Union Budget 2024: Every year before the Union Finance minister reads out the Union Budget in the parliament, the government shares another crucial annual document — the Economic Survey of India.
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The document is a yearly report, which is prepared by the Economics Division of the Department of Economic Affairs under the Ministry of Finance, that provides an overview of the Indian economy in the financial year that is coming to a close.
The Economic Survey of India was first presented in 1950-51 and at that time, it was a part of the main Union Budget. But after 1964, the Economic Survey was separately prepared and tabled a day before the main Budget presentation.
What is the Economic Survey?
The Economic Survey basically takes a close look at the developments in the Indian economy in different sectors, such as agriculture, services, industries, public finance, and infrastructure, over the last 12 months. It also gives an overview of exports, imports, foreign exchange reserves, and money supply during the fiscal.
It highlights the policy initiatives of the government, summarizes the performance on major development programmes, and shows the growth prospects of the economy.
The report also gives an outlook on India’s GDP growth, inflation rate and projection, forex reserves, and trade deficits.
The annual report also lists the key challenges that lie ahead along with measures to deal with them. It lays the groundwork for the presentation of the budget. It also acts as a guide for policymakers in identifying the major impediments to economic growth.
What are the basic components of the Economic Survey?
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The survey has two parts: Part A and Part B. Part A gives details of the major economic developments in the year and a broad review of the economy. The second part covers specific topics such as social security, poverty, education, healthcare, human development, and climate.
Major highlights of Economic Survey FY2023
> The survey said the Indian economy quickly recovered from the aftermath of the pandemic. Its growth is backed by domestic demand and a pick-up in capital investment. Slowing growth and shrinking trade across the globe led to the loss of export stimulus during the second half of FY 2022-23.
> The survey said the Indian economy will grow 6% to 6.8% in the upcoming FY 2023-24. It is lower when compared to the projected 7% for the present financial year 2022-23.
> The survey said India’s Gross Domestic Product (GDP) is expected to grow at 6.5% in FY 2023-24, compared to the 7% growth rate estimated for the present financial year. A higher capex, credit growth to small businesses, private consumption, strengthening the corporate balance sheet, and migrant workers returning to cities will be the key drivers of GDP targets.
> The Indian rupee may feel pressure with the continuous widening of the Current Account Deficit (CAD). India has sufficient foreign exchange or forex reserves to finance its Current Account Deficit (CAD) and to keep a check in the forex market for managing any rupee volatility.
> The survey said India stands fifth to be called the largest economy for the exchange rate. It takes the third position for the largest purchasing power parity.
Economic Survey for FY2024
In the year of General Elections, the Centre tables the survey only when the full annual financial statement is presented, which is around June-July after the new government takes oath.
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Last month it was reported that the Finance Ministry may table a ‘concise’ document detailing the state of the Indian economy similar to an Economic Survey ahead of the interim budget on February 1. It will likely include key indicators and forecasts such as GDP growth, nominal GDP growth target, and oil prices, among others, a Finance Ministry official told CNBC TV18.
