The Economic Survey 2023-24 is a key document for anyone preparing for the UPSC exam. It gives a detailed look at India’s economic health, covering important topics like GDP growth, sector performance, and government policies. This survey helps students understand the economy better and prepares them for questions in the exam.
Key Takeaways
- The survey shows India’s GDP is expected to grow steadily, with various factors influencing this growth.
- There have been significant improvements in the agriculture, manufacturing, and services sectors.
- New government policies aim to make it easier for businesses to operate and grow.
- Inflation rates and measures to control them are highlighted, showing their impact on everyday life.
- The survey also discusses employment trends and efforts to create more jobs in the future.
Overview of the Economic Survey 2023-24
The Economic Survey 2023-24 was recently presented in the Indian Parliament by the Union Minister for Finance. This document provides a detailed analysis of India’s economic performance over the past fiscal year and offers projections for the coming year. The survey is prepared by the Economic Division of the Department of Economic Affairs under the Ministry of Finance, with oversight by Chief Economic Adviser V. Anantha Nageswaran. It reviews economic developments and summarizes outcomes, making it a crucial document for understanding the country’s economic health.
Purpose and Structure
The Economic Survey aims to provide a comprehensive overview of the Indian economy. It consists of two parts: the first part covers economic developments, challenges, and an overall review of the economy, while the second part focuses on the previous financial year. This structure helps in understanding both current and past economic conditions.
Key Contributors
The survey is prepared by the Economic Division of the Department of Economic Affairs under the Ministry of Finance. It is supervised by the Chief Economic Adviser, ensuring that the document is both accurate and insightful. The involvement of various experts makes it a reliable source of information.
Significance for UPSC Aspirants
For UPSC aspirants, the Economic Survey is a vital resource. It provides in-depth insights into the state of the Indian economy, covering various indicators and offering an outlook for the ongoing fiscal year. This makes it an essential study material for those preparing for the UPSC exams.
The Economic Survey 2023-24 is not just a document but a roadmap that highlights the impact of government efforts to streamline regulations and create a business-friendly environment in the country.
India’s GDP Growth Projection
Current Estimates
India’s economy is projected to grow by 6.5 to 7 percent in the financial year ending March 2025, according to the 2023-24 Economic Survey report. This is below the Reserve Bank of India’s (RBI) forecast of 7.2 percent and last year’s GDP growth of 8.2 percent.
Factors Influencing Growth
Several factors influence India’s GDP growth. These include unpredictable weather patterns, financial market uncertainties in developed economies, and geopolitical complexities. Despite these challenges, the government remains hopeful about reaching the growth target.
Comparison with Previous Years
India’s real GDP grew by 8.2 percent in FY24, exceeding the 8 percent mark in three out of four quarters. However, the growth projection for FY25 is more conservative, reflecting a balanced view of potential risks and opportunities.
India’s economy is projected to grow by 6.5 to 7 percent in the financial year ending March 2025, according to the 2023-24 Economic Survey report. This is below the Reserve Bank of India’s (RBI) forecast of 7.2 percent and last year’s GDP growth of 8.2 percent.
Sectoral Performance Analysis
The Economic Survey 2023-24 offers a comprehensive view of India’s economic performance and prospects. It highlights the performance of various sectors, providing valuable insights for UPSC aspirants.
Government Policy Initiatives
Regulatory Reforms
The government has been actively working to reduce the regulatory burden on businesses, especially for Medium, Small, and Micro Enterprises (MSMEs). This includes streamlining licensing, inspection, and compliance requirements. Removing these regulatory bottlenecks is crucial for fostering a more business-friendly environment.
Incentives for Businesses
Various incentives have been introduced to boost the startup ecosystem. These include tax exemptions, legal support in patent filing, and easy compliance with laws. The government aims to facilitate the growth of startups through various departments and programs.
Impact on Ease of Doing Business
The government’s initiatives have significantly improved the ease of doing business in India. Policies like the National Monetization Pipeline and the National Infrastructure Pipeline have been instrumental. Additionally, public-private partnerships in various projects and the PM GatiShakti National Master Plan have further streamlined processes.
The startup ecosystem has been facilitated through various government departments and programs, making it easier for new businesses to thrive.
Inflation and Price Stability
Retail inflation in India has been effectively managed, with rates decreasing from 6.7% in FY23 to 5.4% in FY24. This was achieved through strategic price cuts on LPG, petrol, and diesel. Core services inflation fell to a nine-year low in FY24, highlighting the success of these measures.
Current Inflation Rates
Retail inflation in India has been effectively managed, with rates decreasing from 6.7% in FY23 to 5.4% in FY24. This was achieved through strategic price cuts on LPG, petrol, and diesel. Core services inflation fell to a nine-year low in FY24, highlighting the success of these measures.
