Economic Survey 2023-24: Key Highlights

The Economic Survey 2023-24 of India provides a comprehensive analysis of the country’s economic performance over the past year and outlines prospects for the coming year. Here are the key highlights.

The Economic Survey 2023-24 projects the FY25 real GDP growth at 6.5-7%, lower than the economic growth rate of 8.2% estimated for the previous financial year.

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey of India 2023-24, along with a statistical appendix, in both Houses of Parliament on July 22.

The survey said that the outlook for India’s financial sector appears bright, but it needs to brace for likely vulnerabilities.

Economic Survey 2023-24

The Economic Survey is an annual document presented by the Ministry of Finance in India.

It serves as an official report card on the government’s financial performance and the state of the economy during the fiscal year ending March 31.

Typically released a day before the Union Budget is tabled in Parliament, it offers a comprehensive overview of economic trends and insights into future policy directions.

Here are the key Highlights from the Economic Survey 2023-24.

Macroeconomic Indicators

Despite global and external challenges, India’s economy carried forward the momentum it built in FY23 into FY24. The focus on maintaining macroeconomic stability ensured that these challenges had minimal impact on India’s economy.

• GDP Growth: The survey projects India’s GDP growth for 2023-24 to be around 6.5-7.0%, driven by robust private consumption, investment, and a resilient service sector.
• Inflation: Inflation remained within the target range, with a 4-5% forecast for the upcoming year, reflecting stable food and energy prices.
• In FY23, Consumer Price Index (CPI) based retail inflation in India was primarily influenced by higher food inflation, while core inflation remained moderate.
• Externally, the Russia-Ukraine war led to price pressures, while domestically, excessive heat in the summer and uneven rainfall put pressure on food prices.
• Core inflation hits a four-year low in FY24: Core inflation is measured by excluding food and energy items from CPI headline inflation. It assesses the underlying price trends by largely eliminating the impact of price volatilities arising from transitory supply shocks.
• Gross value addition: On the supply side, gross value added (GVA) at 2011-12 prices grew by 7.2 per cent in FY24, with growth remaining broad-based.
• Real estate: In 2023, residential real estate sales in India were at their highest since 2013, witnessing a 33 per cent YoY growth, with a total sale of 4.1 lakh units in the top eight cities.

Sectoral Performance

The Economic Survey called for urgent reforms in India’s agricultural sector, warning that the structural issues could impede the country’s overall economic growth trajectory.

• Agriculture: Indian agriculture is not in a crisis now but requires a serious structural transformation because climate change and water criticality loom large in the times to come.
• The agriculture sector showed moderate growth due to favourable monsoon conditions, increased adoption of technology, and government support through schemes like PM-KISAN.
• Industry: The industrial sector witnessed a recovery, particularly in manufacturing, bolstered by the PLI (Production Linked Incentive) scheme and increased FDI inflows.
• The economic survey recommends a reduction in the compliance burden for MSMEs to improve growth prospects.
• Services: The services sector continued to be the mainstay of growth, with significant contributions from IT, financial services, and real estate.

Banking and financial sector

The Indian economy’s financial and banking sectors have shown strong performance despite continuous geopolitical challenges.

• The Central Bank maintained a steady policy rate throughout the year, with the overall inflation rate under control.
• The effects of the monetary tightening following the Russia-Ukraine conflict are evident in the lending and deposit interest rates increase among banks.
• Bank loans saw significant and widespread growth across various sectors, with personal loans and services leading the way.

Fiscal and Monetary Policy

• Fiscal Deficit: The fiscal deficit is projected to be around 5.9% of GDP, reflecting the government’s continued focus on infrastructure spending and social sector schemes.
• Monetary Policy: The Reserve Bank of India (RBI) maintained an accommodative stance to support growth, with a focus on liquidity management and credit flow to key sectors.
• The Monetary Policy Committee (MPC) maintained the status quo on the policy repo rate at 6.5 per cent in FY24.

Employment and Labor Market

The Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce, according to the Economic Survey for 2023-24.

• Employment Generation: Various government initiatives such as MGNREGA, PMEGP, and skill development programs have contributed to job creation, particularly in rural areas.
• Unemployment Rate: The survey notes a decline in the unemployment rate, reflecting economic recovery and labour market improvements.

Trade and External Sector

Since the COVID-19 pandemic, the global economy has been buffeted by several shocks – the Russia-Ukraine conflict, developments in the Middle East and the Red Sea crisis, leading to supply dislocations in several commodities and a considerable rise in inflation in many countries.

• Exports and Imports: Merchandise exports showed a robust performance, driven by demand for engineering goods, chemicals, and pharmaceuticals. Imports also increased, reflecting domestic demand recovery.
• Foreign Exchange Reserves: India’s forex reserves remained strong, providing a cushion against external shocks.

