An Analysis Of The Government’s Achievements On The Economic Front
The Economic Survey 2022-23 was tabled in Parliament by the Finance Minister Nirmala Sitharaman on January 31 after the President's address on the first day of the Budget session. The survey revealed the agonies of a soul-crushing FY23 and how India fared better than most economies under the unique mix of difficulties. The publication of this year's Survey coincides with concerns about a recession in Western nations and admiration for India's economy as a shining example. The Department of Economic Affairs (DEA), under the direction of Chief Economic Advisor V Anantha Nageswaran, produced the Economic Survey 2023. The Survey sets a new precedent by not recommending any reforms and focusing instead on an examination of the government's current economic accomplishments.
The Economic Survey, the annual flagship document of the Ministry of Finance, is carefully optimistic in its assessment of the prospects of the Indian economy over the coming year. According to the union budget expectations that are defined by all the stakeholders, it details which sector has performed at what level. Under the direction of the CEA, it is created by the Department of Economic Affairs' (DEA) Economic Division. The Finance Minister approves the Survey after it has been prepared. The Economic Survey was presented along with the Budget beginning in 1950–51 and continuing until 1964.
Despite being published one day before the Budget, the survey's analysis and recommendations are not binding on the government. Even yet, the survey is still the Union government's most in-depth and trustworthy analysis of the economy. As a result, its findings and specifics offer a recognised framework for analysing the Indian economy.
Below are the following highlights of the Economic Survey 2022-23
The economic survey predicts that India's economy would expand by 6.1% in 2023–2024 as opposed to 7% in the current fiscal year and 8.7% in 2021–2022. According to projections, the country's real GDP will be between 6.8% and 7.0% in the fiscal years 2023 and 2024, depending on the global political and economic climate at the time. This figure closely matches the projections made by international organisations.
The Economic Survey issues a warning that while outperforming most other currencies, the challenge of the sliding rupee persists due to the possibility of further policy rate increases by the US Fed. If global commodity prices stay high and the pace of economic expansion is strong, the Current Account Deficit (CAD) could increase further. The rupee may face pressure if the CAD deepens. CAD risks come from a variety of factors. Despite having dropped from record highs, commodity prices are still higher than they were prior to the conflict. It has increased the CAD, which had already been expanded by India's growth pace. India has enough foreign exchange reserves for fiscal year 23 to cover the CAD and intervene in the currency market to reduce rupee volatility.
Commodity prices should decline if the global economy weakens as forecast by the International Monetary Fund and many others. In such a case, a large number of analysts in India anticipate a significantly lower wholesale price index in the upcoming fiscal year. Although we would acknowledge the risks are still significant, the underlying premise is that inflation should not be as much of an issue as it was in 2022. With upside risks, we anticipate that inflation will stay well-behaved in 2023–2024.
It is challenging to make an oil price prediction. The RBI accepts a price that is less than $100 per barrel. With that figure, we can maintain the growth rate we predicted in the poll. There is a lot of uncertainty around the oil markets. I believe the real GDP growth predictions won't change as long as the price is under $100 per barrel.
The Indian government has put in place a number of policies to lessen the country's reliance on imports and ultimately boost exports. By analysing vast amounts of data from production-related programmes and utilising people's natural talent for service export to other nations, India's strategy of being self-sufficient has been proven to be effective. With a little encouragement from the government and a significant shift in people's thinking, everything is conceivable, be it the expansion of the manufacturing sector, the development of digital infrastructure, or the export of services. These industries were already a pillar of India's economy, and they have the potential to distinguish the nation.
The creation of jobs has increased, while the unemployment rate in urban areas has decreased. The Employee Provident Fund programme has experienced an increase in net registration numbers. Both in urban and rural areas, the labour markets have improved beyond pre-Covid levels, with unemployment rates falling from 5.8% in 2018–19 to 4.2% in 2020–21.
In 2020–21, private investment in agriculture will increase to 9.3%. Institutional lending to the agriculture industry increased even further in 2021–2022, reaching 18.6 lakh crore. Institutional Loan to the Agricultural Sector grew to 18.6 lakh crore in 2021–2022 in terms of credit growth.
Since January 2022, lending to Micro, Small and Medium-Sized Enterprises (MSMEs) has increased by an average of about 30%, and credit to big industries has increased by double digits since October 2022.
In the first half of FY23, foreign direct investment (FDI) in the manufacturing sector moderated. However, because of structural reforms and steps to make doing business easier, inflows continued to be significantly higher than they were before the pandemic, making India one of the most appealing FDI locations in the world.
In the worldwide pharmaceutical industry, India's pharmaceutical sector is significant. By September 2022, total FDI in the pharmaceutical industry had reached $20 billion. India is now the second-largest mobile phone manufacturer in the world after China, with a rise in handset output from 6 crore units in FY15 to 29 crore units in FY21.
The Survey features a whole chapter devoted to the prognosis for India's medium-term growth. The overall finding is positive; the twin balance sheet crisis does not seem to be a growth inhibitor any longer. The balance balances of the banking and corporate sectors are in much better shape, and the lending cycle is about to pick up. The survey makes it clear that the Indian economy is in a good position to follow the same growth trajectory as it did after 2003. This gives me comfort. Therefore, even if the short-term view is difficult, the long-term outlook is optimistic due to favourable demographics, formalisation, and digitization.
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