The Union Budget for FY24 will be presented on February 1, 2023. Following the traditions, the Finance Minister tabled the Economic Survey 2023 in the parliament on January 31, 2023. Here are the key highlights of the Economic Survey.
What is the Economic Survey?
The Economic Survey report is presented on the eve of the budget session providing information about the country’s economic performance measured against various economic parameters. The Economic Survey lays out the government’s economic forecast for the upcoming year and provides an outline of the general structure of the upcoming budget.
The Department of Economic Affairs (DEA) prepares the Economic Survey report under the guidance of the Chief Economic Advisor.
Highlights of the Economic Survey 2023
The following are some noteworthy highlights of the Economic Survey 2023.
- The 2023 Economics Survey projected India’s economic growth rate at 6-6.8% for the next Fiscal year starting from April 2023.
- The baseline nominal GDP growth rate is pegged at 11%., while the Indian economy will grow in 2023-24 by 7%.
- The report cautioned that the Indian Rupee may come under more pressure if the Current Account Deficit continues to widen.
- There will be further loss of export stimulus resulting from slowing world growth and shrinking global trade.
- However, the survey has shown confidence in India’s growth story based on robust fundamentals.
- According to the report, higher capital expenditure, growth in private consumption and credit to small businesses, strengthening corporate balance sheets, and returning migrant labourers will be the primary driving force for the country’s economy.
- The survey mentioned that India has ‘recouped’ what’d lost, ‘renewed’ what’d paused and ‘energised’ what had slowed down.
- Despite the slow GDP growth in 2023-24, India will continue to be one of the fastest-growing economies. It is currently the fifth in the exchange rate and the third in purchasing power parity.
- Retail inflation is back in the range of RBI.
- There is a drop in the urban unemployment rate with an increase in employment generation and net registration in the Employee Provident Fund.
- The government’s key economic reform plans include creating public goods to enhance opportunities and integrating the private sector as a co-partner in driving development. It also suggests enhancing agricultural productivity, ease of living and building trust-based governance are the primary impetus to accelerate economic reform.
- According to the report, India’s e-commerce is projected to grow at 18% annually till 2025.
- UPI transactions continued to grow in value (121%) and volume (115%) between 2019-2022.
- The Indian economy has shown broad-based recovery from Covid-induced contraction, the Russia-Ukraine conflict, and global inflation and might ascend to the pre-pandemic growth path in FY24.
Also read: Union Budget 2023: Stock Market Expectations
India’s mid-term growth outlook
The survey report has also made observations regarding India’s mid-term growth.
According to the report, the Indian economy will record healthier growth in the coming decade once the pandemic shock and rising commodity prices from inflation subside. Between 2014-2022 the country’s economy has undergone various structural and governance changes which have strengthened the country’s fundamentals. The transformative reforms performed by the government have enhanced its overall efficiency and will help the economy overcome rapidly when the global economic shocks and spikes in commodity prices fade away. There is a presence of a strong mid-term growth impetus benefiting the country’s growth.
The Economic Survey of 2022 projected India’s GDP growth to 8.8.5% in 2022-23. It has been moderated to 6-6.8% in 2023-24, supported by a widespread vaccine drive, supply-side recovery, strong export growth, and increasing capital expenditure.
The Economic Survey presents a critical evaluation of the country’s economic performance. One can expect tomorrow’s budget will be based on the findings of the survey report. To learn more about Union Budget 2023, follow Angel One’s blog.