India’s GDP is projected to grow between 6.3% and 6.8% in 2025-26, according to the Economic Survey presented by Finance Minister Nirmala Sitharaman. This growth is expected to be in line with the 6.4% GDP growth estimated for 2024-25, indicating steady economic momentum despite global uncertainties.
The Economic Survey stresses the need for reforms at the state level, particularly in land, labour, and industrial laws, to create a more conducive business environment. It also calls for deregulation and simplified policies to reduce bureaucratic hurdles. However, the survey does not emphasize boosting consumption demand, despite its importance in recent policy discussions. It does caution private companies against underpaying employees, as this could weaken consumption and hinder economic growth.
Regarding foreign investment, the survey reports that while net FDI remains positive, outflows due to profit repatriation and Indian investments abroad have surpassed inflows, raising concerns about India’s ability to attract and retain foreign capital. Additionally, a chapter on artificial intelligence (AI) highlights its impact on employment, particularly in the services sector. With automation on the rise, policymakers are urged to prepare for labour market shifts, particularly in IT, where AI-driven job displacement may be a challenge.
The survey also allocates ₹11,11,111 crore (3.4% of GDP) for capital expenditure in this fiscal year, aiming to bolster infrastructure and long-term economic resilience.
Public-Private Partnerships (PPPs)
The government has introduced several mechanisms to boost private sector participation in infrastructure development:
- Public Private Partnership Appraisal Committee (PPPAC): This committee has recommended 77 projects worth ₹2.4 lakh crore from FY15 to FY24, improving project appraisal and approval processes.
- Viability Gap Funding (VGF): To support financially unviable but essential projects, 57 initiatives costing ₹64,926 crore received in-principle approval, with a total VGF sanction of ₹5,813.6 crore.
- National Monetisation Pipeline (NMP): Launched in August 2021, the NMP aims to attract private investment for infrastructure creation, targeting ₹6 lakh crore in monetisation through core government assets by FY25.
Sector-Specific Allocations
- Rail Infrastructure: ₹2,582 crore has been allocated for rail infrastructure development in Delhi, a significant increase from previous outlays, reflecting the government’s focus on urban transportation.
- Rural Connectivity: The Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase IV will provide all-weather connectivity to 25,000 rural habitations. Since 2000, the scheme has completed 7,65,530 km of roads with a total expenditure of ₹3,24,177 crore.
To encourage state-level infrastructure projects, the budget includes ₹1.5 lakh crore in long-term, interest-free loans to states, aligning state priorities with national objectives.
Urban Infrastructure Developments
- Metro Rail Networks: The expansion of metro networks, now exceeding 1,000 kilometers, has improved urban mobility and accessibility.
- Swachh Bharat Abhiyan: The program has contributed to better sanitation and cleanliness, furthering modern and connected infrastructure development.
Key Initiatives in Urban Development
- Pradhan Mantri Awas Yojana – Urban (PMAY-U): Since 2015, 1.18 crore houses have been sanctioned, with 89 lakh completed by November 2024. PMAY-U 2.0 plans to assist 1 crore more households.
- Smart Cities Mission: 7,479 projects worth ₹1.50 lakh crore have been completed, including affordable housing, smart roads, and LED streetlights.
- AMRUT: The program has expanded tap water coverage to 70%, increased sewerage coverage to 62%, and developed 5,070 acres of green spaces.
The government’s focus on smart urban planning, enhanced public transportation, and sustainable development is shaping a future-ready infrastructure ecosystem, supporting economic growth and improving quality of life.
Industry Experts Opinion
Ms. Kavita Shirvaikar, Managing Director of Patel Engineering Limited
On Public-Private Partnership Model
“India-as a growing economy-should bridge the infrastructure gaps by exploring private sector expertise and capital through large-scale projects, keeping in step with sustainable and inclusive growth. Innovative financing models, streamlined regulatory frameworks, and more beneficial investments will be favourable in unlocking the full growth potential of the industry. As highlighted in the Economic Survey, both the public and private sectors together will drive the ambitious vision of Viksit Bharat@2047, leveraging their strengths to accelerate growth and development. Acceptance of public-private collaboration, balanced risk-and-revenue sharing, and better project conceptualization notwithstanding, a great deal has already been accomplished by government and public sector initiatives in areas.”
