Gati Shakti initiative aims to create seamless multimodal connectivity, integrating the aviation sector
with railways, roads, and waterways.

Port, Waterways and Shipping: Sea of opportunities:

• The government of India has launched the Maritime India Vision 2030 and Maritime Amritkaal Vision 2047
to position Indian shipbuilding and
ship repair among the top five
globally by 2047.
• Inland water transport has
significant untapped potential in
India, with around 14,850 km of
navigable waterways, including 26
operational waterways covering over
4,800 km as of October 2024.
• The government is also working to
promote river cruise tourism on national waterways.

OTHER SERVICES:
Tourism and hospitality:
• The tourism sector's contribution to GDP returned to 5% in FY23, creating 7.6 crore jobs.
• International tourist arrivals (ITAs) in India rebounded to pre-pandemic levels in 2023.
o India’s share of global ITAs stands at 1.45%, with foreign exchange earnings through tourism at 28
billion USD.
• India received 1.8% of world tourism receipts, ranking 14th worldwide in 2023.

Real Estate: Building the economy

• After the enactment of the Real Estate Regulatory Authority, India ranked 31st out of 89 countries in the
Global Real Estate Transparency Index in 2024.
• Housing demand in India is expected to touch 93 million units by 2036.

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• The government introduced Real Estate Investment Trusts (REITs) to allow investors to pool funds and
invest in income-generating commercial real estate, boosting market liquidity and attracting institutional
investors.

Telecommunication:
• India is the 2nd-largest telecommunications market, with over 1.18 billion telephone subscribers, 84%
teledensity, and 941 million broadband users as of 31st October 2024.
• India leads in mobile data consumption per subscriber and offers the world's most affordable data rates.

STATE WISE ANALYSIS OF SERVICE SECTOR PERFORMANCE:

• The service sector accounts for about 55% of national GVA in FY25, but its activity is geographically
dispersed across Indian states.
• In FY23, Karnataka and Maharashtra account for over one-fourth of the total service sector GSVA.
o Together with Tamil Nadu, Uttar Pradesh, and Gujarat, these states share more than 50% of the total
service sector GSVA.
o Furthermore, these states contribute over 50% of the total industrial GSVA, while 19 other states
account for just one-fourth of the service sector GSVA.
States can be classified into 4 distinct categories based on their service and industrial performance in terms of
per capita GSVA:
• States with high per capita industrial GSVA:
o States like Gujarat, Uttarakhand, and Himachal Pradesh.
o States like Chhattisgarh and Odisha also perform well in the industrial sector but have low service
sector growth.
• Strong service sector performers:
o States like Karnataka, Telangana, and
Kerala excel in services with high per
capita service GSVA, but their industrial
performance is only average.
o These states are largely driven by
urbanized service sectors.
• Dual strengths – industrial and service:
o Maharashtra and Tamil Nadu have
strong industrial and service sectors.
• States with reform potential:
o Arunachal Pradesh, Bihar, Chhattisgarh,
Jharkhand, Madhya Pradesh, Manipur,
Meghalaya, Nagaland, Rajasthan,
Tripura, Uttar Pradesh and West Bengal.

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• The 'Agriculture and Allied Activities' sector contributes around 16% to India's GDP in FY24 and supports
about 46.1% of the population.
o The agriculture sector in India
has shown robust growth,
averaging 5% annually from
FY17 to FY23, despite facing
challenges.
• Due to a good monsoon, kharif
foodgrain production in 2024 is
projected at 1647.05 Lakh Metric
Tonnes (LMT), an increase of 89.37
LMT from the previous year and
124.59 LMT above the average, which
bodes well for food security.
• Agricultural income has increased at
5.23% annually over the past decade,
compared to 6.24% for non-agricultural
income and 5.80% for the overall
economy.
• India, a major global cereal producer,
accounts for 11.6% of the world's total
output, but its crop yields are
significantly lower than other leading
producers, highlighting the need for
productivity improvements.
o The crop sector grew at a
modest rate of 2.1% annually
from FY13 to FY22, mainly due to significant increases in the production of fruits, vegetables, and
pulses.
• High-value sectors like horticulture, livestock, and fisheries are key contributors to the growth of agriculture.
• The fishery sector has shown the highest compound annual growth rate (CAGR) of 13.67%, followed by
livestock with a CAGR of 12.99% from FY15 to FY23.
o Andhra Pradesh led in agriculture and allied sectors (excluding forestry and logging), followed by
Madhya Pradesh and Tamil Nadu.

Government Initiatives to Boost Agricultural Productivity and Farmers' Incomes:

• The government is implementing initiatives to enhance agricultural productivity and increase farmers'
incomes, as per the Doubling Farmers' Income (DFI) Report 2016, which highlights strategies for improving
crop and livestock productivity, boosting cropping intensity, and diversifying into high-value crops.
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• Key measures include Per Drop More Crop (PDMC), the National Mission on Sustainable Agriculture
(NMSA), and promoting organic fertilisers for better sustainability.
• Digital initiatives like the Digital Agriculture Mission and e-National Agriculture Market (e-NAM), along with
income support programs like PM-KISAN, are aimed at adopting innovative technologies and ensuring fair
prices for farmers' produce.

INDIA'S FLORICULTURE: A SUNRISE INDUSTRY

• India's floriculture (the cultivation of flowers and ornamental plants) industry has become a high-performing
"sunrise industry" with 100% export focus.
• Subsidy support and crop loan financing
make floriculture a promising venture
for marginal and small landholdings,
which make up over 96% of
landholdings and 63% of the cultivation
area.
• In FY24, around 297 thousand hectares
were used for floriculture in India.
• India exported 19,678 metric tonnes of
floriculture products, earning ₹717.83
crore (USD 86.63 million), with key
export destinations including the USA,
Netherlands, UAE, UK, Canada, and
Malaysia.

Transforming Rural Economies: The Rise of Horticulture:

• India's horticulture sector is more productive and profitable than traditional agriculture, emerging as a fast-
growing industry.
o India is a leading exporter of fresh grapes, with major grape-growing states including Maharashtra,
Karnataka, Tamil Nadu, and Mizoram.

RAINFALL AND IRRIGATION SYSTEM: Building Efficiency and Extending Coverage

• In India, about 55% of the net sown area receives irrigation, while a significant portion of agricultural land
relies on rain-fed systems, making it highly vulnerable to fluctuations in precipitation.
• From FY16 to FY21, India's irrigation area coverage increased from 49.3% to 55% of the gross cropped area,
while irrigation intensity rose from 144.2% to 154.5%.
o States like Punjab (~98%), Haryana(~94%), Uttar Pradesh, and Telangana have high irrigation
coverage of their gross cropped area, while states like Jharkhand(<20%) and Assam lag behind,
highlighting the need for improved irrigation.
• More than two-thirds of India's agricultural land is at risk of drought, with a 35% national probability.
o Erratic monsoon patterns heavily impact marginal and small-scale farmers, who make up 85% of
India's agricultural holdings and cultivate on plots smaller than 2 hectares.
• The government has prioritized irrigation development through the Per Drop More Crop (PDMC) initiative
under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to promote water efficiency, providing financial
assistance for micro irrigation.
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 o From FY16 to FY25, ₹21,968.75 crore was released for
the PDMC scheme, covering 95.58 lakh hectares,
which is 104.67% higher compared to the Pre-PDMC
period.
• In addition to PDMC, the Micro Irrigation Fund (MIF) supports
innovative projects by providing a 2% interest subvention to
states on loans availed under MIF.
o Micro-irrigation has significant potential for India’s
140 million hectares of arable land, with 8% of
irrigated area currently under micro-irrigation.
o The adoption rate in India is slower compared to the
USA (68.6%) and China (13.7%).
• The Rain-fed Area Development (RAD) program, part of the
National Mission for Sustainable Agriculture (NMSA) since
FY15 and integrated into the Rashtriya Krishi Vikas Yojana
(RKVY) from FY22, has allocated ₹1,858.41 crore, covering 8 lakh hectares.
• The Composite Land-use Restoration and Assessment Tool (CLART GIS) and the AVNI Gramin app can
identify water bodies for groundwater recharge and monitor restoration efforts through geo-tagged images
and farmer-level verification.

AGRICULTURE CREDIT: A critical input

• The Government of India introduced the Kisan Credit Card (KCC) to help farmers meet their short-term
working capital needs efficiently, boosting working capital flow to agriculture and allied sectors.
o As of March 2024, there are 7.75 crore operational KCC accounts with an outstanding loan of ₹9.81
lakh crore.
• In 2018-19, KCC was extended to cover the working capital needs of fisheries and animal husbandry, with
the limit for collateral-free loans raised to ₹1.6 lakh.
o As of 31 March 2024, 1.24
lakh KCC were issued for
fisheries and 44.40 lakh
KCC for animal husbandry
activities.
• The Modified Interest Subvention
Scheme (MISS) provides short-
term agri-loans through KCC at a
concessional interest rate of 7%,
while the Prompt Repayment
Incentive (PRI) offers a 3%
incentive for timely repayment.
o From FY25, the claim
processing for MISS has
been digitized through the
Kisan Rin Portal for faster and more efficient settlement.

