Economic Survey 2023-24:
Finance Minister Nirmala Sitharaman on Monday tabled the Economic Survey 2023-24 in Parliament, setting the stage for the Union Budget 2024-25 .
- The latest Economic Survey remains bullish on India’s growth and macroeconomic outlook. It pegged India’s GDP growth for FY25 at 6.5-7 per cent and the country’s inflation lower at 4.5 per cent
- India’s real GDP grew by 8.2% in FY24, surpassing the 8% mark in three out of four quarters of FY24.
- Retail Inflation: Retail inflation decreased from 6.7% in FY23 to 5.4% in FY24.
- The CAD improved to 0.7% of GDP in FY24 from 2.0% in FY23.
- Tax Revenue: Direct taxes contributed 55% of the total tax revenue, with indirect taxes making up the remaining 45%.
- Capital Spending: The government progressively increased capital expenditure and provided free food grains to 81.4 crore people.
- Monetary Management and Financial Intermediation – Stability is the Watchword
- Monetary Policy: The RBI maintained a steady policy repo rate at 6.5% throughout FY24.
- Consequently, Core inflation declined by around 4% from April 2022 to June 2024.
- Credit Growth: Credit disbursal by Scheduled Commercial Banks (SCBs) reached Rs 164.3 lakh crore, growing by 20.2% by March 2024.
- Banking Sector: Gross and net non-performing assets are at multi-year lows, and bank asset quality has improved.
- Data from the RBI’s Financial Stability Report of June 2024 show that the asset quality of SCBs has improved, with the Gross Non-Performing Assets (GNPA) ratio declining to 2.8% in March 2024, a 12-year low.
- Insolvency and Bankruptcy Code has been recognised as an effective solution for the twin balance sheet problem, in the last 8 years, 31,394 corporate debtors involving a value of Rs 13.9 Lakh Crore have been disposed off as of March 2024.
- Twin Balance Sheet Problem refers to heavily indebted corporations and banks burdened with bad loans, creating a vicious cycle hindering economic growth.
- Primary capital markets facilitated capital formation of Rs 10.9 lakh crore, approximately 29% of the gross fixed capital formation of private and public corporates in FY23.
- India is poised to become one of the fastest-growing insurance markets and has the second-largest microfinance sector globally.
- Inflation Trends:
- 29 States and Union Territories recorded inflation below 6% in FY24.
- Core services inflation eased to a nine-year low in FY24
- Food inflation increased from 6.6% in FY23 to 7.5% in FY24.
- Price cuts on LPG, petrol, and diesel helped in keeping retail fuel inflation relatively low.
- The RBI forecasts inflation to decline to 4.5% in FY25 and 4.1% in FY26.
- External Sector – Stability Amid Plenty:
- India’s services exports grew by 4.9% to USD 341.1 billion in FY24, with significant contributions from IT/software and other business services.
- India remains the top global recipient, with remittances totaling USD 120 billion in 2023.
- India’s external debt to GDP ratio stood at 18.7% as of March 2024.
- India’s rank in the World Bank Logistics Index improved to 38th in 2023 from 44th in 2014
- India’s share in world tourism receipts increased from 1.38% in 2021 to 1.58% in 2022.
- Healthcare: Over 34.7 crore Ayushman Bharat cards have been issued.
- Housing: 2.63 crore houses constructed under PM-AWAS-Gramin in the past 9 years.
- Youth Unemployment: Fell from 17.8% in 2017-18 to 10% in 2022-23.
- Female Labor Force Participation: Rising for six consecutive years (37.0% currently).
- Pharmaceutical and Clothing Sectors: India’s pharmaceutical market is the world’s third-largest by volume, valued at USD 50 billion.
- It is the second-largest clothing manufacturer globally, with textile and apparel exports reaching Rs 2.97 lakh crore in FY24.
- Digital Services: India’s share in global digitally delivered services exports increased to 6% in 2023.
- Globally, India’s services exports constituted 4.4% of the world’s commercial services exports in 2022 & accounted for 44% of India’s total exports in FY24.
- The pace of National Highways construction increased from 11.7 km per day in FY14 to approximately 34 km per day by FY24.
- Railways: Capital expenditure on Railways increased by 77% over the past five years.
- Aviation: 21 new airport terminal buildings operationalised in FY24.
- Logistics: Rank in the International Shipments category improved to 22nd in 2023 from 44th in 2014.
- Space: India has 55 active space assets, including 18 communication, 9 navigation, 5 scientific, 3 meteorological, and 20 earth observation satellites.
