Executive Summary:
This document is a response to questions raised in Lok Sabha regarding India's GDP growth, investment strategies, ease of doing business, and fiscal deficit. It provides the revised GDP growth estimate for the current financial year (2024-25), outlines steps to attract investments, details progress in ease of doing business, and specifies the fiscal deficit target for 2025-26, along with the roadmap for fiscal consolidation as per the FRBM Act. The answers were provided on August 4, 2025, by the Minister of State in the Ministry of Finance.
Key Points / Main Content:
* **GDP Growth:**
* GDP grew by 6.5% in 2024-25, driven by Construction (9.4%), Public Administration, Defence & Other Services (8.9%), and Financial, Real Estate & Professional Services (7.2%).
* GDP growth for 2025-26 is projected in the range of 6.3 to 6.8.
* **Investment Attraction:**
* The government is focusing on capital expenditure, infrastructure development, financial sector reforms, and enhancing the ease of doing business to attract domestic and foreign investment.
* The Union Budget 2025-26 identifies investment as a key engine of growth, supported by credit guarantee schemes, the PLI scheme, and skilling initiatives.
* FDI policy is regularly reviewed and updated, with most sectors open to 100% FDI under the automatic route (excluding strategically important sectors).
* **Ease of Doing Business:**
* The government has implemented reforms under the Ease of Doing Business programme, including BRAP, BusinessReady assessment, Jan Vishwas, and reducing compliance burdens.
* The Jan Vishwas Amendment of Provisions Act, 2023, decriminalized 183 provisions across 42 Central Acts, and the Jan Vishwas Bill 2.0 aims to ease over 100 legal provisions.
* BRAP 2024 streamlines processes, reduces compliance burdens, and implements digital solutions, covering sectors like Labour, Environment, Taxes, Land Administration, Utility Permits, Inspection and Construction, and incorporating new areas like ICT adoption.
* **Fiscal Deficit:**
* The fiscal deficit target for 2025-26 is set at 4.4% of GDP.
* The government aims to reduce the debt to GDP level to about 51% by March 31, 2031, as outlined in the Statements of Fiscal Policy presented alongside the Union Budget 2025-26, in accordance with the FRBM Act, 2003.
Impact Analysis:
* **Businesses (Domestic and Foreign):**
* Impact: Benefit from streamlined regulations, reduced compliance burdens, and easier access to investment opportunities.
* Action Required: Stay informed about the latest reforms and initiatives under the Ease of Doing Business program, including BRAP 2024, and leverage available incentives and support schemes like the PLI scheme.
* **Investors:**
* Impact: Increased confidence due to a stable and investor-friendly FDI policy, robust infrastructure development, and financial sector reforms.
* Action Required: Monitor policy updates and sector-specific changes to maximize investment returns, and leverage the automatic route for FDI where applicable.
* **Citizens:**
* Impact: Indirectly benefit from increased economic activity, job creation, and improved public services resulting from higher GDP growth and investment.
* Action Required: No direct action required.
* **Government of India (Ministry of Finance and other Departments):**
* Impact: Responsible for implementing and monitoring the various initiatives and reforms outlined in the document, including achieving fiscal consolidation targets.
* Action Required: Continue to review and update policies, streamline processes, and coordinate efforts across departments to achieve the stated goals of economic growth, investment attraction, and fiscal responsibility.
Key Entities Referenced
Ministry of Finance: The Indian government ministry responsible for economic policy, financial regulations, and taxation.
Gross Domestic Product: A monetary measure of the market value of all the final goods and services produced in a specific time period by countries.
Economic Survey 202425: An annual report on the state of the Indian economy.
Union Budget 202526: The annual financial statement presenting the Indian government's revenues and expenditures for the fiscal year.
Production Linked Incentive PLI Scheme: A scheme to give companies incentives for enhancing their manufacturing and exports.
Foreign Direct Investment FDI: An investment made by a firm or individual in one country into business interests located in another country.
Ease of Doing Business: Initiatives undertaken to improve the business environment, attract investments, and promote economic growth.
