The Economic Survey 2022–23 was presented in the Parliament today by Finance Minister Nirmala Sitharaman. According to the survey, the Indian economy's growth is projected to slow to 6.5 percent in the fiscal year starting April. However, it will be the fastest growing major economy in the world.
Here are the survey's major highlights:
India to see Gross Domestic Product (GDP) growth of 6% to 6.8% in 2023-24
The Economic Survey 2022–23 projected base GDP growth of 6.5% in real terms in FY24. The projection is roughly comparable to those produced both locally and by multilateral organisations like the World Bank, International Monetary Fund (IMF), and Asian Development Bank (ADB).
In its annual Economic Survey report, the government stated that its baseline scenario for growth for 2023–2024 was 6.5%, with nominal growth—which takes inflation into account—predicted at 11%.
Capital expenditure (capex) target of ₹7.5 lakh crore for FY23 to be achieved
According to the Economic Survey 2022–23, capital expenditure has started to stimulate private investment, and the budget target of ₹7.5 lakh crore for the current fiscal year is expected to be met.
To continue the public investment-led recovery of the pandemic-damaged economy, the Finance Minister increased capital expenditure (capex) by 35.4% for the fiscal year 2022–23 to ₹7.5 lakh crore. The previous year's capex was estimated at Rs. 5.5 lakh crore.
Foreign Direct Investment (FDI) inflows expected to rebound in India
Due to India's rapid economic growth and initiatives to further enhance the business environment, FDI into the nation is anticipated to increase in the upcoming months, according to the Economic Survey released on Tuesday.
In the first half of the current fiscal year (April to September), FDI equity inflows in the manufacturing sector fell below their corresponding level in the first half of 2021–2022, according to the survey. This decline was attributed to the rise in global uncertainty following the Russia–Ukraine conflict.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), FDI equity inflows into India decreased by 14% to USD 26.9 billion over the period from April to September this fiscal.
If inflation moderates, credit growth is projected to be brisk in FY24
According to the Economic Survey 2022–23, credit growth is projected to be brisk for Micro, Small, and Medium-Sized Enterprises (MSMEs) in FY2023–24 provided inflation continues to be moderate and credit costs are low.
Between January and November 2022, the credit growth for MSMEs was roughly 31%.
According to the survey, credit growth is likely to be brisk in FY24 if both inflation and the real cost of credit decline in FY24.
Current Account Deficit (CAD) to be carefully monitored
The need for careful monitoring of the current account deficit, which could continue to grow due to elevated global commodity prices, was emphasised in the Economic Survey 2022–23.
According to the most recent Reserve Bank data, the country's current account deficit increased to 4.4% of GDP in the quarter ending in September from 2.2% of GDP during the April-June period as a result of a larger trade gap.
Rupee likely to remain under depreciation pressure
According to the Economic Survey 2022–23, the pressure on the Indian rupee's depreciation may continue as a result of the export market's slowing and the subsequent expansion of the current account deficit.
According to the report, the risks to the current account balance stem from multiple sources.
The rupee lost 12 paise to 81.64 against the US dollar in Tuesday's opening trading as a result of considerable foreign fund outflows and a sluggish trend in domestic stocks.
The geopolitical environment and the US Fed's tightening of monetary policy have put pressure on the Indian rupee, which has even crossed the 83-mark to the US dollar.
Infrastructure, capex boost helped India steer through setback due to Covid-19, geopolitical situation
Geopolitical tensions persist, the global economy is still recovering from the effects of the Covid-19 pandemic, and India could successfully navigate the situation thanks to its committed support for infrastructure through increased capex and sound macroeconomic fundamentals, said the Economic Survey report.
According to the Economic Survey 2022–23, PM GatiShakti has additionally assisted in accelerating infrastructure development by combining the seven growth engines of roads, railroads, airports, ports, mass transit, waterways, and logistic infrastructure.
Following a two-year COVID slump, housing prices are starting to firm again
The Economic Survey announced on Tuesday said that housing prices have begun to firm up following a two-year COVID slowdown and that unsold inventories have decreased due to increased demand. The Economic Survey also predicted a fall in costs as a result of lower import levies on numerous building supplies.
The civil aviation industry in India has a lot of potential
According to the Economic Survey, the country's civil aviation industry has "great potential" because of rising middle-class demand, higher disposable incomes, and favourable demographics. Air travel has also recovered since the lifting of restrictions brought on by the coronavirus pandemic.
The UDAN scheme, which has significantly improved regional connectivity by opening airports in the hinterland, was listed among the various factors that are helping the civil aviation sector in the survey for 2022–23.