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• Banks are required to allocate 40% of their Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount
of Off-Balance Sheet Exposure (CEOBE) to priority sectors, including agriculture, to support small and
marginal farmers.
o These measures have reduced reliance
on non-institutional credit sources
from 90% in 1950 to around 25% in
FY22.
• Ground-level credit (GLC) to agriculture has
also shown impressive growth with a CAGR of
12.98% from 2014-15 to 2024-25.
o Within this, the share of small and
marginal farmers has significantly
increased from ₹3.46 lakh crore (41%)
to ₹14.39 lakh crore (57%) from 2014-
15 to 2023-24.

KISAN RIN PORTAL: Streamlining Agri Credit for Farmers' Prosperity:

• Launched in September 2023, it addresses key challenges in the Modified Interest Subvention-Kisan Credit
Card (MISS-KCC) scheme.
• Previously, banks had to manually submit claims for Interest Subvention (IS) and Prompt Repayment
Incentive (PRI) to RBI and NABARD, leading to delays, but the Kisan Rin Portal digitizes this process, ensuring
quicker, seamless transactions and improved access to credit for agricultural needs.
• The portal simplifies access to low-cost credit for traditional cropping as well as dairy, poultry, fisheries, and
beekeeping.
• The KRP's impact extends to over 453 banks, with 1.89 lakh branches actively processing claims, and by 31
December 2024, it had processed claims benefiting 5.9 crore farmers under the MISS-KCC scheme.

Pradhan Mantri Fasal Bima Yojana (PMFBY):

• PMFBY is the world's largest crop insurance program by farmer enrolment and the third-largest by
premiums, offering risk coverage from pre-sowing to post-harvest stages.
o In FY25, the participation of State governments and insurers increased to 24 and 15, respectively,
up from 20 and 11 in FY21, contributing to a 32% reduction in premium rates.
• As a result, farmer enrolment reached 4 crore in FY24, a 26% increase from 3.17 crore in FY23, with the
insured area expanding to 600 lakh hectares, reflecting a 19% rise from 500 lakh hectares in FY23. Both the
acreage and farmer enrolment figures under the scheme are at an all-time high.

AGRICULTURE MECHANISATION: Facilitating access

• The Sub-Mission on Agricultural Mechanisation (SMAM) supports state governments with training,
demonstrations on agricultural machinery, establishing Custom Hiring Centres (CHCs), and helping farmers
acquire farming equipment.
o As of 31 December, 26,662 CHCs were established under this initiative, with 138 CHCs set up in the
year FY25 alone.
• The government has launched a scheme to provide drones to 15,000 Women SHGs, enabling them to earn
at least ₹1 lakh annually by offering rental services for agricultural tasks.
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AGRICULTURE EXTENSION: The Enabler
• The government is implementing the Sub-Mission on Agricultural Extension (SMAE) to strengthen
agricultural extension services, foster entrepreneurship, and improve productivity across India.
o A key component of SMAE is the support from the Agricultural Technology Management Agency
(ATMA), which promotes the latest agricultural technologies to enhance production.
o During FY24, over 3.66 million farmers benefitted from these extension activities, with an additional
4.49 million farmers having availed themselves of the benefits by November 2024.
• The government has launched the short duration skill training scheme to provide short-term skill training to
rural youth and farmers in agriculture and related fields.
• To address the training needs of middle-level field extension workers, the government has established 4
regional extension education institutes located in Haryana, Telangana, Gujarat, and Assam.
• The government operates the Kisan Call Centre to address farmers' queries in 22 languages from 17 locations
nationwide.

IMPROVEMENT IN AGRICULTURE MARKETING INFRASTRUCTURE

• Agriculture Marketing Infrastructure (AMI) sub-scheme introduced in 2014 provides capital subsidies to
individuals, farmers, and cooperatives for developing storage infrastructure.
• The Agriculture Infrastructure Fund (AIF), launched in 2020, provides medium-term financing for post-
harvest management and community farming projects, offering interest subvention, credit guarantees, and
support for facilities like custom hiring centres, processing units, warehouses, and cold storage.
• The government introduced the e-NAM Scheme to enhance efficiency in agricultural marketing and price
discovery, providing free software and ₹75 lakh financial assistance per APMC Mandi for essential hardware.
As of October 31, 2024, over 1.78 crore farmers and 2.62 lakh traders have registered on the e-NAM portal.
• In 2020, the government launched a scheme with a budget of ₹6,860 crore to support Farmer Producer
Organizations (FPOs) and empower farmers.

CLIMATE ACTION IN AGRICULTURE

• The National Mission on Sustainable Agriculture (NMSA) is recognized as one of the nine missions within
the National Action Plan on Climate Change (NAPCC).
• The government has implemented two schemes since 2015 to support organic farming: the Paramparagat
Krishi Vikas Yojana (PKVY) and the Mission Organic Value Chain Development for North Eastern Region
(MOVCDNER).
o Under PKVY, 52,289 clusters covering 14.99 lakh hectares have mobilized 25.30 lakh farmers, while
MOVCDNER created 434 Farmer Producer Companies, covering 1.73 lakh hectares and benefiting
2.19 lakh farmers.

Composite Index of Agricultural Sustainability:

• The sustainability index is calculated by ICAR using 51 indicators related to environmental health, soil and
water quality, and socioeconomic development.
• The average estimated value of the Index is 0.49, indicating that Indian agriculture is moderately
sustainable.

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• States like Mizoram, Kerala, Madhya Pradesh, Andhra Pradesh, Manipur, West Bengal, and Uttarakhand
perform better than the national average. Arid Rajasthan has the least sustainable agricultural practices.
• States in the Indo-Gangetic Plains, including Uttar Pradesh, Punjab, Bihar, and Haryana, as well as rice-
dominant states like Jharkhand and Assam, face higher risks from climate change impacts.

ALLIED SECTORS: Potential to Build Resilience

• The livestock sector's contribution to the Gross Value Added (GVA) of agriculture rose from 24.38% in FY15
to 30.23% in FY23.
o In FY23, it accounted for 5.5% of the total GVA, reflecting strong growth with a CAGR of 12.99%.
o The milk industry is a major branch of livestock production, generating over ₹11.16 lakh crore
(US$133.16 billion) in revenue.
• The Rashtriya Gokul Mission supports the development and conservation of indigenous bovine breeds, while
the Livestock Health and Disease Control Program enhances livestock well-being.
o The Multipurpose AI Technicians in Rural India (MAITRIs) mechanism has been established to deliver
breeding inputs directly to farmers' doorsteps.
• The government has implemented initiatives like the Pradhan Mantri Matsya Sampada Yojana (PMMSY) to
boost aquaculture productivity and improve fisheries management.
• The Fisheries and Aquaculture Infrastructure Development Fund (FIDF) provides financial support for
developing infrastructure in both marine and inland fisheries.
o Total fish production (inland and marine) increased to 184.02 lakh tonnes in FY23, up from 95.79 lakh
tonnes in FY14.
o India's seafood exports grew by 29.70%, rising from ₹46,662.85 crore in FY20 to ₹60,523.89 crore in
2023-24.
• Under the Pradhan Mantri Matsya Kisan Samridhi Sah-Yojana (PM-MKSSY), the National Fisheries Digital
Platform (NFDP) was launched, registering 16.35 lakh fish producers, workers, vendors, and processors in
just four months.

COOPERATIVE SOCIETIES: Strengthening the Institution to serve better

• The Indian government has strengthened the cooperative sector through initiatives like introducing Model
Bye-Laws for Primary Agricultural Credit Societies (PACS) and prioritizing their computerisation to improve
efficiency and transparency.
• Efforts are underway to establish new multipurpose PACS and dedicated dairy and fishery cooperatives,
while transforming PACS into Common Service Centres (CSCs) to offer services beyond financial assistance.
• Other measures to enrich the cooperative landscape include establishing retail petrol and diesel outlets,
setting up micro-ATMs within cooperative societies for easier banking access, and issuing RuPay Kisan
Credit Cards for dairy cooperatives to enhance their financial capabilities.
• The initiatives have led to the establishment of over 9,000 new PACS, dairy, and fishery cooperatives in
underserved panchayats.
• A total of 35,293 PACS are now functioning as Pradhan Mantri Kisan Samriddhi Kendras (PMKSK), providing
fertilisers and services, while 1,723 micro-ATMs have been distributed to offer doorstep financial services to
rural populations.