Fiscal Responsibility and Budget Management Act, 2003: An act of the Parliament of India to institutionalize financial discipline, reduce India's fiscal deficit, and improve macroeconomic management.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF ECONOMIC AFFAIRS
LOK SABHA
UNSTARRED QUESTION No. †2445
TO BE ANSWERED ON 4 AUGUST 2025/ SRAVANA 13, 1947 (SAKA)
GROSS DOMESTIC PRODUCT GROWTH
†2445. Shri Sanjay Haribhau Jadhav:
Smt. Bharti Pardhi:
Will the Minister of FINANCE be pleased to state:
(a) the revised Gross Domestic Product (GDP) growth estimate for the current financial
year along with the major factors contributing to this growth;
(b) the steps being taken by the Government to attract more domestic and foreign
investments in key sectors;
(c) the progress made in ease of doing business during the last twelve months; and
(d) the details of the current fiscal deficit as a percentage of GDP and the roadmap of the
Government to adhere to the fiscal consolidation targets mentioned in the FRBM Act?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) As per the latest available Provisional Estimates of Gross Domestic Product (GDP)
released by the Ministry of Statistics and Programme Implementation, GDP at
constant prices is estimated to have grown by 6.5% in 2024-25. This growth was
primarily driven by robust performance in the Construction Sector (9.4%), Public
Administration, Defence & Other Services (8.9%) and Financial, Real Estate &
Professional Services (7.2%). Looking ahead, the Economic Survey 2024-25 has
projected GDP growth for the year 2025–26 in the range of 6.3% to 6.8%.
(b) The Government has undertaken a series of initiatives to attract greater domestic and
foreign investment, focusing on robust capital expenditure, infrastructure
development, financial sector reforms, and enhancing the ease of doing business. The
Union Budget 2025–26 identifies investment as one of the four key engines of
growth. Complementary measures include credit guarantee schemes, the Production-
Linked Incentive (PLI) Scheme, and the creation of a strong skilling ecosystem. In
addition, the Government has implemented wide-ranging and transformative Foreign
Direct Investment (FDI) reforms across sectors such as Defence, Civil Aviation,Pharmaceuticals, Single Brand Retail, Contract Manufacturing, Digital Media,
Insurance and Space. To maintain India’s appeal as an investment destination, the FDI
policy is reviewed regularly and updated as needed. An investor-friendly framework
is in place, with most sectors—except a few of strategic importance—open to 100%
FDI under the automatic route, requiring no prior government approval.
(c) The Government of India has consistently undertaken wide-ranging reforms to
improve the business environment, attract investments, and promote economic
growth. These measures include initiatives undertaken under the Ease of Doing
Business programme, comprising the Business Reform Action Plan (BRAP),
Business-Ready assessment, Jan Vishwas and Reducing Compliance Burden on
Businesses and Citizens. The Jan Vishwas (Amendment of Provisions) Act, 2023,
decriminalised 183 provisions across 42 Central Acts, and the Jan Vishwas Bill 2.0
proposed in the Union Budget 2025–26, aims to further ease over 100 legal
provisions. Moreover, in a major push to further strengthen the business environment,
BRAP 2024, led by the Department for Promotion of Industry and Internal Trade
(DPIIT), continues to streamline processes, reduce compliance burdens, and
implement digital solutions, while expanding on its initial scope to cover critical
sectors such as Labour, Environment, Taxes, Land Administration, Utility Permits,
Inspection and Construction, and incorporating new areas like ICT adoption and
process reengineering through the Time and Document Study (TDS) to ensure faster
and more efficient Government-to-Business service delivery.
(d) The Union Budget 2025-26 has set the fiscal deficit target for 2025–26 at 4.4% of
GDP. The Government of India’s roadmap for fiscal consolidation is outlined in the
Statements of Fiscal Policy presented alongside the Union Budget 2025-26, as
required under the Fiscal Responsibility and Budget Management Act, 2003. It states
that “Sans any major macro-economic disruptive exogenous shock(s), and while
keeping in mind potential growth trends and emergent development needs, the
Government would endeavour to keep fiscal deficit in each year (from FY 2026-27 till
FY 2030-31) such that the Central Government debt is on declining path to attain a
debt to GDP level of about 50±1 per cent by 31st March 2031 (the last year of the
16th Finance Commission cycle)”.
****