Economic Survey 2024 Released: Key Points and Highlights

Why in news?

The Economic Survey 2024 was tabled on the Indian floor by the Finance Minister Nirmala Sitharaman on 22nd July, 2024 which contained insights of the country’s progress and predictions for the future. This document, which is essential for economists, policymakers, scholars, and UPSC aspirants, provides a backdrop for the Union Budget 2024-25 and provides a perspective of the growth rate in India, inflationary rates, government’s fiscal stability and strategy.

Overview of Economic Survey 2023-24

Release Date: July 22, 2024
Presented By: Finance Minister Nirmala Sitharaman
Prepared By: Department of Economic Affairs under Chief Economic Adviser V. Anantha Nageswaran
History: First published in 1950-51
Parts: Two (Part 1 and Part 2)
Nature of Recommendations: Advisory
Official Website: Economic Survey 2024

The Economic Survey serves as a pre-budget document, providing a detailed account of the state of the economy and suggesting the roadmap for the future. It is divided into two parts: Part 1 focuses on the overall economic health and growth prospects, while Part 2 delves into specific sectors and issues.

Key Highlights of the Economic Survey 2024

According to the Economic Survey 2024, the Indian real GDP growth rate is expected to be 6. to be between 5% to 7% for the FY25. The modicum of particular concentration is placed upon lower inflation, better fiscal deficit, and strategic course on private investment, development of MSMEs, and green economy.

Growth Prospects of India for FY25

The Economic Survey provides an optimistic GDP growth forecast for FY25, supported by several domestic and external factors:

• Economic Resilience:
  • Still, India’s economy remained strong, supported by domestic demand and an emerging, though still recovering private sector amid global instabilities. Some of the structural reforms like GST and the IBC have started throwing the desired positive results. It also reveals the fact that technological innovations and use of information technology play crucial role in enhancing efficiency of the sectors.
• Agricultural and Rural Performance:
  • Better mon-soon and improvement in agriculture prospects are likely to boost the rural consumption and economic activity in the agrarian economy which will add on to the economic growth. Some of the government measures for encouraging adoption of higher technologies in farming, undertaking irrigation schemes and diversification of crops are expected to enhance the efficiency of the agricultural sector and therefore enhance incomes in the rural areas.
• Industrial and Services Sectors:
  • The indicators of the manufacturing industry have started to reverse the deteriorating trend through better capacity utilization and rising industrial production. The services sector remains robust specifically; IT & ITES with a global demand coupled with digitisation.

Inflation Trends and Projections

• Inflation management remains a focal point in the Economic Survey, highlighting the following trends:
  • Current Inflation Status:
    • Retail inflation was on average at 6%, the adjusted upward by gained 7% in FY23, while the later was reduced to 5%. 9/4%, to a core inflation of 2 Falls to 4% in FY24 due a, In goods and services. The inflation in core services has gone down to a nine year record low while that of the core goods is even at a four year record low. Some of this moderation has however been occasioned by sound monetary policies together with supply side measures that have helped reduce cost-push inflation.
  • Future Projections:
    • The Survey also expects inflation to go down even lower to 4. 5 % in FY 25 and 4. 1% on the FY26 basis, provided there is no distortion in the monsoon and there are no major changes on the outside or in policies.
    • These projections are in tune with the RBI and IMF, although aggregative demand is expected to cross the $2-trillion mark this fiscal.
    • Thus, it will be the responsibility of the government to ensure that measures that will help maintain a stability of prices on the market while encouraging growth will aid in the achievement of these goals.

Fiscal Position and External Sector

• Fiscal Health:
  • Fiscal deficit has been brought down from 6. To bring the spending to 4 percent of GDP in FY23 and 5 percent in FY24. 6 percent in FY24 based on better tax compliance, better control over expenditure, and better efforts to go for greater use of digital modes of transactions.
  • The direct tax to GDP ratio has increased and the gap between direct and indirect taxes has come down since the implementation of GST for better recovery The government subsidies are now targeted and the expenditure is better managed for better fiscal consolidation.
• External Balance:
  • Current account Balance also known as Current Account Deficit (CAD) has reduced its size to 0. reached 7% of GDP in FY24 up from 2%. 0% in FY23.
  • This has been achieved through a powerful services export cushioning a weak external demand for goods thus greatly enhancing the external sector. These have been complemented by a steep increase in remitances, and healthy steady FDI flows that has strengthened the external balance more.