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FOOD PROCESSING INDUSTRIES: Critical for the Economy
• The food processing industry in India is a major employer, accounting for 12.41% of total employment in the
organised sector.
o In FY24, agri-food exports, including processed food, reached USD 46.44 billion, making up 11.7% of
India's total exports, with processed food exports' share rising from 14.9% in FY18 to 23.4% in FY24.
• The Indian government has launched key programs like the Pradhan Mantri Kisan Sampada Yojana (PMKSY)
to develop modern infrastructure and optimize supply chains from farm to retail in the food processing sector.
• The Production Linked Incentive Scheme for Food Processing (PLISFPI), launched in 2021, promotes global
food processing leaders with 171 approved applications (as of 31 October 2024), while the Pradhan Mantri
Formalisation of Micro Food Processing Enterprises (PMFME) scheme, launched in 2020, supports micro
food enterprises with technical, financial, and business assistance.

FOOD MANAGEMENT: Enabling Food Security

• Food security is characterized by the availability, access, utilization, and stability of the food supply.
• The government has addressed food security through the Public Distribution System (PDS) and Targeted
Public Distribution System (TPDS), with the National Food Security Act (NFSA) 2013 and PMGKAY shifting
the focus from welfare-based to rights-based food security.
o NFSA entitles up to 75% of the rural and 50% of the urban populations (81.35 crore people) to receive
highly subsidized food grains under TPDS. Therefore, about two-thirds of the population is covered
under the Act to receive highly subsidised food grains.

• Pradhan Mantri Garib Kalyan AnnaYojana (PMGKAY) was introduced to alleviate the suffering of the poor
and vulnerable during the COVID-19 pandemic, providing free food grains in addition to regular allocations
for around 80 crore beneficiaries.
o The provision of free food grains under PMGKAY will continue for another five years starting from
January 2024.
• The government aims for 100% e-KYC compliance nationwide to enhance the Public Distribution System
(PDS), aligning with the One Nation, One Ration Card (ONORC) scheme, allowing beneficiaries to complete
e-KYC anywhere.
• The government has approved the Credit Guarantee Scheme for electronic-negotiable warehouse receipt
(e-NWR)-based Pledge Financing (CGS-NPF), enabling farmers to obtain loans against e-NWRs for stored
commodities, helping improve post-harvest lending and farmers' income.

MEASURES TO SUPPORT FOODGRAIN STORAGE INFRASTRUCTURE IN THE COUNTRY

• Steel silos are being developed in public-private partnerships (PPP) to upgrade foodgrain storage
infrastructure and increase capacity in India.
• The government is creating capacity under Hub and Spoke Model Silos, where “Hub” silos have a dedicated
railway siding and container depot facility.
o While the transportation from “Spoke” Silos to “Hub” Silos is undertaken by road, transportation from
Hub to Hub is via rail.
• To improve food grain storage, especially in hilly and remote areas, the government is exploring the use of
Flospan, a type of Mobile Storage Unit (MSU), in collaboration with the World Food Programme (WFP).
o These units can be quickly erected and have a storage capacity of 400 metric tonnes.
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 o As a pilot project, WFP has installed Flospan in 6 states: Jammu & Kashmir, Himachal Pradesh,
Rajasthan, Mizoram, Uttarakhand, and Chhattisgarh.
• To modernise government grain warehouses, the government partnered with WFP and Indian Grain Storage
Management & Research Institute (IGMRI) to pilot a 'Smart Warehouse'.
o This warehouse uses sensors to monitor temperature, humidity, airflow, and rodent activity, providing
real-time data to improve storage and reduce losses.

CONCLUSION
• With consistent and stable agricultural growth at 5%, contributing 1% growth to GVA, and a 20% share of
overall GVA in the economy, the right policies will boost productivity, absorb surplus labour, foster agro-
based entrepreneurship, and ensure food security for both India and other nations.

• India aims to
achieve
developed
nation status
by 2047
through
inclusive and
sustainable
development,
with per capita
carbon
emissions
one-third of
the global
average while
being one of
the fastest-
growing
economies.
• The India-led global movement, Lifestyle for Environment (LiFE), aims to boost sustainability efforts, with a
focus on promoting a circular economy.
o Developed countries are falling short of their Nationally Determined Contributions (NDCs) by about
38%, with their actions failing to reflect their historical responsibility or leadership in meeting
obligations.
• The 29th session of the Conference of the Parties (COP 29) and the 6th session of the Conference of the
Parties serving as the meeting of the Parties to the Paris Agreement (CMA 6) in Baku, Azerbaijan, were
designated as the 'Finance COP', focusing on the New Collective Quantified Goal (NCQG) for climate
finance.

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 o The target of mobilizing USD 300 billion annually by 2035 is far below the estimated requirement of
USD 5.1 - 6.8 trillion by 2030, failing to align with the urgent actions needed to meet the Paris
Agreement's temperature goals.

BRINGING ADAPTATION TO THE FOREFRONT

• The Ministry of Environment, Forest and Climate Change (MoEFCC) is developing the National Adaptation
Plan (NAP) to outline India's adaptation priorities and ensure climate resilience across all regions and sectors.

Adaptation in agriculture:
• Adaptation strategies in agriculture focus on developing climate-resilient seeds, preserving groundwater,
improving soil health, and modifying cropping practices.

Building resilience in urban areas:

• Launched in 2010, the National Mission on Sustainable Habitat (NMSH) under the National Action Plan on
Climate Change (NAPCC) promotes low-carbon urban development and resilience.
• AMRUT improves water systems, groundwater recharge, green spaces, wastewater recycling, and energy
efficiency, supporting NMSH goals.
• AMRUT 2.0 aims to create water-secure cities by focusing on water conservation, augmentation, and
rejuvenation.
• The Smart City Mission focuses on a people-centric approach based on liveability, economic ability, and
sustainability.
• Launched in 2021, the River Cities Alliance (RCA) promotes sustainable river-centric development in over
145 cities, through collaboration between the Ministry of Jal Shakti and MoHUA.

Adaptation in coastal regions:

• India's 7,600 km long coastline and islands make adaptation crucial, with actions such as planting
mangroves, building sea walls and artificial reefs, beach nourishment, dune planting, and sand bypassing.
• Promotional measures are implemented through the ‘Conservation and Management of Mangroves and Coral
Reefs’ scheme under the National Coastal Mission Programme.
• Regulatory measures are implemented through the Coastal Regulation Zone (CRZ) Notification (2019) under
the Environment (Protection) Act, 1986; the Wild Life (Protection) Act, 1972; the Indian Forest Act, 1927; the
Biological Diversity Act, 2002; and rules under these acts as amended from time to time.
• Through collaboration with initiatives like State CAMPA, MGNREGS, and state-specific programs, 22,560.34
hectares of degraded mangrove areas have been restored across 13 states and UTs.
Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI):
• The programme will cover approximately 540 square kilometres across 9 coastal states and 4 UTs over
five years (2023-2028) - to promote and conserve mangroves.
• As of 30 November 2024, 6 states and UTs: Andhra Pradesh, Gujarat, Odisha, West Bengal, Kerala, and
Puducherry have been allocated funds under the program.

Adaptation action for water management:

• The Jal Shakti Abhiyan, launched in 2019, addresses water stress across the country.

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 o The Jal Shakti Abhiyan: Catch the Rain – 2024, themed "Nari Shakti se Jal Shakti," focuses on
women's role in water conservation through interventions like rainwater harvesting, water body
mapping, and afforestation.
• The National Aquifer Mapping Project (NAQUIM) has been completed across 25 lakh square kilometers,
providing water conservation plans and recharge structures for state agencies.
• The Bhu-Neer portal, launched in September 2024 by the Central Ground Water Authority, aims to regulate
groundwater resources and promote transparency, efficiency, and sustainability.
• The FloodWatch India app (Version 2.0), launched by the Central Water Commission, provides real-time
flood forecasts, data from 592 monitoring stations, and reservoir storage insights for better flood
management.
• The Smart Laboratory on Clean Rivers (SLCR) in Varanasi, under the India-Denmark Green Strategic
Partnership, aims to rejuvenate the Varuna River through sustainable practices and collaboration among
various stakeholders.

ENERGY TRANSITION
• India's Human Development Index (HDI) is 0.644, and as per estimate that to reach an HDI of 0.9 and
become a developed country, India's per capita final energy requirement must be between 45.7 to 75
gigajoules per year.
• Provisional estimates from the Energy Statistics of India 2024 show that the total final energy consumption
per capita in FY23 was 16.7 gigajoules, indicating a significant gap to meet the energy requirements needed
for growth towards Viksit Bharat status.

PROGRESS MADE ON INDIA’S ENERGY TRANSITION

• India has achieved an installed electricity
generation capacity of 213,701 megawatts
from non-fossil fuel sources, accounting for
46.8% of the total capacity as of November
2024, with a goal of reaching 50% by 2030.

