Economic Survey 2023-24: Key Highlights and Analysis

The Economic Survey 2023-24, presented by Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman, provides a detailed overview of India’s economic performance and future outlook. Here are the key highlights and analysis, organized by thematic chapters:

PIB Economic Survey 2023-24

Chapter 1: State of the Economy – Steady as She Goes

GDP Growth Projection: The Economic Survey conservatively projects a real GDP growth of 6.5–7%, with balanced risks, despite higher market expectations.
Momentum Maintenance: India’s economy continued its momentum from FY23 into FY24, facing minimal impact from external challenges due to macroeconomic stability.
Real GDP Growth: Real GDP grew by 8.2% in FY24, exceeding 8% in three out of four quarters.
Gross Value Added (GVA): GVA grew by 7.2% in FY24 (at 2011-12 prices) and net taxes at constant prices grew by 19.1%.
Inflation Management: Retail inflation reduced from 6.7% in FY23 to 5.4% in FY24 due to effective administrative and monetary policies.
Current Account Deficit (CAD): CAD improved to 0.7% of GDP in FY24 from 2.0% in FY23.
Post-Pandemic Recovery: Real GDP in FY24 was 20% higher than FY20, a notable recovery achieved by few major economies.
Tax Collection: 55% of tax collected from direct taxes, and 45% from indirect taxes.
Welfare Programs: Government ensured free food grains to 81.4 crore people and progressively increased capital expenditure.

Chapter 2: Monetary Management and Financial Intermediation – Stability is the Watchword

Banking Sector Performance: India’s banking and financial sectors performed exceptionally well in FY24.
Policy Rate: RBI maintained a steady policy rate, keeping the policy repo rate at 6.5%.
Credit Growth: Credit disbursal by Scheduled Commercial Banks (SCBs) reached ₹164.3 lakh crore, growing by 20.2% by March 2024.
Broad Money (M3) Growth: Excluding HDFC merger, M3 grew by 11.2% YoY as of 22 March 2024.
Non-Performing Assets (NPA): Gross and net NPAs at multi-year lows, indicating improved bank asset quality.
Agriculture Credit: Agriculture and allied activities saw double-digit credit growth in FY24.
Industrial Credit: Industrial credit growth was 8.5%, up from 5.2% the previous year.
Insolvency and Bankruptcy Code (IBC): 31,394 corporate debtors involving ₹13.9 lakh crore disposed off by March 2024.
Capital Markets: Primary capital markets facilitated capital formation of ₹10.9 lakh crore in FY24.
Market Capitalisation: Indian stock market’s market capitalisation to GDP ratio is the fifth largest in the world.
Financial Inclusion: Digital Financial Inclusion (DFI) is the next big challenge for sustainable economic growth.

Chapter 3: Prices and Inflation – Under Control

Retail Inflation: Maintained at 5.4% in FY24, the lowest since the pandemic, due to timely policy interventions.
Fuel Prices: Central Government announced price cuts for LPG, petrol, and diesel, keeping retail fuel inflation low.
LPG and Fuel Inflation: LPG cylinder prices reduced by ₹200 in August 2023; petrol and diesel prices lowered by ₹2 per litre.
Core Inflation: Core services inflation eased to a nine-year low; core goods inflation declined to a four-year low.
Food Inflation: Increased from 6.6% in FY23 to 7.5% in FY24 due to extreme weather events impacting farm output.
Inflation Management: Dynamic stock management, open market operations, and subsidised food items helped mitigate food inflation.
State Inflation: 29 States and UTs recorded inflation below 6% in FY24.

Chapter 4: External Sector – Stability Amid Plenty

Geopolitical Challenges: Despite geopolitical headwinds, India’s external sector remained strong.
Logistics Performance Index: Improved rank from 44th in 2018 to 38th in 2023 out of 139 countries.
Current Account Deficit: Improved to 0.7% of GDP in FY24 due to moderation in imports and rising services exports.
Global Export Share: India’s share in global goods exports was 1.8% in FY24.
Services Exports: Grew by 4.9% to USD 341.1 billion, driven by IT/software services and other business services.
Remittances: India is the top remittance recipient globally with USD 120 billion in 2023.
External Debt: External debt to GDP ratio was 18.7% at the end of March 2024.

Chapter 5: Medium-Term Outlook – A Growth Strategy for New India

Policy Focus Areas: Job and skill creation, agricultural potential, MSME bottlenecks, green transition, managing relations with China, deepening the corporate bond market, tackling inequality, and improving youth health.
Amrit Kaal Strategy: Based on six key areas: boosting private investment, expanding MSMEs, agriculture as a growth engine, financing green transition, bridging education-employment gap, and building state capacity.
Growth Compact: For 7%+ growth, a tripartite compact between the Union Government, State Governments, and the private sector is essential.

Chapter 6: Climate Change and Energy Transition: Dealing with Trade-Offs

Climate Action Recognition: India is the only G20 nation aligned with a 2-degree centigrade warming target.
Renewable Energy: Non-fossil sources reached 45.4% of installed electricity generation capacity by 31 May 2024.
Emission Reduction: Reduced emission intensity of GDP by 33% from 2005 levels by 2019.
Energy Savings: Total annual energy savings of 51 million tonnes of oil equivalent, translating to annual cost savings of ₹1,94,320 Crore.
Green Bonds: Issued ₹16,000 Crore in January-February 2023 and ₹20,000 Crore in October-December 2023.

