Key Takeaways from Economic Survey 2023

Key Takeaways from Economic Survey 2023

News: Recently, the government tabled the Economic Survey 2022-23. The Survey laid out the outlook for India’s growth, inflation and unemployment in the coming years.

What is Economic Survey?
 The Survey provides a detailed report of the national economy for the year along with forecasts. It touches upon everything from agriculture to unemployment to infrastructure.
 It is prepared by the Economic Division of the Department of Economic Affairs (DEA).
 The comments or policy solutions contained in the Survey are not binding on the government.

Key Takeaways:

GDP Growth
 The Survey said India’s growth estimate for FY23 is higher than for almost all major economies.
 Despite global concerns, India is still expected to grow between 6.5 and 7.0 per cent.

Inflation
 The RBI has projected headline inflation at 6.8% in FY23, outside its comfort zone of 2% to 6%.
 High inflation is seen as one big factor holding back demand among consumers. However, the Survey optimistically stated “it is not high enough to deter private consumption and also not so low as to weaken the inducement to invest.”

Unemployment
 The Survey said “employment levels have risen in the current financial year.”
 It pointed to the Periodic Labour Force Survey (PLFS), which showed that urban unemployment rate for people aged 15 years and above declined from 9.8% in the quarter ending September 2021 to 7.2% one year later.
 The Survey also underlined that the fall in unemployment rate is accompanied by an improvement in the labour force participation rate.

Outlook for 2023-24
 The Survey projected a baseline GDP growth of 6.5% in real terms in FY24.
 However, low demand for Indian exports, owing to poor global growth, may widen India’s trade deficit and make the rupee depreciate. Similarly, sustained monetary tightening (higher interest rates) may drag down economic activity in FY24.

Conclusion
 The central thrust of this year’s Survey is that India’s economy has recovered from the Covid disruption and, at long last, is poised to see sustained robust growth in the rest of the decade.