Economic Survey For 2022-23: Highlights

Economic Survey For 2022-23:

Finance Minister recently tabled the Economic Survey for 2022-23 in the Lok Sabha.

• The Economic Survey 2022-23 highlighted that India’s economic recovery from the pandemic is complete and the economy is expected to grow in the range of 6% to 6.8% in the coming financial year 2023-24.

Highlights of Economic Survey 2023:

• India’s GDP growth is expected to remain robust in FY23 at 7 percent (in real terms). This follows an 8.7 percent growth in the previous financial year.
• GDP forecast for FY24 to be in the range of 6-6.8 %, depending on the trajectory of economic and political developments globally.
• Economic Survey 2022-23 projects a baseline GDP growth of 11 percent in nominal terms and 6.5 percent in real terms in FY 24.
• India is the third largest economy in PPP (purchasing power parity) terms, the fifth largest in terms of exchange rate
• Private consumption as a percent of GDP stood at 58.5 percent in Q2 of FY23, the highest among the second quarters of all the years since FY15, supported by a rebound in contact-intensive services such as trade, hotel, and transport.
• While India’s retail inflation rate peaked at 7.8 percent in April 2022, above the RBI’s upper tolerance limit of 6 percent, the overshoot of inflation above the upper end of the target range in India was however one of the lowest in the world.
• Credit growth to the Micro, Small, and Medium Enterprises (MSME) sector has been remarkably high, over 30.5 percent, on average during Jan-Nov 2022.
• Capital expenditure of the central government, which increased by 63.4 percent in the first eight months of FY 23, was another growth driver of the Indian economy in the current year.
• The Economic Survey cautions that the challenge of the depreciating rupee, although better performing than most other currencies, persists with the likelihood of further increases in policy rates by the US Fed.
• A surge in the growth of exports in FY22 and the first half of FY23 induced a shift in the gears of the production processes from mild acceleration to cruise mode.
• Electronics exports rise nearly threefold, from US $4.4 billion in FY19 to US $11.6 Billion in FY22.
• The government’s finances have shown a resilient performance during the year FY23, facilitated by the recovery in economic activity, and buoyancy in revenues from direct taxes and GST.
• The Gross Tax Revenue registered a YoY growth of 15.5 percent from April to November 2022, driven by robust growth in the direct taxes and GST.
• GST has stabilized as a vital revenue source for central and state governments, with the gross GST collections increasing at 24.8 percent on YoY basis from April to December 2022.
• The Centre’s Capex has steadily increased from a long-term average of 1.7 percent of GDP (FY09 to FY20) to 2.5 percent of GDP in FY22 PA.
• Credit disbursed by Non-Banking Financial Companies (NBFCs) has also been on the rise.
• Gross Non-Performing Assets (GNPA) ratio has fallen to a seven-year low of 5.
• The Capital-to-Risk Weighted Assets Ratio (CRAR) remains healthy at 16.0.
• Central and State Government’s budgeted expenditure on the health sector touched 2.1% of GDP in FY23 (BE) and 2.2% in FY22 (RE) against 1.6% in FY21.
• Social sector expenditure increased to Rs. 21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16.
• The Aspirational Districts Programme has emerged as a template for good governance, especially in remote and difficult areas.
• JAM (Jan-Dhan, Aadhaar, and Mobile) trinity, combined with the power of DBT, has brought the marginalized sections of society into the formal financial system, revolutionizing the path of transparent and accountable governance by empowering the people.
• Labor markets have recovered beyond pre-Covid levels, in both urban and rural areas, with unemployment rates falling from 5.8 percent in 2018-19 to 4.2 percent in 2020-21.
• The year FY22 saw improvement in Gross Enrolment Ratios (GER) in schools and improvement in gender parity. GER in the primary enrolment in classes I to V as a percentage of the population in age 6 to 10 years – for girls, as well as boys, have improved in FY22.
• Due to several steps taken by the government on health, out-of-pocket expenditure as a percentage of total health expenditure declined from 64.2% in FY14 to 48.2% in FY19.
• Infant Mortality Rate (IMR), Under Five mortality rate (U5MR), and neonatal Mortality Rate (NMR) have shown a steady decline.
• Over 1.54 lakh Health and Wellness Centres have been operationalized across the country under Ayushman Bharat.
• Private investment in agriculture increases to 9.3% in 2020-21.
• MSP for all mandated crops fixed at 1.5 times of all India’s weighted average cost of production since 2018.
• Institutional Credit to the Agricultural Sector continued to grow to 18.6 lakh crore in 2021-22
• Foodgrains production in India saw a sustained increase and stood at 315.7 million tonnes in 2021-22.
• Online, Competitive, Transparent Bidding System with 1.74 crore farmers and 2.39 lakh traders put in place under the National Agriculture Market (e-NAM) Scheme
• Organic Farming is being promoted through Farmer Producer Organisations (FPO) under the Paramparagat Krishi Vikas Yojana (PKVY).
• India stands at the forefront to promote millets through the International Year of Millet initiative.
• Overall Gross Value Added (GVA) by the Industrial Sector (for the first half of FY 22-23) rose 3.7 per cent, which is higher than the average growth of 2.8 per cent achieved in the first half of the last decade.
• Credit to Micro, Small, and Medium Enterprises (MSMEs) has grown by an average of around 30% since January 2022 and credit to large industries has been showing double-digit growth since October 2022.
• India has become the second-largest mobile phone manufacturer globally, with the production of handsets going up from 6 crore units in FY15 to 29 crore units in FY21.
• Foreign Direct Investment (FDI) flows into the Pharma Industry have risen four times, from US $180 million in FY19 to US $699 million in FY22.
• The Production Linked Incentive (PLI) schemes were introduced across 14 categories, with an estimated capex of ₹4 lakh crore over the next five years, to plug India into global supply chains. Investment of ₹47,500 crores has been seen under the PLI schemes in the FY22, which is 106% of the designated target for the year. Production/sales worth ₹3.85 lakh crore and employment generation of 3.0 lakh have been recorded due to PLI schemes.
• The services sector is expected to grow at 9.1% in FY23, against 8.4% (YoY) in FY22.
• Robust expansion in PMI services, indicative of service sector activity, observed since July 2022
• Tourism sector is showing signs of revival, with foreign tourist arrivals in India in FY23 growing month-on-month with resumption of scheduled international flights and easing of Covid-19 regulations.
• Merchandise exports were $332.8 billion for April-December 2022.
• As of December 2022, Forex Reserves stood at $ 563 billion covering 9.3 months of imports.
• As of end-November 2022, India is the sixth largest foreign exchange reserves holder in the world.
• 89,151 projects costing ₹141.4 lakh crore under different stages of implementation; 1009 projects worth ₹5.5 lakh crore completed
• ₹ 0.9 lakh crore monetisation target achieved against expected ₹0.8 lakh crore in FY22.
• FY23 target is envisaged to be ₹1.6 lakh crore (27 per cent of overall NMP Target)
• The total installed power capacity (industries having demand of 1 Mega Watt (MW) and above) increased from 460.7 GW on 31 March 2021 to 482.2 GW on 31 March 2022.
• Rapid increase in National Highways (NHs) /Roads Construction with 10457 km NHs/roads constructed in FY22 compared to 6061 km in FY16.