Chapter 7: Social Sector – Benefits that Empower

Welfare Impact: Digitisation of healthcare, education, and governance has increased the impact per rupee spent.
Welfare Expenditure Growth: Nominal GDP grew at 9.5% CAGR while welfare expenditure grew at 12.8% CAGR between FY18 and FY24.
Inequality Reduction: Gini coefficient declined in both rural (from 0.283 to 0.266) and urban (from 0.363 to 0.314) sectors.
Ayushman Bharat: 34.7 crore cards generated, covering 7.37 crore hospital admissions.
Mental Health Coverage: 22 mental disorders covered under Ayushman Bharat – PMJAY.
Early Childhood Education: ‘Poshan Bhi Padhai Bhi’ programme aims to develop the world’s largest, universal, high-quality preschool network at Anganwadi Centres.
Vidyanjali Initiative: Enhanced educational experiences for 1.44 crore students through community engagement.
Higher Education Enrolment: Faster growth in enrolment from underprivileged sections (SC, ST, OBC) with a 31.6% increase since FY15.
R&D Progress: Nearly one lakh patents granted in FY24, up from less than 25,000 in FY20.
Housing and Roads: Under PM-AWAS-Gramin, 2.63 crore houses constructed; 15.14 lakh km roads completed under Gram Sadak Yojana since 2014-15.

Chapter 8: Employment and Skill Development: Towards Quality

Labour Market Improvement: Unemployment rate declined to 3.2% in 2022-23.
Urban Unemployment: Declined to 6.7% in the quarter ending March 2024.
Workforce Distribution: 45% in agriculture, 11.4% in manufacturing, 28.9% in services, and 13% in construction.
Youth Unemployment: Declined from 17.8% in 2017-18 to 10% in 2022-23.
EPFO Payroll: Significant growth in new subscribers, especially in the 18-28 years band.
Female Labour Force Participation: Rising steadily for six years.
Manufacturing Sector Recovery: Employment in organised manufacturing sector above pre-pandemic levels.
Wages Growth: Rural wages grew at 6.9% CAGR, urban at 6.1% CAGR.
Factories Growth: Number of factories employing over 100 workers grew by 11.8% over FY18 to FY22.
EPFO Membership: Grew at 8.4% CAGR between FY15 and FY24.
Job Generation Requirement: 78.5 lakh jobs annually needed in the non-farm sector until 2030.

Chapter 9: Agriculture and Food Management – Plenty of Upside Left If We Get It Right

Agriculture Growth: Registered an average annual growth rate of 4.18% over the last five years.
Agricultural Credit: Total credit disbursed to agriculture amounted to ₹22.84 lakh crore as of January 31, 2024.
Kisan Credit Cards: 7.5 crore KCCs issued with a limit of ₹9.4 lakh crore.
Micro Irrigation: 90.0 lakh hectares covered under ‘Per drop more crop’ from 2015-16 to 2023-24.

Chapter 10: Industry – Small and Medium Matters

Industrial Growth: 9.5% growth rate supporting overall economic growth of 8.2% in FY24.
Manufacturing Sector: Achieved an average annual growth rate of 5.2% over the last decade.
Coal Production: Accelerated coal production reduced import dependence.
Pharmaceutical Market: India is the world’s third largest by volume with a valuation of USD 50 billion.
Clothing Manufacturing: India is the second-largest globally and among the top five exporters.
Electronics Manufacturing: Accounts for 3.7% of the global market share in FY22.
PLI Schemes: Attracted over ₹1.28 lakh crore of investment until May 2024, leading to production/sales of ₹10.8 lakh crore and employment generation of over 8.5 lakh.

Chapter 11: Services – Fuelling Growth Opportunities

Services Sector Contribution: 55% of overall GVA, back to pre-pandemic levels.
Active Companies: 65% of the highest number of active companies are in the services sector.
Global Services Exports: Constituted 4.4% of the world’s commercial services exports in 2022.
Computer and Business Services Exports: Accounted for 73% of India’s services exports, with a 9.6% YoY growth.
Aviation Sector Growth: 15% YoY increase in total air passengers handled.
Services Sector Credit: ₹45.9 lakh crore in March 2024, with a 22.9% YoY growth.

Chapter 12: Infrastructure – Lifting Potential Growth

Public Sector Investment: Significant role in funding large-scale infrastructure projects.
National Highway Construction: Pace increased to around 34 km per day by FY24.
Railway Capital Expenditure: Increased by 77% in the past five years.
Airport Infrastructure: New terminal buildings operationalised at 21 airports, increasing passenger handling capacity by 62 million per annum.
Clean Energy Investment: ₹8.5 lakh crore (USD 102.4 billion) between 2014 and 2023.

Chapter 13: Climate Change and India

Global Climate Strategies: Flawed and not universally applicable, overconsumption not addressed.
India’s Ethos: Emphasizes a harmonious relationship with nature, contrasting with overconsumption cultures.
Sustainable Housing: Shift towards ‘traditional multi-generational households’.
Mission LiFE: Focuses on human-nature harmony, promoting mindful consumption to address global climate change.

The Economic Survey 2023-24 provides a detailed analysis of India’s economic landscape, highlighting its resilience and strategic initiatives aimed at sustainable and inclusive growth. With focused efforts on macroeconomic stability, financial inclusion, climate action, and social welfare, India is well-positioned to navigate future challenges and capitalize on growth opportunities.