The Economic Survey for 2023-24 was tabled in Parliament on Tuesday, a day before Finance Minister Nirmala Sitharaman would present the Union Budget before the Parliament. The Economic Survey is an annual economic report card that is given a day before the budget and assesses the performance of each sector and suggests the future steps to be taken.
The Department of Economic Affairs (DEA) compiled the Economic Survey under the supervision of Chief Economic Advisor V Anantha Nageswaran.
Key Highlights of the Economic Survey.
GDP Growth
India will continue to be the world's fastest-expanding major economy. Recovering from the pandemic-induced recession, the Russian-Ukraine war, and inflation, the Indian economy is undertaking a broad-based recovery across sectors, with the goal of resuming pre-pandemic growth in FY23. India's GDP growth is predicted to continue strong in FY24, at 7%. (in real terms). This follows an 8.7% increase in the previous financial year. GDP is expected to be in the 6-6.8% range in FY24, depending on global economic and political events.
The Economic Survey 2022-23 forecasts nominal GDP growth of 11% and real GDP growth of 6.5 percent in FY 24.
Inflation
In November 2022, retail inflation will be back within the RBI's target range, The RBI projects 6.8 percent inflation this fiscal year, which is above the upper goal limit but not high enough to dissuade private spending or low enough to impair incentives to invest. Borrowing costs may remain 'higher for longer' as a result of persistent inflation, which may extend the tightening cycle.
Current Account Deficit
The Economic Survey warns that the difficulty of the falling rupee, while outperforming most other currencies, remains, with the possibility of more policy rate hikes by the US Fed. The CAD may expand more if global commodity prices remain high and economic growth momentum remains robust. The rupee may face pressure if the current account deficit deepens.
CAD risks come from a variety of factors. While commodities prices have fallen from record highs, they remain higher than pre-conflict levels. It has increased the current account deficit (CAD), which had already been expanded by India's growth pace.
For fiscal year 23, India has sufficient forex reserves to fund the CAD and intervene in the currency market to limit rupee volatility.