New initiatives and updates on existing

policies/schemes to boost energy
transition:
• The Ministry of New and Renewable Energy
(MNRE) launched the New Solar Power
Scheme for Particularly Vulnerable Tribal
Group (PVTG) habitations under PM
JANMAN on 4 January 2024.
o Later revised on 18 October 2024 to include other tribal habitations and renamed the scheme under
both PM JANMAN and Dharti Aabha Janjatiya Gram Utkarsh Abhiyan (DA JGUA).
• The PM - Surya Ghar: Muft Bijli Yojana aims to install rooftop solar plants in one crore households,
contributing to 30 gigawatts of residential rooftop solar capacity and adding 40-45 gigawatts by 2027.
o Over 7 lakh households have already installed rooftop solar systems as of 9 January 2025.
• The Viability Gap Funding (VGF) scheme for offshore wind energy has a budget of ₹7,453 crore, including
₹6,853 crore for one gigawatt of projects in Gujarat and Tamil Nadu, and ₹600 crore for upgrading ports.
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• The Green Energy Corridor (GEC) projects aim to improve transmission systems for renewable energy, with
GEC-I already implementing 9,136 circuit kilometres of transmission lines and 21,413 MVA substations in eight
states, and GEC-II progressing in seven more states.
• The National Bioenergy Programme focuses on three pillars: the Waste to Energy Programme, the Biomass
Programme (supporting briquettes, pellets, and biomass-based cogeneration), and the Biogas Programme
promoting family-type biogas plants.
• The Scheme for the Development of Solar Parks and Ultra-mega Solar Power Projects targets 40,000
megawatts of capacity, focusing on infrastructure development and necessary clearances for utility-scale
solar projects.
o As of 31 December 2024, 55 Solar Parks with a cumulative capacity of 39.9 gigawatts have been
sanctioned across 13 states.
• The Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PMKUSUM) aims to add 34.8
gigawatts of solar capacity by promoting small grid-connected solar plants, stand-alone solar pumps, and
the solarisation of existing agricultural pumps.
• The Production Linked Incentive Scheme for the National Programme on High-Efficiency Solar Photovoltaic
Modules has been initiated to enhance manufacturing capabilities in the solar sector.
• The National Green Hydrogen Mission aims to produce 5 million metric tonnes of Green Hydrogen annually,
with 125 gigawatts of renewable energy capacity and a potential 50 million metric tonnes of CO2 emission
reduction by 2030.
o Under the mission, the green hydrogen production capacity of 412,000 tonnes per annum and
electrolyser manufacturing capacity of 3000 megawatts per annum have been successfully awarded.
• The Central Public Sector Undertaking Scheme Phase-II aims to establish grid-connected solar power
projects.

Developments in financial regulation on green investments:

• Based on the 2019 National Guidelines on Responsible Business Conduct (NGRBC), SEBI introduced the
Business Responsibility and Sustainability Report (BRSR) for the top 1000 listed companies, mandatory
from FY23, replacing the previous Business Responsibility Report (BRR) of 2012.
• In 2023, the BRSR norms were expanded to include BRSR core for assurance and ESG disclosures for value
chains, covering the top 75% of upstream and downstream partners.
• From FY26, the top 500 listed entities will report under BRSR core, expanding to the top 1000 from FY27.
• In 2017, SEBI introduced a regulatory framework for green debt securities, outlining activities eligible for
financing through them.
o The framework was revamped in 2023 by introducing the concepts of transition bonds (funds raised
for transitioning to a more sustainable form of operations, in line with India’s Intended Nationally
Determined Contributions), blue bonds (related to water management and marine sector), and yellow
bonds (related to solar energy), and circular economy as sub-categories of the green debt securities.
• The Government of India has included Sovereign Green Bonds (SGrBs) in its market borrowings to mobilize
resources for green infrastructure, issuing bonds with 5, 10, and 30-year maturities.
o In FY23, ₹16,000 crore worth of SGrBs were issued, followed by ₹20,000 crore in FY24.
o In FY25, ₹11,697.40 crore of 10-year SGrBs have been raised, with plans to raise ₹10,000 crore more
in H2 FY25, including ₹5,000 crore each under 10-year and 30-year securities.
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• The RBI introduced a framework for accepting Green Deposits for Regulated Entities (REs) from 1 June
2023 to encourage green deposits and address greenwashing concerns, boosting credit flow to green
projects.
• RBI has classified bank loans of up to ₹30 crore for renewable energy projects (e.g., solar, biomass, wind,
micro-hydel, and public utilities like street lighting) under the priority sector lending category.

OPTIMISING LIFESTYLES FOR SUSTAINABLE DEVELOPMENT

• India introduced the Lifestyle for Environment (LiFE) Mission at COP26 in Glasgow in 2021, recognizing the
need to mobilize collective efforts to moderate consumption and production habits.
o It aims to mobilize one billion Indians and global citizens to take individual and collective actions for
environmental protection from 2022 to 2028.
o Within India, the goal is for at least 80% of all villages and urban local bodies to become
environmentally friendly by 2028 under this mission.
• Nearly 17% of food available to
consumers worldwide is wasted
annually, contributing to over 8%
of global greenhouse gas
emissions. If food waste were a
country, it would be the 3rd-
largest emitter of greenhouse
gases globally.
• Household consumption
contributes to around two-thirds
of global greenhouse gas
emissions.

Green Credit Programme:

• The Green Credit Rules, 2023, support the Green Credit Programme (GCP) by incentivizing voluntary
environmental conservation efforts, leading to the issuance of green credits.

Ek Ped Maa Ke Naam:

• The 'Ek Ped Maa Ke Naam' tree plantation campaign, launched on World Environment Day in June 2024,
encourages pro-environmental activities by leveraging people's respect for mothers to conserve nature. The
campaign successfully planted 80 crore seedlings by September 2024, meeting its ambitious goal.

Swachh Bharat Mission:

• Launched in 2014, the Swachh Bharat Mission (SBM) transformed sanitation access in India, and SBM 2.0
integrates waste management and sanitation with sustainability and circular economy principles.

Circular Economy and Resource Efficiency:

• According to an estimate, the circularity of resources could lead to cost savings of 11% of current GDP in
2030 and 30% in 2050.
• India's Extended Producer Responsibility (EPR) framework holds manufacturers accountable for the waste
generated by their products, promoting sustainable design, recycling, and waste management.

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• Plastic pollution is a major cause of biodiversity loss, ecosystem degradation, and climate change,
contributing to 15% of global greenhouse gas emissions by 2050.
o India has one of the lowest per capita plastic consumption rates (14 kg) compared to developed
economies (over 100 kg), and its Plastic Waste Management Rules, 2016, provide a framework for
sustainable plastic waste management.

Trend in social services expenditure:

• The general
government's
social services
expenditure
(SSE) has
shown a rising
trend since
FY17,
increasing as a
percentage of
total
expenditure
from 23.3% in
FY21 to 26.2%
in FY25 (BE).
• From FY21
(pandemic
year) to FY25 (BE), the social services expenditure (SSE) grew at a 15% CAGR, with the combined outlay of
the centre and state governments rising from ₹14.8 lakh crore in FY21 to ₹25.7 lakh crore in FY25 (BE).
o During this period, education expenditure grew at a 12% CAGR, increasing from ₹5.8 lakh crore in
FY21 to ₹9.2 lakh crore in FY25 (BE), while health expenditure grew at an 18% CAGR, rising from ₹3.2
lakh crore in FY21 to ₹6.1 lakh crore in FY25 (BE).

Household Consumption Expenditure Survey 2023-24:

• The Household Consumption
Expenditure Survey (HCES) 2023-
24 highlights a narrowing gap in
consumption expenditure between
urban and rural areas.
• The largest growth in average
MPCE (2022-23 to 2023-24) was
seen in the bottom 5–10% of the
population, with a 22% increase in
rural areas and 19% growth in urban
areas.
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Evidence on the distribution of benefits from the PDS:
• Food subsidies are the largest fiscal outlay in the government's social schemes, with 6.5% of the Union
budget in 2022-23 spent on PM Garib Kalyan Anna Yojana (PMGKAY) for free and subsidised food rations.
• The Union food subsidy bill doubled from 0.5% to 1% of GDP between FY19 and FY23 as food subsidies were
expanded and consolidated under PMGKAY during the COVID-19 emergency fiscal response.
o The average PDS benefits increased in 2022-23, relative to 3% in 2011-12.
• In 2022-23, 84% of the population had a ration card, with 59% holding a BPL (Below Poverty Line), AAY
(Antyodaya Anna Yojana), or PHH (Priority Household) card.
o 74% of the population actively used the PDS/PMGKAY to access food rations or kerosene, with rice
and wheat being the most commonly consumed items.
• Ration card coverage was higher in rural areas (89%) compared to urban areas (72%).