Measures to Control Inflation
The government and the Reserve Bank of India (RBI) have implemented several measures to control inflation. These include price cuts on essential fuels like LPG, petrol, and diesel. Additionally, the RBI has maintained a steady policy rate, helping to keep inflation in check.
Impact on Common Man
Lower inflation rates have a direct impact on the common man. With reduced prices for essential items like fuel, the cost of living becomes more manageable. This is crucial for maintaining economic stability and ensuring that the benefits of growth reach all sections of society.
The Economic Survey 2023-24 emphasizes that low and stable inflation is key to economic stability and growth.
Employment and Labor Market Trends
Unemployment Rates
India has seen a significant improvement in its labor market indicators over the past six years. The unemployment rate has dropped to 3.2% in 2022-23 from 4.7% in 2019-20. Notably, the youth unemployment rate (ages 15-29) has decreased from 17.8% in 2017-18 to 10% in 2022-23. The female labor force participation rate has also been rising steadily.
Job Creation Initiatives
The government has been proactive in creating jobs, especially in the formal sector. Net payroll additions under the Employees’ Provident Fund Organization (EPFO) have more than doubled from 61.1 lakh in FY19 to 131.5 lakh in FY24. The gig workforce is also expected to expand to 2.35 crore by 2029-30. However, the economy needs to create approximately 7.85 million non-farm jobs annually until 2030 to keep up with the growing workforce.
Future Outlook
The future of employment in India looks promising but challenging. Artificial intelligence (AI) is expected to be a major disruptor, affecting various sectors including the BPO industry. While AI presents risks, it also offers opportunities for job creation in new fields. The focus should be on balancing technology and labor to ensure sustainable job growth.
India’s employment trends show a positive trajectory, but the sustainability of this growth remains a topic of debate.
Social Sector Developments
The Economic Survey 2023-24 highlights significant progress in India’s social sector. Welfare expenditure has grown at a CAGR of 12.8% from FY18 to FY24. This increase in social sector investments has led to notable achievements, such as the issuance of 34.7 crore Ayushman Bharat cards and the construction of 2.63 crore houses under PM-AWAS-Gramin in the last nine years.
Infrastructure Growth and Development
India has made significant strides in infrastructure development, which is crucial for long-term economic growth and efficiency. Capital expenditure by the union and state governments has played a central role in funding large-scale infrastructure projects. The capital expenditure of the union government increased by 2.2 times from FY21 to FY24.
Transportation Projects
The pace of construction of National Highways has increased significantly, with the average pace rising from 11.7 km per day in FY14 to around 34 km per day by FY24. This rapid development in highway construction is expected to boost market activity and increased investment.
Urban Development
Urban development has seen substantial investments, particularly in smart cities and urban infrastructure. These initiatives aim to improve the quality of life for urban residents and make cities more sustainable and efficient.
Rural Infrastructure
Rural infrastructure has not been left behind. Investments in rural roads, electrification, and water supply have been prioritized to ensure balanced regional development. These efforts are expected to bridge the urban-rural divide and promote inclusive growth.
The focus on infrastructure development is not just about building roads and bridges; it’s about creating a foundation for sustainable economic growth and improving the quality of life for all citizens.
Environmental and Sustainability Efforts
Climate Change Initiatives
India is making strides in addressing climate change. The country has launched Mission LiFE, which promotes harmony between humans and nature. This initiative encourages mindful consumption to tackle the root causes of global climate change. Additionally, India is shifting towards traditional multi-generational households to pave the way for sustainable housing.
Renewable Energy Projects
India has significantly increased its renewable energy capacity. As of May 2024, 45.4% of the installed electricity generation capacity comes from non-fossil sources. This shift has led to annual energy savings of 51 million tonnes of oil equivalent, translating to cost savings of ₹1,94,320 Crore and emissions reduction of 306 million tonnes. The country has also issued green bonds worth ₹16,000 Crore in early 2023 and ₹20,000 Crore in late 2023.
Sustainable Development Goals
India is committed to balancing development and sustainability. The emission intensity of GDP has been reduced by 33% from 2005 levels. The country is also focusing on integrating renewable energy with nuclear power, biofuels, and green hydrogen to address the risks associated with large-scale renewable energy adoption. This includes challenges like intermittency, grid integration, backup power generation, and storage.
Balancing development and sustainability is crucial for India’s future. The country must continue to innovate and invest in sustainable practices to ensure long-term growth and environmental health.
Fiscal Deficit and Public Debt
Current Fiscal Deficit
The fiscal deficit of the union government has declined to 5.6% of GDP as per provisional actuals published by the Controller General of Accounts. This reduction is a positive sign, indicating better fiscal management and higher revenue collections. Robust growth in direct and indirect tax revenues has played a significant role in this improvement.
