India recovered from the pandemic and moved forward in an orderly manner: Economic Survey 2023-24

According to the Economic Survey 2023-24 presented in Parliament on Monday, the Indian economy has recovered and expanded in a systematic manner after the pandemic and the real gross domestic product (GDP) in 2023-24 will be 20 per cent higher than the pre-pandemic 2019-20 level.

This is a feat that only a few major economies have achieved, according to the survey document.

“Prospects for continued strong growth look good in FY25, subject to geopolitical, financial market and climate risks,” the Economic Survey said.

According to the World Economic Outlook published by the International Monetary Fund (IMF) in April this year, global economic growth is estimated to be 3.2 percent in 2023. Different patterns of growth have emerged among countries.

The wide variations in growth performance across countries are due to domestic structural issues, uneven exposure to geopolitical conflicts, and the impact of monetary policy tightening.

The Economic Survey said India’s economy will continue the momentum maintained in 2022-23 in 2023-24 even as it faces external challenges.

India’s real GDP will grow by 8.2 per cent in 2023-24, crossing the 8 per cent mark in three out of the four quarters of 2023-24.

“The focus on maintaining macroeconomic stability ensured that external challenges had minimal impact on India’s economy,” the survey said.

The report said that the government’s emphasis on capital expenditure and the continued momentum in private investment have boosted capital formation growth. Gross fixed capital formation grew by 9 per cent in real terms in 2023-24.

Going forward, better corporate and bank balance sheets would further strengthen private investment, the Economic Survey said.

“Positive trends in the residential real estate market indicate that capital formation in the household sector is increasing significantly,” the survey said.

Inflationary pressures arising from global crises, supply chain disruptions and monsoon uncertainties have been managed efficiently by the administrative and monetary policy responses. As a result, retail inflation declined to 5.4 per cent in 2023-24, after averaging 6.7 per cent in 2022-23.

“The fiscal balance of the general government has improved progressively despite increased public investment. Tax compliance gains driven by process reforms, expenditure restraint and increasing digitalisation have helped India achieve this fine balance.”

Weak global demand for goods has put pressure on the external balance, but strong services exports have largely counteracted this.

As a result, the current account deficit (CAD) will be 0.7 per cent of GDP during 2023-24, better than the deficit of 2.0 per cent of GDP in 2022-23.

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament today. The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and under the supervision of the Chief Economic Adviser, gives an insight into the state of the economy for 2023-24 (April-March) and various indicators and some outlook for the current year.

Sitharaman will present the Union Budget for 2024-25 in Parliament tomorrow. With this budget presentation, Sitharaman will surpass the record set by former Prime Minister Morarji Desai, who as finance minister presented five annual budgets and one interim budget between 1959 and 1964. Sitharaman’s upcoming budget speech will be her seventh.