On Renewable Energy
“The growth of renewable energy in India, which is showing steady progress toward sustainability goals, is strong and needs continued innovation and investment. As seen in the Economic Survey, although there have been great strides, we feel those breakthroughs in energy storage, efficient grid integration, and sustainable sourcing of critical minerals will be needed to meet the 50% non-fossil fuel target by 2030. The Green Energy Corridor projects point to much-needed infrastructure developments, but it is only by embracing more of the advanced technologies and global expertise that will enable long-term energy stability. It is anticipated in such a context that robust public-private partnerships and heavy investments in renewable solutions will determine the course toward a sustainable energy future for a net-zero emission target by 2070.”
On Job Creation in Green Energy Sector
“The green transition has opened up new employment opportunities, especially in renewable energy, which has reach 1.02 million jobs in hydropower alone. More importantly, the most significant impact lies in empowering women, as seen in projects such as Solar Urja Lamps in Rajasthan and GEAPP projects. Still, there are challenges in terms of technological, financial, and social barriers that hinder full participation. The industry calls on the government to remove these barriers through accessible training, improved financial access and supportive policies. This will not only drive development and environmental sustainability but also be inclusive of the possibility for marginalized groups fully to reap the benefits of sustainable growth. A focus strategy of inclusiveness, increased financial access, and technology adoption must be a workforce development method. Inclusivity will be key players in the green transition, meeting environmental goals while fostering equitable inclusion in the workforce.”
Mr. Shrinivas Rao, FRICS, CEO Vestian
“The Economic Survey 2025 reaffirms the vision of Viksit Bharat 2047, recognizing that this goal cannot be achieved without the contribution of the real estate sector—the second-largest employment generator in the country. The survey highlights the sector’s strong performance in 2024, driven by economic stability and positive market sentiment. Vestian Research data reinforces this trend, with 2024 recording the highest-ever office absorption at 70.7 million sq. ft.
Mr. Sahil Agarwal, CEO, Nimbus Group
“The Economic Survey underscores the crucial role of the real estate sector in economic growth and projects sustained demand for both housing and office spaces over the long term. Given its significant contribution to GDP and employment, real estate remains one of the key pillars of India’s economic expansion.
The sector has witnessed renewed confidence following the implementation of RERA (Real Estate Regulatory Authority), which has instilled greater transparency and accountability. As a result, both end-users and investors are now more willing to invest in projects developed by RERA-compliant builders, leading to a healthier and more robust market. Over time, we expect transparency and governance in the sector to improve even further, making it even more attractive for investment.
The Economic Survey rightly predicts that housing demand in India will reach 93 million units by 2036, a figure that underscores the enormous growth potential of the sector. Beyond just real estate, this surge in demand will also benefit auxiliary industries, such as construction materials, home décor, finance, and technology, creating a ripple effect across the economy.
However, to fully capitalize on this demand and drive further growth, we urge the government to grant long-pending industry status to the real estate sector. This will allow developers to access easier financing, lower borrowing costs, and incentives, ultimately enabling the sector to meet housing demand more effectively and contribute even more significantly to India’s economic progress.”
Mr. Pradeep Aggarwal. Founder & Chairman, Signature Global Group and Chairman, ASSOCHAM – National Council on Real Estate, Housing and Urban Development
“The Economic Survey 2025 underscores India’s economic resilience, with projected GDP growth of 6.4% for FY25 and sustained momentum across key sectors. Real estate remains a cornerstone of this growth, with over 1.38 lakh projects and nearly 96,000 agents registered under RERA, ensuring greater transparency and consumer confidence. Housing continues to be a national priority, with 1.18 crore homes sanctioned under PMAY-U and 2.69 crore rural homes completed under PMAY-G. As the government drives regulatory reforms and infrastructure expansion, the sector is set to play a pivaotal role in achieving the vision of ‘Viksit Bharat 2047’—a developed and inclusive India. A strong, well-regulated real estate market will not only boost economic productivity but also enhance urbanization, sustainability, and quality of life for millions.”
Despite global challenges, the survey presents an optimistic outlook for India’s economy. It emphasizes that policy changes, regulatory easing, and sectoral reforms will be key to unlocking higher growth potential and strengthening India’s position in the global economy.
Image source- The Hindu