SCHOOL EDUCATION:
• India's school education system serves 24.8 crore students across 14.72 lakh schools with 98 lakh teachers
(UDISE+ 2023-24).
• Government schools constitute 69% of all schools, enrolling 50% of students and employing 51% of
teachers.
o Private schools make up 22.5%, with 32.6% of student enrollment and 38% of teachers.
• The NEP 2020 targets a 100% Gross Enrolment Ratio (GER) by 2030.
o GER is 93% at the primary level, while efforts continue to close gaps at the secondary level (77.4%)
and higher secondary level (56.2%), moving closer to the goal of inclusive and equitable education for
all.
• School dropout rates have decreased in recent years, reaching 1.9% at the primary level, 5.2% at the upper
primary level, and 14.1% at the secondary level.
o However, challenges remain with retention rates at 85.4% for primary (Classes I-V), 78% for
elementary (Classes I-VIII), 63.8% for secondary (Classes I-X), and 45.6% for higher secondary
(Classes I-XII).
• Key initiatives under NEP 2020 include the Samagra Shiksha Abhiyan and its sub-schemes like NISHTHA,
Vidya Pravesh, DIETs (District Institutes of Education and Training), and KGBV (Kasturba Gandhi Balika
Vidyalaya).
o Other significant programs are DIKSHA, STARS, PARAKH, PM SHRI, ULLAS, and PM POSHAN, among
others.
In April 2024, the government launched 2 key initiatives for Early Childhood Care and Education (ECCE):
• Navchetana:
o Focuses on the holistic development of children from birth to three years.
o It offers 140 age-specific activities through a 36-month stimulation calendar and emphasizes the
inclusion of differently-abled children, maternal mental health, and "Garbh Sanskar" (practices during
pregnancy).
• Aadharshila:

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 o Combines Indian and international research to promote play-based learning for children aged three
to six years.
o It includes 130+ activities that encourage both child-led and educator-led learning.

Building strong foundations

through literacy and numeracy:
• In July 2021, the Department of
School Education & Literacy
launched the NIPUN Bharat
Mission (National Initiative for
Proficiency in Reading with
Understanding and Numeracy)
to ensure that all children
achieve foundational literacy
and numeracy (FLN) by the end
of Grade 3 by 2026-27.

Peer Teaching: A pathway to

achieving FLN:
State governments have launched
programmes to tackle FLN
challenges:
• Mission Ankur (Madhya Pradesh & Gujarat): Engages schools and communities for primary students' holistic
development and FLN attainment.
• Mission Daksh (Bihar): Provides personalized mentoring to help lagging students reach grade-level
competencies by 2025.
Peer teaching is an effective approach where students learn by teaching and supporting their peers.
o In resource-limited classrooms with high student-teacher ratios, it offers scalable, tailored support.
o ‘Student Champions’ - older or more knowledgeable students—help guide younger or struggling
peers through foundational concepts.
• The SARTHAQ guidelines (Students' and Teachers' Holistic Advancement through Quality Education) for NEP
2020 emphasize peer tutoring to improve FLN and educational outcomes.
India’s Experiments with Structured Peer Learning:
• Nalli-Kali (Karnataka):
o Launched in 1995 in Mysuru, it promotes peer learning through self-paced activities.
o Now the primary teaching method for Grades 1-3 to build age-appropriate skills.
• Prerana Model (Multiple States):
o Implemented in AP, Karnataka, Maharashtra, Tamil Nadu, and Telangana via the Sikshana Foundation.
o Focuses on small group learning, with 4-5 students collaborating to teach and learn together.
• Involve Learning Solutions Foundation (UP, Bihar, Karnataka):
o Active in six districts to integrate peer teaching into government schools under NIPUN Bharat.

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 o ‘Student Champions’ (trained students) guide four learners with better subject mastery.

Empowering minds and hearts through social and emotional learning (SEL) techniques:
• UNESCO defines Social and Emotional Learning (SEL) as the process of developing skills to manage
emotions, care for others, build positive relationships, make responsible decisions, and handle challenges
effectively.
• CASEL (Collaborative for Academic, Social, and Emotional Learning) identifies 5 core components of SEL:
Self-Awareness, Self-Management, Social Awareness, Relationship Skills, and Responsible Decision-Making.
o These components help students handle challenges, improve mental well-being, and boost academic
performance.
• The National Curriculum Framework 2023 and NIPUN Bharat mission guidelines 2021 emphasize SEL-based
teaching to improve educational outcomes, foster well-being, and support holistic development in
foundational education.

Imparting life skills: The Tim Tim Tare initiative

• Tim Tim Tare (TTT) is an initiative that helps adolescent students in India develop life skills like
communication, emotional intelligence, and social well-being, focusing on soft skills rather than technical
training to prepare them for life's challenges.
• TTT follows the WHO Life Skills Framework to teach 16 core skills like empathy, critical thinking, etiquette,
and time management, covering 100+ related topics for youth development.
• Tim Tim Tare (TTT), launched in 2009 in Tamil Nadu, has expanded across multiple states, reaching
millions of students.
o It also trains thousands of teachers to ensure widespread, long-term impact.
• It reaches 10+ crore students, especially in central India and Gujarat, through government schools,
Navodaya Vidyalayas, Kendriya Vidyalayas, Kasturba Vidyalayas, and juvenile homes.
o It is accessible via PM eVidya channels, state relay centres, YouTube, and WhatsApp, with SCERT
approval ensuring credibility and alignment with national standards.

Bridging the gap: Digital technology in education and the essentiality of digital literacy
• UNESCO defines digital literacy as the set of skills that encompass computer literacy, ICT literacy,
information literacy, and media literacy.
• The Comprehensive Annual Modular Survey 2022-23 reveals a rural-urban digital divide in internet-
searching skills, with rural areas, especially females, lagging behind.
o In rural areas, 63% of males and 55% of females can search the internet, compared to 74% of males
and 69% of females in urban areas, highlighting the need to close the digital gap.
• The NEP 2020 highlights technology's role in improving education and promoting inclusivity for Divyang
students.
o Key initiatives include DIKSHA, SWAYAM, e-VIDYA, PMGDISHA, and e-content for Divyang to support
inclusive digital education.
• The government launched the PM e-Vidya DTH Channel for Indian Sign Language to support hearing-
impaired students, while Samagra Shiksha provides funds for ICT labs and smart classrooms in schools with
classes VI to XII.

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• The government launched the TeacherApp, a digital platform with 260+ hours of resources like courses,
videos, podcasts, and live sessions.

Tamil Nadu’s Illam Thedi Kalvi (Education at Doorstep): Innovation in public education
• The Tamil Nadu government launched the Illam Thedi Kalvi Scheme during COVID-19 to bridge the learning
gap through in-person education and door-to-door volunteer support, reducing internet dependence.
• The scheme continues post-pandemic with remedial lessons and year-round volunteer support, focusing
on
integrating
out-of-
school
children,
especially
girls, CwSN,
transgender
children, and
those from
migrant
worker
families.

Children with
Special Needs
(CwSN):
Developing a
culture of
inclusivity

HIGHER EDUCATION
• India's higher education system saw 4.33 crore enrollments in 2021-22, a 26.5% rise from 3.42 crore in
2014-15.
• The GER (18–23 age group) increased from 23.7% to 28.4% during this period, with a target of 50% by 2035,
requiring expanded infrastructure.
• The number of Indian Institutes of Technology (IITs) increased from 16 in 2014 to 23 in 2023, while Indian
Institutes of Management (IIMs) grew from 13 to 20 during the same period.
• Medical colleges increased from 387 in 2013-14 to 780 in 2024-25, and universities saw 59.6% growth, rising
from 723 in 2014 to 1,213 in 2024.
• Medical education opportunities in India are geographically skewed, with 51% of undergraduate and 49% of
postgraduate seats concentrated in the southern states.
o This skew is also evident in healthcare services, where urban areas have 3.8 doctors for every 1
doctor in rural areas.
o Additionally, 75% of dispensaries, 60% of hospitals, and 80% of doctors are located in urban regions.

TOWARDS A HEALTHY NATION

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• According to the National Health Accounts 2021-22, the Total Health Expenditure (THE) in FY22 was 3.8% of
the GDP.
• The share of Government Health Expenditure (GHE) in Total Health Expenditure (THE) increased from 29.0%
in FY15 to 48.0% in FY22.
o During the same period, the
Out-of-Pocket
Expenditure (OOPE)
declined from 62.6% to
39.4%.
• AB-PMJAY has significantly
reduced OOPE by increasing social
security and primary health
spending, resulting in ₹1.25 lakh
crore in savings.
• As of 1 January 2025,over 36.36
crore Ayushman cards have been
issued. Key statistics of AB-
PMJAY are given below.

