The Economic Survey 2022-23, prepared by a team of esteemed economists led by Chief Economic Adviser Anantha Nageswaran, serves as a comprehensive report analyzing India’s economic developments over the past year and offering insightful projections for the upcoming fiscal year.
This annual document provides a vital snapshot of India’s economic landscape, covering a wide range of factors that impact the nation’s growth, fiscal health, and social well-being. In this blog, we will delve into the key findings of the Economic Survey 2022-23, focusing on various aspects that shape India’s economic trajectory.
Growth Prospects
India continues to hold its position as the 3rd largest economy globally in terms of Purchasing Power Parity (PPP) and the 5th largest based on market exchange rates. The Indian economy is expected to exhibit a significant growth of 7% in real terms during 2022-23. Projections for 2023-24 hover between 6.0% to 6.8%, contingent on the global economic and political developments.
In comparison, global growth, as per the IMF’s World Economic Outlook in October 2022, is anticipated to slow down to 2.7% in 2023.
Private Consumption and Fiscal Developments
Private consumption, which plays a pivotal role in driving economic growth, rebounded to 58.4% of GDP in the second quarter of 2022-23. This recovery was primarily due to a resurgence in contact-intensive services, such as trade and transport. However, this recovery has been closely monitored, as its sustainability hinges on various factors.
On the fiscal front, India saw some key developments. Inflation rates peaked at 7.8% in April 2022, exceeding the Reserve Bank of India’s upper tolerance limit of 6%. On a more positive note, the gross tax revenue witnessed a year-on-year growth of 15.5% from April to November 2022, largely driven by robust growth in direct taxes and the Goods and Services Tax (GST). The government’s capital expenditure increased to 2.5% of GDP in 2021-22, indicating investments in infrastructure and development.
Monetary Management
A notable achievement in India’s monetary management is the decline in gross non-performing assets (NPA) ratio of scheduled commercial banks to a seven-year low of 5%. This signifies an improved health of the banking sector. The Capital-to-Risk Weighted Assets Ratio (CRAR) remains robust at 16.0, assuring financial stability.
Additionally, the survey expressed confidence that the Union government should be able to meet the fiscal deficit target of 6.4% of GDP for the ongoing financial year. The government also aims to further lower the fiscal deficit to 4.5% of GDP by FY26, continuing its commitment to fiscal discipline.
Social Infrastructure and Employment
The Economic Survey 2022-23 sheds light on key aspects of social infrastructure and employment. In the budgetary allocation for education, India allocated 2.9% of total GDP. Health care also saw positive developments, with out-of-pocket expenditure as a percentage of total health expenditure declining to 48.2% in 2018-19.
Notable schemes like PM-Kisan and PM Garib Kalyan Yojana have contributed to ensuring food security, a fact endorsed by the United Nations Development Programme (UNDP). The JAM (Jan-Dhan, Aadhaar, and mobile) trinity and direct benefit transfers have successfully brought marginalized sections into the formal financial system.
On the employment front, labor markets have shown resilience, with unemployment rates falling to 4.2% in 2020-21, recovering beyond pre-Covid levels. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) continues to indirectly create opportunities for rural households to diversify their income sources.
Read more: MSME Sector On-Boarded its Journey by Making it Big in Creating Employment Opportunities
Agriculture and Food Management
Agriculture, a critical component of India’s economy, saw private investment rise to 9.3% in 2020-21. Institutional credit to the agricultural sector continued to grow, reaching Rs 18.6 lakh crore in 2021-22. The minimum support price (MSP) for all mandated crops was fixed at 1.5 times the all-India weighted average cost of production from 2018.
India also saw a sustained increase in foodgrain production, reaching 315.7 million tonnes in 2021-22. Furthermore, India took a proactive role in promoting millets through the International Year of Millets initiative.
Industrial and Service Sectors
India made significant strides in the industrial sector, becoming the second-largest global manufacturer of mobile phones. The production-linked incentive (PLI) schemes were introduced across 14 categories, with an estimated capital expenditure of Rs 4 lakh crore over the next five years, aiming to integrate India into global supply chains.
The services sector is expected to exhibit robust growth at 9.1% in 2022-23, positioning India among the top ten services exporting countries in 2021. India’s e-commerce market is projected to grow at an impressive 18% annually through 2025.
External Sector and Environment
In the external sector, India diversified its export markets to countries like Brazil, South Africa, and Saudi Arabia, resulting in merchandise exports of 332.8 billion dollars for April-December 2022. India entered into comprehensive economic partnership agreements with the United Arab Emirates and Australia in 2022, enhancing its global trade network.
India continued to be the world’s largest recipient of remittances, receiving 100 billion dollars in 2022, making remittances the second-largest major source of external financing after service exports. Additionally, India stood as the 6th largest foreign exchange reserves holder in the world as of end-November 2022.
India’s commitment to addressing climate change and environmental concerns was also emphasized. India declared a Net Zero Pledge, aiming to achieve net zero emissions by 2070. The country achieved its target of 40% installed electric capacity from non-fossil fuels ahead of the 2030 deadline.
Initiatives like the LIFE – Lifestyle for Environment movement and the issuance of Sovereign Green Bonds (SGrBs) in 2022 are testament to India’s environmental consciousness. The National Green Hydrogen Mission is set to make India energy independent by 2047.
Infrastructure and Digital Advancements
India’s infrastructure development is evident through various active projects, including the National Infrastructure Pipeline, National Monetization Pipeline, Gati Shakti, National Logistics Policy, and Digital Public Infrastructure.
The Unified Payment Interface (UPI)-based transactions have seen remarkable growth in both value (121%) and volume (115%) between 2019 and 2022. Rural internet subscriptions also witnessed a remarkable 200% increase between 2015 and 2021, indicating the nation’s commitment to bridging the digital divide.
Conclusion
The Economic Survey 2022-23 offers a comprehensive summary of India’s economic journey, highlighting achievements and challenges across various sectors. India’s impressive growth projections, fiscal discipline, social welfare initiatives, agricultural advancements, industrial and services sectors, external trade achievements, and commitment to environmental sustainability all reflect the nation’s resilience and determination.
As India continues to navigate the complexities of a dynamic global economy, the insights provided by the Economic Survey serve as a vital compass for policymakers, investors, and citizens, guiding the nation towards a brighter economic future.