Key Insights from the Economic Survey 2022-2023

Hello there, students! How have you been? Today, we will explore more about the recent economic survey, 2022-2023. Economics plays a crucial role in various aspects of our lives, including the cost of living and the job market. By analyzing the data in the survey report, we can gain essential insights into economic trends and make informed decisions that can positively impbact our lives. Let’s get started!

The Economic Survey 2022-23 was recently released by the Ministry of Finance, Government of India. This document serves as an annual report on the state of the Indian economy, providing a comprehensive analysis of its performance over the past financial year and presenting an outlook for the future. The Department of Economic Affairs, Ministry of finance presents the survey just before the Union Budget under the guidance of the Chief Economic Adviser of India.

It is an important document that provides valuable insights into the state of the Indian economy, provides an outlook for the future, guides government policy, informs the public, and facilitates informed debate on economic issues. It is a key tool for promoting economic growth and development in India.

 

The Survey highlights six challenges faced by the Global Economy. The first three challenges include disruptions caused by COVID-19 in economies, the negative impact of the Russian-Ukraine conflict on the supply chain of food, fuel, and fertilizer, and the synchronized policy rate hikes by central banks like the Federal Reserve to control inflation, resulting in the appreciation of the US Dollar and the widening of Current Account Deficits in net importing economies. The fourth challenge was the threat of global stagflation, causing nations to protect their own economies, which slowed cross-border trade and affected overall growth. The fifth challenge was China’s significant economic slowdown due to its policies. The sixth challenge was the damage from the pandemic, including the loss of education and income-earning opportunities.

The Survey states that India, like many other countries, faced these exceptional challenges but managed to handle them better than most economies.

Here are some key highlights of the Economic Survey 2022-2023:

The Survey states that the Indian economy is experiencing a broad-based recovery across various sectors, and it is expected to regain its pre-pandemic growth path in the Financial Year 2023. The retail inflation has been brought back within the target range set by the Reserve Bank of India (RBI) in November 2022. Meanwhile, direct tax collections have remained robust between April and November of the same year. An increase in employment generation is reflected in the declining urban unemployment rate and a faster net registration in the Employee Provident Fund.

The government is focusing on reforms aimed at creating public goods to enhance opportunities, efficiency and ease of living, promoting trust-based governance, boosting agricultural productivity, and making the private sector a co-partner in development. Apart from this, cleaner balance sheets have resulted in increased lending by financial institutions and growth in credit offtake. The Non-food credit offtake by Scheduled Commercial Banks has been growing in double digits since April 2022, while the Gross Non-Performing Assets (GNPA) ratio of SCBs has fallen to a seven-year low of 5.0.

The social sector expenditure, which is the combined expenditure of the Central and State Governments, has increased to Rs. 21.3 lakh crore in FY23 (BE) from Rs.9.1 lakh crore in FY16. The budgeted expenditure on the health sector, both by the Central and State Governments, has increased to 2.1% of GDP in FY23 (BE) and 2.2% in FY22 (RE), compared to 1.6% in FY21. Additionally, over 220 crore COVID vaccine doses have been administered, and a UNDP report highlights that 41.5 crore people have exited poverty in India between 2005-06 and 2019-20. India has declared a Net Zero Pledge to achieve its net zero emissions goal by 2070 and has launched the LIFE-Life style for Environment, a mass movement. The National Green Hydrogen Mission has been launched to enable India to become energy independent by 2047. Private investment in agriculture has increased to 9.3% in 2020-21 and free foodgrains have been provided to 81.4 crore beneficiaries under the National Food Security Act for one year. Moreover, 11.3 crore farmers have been covered under PM KISAN in its April-July 2022-23 payment cycle, and India is leading the way in promoting millets through the International Year of Millets initiative.

Investment of ₹47,500 crores has been made under the PLI schemes in FY22, which is 106% of the designated target for the year. The e-commerce market in India is projected to grow at an annual rate of 18% through 2025, and merchandise exports amounted to US$ 332.8 billion for April-December 2022. India is the largest recipient of remittances globally, receiving US$ 100 billion in 2022. The PM GatiShakti National Master Plan has created a comprehensive database for integrated planning and synchronized implementation across various Ministries and Departments. UPI-based transactions have grown in both value (121%) and volume (115%) terms, between 2019-2022, paving the way for its international adoption.

A glimpse into the 2023-24 economic outlook: A mixed balance of opportunities and challenges awaits

The Survey predicts a quick recovery for India in 2023-24, with growth driven by solid domestic demand and an increase in capital investment. A new private sector capital formation cycle is emerging due to strong financials and government’s action to boost capital expenditure, compensating for private sector’s caution. Budgeted capital expenditure has increased 2.7 times in the last seven years, re-energizing the Capex cycle. Structural reforms such as the GST and the Insolvency and Bankruptcy Code have improved the efficiency and transparency of the economy.

Global growth is expected to slow from 3.2% in 2022 to 2.7% in 2023, according to IMF’s World Economic Outlook. Slowing economic growth and rising uncertainty are expected to negatively impact global trade, as evidenced by the World Trade Organization’s lower forecast for trade growth, dropping from 3.5% in 2022 to just 1.0% in 2023. India’s current account balance is at risk due to high commodity prices and plateauing export growth, potentially causing currency depreciation if the current account deficit widens.

If inflation becomes entrenched, borrowing costs may stay “higher for longer,” causing low growth in the global economy in FY24. However, the silver linings of this scenario are low oil prices and a better CAD for India, with the overall external situation remaining manageable.

 

The recent economic survey has shown us the significance of finance and the impact it has on the growth and development of a country.

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