• On 11 September 2024, the

expansion of AB PMJAY was
approved to include senior
citizens aged 70 and above,
irrespective of their socio-
economic status.
o As of 15 January 2025,
more than 40 lakh senior
citizens have been
enrolled the scheme.
• Ayushman Bharat, launched in
2018, marked a shift to
comprehensive healthcare by
focusing on prevention, promotion,
and treatment across primary,
secondary, and tertiary levels.
o It transformed Sub-Health Centres (SHCs) and Primary Health Centres (PHCs) into Ayushman
Arogya Mandirs (AAM), providing universal, free healthcare services - including preventive,
promotive, curative, palliative, and rehabilitative care - in both rural and urban areas.
o Number of AAMs operational - 1,75,560 +
• PM-ABHIM, launched in October 2021, aims to strengthen public health infrastructure by addressing gaps
in infrastructure, surveillance, and research across urban and rural areas from FY22 to FY26.

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• The government launched the Free Drug Service Initiative (FDSI) in 2015 under the National Health Mission
(NHM) to reduce OOPE by providing financial support to states/UTs for the availability of essential drugs in
public health facilities.
• The Universal Immunisation Programme (UIP), originally launched as the Expanded Programme on
Immunisation in 1978, was rebranded in 1985 to provide life-saving vaccines to newborns and pregnant
women, extending coverage from urban to rural areas to reduce healthcare disparities.
o Currently, the UIP offers 11 vaccines free of cost, protecting against 12 vaccinepreventable diseases.
• The Jan Aushadhi Scheme, launched to provide affordable medicines, achieved record sales in 2024 and
expanded to 14,000+ kendras nationwide.

Disruptive technology providing seamless and equitable healthcare:

• The U-WIN portal is a digital platform that records vaccination details for pregnant women and children up
to 16 years under the UIP.
o The U-WIN portal generates QR-based e-vaccination certificates and helps create Ayushman Bharat
Health Accounts (ABHA) for parents and children, supporting digital health management in 11 regional
languages.
o So far, 1.7 crore pregnant women and 5.4 crore children have been digitally registered, with 26.4 crore
vaccine doses tracked in real-time.
• E-Sanjeevani, India's National Telemedicine Service, is the world's largest telemedicine platform for primary
healthcare.
• The Ayushman Bharat Digital Mission (ABDM), launched in September 2021, aims to build a national digital
health ecosystem to support universal health coverage and integrated health infrastructure.
o Total ABHA created - 72.81 crore units
• Aerial Angels: Transforming Healthcare with Drone Technology
o In September 2021, the World Economic Forum (WEF) and the Telangana government launched
'Medicines from the Sky' in
Vikarabad, the first such project in
Asia to test medium-range
medicine delivery via drones, later
expanded to Arunachal Pradesh in
2022 to study its healthcare
integration.
o The i-DRONE (ICMR’s Drone
Response and Outreach for North
East) was launched in October 2021
by the Ministry of Health and Family
Welfare (MoHFW) to test drone-
based delivery of vaccines and
medical supplies in the rugged
terrains of Manipur and Nagaland.

Impact of lifestyle choices on health:

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• According to WHO, non-communicable diseases (NCDs) cause 41 million deaths annually, accounting for
74% of global deaths, with 77% of these deaths occurring in low- and middle-income countries, driven partly
by population growth and ageing.
• The 2017 ICMR report ‘India: Health of the Nation's States’ revealed that NCD-related deaths in India
increased from 37.9% in 1990 to 61.8% in 2016.
• The four major NCDs are cardiovascular diseases (CVDs), cancers, chronic respiratory diseases (CRDs), and
diabetes, with unhealthy diet, lack of physical activity, tobacco use, and alcohol consumption as common risk
factors.
• To address the rising NCD challenge, the MoHFW launched the National Programme for Prevention and
Control of NCD (NP-NCD), formerly known as the NPCDCS (National Programme for Prevention and Control
of Cancer, Diabetes, Cardiovascular Diseases, and Stroke).
• The government launched the Population-Based Screening (PBS) initiative to detect NCDs early by
screening individuals aged 30 and above.
• The National NCD Portal, introduced in 2018, manages patient data and links health records with ABHA IDs.

RURAL ECONOMY
Rural Infrastructure:
• Pradhan Mantri Gram Sadak
Yojana (PMGSY): 99.6% of the
targeted habitations provided
connectivity.
• A separate vertical has been
launched under PMGSY to
support Particularly Vulnerable
Tribal Groups (PVTG) through the
Pradhan Mantri Janjati Adivasi
Nyaya Maha Abhiyan (PM-
JANMAN).
o Population norms have
been relaxed to 100 to
connect unconnected
PVTG habitations.The
target is to construct 8,000 km of roads by March 2028

Rural Housing: A Milestone for identity and economic growth

• The Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) was launched on 1 April 2016, aligning with SDG Goal
11.1 on 'Safe and affordable housing' and India's vision of 'Housing for All'.
• PMAY-G aims to provide pucca houses with basic amenities to houseless families and those in kutcha or
dilapidated houses in rural areas by 2029.
o Since 2016, 2.69 crore houses have been constructed, and the scheme has been extended to build
2 crore more houses over the next five years.
o The construction of a PMAY-G house generates 314 person-days of direct employment, including 81
skilled, 71 semi-skilled, and 164 unskilled person-days.

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 ▪ Since 2016, an estimated 192 crore person-days of skilled labour and 250 crore person-days
of unskilled labour have been employed.
• The PMAY-G scheme reserves 60% of its targets for SC/ST households, with 59.58 lakh SC and 58.57 lakh
ST houses completed.
o The scheme prioritizes women's empowerment, with 74% of sanctioned houses owned solely or
jointly by women.

Localising SDGs: Powering rural progress

• SDG localisation is the process of adapting global goals into local development plans that address regional
needs, context, and priorities while aligning with national frameworks (United Nations, 2024).
• SDG localisation is being implemented at the Gram Panchayat (GP) level through Village Panchayat
Development Plans under Mission Antyodaya and the Transformation of Aspirational Districts Programme
(TADP), launched in 2018 with districts as the lowest implementation level.
• Additionally, work is underway to develop a Local Indicator Framework (LIF) at the GP level, with 9 themes
covering all 17 SDGs.
• The timely submission of Voluntary National Reviews in 2017, 2020, and 2023 and the adoption of the SDG
Index reflect India's commitment to the SDG goals.
o The vision of 'Sabka Saath, Sabka Vikas' and Viksit Bharat 2047 serves as a roadmap for achieving
these goals.
• India's SDG implementation follows a multi-layered approach with 4 key pillars: institutional ownership,
collaborative competition, capacity building, and a whole-of-society approach.
• NITI Aayog is transitioning to SDG Coordination and Acceleration Centres (SDGCACs) to advance SDG
efforts by 2030, focusing on innovative solutions, scaling successful initiatives, and collaborating with diverse
stakeholders.

Social Inclusion and Gender:

• State Rural Livelihoods Missions (SRLMs) have developed state-specific strategies to integrate DAY-NRLM
components and community institutions, focusing on child education, early marriage, women's asset
creation, and violence prevention.
• Gender Resource Centres (GRCs) are being set up to address gender issues locally, with Gender Point
Persons (GPPs) educating SHG members on gender-based violence and discrimination.
o A total of 3997 GRCs are operating across 18 States and UTs under DAY-NRLM.

Free legal assistance in remote and rural areas:

• The government launched the 'Designing Innovative Solutions for Holistic Access to Justice in India'
scheme to provide pre-litigation advice through Tele-Law and offer pro bono legal services via the Nyaya
Bandhu programme.
• The Gram Nyayalayas Act, 2008 ensures grassroots-level justice in rural areas.
o As of October 2024, 313 Gram Nyayalayas have disposed of over 2.99 lakh cases between December
2020 and October 2024.
• The National Social Assistance Programme (NSAP) provides financial assistance to elderly, widows,
disabled persons, and bereaved households from Below Poverty Line (BPL) families.

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 o NSAP supports 3.09 crore BPL beneficiaries, while States/UTs assist an additional 5.86 crore
beneficiaries through state pension schemes.
o Together, around 9 crore beneficiaries are covered under the national pension safety net, with an
annual expenditure exceeding ₹1 lakh crore.