Medium-Term Growth Strategy

• The Economic Survey outlines strategic priorities for sustaining growth over the medium term:
  • Private Investment: There is consensus that increasing investment from private sector stakeholders is essential for economic development. There is need to encourage private sector investment that requires appropriate policies and incentives for the investors. This comprises of increasing the business climate, eliminating structural constraints to investments, and offering tax incentives for the new investments.
  • MSME Growth: It is strategic to create and support Micro, Small and Medium Enterprises (MSMEs). Overall, the Mittelstand development indicates the prospects of India’s economic growth because Mittelstand is recognized as a significant factor in the country’s economy. Other factors that are relevant to MSME growth include credit, technology, and markets US intervention is needed for these to be available to the MSMEs.
  • Agricultural Potential: Learning and recognizing this potential of agriculture as the driver of growth can go a long way. So, it will be necessary to eliminate policy barriers and to direct more resources to develop this sector as an agricultural potential. This entails spending in cool storage facilities, processing plants and effective logistic chains to minimize post-harvest losses and improve value addition.
  • Green Transition: Therefore, it is necessary to mobilise climate finance for India sustainable development as explained in the next section. Measures that would be crucial in this transition include policies that are mean to spur the use of renewable energy and the cutting down on carbon emissions. Government’s vision on electric cars and solar energy, opportunities in green agriculture and clean technologies are an example of the sustainable development of economy.
  • Education and Employment: If the education employment conundrum is to be fixed and quality of education enhanced then demographic Dividend can be realized. Special attention should be paid to the changes of the educational outcomes towards the needs of the market. The government is planning to provide job opportunities mainly through skill development programs, vocational training, training-cum- Placement linkages with Industries and academic institutions.

Social and Economic Development

• The Economic Survey 2024 emphasizes social and economic development through healthcare, education, and employment initiatives:
  • Healthcare: It has to be noted that under Ayushman Bharat health care facility has emerged as highly accessible and it has provided health care to more than 34. So far, 7 crore cards have been issued, and 7. 37 crore hospitalizations for which treatment cost was kept low, and thereby, containing out of pocket expenses for poor families. The survey also reveals the imperatives of augmenting health care systems and improving the competency of medical facilities.
  • Education: Currently in force, NEP 2020 is revamping the education system especially on issues of basic literacy and numerical competencies. The key ideas of the ‘Poshan bhi Padhai bhi’ program are to develop a high-quality preschool in Anganwadi Centres with proper nutrition. The measures aimed at comprehensive learning methods, digital learning, and teacher training will lead to increasing the effectiveness of learning.

Conclusion

• The Economic Survey 2023-24, tables India’s strength and prospects for growth presenting an effective plan for inclusive development.
• Given emphasis on the improvement of private investment, on MSME and farmers support, on agriculture development and on green transition India has more perspectives for further economic growth.
• The goals set in the Survey represent the strategic directions that will significantly influence the further development of the country’s economy and provide for the stability of its progress.
• To some extent, economic survey empowers the policymakers with sufficient knowledge base upon which the respective policies can be formulated and appropriate actions taken.
• Indeed, the cultural and social impact of economic development will have a significant effect for India in sing oil’s assertion that as the country proceeds to the next level of development, the continuing dynamism of the nation must be taken into account.

FAQS

Q1: What is the Economic Survey 2024?
Ans: The Economic Survey 2023-2024 is a comprehensive report presented by Finance Minister Nirmala Sitharaman that analyzes India’s economic performance and outlines future projections. It serves as a precursor to the Union Budget 2024-25.

Q2: When was the Economic Survey 2024 released?
Ans: The Economic Survey 2024 was released on July 22, 2024, a day before the Union Budget.

Q3: Who prepares the Economic Survey?
Ans: The Economic Survey is prepared by the Department of Economic Affairs under the guidance of the Chief Economic Adviser, currently V. Anantha Nageswaran.

Q4: What are the key GDP growth projections in the Economic Survey 2024?
Ans: The survey projects India’s real GDP growth rate to be between 6.5% and 7% for FY25.