Social Sector and Inclusive Growth

Over 10.3 crore women have been provided free-of-cost gas connections under PM Ujjwala Yojana, 11.7 crore toilets have been built under Swachh Bharat Mission, 52.6 crore Jan Dhan accounts have been opened, 3.47 crore pucca houses have been built for the poor people under the PM-AWAS Yojana, 11.7 crore households provided tap water connections under Jal Jeevan Mission, and 6.9 crore hospital admissions have been made under the Ayushman Bharat Scheme.

• Healthcare: Increased spending on healthcare infrastructure, vaccination drives, and Ayushman Bharat have improved health outcomes.
• Child immunisation under Mission Indradhanush and sanitation through programmes like ODF and ODF plus and Swachh Bharat Mission have led to lesser disease incidence due to cleaner practices, lesser school absenteeism due to illness, and more effective nutrient absorption over the long run among the least privileged.
• Education: The survey highlights progress in digital education and the implementation of the National Education Policy (NEP) 2020.
• Implementing Early Childhood Care and Education or ECCE, strengthening foundational literacy and numeracy, experiential learning, multilingual education, focusing on interdisciplinary and multidisciplinary approaches, holistic assessment, etc., are the major recommendations of the NEP 2020 to develop a new system that is in line with the inspirational goals of the 21st century

Structural Reforms

• Ease of Doing Business: Continued efforts to improve the business environment through regulatory reforms, digitalization, and simplification of procedures.
• Digital Economy: The push towards digitalization has accelerated, with initiatives like the Digital India program and increased fintech adoption.
• Aviation sector: Indian airlines need to be strengthened to ensure long-haul international air connectivity, the Economic Survey 2024 said. The emphasis on supporting Indian carriers was required to plug the leak caused by a large proportion of Indian long-haul international traffic travelling through connectivity hubs in the Middle East and Southeast Asia.

Detailed report on Infrastructure development

Climate and Sustainability

India has adopted the mission-mode approach to address climate change. The National Action Plan on Climate Change (NAPCC) outlines the strategy to enhance the sustainability of the country’s development path.

• Renewable Energy: Significant progress in renewable energy capacity addition, with a focus on solar and wind energy.
• Solar energy: The addition to the installed solar power capacity was 15.03 GW in 2023-24, reaching a cumulative of 82.64 GW on 30 April 2024.
• NDC: The country achieved 40 per cent cumulative electrical power installed capacity from non-fossil fuel-based energy sources in 2021 and reduced the emission intensity of India’s GDP from 2005 levels by 33 per cent in 2019– nine and eleven years before the target year of 2030, respectively.
• Sustainability Initiatives: Various initiatives to promote sustainable development, including waste management, water conservation, and green finance.
• India’s adaptation-relevant action also includes steps taken to improve resilience in the economy through developmental programs such as Swachh Bharat Mission, Mahatma Gandhi National Rural Employment Guarantee Act, Pradhan Mantri Awas Yojana, Saubhagya Scheme, etc., to name a few.

Challenges

• Managing inflationary pressures, global uncertainties, and ensuring equitable growth remain key challenges.
• Renewable energy faces intermittency and discontinuous supply, impacting grid stability in the absence of battery storage
• Many technologies required for global Net Zero are currently commercially unavailable, such as hydrogen-fuelled steel/cement, steel and aluminium production with CCUS, etc.
• There is a need to enhance international cooperation in R&D, especially in the domains of distributed RE, offshore wind, geothermal, tidal energy, biofuels, compressed biogas, green hydrogen, energy storage, electrolysers, and nuclear power (including Small Modular Reactors SMR).

Conclusion

India is on the path to scaling the next level of the development ladder to a ‘Developed India’ step by 2047 (ViksitBharat@2047).

The Economic Survey 2023-24 underscores India’s robust economic recovery post-pandemic, highlighting strong macroeconomic fundamentals, proactive government policies, and significant progress in key sectors.

It emphasizes the need for sustained reforms and investments to achieve long-term inclusive and sustainable growth.

Frequently Asked Questions (FAQs)

Q. Who presents the economic survey and union budget?

Ans: Union Finance Minister Nirmala Sitharaman has presented the economic survey 2023-24 and will be presenting the Union Budget 2024-25 on July 23, 2024. It will be a record seventh consecutive Budget presentation for Ms Sitharaman. Previously, Morarji Desai presented the Union Budget for six times consecutively.

Q. Who publishes the economic survey?

Ans: The Economic Survey of India is an annual document released by the Finance Ministry, Government of India and reviews the developments in the Indian economy over the past twelve months.

All chapters of Economic Survey 2023-24

-Article by Swathi Satish