Enhancing rural incomes:

Mahatma Gandhi National Rural Employment Guarantee Scheme:
• The MGNREGA Act 2005 enhances rural livelihood security by providing at least 100 days of guaranteed
wage employment per year to households with adults willing to do unskilled manual work.
• MGNREGS, initially a wage employment scheme, has evolved into a rural asset creation program for
sustainable livelihood diversification.
o The share of 'works on individual land' increased from 16.2% in FY15 to 71.2% in FY25, while
expenditure on these works
rose from 11.65% to 28.9%
during the same period.
• Several efficiency reforms have
been introduced in MGNREGA to
improve transparency and utilisation,
including:
o Geotagging of work before,
during, and after completion.
o 99.98% payments processed via the National Electronic Fund Management System (NEFMS) with
DBT-enabled wage transfers.
o Aadhaar-based payments cover 96.3% of active workers, with 99.23% of wage transactions
processed through the Aadhaar Payment Bridge System (APBS) in December 2024.
o Social audit units have been established in 28 states/UTs.

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• Capacity development of MGNREGS workers is being promoted through initiatives like Bare Foot
Technicians (BFT) and the UNNATI
skilling project.
• MGNREGS is converged with
initiatives like Nutri-Gardens (NRLM),
fodder farms (DAHD), horticulture
(Ministry of Agriculture), medicinal
plantations (Ministry of Ayush), and
Gram Panchayat buildings (Ministry of
Panchayati Raj).
Deendayal Antyodaya Yojana-National
Rural Livelihood Mission (DAYNRLM):
Launched in 2011, aims to reduce poverty
by helping poor households access self-
employment and skilled wage
opportunities for sustainable livelihoods.

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• India moved from the 10th largest
economy in 2014 to the 4th
largest in less than a decade,
surpassing the UK.
o By 2030, India is expected
to become the world's
3rd-largest economy,
after the USA and China,
driven by a growing
working-age population
and a strong
manufacturing sector.
• India has around 26% of its
population in the 10-24 age
group, offering a unique
demographic opportunity.
• With a median age of 28, India's
young population is a key driver of
growth compared to aging
developed countries.
o The Economic Survey
2023-24 stated that India
needs to create an
average of 78.5 lakh non-farm jobs each year until 2030 to effectively employ its expanding
workforce.
• India's dependency ratio has dropped from 64.6% in 2011 to 55.7% in 2021 and is expected to decline further
to 54.3% by 2026.

STATE OF EMPLOYMENT
• The 2023-24 Periodic Labour Force Survey (PLFS) report by the NSO shows a strong recovery in
employment across India after the pandemic.
o India's annual unemployment rate for people aged 15 and above has consistently dropped from 6%
in 2017-18 to 3.2% in 2023-24.
▪ This recovery has been accompanied by an increase in the labour force participation rate
(LFPR) and the worker-to-population ratio (WPR).
• Trends in labour market conditions across India:
o Out of 36 states and union territories, only 12 have a workforce participation rate (WPR) below the
national average of 43.7%, and 12 fall below the national labor force participation rate (LFPR) average
of 45.1%.

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 o Additionally,
14 states
have seen a
more than
10% rise in
workforce
participation
(WPR), and
11 states
have
achieved a
similar
increase in
labor force
participation
(LFPR) since
2017-18.
• Meanwhile, casual workers decreased from 24.9% to 19.8%, reflecting a shift toward more structured self-
employment.
• PLFS data shows fewer women in regular jobs but more in self-employment or household work, especially
in rural areas.
o In rural India, women in regular wage jobs dropped from 10.5% in 2017-18 to 7.8% in 2023-24, while
more women shifted to self-employment or working in household enterprises.
o In urban areas, women in salaried jobs declined from 52.1% to 49.4%, with the sharpest drop in 2020-
21, falling to 50.1% from 54.2% the previous year.
o Rural Women: The share of rural women in self-employment rose from 19% (2017-18) to 31.2%
(2023-24), while unpaid family labor increased from 38.7% to 42.3%.
o Urban Women: Self-employment among urban women grew from 23.7% to 28.5%, and unpaid family
labor increased from 11% to 13.8%.

Sectoral distribution of the workforce:

According to PLFS 2023-24:
• Agriculture remains the largest employer, rising from 44.1% (2017-18) to 46.1% (2023-24).
• Industry and services saw declines: manufacturing fell from 12.1% to 11.4%, and services dropped from
31.1% to 29.7%.
• Share of Female workers in agriculture increased from 57.0% to 64.4%, while male participation decreased
from 40.2% to 36.3%.
o More men shifted to sectors like construction, trade, hotels, restaurants, transport, and
communication services.

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 Source: Annual PLFS report 2023-24, MoSPI

Rise in Female LFPR: Tapping into female labour for economic growth:
• From the gender perspective, the female labour force participation rate (FLFPR) has been rising for 7
years, i.e., from 23.3% in 2017-18 to 41.7% in 2023-24.
o The rise in rural FLFPR mainly drives the overall increase in FLFPR, growing from 24.6% in 2017-
18 to 47.6% in 2023-24
• The FLFPR has improved across states:
o In 2017-18, 20 states/UTs had an FLFPR below 20%.
▪ By 2023-24, this number dropped to 3.
o Most states (21) have an FLFPR of 30-40%, while 7 states/UTs reported over 40% in 2023-24.
▪ Sikkim had the highest rate at 56.9%.
• As of 31 October 2024, 73,151 startups with at least one woman director were recognized under Startup
India, nearly half of the 1,52,139 government-supported startups.

Factors influencing the female labour force participation:

• Increased Participation:
o PLFS 2023-24 indicates a rise in women's participation in economic activities, particularly in rural
areas, partly due to better survey methods capturing unpaid work and initiatives like DAY-NRLM
providing skilling and credit access.
• Barriers to Workforce Participation: Traditional gender norms, childcare responsibilities, and household
duties limit women's participation in paid work.
• Policy Recommendations:
o Remove occupational restrictions on women.
o Enhance childcare infrastructure with more crèches to ease work participation.
o Promote skill development programs aligned with industry demands.

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 o Encourage women’s participation in emerging sectors and non-traditional roles to harness India's
demographic dividend.

Harnessing the power of women entrepreneurs for India’s economic future:

• Over 80% of the nearly 4.96 lakh people in the khadi sector are women artisans.
• Additionally, the Handloom Census 2019-20 shows that 72% of handloom workers in India are women.
• Gender Disparity in micro, small, and medium enterprises (MSME) Ownership:
o Only 22% of all (MSMEs) are owned by women entrepreneurs, largely male-dominated.
o As enterprise size grows, women's ownership drops from 22% in micro to 12% in small and 7% in
medium enterprises.
• NRLM partnered with Global Alliance for Mass Entrepreneurship (GAME) to empower rural women
entrepreneurs through the Women Entrepreneur Financial Empowerment Programme (WEFEP).
o This is supported by NRLM's ground cadres like "Vitta Sakhis," who guide women on loan options,
assist with bank visits, documentation, and business proposals, reducing bank linkage time.
o GAME program aims to impact 2.5 lakh women in the digital platform economy by 2025.
• The "Growtherator" program accelerates MSME growth by fostering profitability, job creation, and long-
term success through mentorship and peer networks.
• WE Hub in Telangana is India’s first state-led incubator for women entrepreneurs.

Government initiatives to boost female entrepreneurship:

• Flagship schemes: Besides these, certain flagship schemes of the government of India, such as Pradhan
Mantri Mudra Yojana, DAY-NRLM etc., are also oriented towards promoting women-led enterprises. Other
schemes and initiatives, such as Yashasvini mass awareness campaigns, are also available for women
entrepreneurship development.

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Trends in wages and earnings:
• Regular/salaried and self-employed workers saw a 5% CAGR growth from 2018-19 to 2023-24, while casual
workers' daily wages grew at a 9% CAGR during the same period.
• Self-employed earnings dropped from 2017-18 to 2020-21 but rose sharply after the pandemic.
• Nominal wages have shown good growth across all categories, outpacing growth in real wages.
• Corporate profitability has reached a 15-year high, even as wage growth moderates.
• As per the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023-24, the average emolument
per hired worker increased by 13%, rising from ₹1,24,842 in 2022-23 to ₹1,41,071 in 2023-24, indicating
improved wage levels.

Employment in factories:
• The Annual Survey of Industries (ASI) 2023 shows the manufacturing sector’s resilience, with employment
growing by over 7% from the previous year.
o Compared to FY19 (pre-pandemic level), the sector added over 22 lakh jobs in FY23, highlighting a
strong post-pandemic recovery.
• Large factories (more than 100 workers) now make up 22% of all operational factories.
o Large factories employ 80% of total workers and 78% of total persons engaged (TPE) in the sector.
o Though small factories are more in number, they contribute less to overall employment.
• 7 key industries - food products, textiles, basic metals, wearing apparel, motor vehicles, machinery &
equipment, and chemicals - account for 54% of total employment.

