India’s Economic Survey 2023-24: A Roadmap for Resilient Growth and Sustainability

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India’s economic future is outlined in depth in the Economic Survey 2023–2024, which places a strong emphasis on sectoral development, job creation, sustainable growth, and technology adaptability.
ECONOMIC SURVEY

India’s Economic Survey 2023-24, presented by the Union Finance Minister on July 22, 2024, provides a detailed account of the nation’s economic performance over the past year. This annual document is a crucial resource for understanding the economic trajectory, policy challenges, and future prospects of one of the world’s fastest-growing economies.

Key Highlights:

Economic Growth: A Resilient Performance

For the third consecutive year, the Indian economy has demonstrated remarkable resilience by maintaining a growth rate of over 7%. This consistent growth is attributed to stable consumption patterns and increasing investment demand, which have helped the economy weather global economic challenges. The government’s strategic policies and reforms have played a pivotal role in sustaining this growth momentum.

Inflation Management: A Success Story

One of the standout achievements highlighted in the Economic Survey 2023-24 is the effective management of inflation. Retail inflation, which had averaged 6.7% in FY23, was successfully reduced to 5.4% in FY24. This is the lowest inflation rate since the onset of the COVID-19 pandemic. The survey credits this success to timely policy interventions by the government and the Reserve Bank of India (RBI), which ensured price stability through strategic administrative and monetary measures.

Current Account Deficit and Forex Reserves: A Positive Outlook

The Economic Survey reports significant improvements in India’s Current Account Deficit (CAD), which decreased to 0.7% of GDP in FY24 from 2.0% in the previous fiscal year. This improvement is a positive indicator of the country’s economic health. Additionally, India’s foreign exchange reserves remain robust, covering more than ten months of projected imports and 98% of external debt as of March 2024. This strong reserve position enhances the country’s ability to manage external economic shocks and maintain economic stability.

Banking Sector: Strength and Stability

The banking sector in India showcased stellar performance during the year, with double-digit credit growth, low Non-Performing Assets (NPAs), and improved asset quality. The survey highlights that the sector’s resilience and stability are crucial for supporting economic growth and providing the necessary financial resources for development projects.

Job Creation and Technological Adaptation

Job creation remains a top priority for the Indian government, as highlighted in the Economic Survey. The report emphasizes the need to generate 7.85 million non-farm jobs annually to meet the employment demands of the growing population. The survey also addresses the challenges and opportunities posed by artificial intelligence (AI) and other technological advancements. While AI presents risks to certain job sectors, it also offers significant opportunities for job creation in new and emerging fields.

Energy Needs and Sustainable Development

India’s energy demand is projected to grow 2 to 2.5 times by 2047, underscoring the need for substantial investments in renewable energy and low-carbon technologies. The Economic Survey stresses the importance of diversifying energy sources and integrating renewable energy with traditional energy systems to meet future demands sustainably. It also highlights the challenges associated with transitioning to a low-carbon economy, including technology availability, raw material sourcing, financing, and land availability.

Sectoral Performance: Agriculture, Industry, and Services

The Economic Survey provides a detailed analysis of the performance of various economic sectors. Agriculture grew at an annual rate of 4.18% over the past five years, driven by advancements in agro-processing and sustainable farming practices. The industrial sector showed a robust growth rate of 9.5% in FY24, supported by increased investment in manufacturing and infrastructure development. The services sector, which contributed 55% to the economy in FY24, continued to be a major driver of economic growth, reflecting India’s strong position in IT, telecommunications, and financial services.

Mental Health: A Growing Concern

For the first time, the Economic Survey extensively covers the socio-economic impacts of mental health issues in India. The report highlights a significant increase in mental health disorders and calls for a comprehensive, community-based approach to address these challenges. The survey points to the National Mental Health Survey (NMHS) data, which indicates that 10.6% of adults in India suffer from mental disorders, with treatment gaps ranging from 70% to 92% for different conditions. The economic implications of mental health issues, including reduced productivity and increased healthcare costs, are significant, necessitating urgent attention and action.

Foreign Direct Investment: Trends and Challenges

The survey notes a decline in net Foreign Direct Investment (FDI) inflows, which fell from $42 billion in FY23 to $26.5 billion in FY24. Despite this decline, gross FDI inflows showed a slight moderation. The report emphasizes the need to create a conducive environment for foreign investors to maintain and enhance investment inflows, which are crucial for economic growth and development.

Research and Development: Innovation and Progress

India’s progress in industrial research and development (R&D) is highlighted in the survey, with a notable rise in the Global Innovation Index (GII) to rank 40th in 2023 and a significant increase in patent filings. The establishment of the Anusandhan National Research Foundation (ANRF) is a major step towards providing strategic direction for scientific research and fostering collaborations between academia, industry, and government.

A Roadmap for the Future

The Economic Survey 2023-24 presents a detailed roadmap for India’s economic future, emphasizing the importance of sustainable growth, technological adaptation, job creation, and sectoral development. The government’s strategic policies and reforms have positioned India on a path of resilience and stability, but continued efforts are needed to address emerging challenges and harness new opportunities.

As India moves forward, the insights and recommendations from the Economic Survey will play a crucial role in shaping policy decisions and guiding the nation’s economic journey towards a prosperous and inclusive future.

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