Debt Management Strategies
India has adopted several strategies to manage its public debt effectively. These include rationalizing GST, simplifying tax compliance, and improving tax collection mechanisms. The government has also focused on expenditure restraint and rising digitization to offset the impact of expansionary public investment.
Long-term Fiscal Policies
The government aims to maintain fiscal stability through a holistic policy approach. This includes transforming the tax ecosystem and ensuring sustainable economic growth. The focus is on creating a business-friendly environment and encouraging private sector investment to sustain the investment momentum in the economy.
The fiscal deficit reduction is a testament to the government’s efforts in streamlining regulations and boosting economic activity. This achievement is crucial for maintaining fiscal health and ensuring long-term economic stability.
International Trade and Relations
India’s trade balance has shown significant improvement. The country’s exports have diversified, reaching new markets like Brazil, South Africa, and Saudi Arabia. This diversification has helped India maintain a stable trade balance despite global uncertainties.
India’s services exports grew by 18.4% to US$ 177.7 billion during April-December 2021. On the other hand, services imports rose by 21.5% to US$ 103.3 billion in the same period. This growth in international trade highlights India’s resilience in the global market.
Global events have a profound impact on India’s trade relations. Geopolitical tensions and economic policies of other countries can influence India’s trade dynamics. Despite these challenges, India has managed to keep its trade sector robust and growing.
India’s external trade has shown remarkable resilience, adapting to global changes and maintaining steady growth. This adaptability is crucial for sustaining economic stability.
Future Economic Outlook
Predictions for the Next Fiscal Year
The Economic Survey 2023-24 projects India’s GDP growth to be between 6.5% and 7% for the fiscal year ending in March 2025. This is slightly below the Reserve Bank of India’s forecast of 7.2%. However, the government remains optimistic about achieving this target despite several risk factors, including unpredictable weather and global economic uncertainties.
Potential Challenges
Several challenges could impact India’s economic growth. These include unpredictable weather patterns, financial market uncertainties in developed economies, and geopolitical complexities. The survey also notes that while inflationary pressures are shrinking, the likelihood of geopolitical disturbances and conflicts has increased.
Strategic Recommendations
To sustain economic growth, the survey recommends a tripartite compact involving the Union Government, State Governments, and the private sector. This collaboration aims to maintain a growth rate of over 7%. Additionally, the survey emphasizes the need for India to diversify its energy sources to meet the increasing demand and sustain economic growth.
The latest global economic outlook for 2024-2025 from the World Bank highlights the importance of economic trends, policies, GDP growth, risks, and inflation rates. This underscores the need for India to stay resilient amid global challenges.
The future of our economy holds many opportunities and challenges. To stay ahead, it’s important to be well-prepared and informed. Visit our website to explore comprehensive resources and expert insights that can help you navigate the economic landscape. Don’t miss out on the chance to equip yourself with the knowledge you need for success.
Conclusion
In summary, the Economic Survey is a vital resource for UPSC aspirants. It provides a detailed look at the country’s economic health and highlights key trends and policies. By understanding the survey, students can gain a clearer picture of the economic landscape, which is crucial for both the Prelims and Mains exams. With the right approach and resources, such as expert mentorship and comprehensive study materials, candidates can effectively prepare and boost their chances of success in the UPSC examination.
Frequently Asked Questions
What is the purpose of the Economic Survey?
The Economic Survey provides a detailed overview of the country’s economic performance over the past year. It helps in understanding the current economic conditions and forms the basis for future policies.
Who prepares the Economic Survey?
The Economic Survey is prepared by the Economic Division of the Department of Economic Affairs under the Ministry of Finance. It is supervised by the Chief Economic Adviser.
Why is the Economic Survey important for UPSC aspirants?
The Economic Survey is crucial for UPSC aspirants as it covers key economic trends and data that are often asked in the exam. It helps in understanding various economic concepts and policies.
What are the main sections of the Economic Survey?
The Economic Survey is divided into two main sections: the first part covers economic developments and challenges, while the second part focuses on the previous financial year.
How does the Economic Survey impact government policies?
The Economic Survey provides insights and recommendations that can influence government policies. It helps in identifying areas that need attention and improvement.
What is the significance of GDP growth projections in the Economic Survey?
GDP growth projections in the Economic Survey provide an estimate of the country’s economic growth for the coming year. It helps in planning and policy-making.
How can UPSC aspirants effectively use the Economic Survey for their preparation?
UPSC aspirants can use the Economic Survey by summarizing key points, linking them with the syllabus, and understanding the implications of various economic policies and trends.
Where can one access the Economic Survey?
The Economic Survey is available on the official website of the Ministry of Finance. It can also be accessed through various educational platforms and government portals.