Growing formal sector in India:

• EPFO payroll data shows increasing job formalization, supported by government initiatives.
o Net EPFO additions more than doubled, from 61 lakh in FY19 to 131 lakh in FY24.
o EPFO membership reached 32.7 crore in March 2024, up from 29.9 crore in March 2023.
• In FY25 (April-November), expert services contributed 50% of new EPFO payroll additions, making it the
largest sector.
o Trading-other industries accounted for 12%, and trading-commercial establishments for 7%.
• From April to November 2024, the 18-25 age group made up 47% of net EPFO payroll additions.
o Overall, 61% of new formal jobs went to workers under 29 years, showing that most organized sector
jobs are benefiting young workers.
• The eShram portal was launched by the Ministry of Labour and Employment (MoLE) on August 26, 2021, to
recognize and support unorganised workers.
o As of December 31, 2024, over 30.51 crore workers have registered on the portal.
• Unorganised workers registered on eShram can now access social security schemes and track their benefits
through the portal.
o So far, 12 central government schemes have been integrated.
• To make eShram a One-Stop Solution for unorganised workers, the Ministry of Labour and Employment
(MoLE) launched eShram – “One-Stop-Solution” on October 21, 2024.

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JOB CREATION: ACTION TOWARDS ENHANCED EMPLOYMENT OPPORTUNITIES
Driving employment
opportunities through the digital
economy:
• According to NITI Aayog, India's
gig workforce is expected to
reach 23.5 crore by 2029-30,
making up 6.7% of the non-
agricultural workforce and 4.1% of
total livelihoods.
• The digital economy offers
women greater employment
opportunities through remote
work, helping bridge the gender
gap by overcoming barriers like
limited access, cultural biases, and mobility restrictions.

Building a green workforce: Job creation in the renewable energy sector:

• According to the 2024 Annual Review by the International Renewable Energy Agency (IRENA), India’s
renewable energy sector employed an estimated 1.02 million people in 2023.
o Hydropower is India's largest renewable energy employer, providing 453,000 jobs and 20% of global
employment, second only to China.
• Global Energy Alliance for People and Planet (GEAPP) India partners with DAY-NRLM to create clean energy
programs that improve women-led enterprises.

SKILL DEVELOPMENT: UPSKILLING, RESKILLING AND NEW SKILLING FOR A CHANGING

WORLD
• Skilled workers are increasing across all groups, including rural, urban, and gender categories.
o The PLFS 2023-24 report shows
4.9% of youth (15-29 years)
received formal vocational training,
while 21.2% trained through informal
sources.
• PLFS data shows that 90.2% of the workforce
has secondary or lower education, leading
88.2% to work in low-competency jobs,
including elementary and semi-skilled
occupations.
o While 4.2% of the workforce with
advanced education earns ₹4–8 lakh
annually, 46% earn less than ₹1 lakh,
mainly low to semi-skilled workers like
agricultural laborers, clerical staff,
factory workers, and small-scale service providers.

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• Improving learning outcomes and
employability is crucial. This
requires action at two levels:
o School level – Strengthening
basic skills in language, math,
and science, as emphasized
in the National Education
Policy (NEP) 2020 under
Foundational Literacy and
Numeracy (FLN).
o Higher education –
Integrating skills for Industry
4.0, including Generative AI
and machine learning.
▪ The NEP 2020 aims
for 50% of students
to gain skill education
exposure by 2025,
with skill education
gradually becoming
part of all secondary
schools over the next
decade.
• The Union Budget 2024-25
launched five key schemes with a ₹2 lakh crore outlay to benefit 4.1 crore youth over five years by promoting
employment and skilling.

Tiered skill framework:

International mobility of skilled workers:

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• India's diaspora has grown from 18 million in 2020 to 32 million, making it one of the largest globally.
• With 65% of its population under 35 and a median age of 28, India's demographic dividend positions it as a
global talent hub, dependent on skill development.
International cooperation in skill development:
• Bilateral Partnerships:
o The Ministry of External Affairs (MEA) has signed Migration and Mobility Partnership Agreements
(MMPAs), Labour Mobility Agreements (LMAs), and Labour Welfare Agreements
o MMPAs and LMAs are signed with 8 countries, including Australia, Israel, Denmark, Italy, Germany,
the UK, Japan, and Austria, focus on vocational training and skill alignment.
• Government-to-Government (G2G) Memorandums of Understanding (MoUs):
o The Ministry of Skill Development and Entrepreneurship (MSDE) has seven active MoUs with Australia,
Denmark, Germany, Japan, Qatar, Singapore, and the United Arab Emirates (UAE), focusing on
vocational training, capacity building, and international certification to enhance global workforce
mobility.
• Skill Gap Assessments & Global Training:
o The National Skill Development Council (NSDC) assesses skill gaps in 16 countries.
o Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and the Craftsmen Training Scheme include language
training for better worker integration abroad.
• Standardization & Skill Recognition:
o The National Skills Qualification Framework (NSQF) ensures international alignment of skills and
qualifications.
• Skill India International Centres (SIICs):
o Act as hubs for global job seekers, reducing migration costs and improving workforce readiness.
o Currently, two SIICs (Varanasi and Bhubaneswar) are operational, with five more under renovation.
• Pre-Departure Orientation Training (PDOT):
o Launched in 2018, PDOT provides free 8-hour training on cultural, legal, and welfare aspects for
migrant workers before departure.
• e-Migrate Platform:
o Managed by MEA, the e-Migrate platform streamlines emigration, offering online registration, PDOT,
and grievance redressal.

• The International Labour Organisation estimates that nearly 75 million jobs globally are at risk of automation
due to AI.
• In line with IMF estimates, Ernst & Young notes that while the impact of AI on emerging economies is lower
than on advanced economies, 57% of occupations in emerging countries could still be affected by higher
Generative AI adoption.
• NASSCOM estimates that the Indian AI market will grow at a 25-35% CAGR by 2027, with continued higher
adoption by the private sector and the market.

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• According to the
Economic Survey 2023-
24, India needs to create
an average of 78.5 lakh
jobs annually in the non-
farm sector by 2030 to
accommodate the rising
workforce.
• A tripartite compact
between the
government, private
sector and academia
can ensure that the gains
from AI-driven
productivity are widely
distributed, taking us in
the direction of the ideal
inclusive growth
strategy.

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 Additional Points
• In 2024, 3 major democracies - India, America, and Indonesia - held elections.

Global inflation: peaked at 8.7% in 2022, fueled by supply chain disruptions and geopolitical tensions, before
easing to 5.7% in 2024.

Fiscal Deficit and other trends:

• Growth in services and goods exports, excluding petroleum and gems and jewellery, was 10.4% (first 9
months of FY25).
• As of the end of December 2024, India's foreign exchange reserves amounted to USD 640.3 billion,
which is sufficient to cover around 90% of the country's external debt of USD 711.8 billion as of September
2024.

Old-age dependency ratio and Gini coefficient:

• The old-age dependency ratio in India is about 15.7%, which is much lower compared to many Emerging
Market Economies (EMEs), indicating a relatively smaller proportion of elderly people dependent on the
working-age population.
• The Gini coefficient, measuring inequality in consumption expenditure, declined from 0.266 to 0.237 in rural
areas and from 0.314 to 0.284 in urban areas between 2022-23 and 2023-24.

LiFE measures:
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 • By 2030, it is estimated that these measures could save consumers around USD 440 billion globally
through reduced consumption and lower prices.

Trends in SIP Investment:

Beneficiaries of PM-KISAN and PMKMY:

• More than 11 crore farmers have benefitted under the Pradhan Mantri Kisan Samman Nidhi (PM-
KISAN), and 23.61 lakh farmers have enrolled under the Pradhan Mantri Kisan Maandhan Yojana
(PMKMY) as of 31st October 2024.

Growing Carbon sink of forests in India:

• Target: India’s Nationally Determined Contribution (NDC) aims to increase carbon sinks by 2.5 to 3 billion
tonnes of CO2 equivalent by 2030 through improved tree cover.
• Current Status: As per the latest Forest Survey of India (FSI) 2024, India’s carbon sink in 2023 is estimated
at 30.43 billion tonnes of CO2 equivalent, compared to 28.14 billion tonnes in 2005.
• Increase in Carbon Sink: The addition to the carbon sink between 2005 and 2023 is 2.29 billion tonnes
of CO2 equivalent, bringing it closer to the NDC target.
o The FSI projects a carbon sink of 31.71 billion tonnes by 2030, surpassing the NDC target.

Draghi report:

• The report highlights the "China Challenge" to European competitiveness, which could also apply to India,
noting that India’s youthful demographic is an advantage but comes with significant responsibility.
• The "China Challenge" refers to China's growing dominance in global manufacturing and trade, which
creates significant competition for other countries.
o It pressures economies like Europe and India to innovate and maintain competitiveness in the global
market.

AI-driven automation:

• Goldman Sachs economists state that nearly 300 million full-time jobs remain exposed to AI-driven
automation.

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