Economic Survey 2023: Highlights, Summary, PDF Download

Every year, the people of India eagerly await the release of the Union Budget. The Finance Budget serves as a blueprint for the upcoming financial year, detailing the government's plans for driving nation's economic growth and prosperity. However, it is important to assess the results of the previous year before moving on to the next. This is where the Economic Survey comes in as it serves as the "report card" for the previous financial year's performance. 
Before delving into the highlights of the Economic Survey 2023, let's gain a deeper understanding of what economic surveys are.

What Is An Economic Survey?

Economic Survey is an annual document that reviews the state of Indian economy and provides an outlook for the next fiscal year. The Survey provides an overview of the Indian economy, including its performance, current status, and growth prospects, as well as the challenges faced by the economy and policy recommendations for addressing these challenges.

Economic Survey is prepared by the Chief Economic Advisor to the Ministry of Finance and presented by the Finance Minister in the Parliament. So, a day before the much-awaited Union Budget, the Economic Survey is tabled at the Parliament. 
One can access this information to gain insight into the economic progress of the country over the previous financial year and make informed decisions about the future.

Economic Survey 2023 Highlights

Economic Survey 2023 was tabled at the parliament on January 31, 2023, by Finance Minister Nirmala Sitharaman. Here are the key highlights from the survey:

GDP Growth

One of the key insights from the economic survey that makes headlines is the GDP growth prediction. India’s real GDP growth in FY 2023-24 is predicted to be in the range of 6-6.8 % as against 7% in FY 2022-23 and 8.7% in FY 2021-22. However, this outcome will depend on global economic and political factors.

Inflation Worries: Borrowing Costs To Remain High

India's retail inflation rate reached a high of 7.8% in April 2022, exceeding the RBI's upper limit of 6%. However, it was among the lowest in the world in terms of inflation exceeding the target range. 

The RBI's projection of 6.8% inflation for this fiscal year, while outside the upper limit, is interestingly neither too high to discourage private consumption nor too low to discourage investment. In the backdrop of inflation, borrowing costs may remain high for an extended period. Also, the bank credit growth is predicted to be brisk in FY 24. 

However, the Economic Survey applauds India's inflation management to stand out amidst advanced economies that are still struggling with stubborn inflation rates.

Rupee May Depreciate Further

The Economic Survey warns that the rupee may depreciate further with the possibility of further interest rate hikes by the US Federal Reserve. 

The Current Account Deficit (CAD) means that the country imports more goods and services than it exports. CAD is at risk of widening due to elevated global commodity prices since the Russia-Ukraine conflict. The widening of CAD could put additional pressure on the rupee. 

In FY 2023, the fiscal deficit of the Union Government has moderated at 6.7%. It is expected to stand at 6.4% of the GDP in FY 2023.

According to the report, India has adequate foreign exchange reserves for the current fiscal year 2023 to cover the deficit and stabilize the rupee, if necessary.

Another important update on foreign exchange reserves was that, as of November 2022, India was the sixth largest foreign exchange reserve holder in the world.

Surging Exports

• Exports grew rapidly in FY22 and FY23, causing production processes to shift from mild acceleration to cruise mode. 
• Exports of goods totalled US$ 332.8 billion from April to December 2022. This represented a 16% increase from 2021. In the first half of 2022–2023, exports of goods and services as a percentage of GDP reached their highest level since 2016. Currently, India is the seventh-largest exporter of services worldwide.

Fiscal Position: Buoyant Revenue

• The government's finances showed a resilient performance in FY2022-23, with a YoY growth of 15.5% in Gross Tax Revenue. This growth is driven by recovery in economic activity, growth in direct taxes and GST.
• Direct taxes grew higher than average in the first 8 months of the year.
• GST stabilized as a vital revenue source, with 24.8% YoY growth from April to December 2022.
•  Economic Survey forecasts that the capital spending budget would be achieved for the entire year, particularly because it climbed by 63.4% during the first eight months of FY22-23. 
• Additionally, by dramatically increasing its CAPEX, the government aimed to make up for the private sector's hesitancy. In keeping with the government's capital spending push from the previous two budgets, the survey likewise suggests a considerable increase in CAPEX in the FY23 budget.

Monetary Policy: Good Year

• RBI raised the repo rate by 225 bps in its monetary tightening cycle starting in April 2022. This helped in miderating the surplus liquidity conditions.
• FY2022-23 saw an increased lending by financial institutions.
• Growth in credit offtake expected to sustain, leading to a virtuous investment cycle.
• Credit by NBFCs are also on the rise.
• Gross Non-Performing Assets ratio (GNPA) fell to 7-year low of 5.

Social Infrastructure And Employment

• There has been a significant increase in government spending on social sector.
• Social sector expenditure increased to Rs. 21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16.
• Budgeted expenditure on health sector reached 2.1% of GDP in FY23 (BE) and 2.2% in FY22 (RE).
• Aadhaar played a vital role in Co-WIN platform and transparent administration of 2 billion vaccine doses.
• Urban unemployment rate declined from 9.8% in the quarter ending September 2021 to 7.2% in the quarter that ended September 2022, as reported by the Periodic Labour Force Survey (PLFS). From July to September 2019, the unemployment rate in the nation was 8.3%; from July to September 2022, it was 7.2%.
•  According to the Survey, this is also accompanied by an improvement in the Labour Force Participation Rate (LFPR), confirming the economy's early FY23 recovery from the pandemic-induced slowdown.

Health

• Nearly 22 crore beneficiaries verified under Ayushman Bharat Scheme as of Jan 4, 2023. Over 1.54 lakh Health and Wellness Centres operationalized.
• Over 220 crore COVID vaccine doses administered as of Jan 6, 2023.

Food Cost

Due to supply limitations, the RBI predicts that domestic prices for spices and cereals would rise in the near future.  As a result of rising feed costs, milk prices are also likely to increase. According to the Economic Survey 2023, the climate has generally become more irregular worldwide, strengthening potential risks to food prices. 

Economic Summary 2023 PDF Download

Download the Economic Survey 2022-23 PDF from the government's official website - https://www.indiabudget.gov.in/economicsurvey/index.php

Direct link to download Economic Survey 2022-23 PDF - https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf