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Source: The post is based on the article “Economic Survey 2022: Highlights” published in PIB on 1st February 2023.
What is the News?
The Government has 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 an Economic Survey?
What are the key highlights from Economic Survey 2022-23?
GDP Growth: Indian economy in 2022-23 has nearly: recouped what was lost, renewed what had paused and re-energised what had slowed during the pandemic and since the conflict in Europe.
The survey has projected the Indian economy to grow by somewhere between 6%-6.8% depending on global factors in 2023-24 with 6.5% as a baseline expectation.
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 sounded optimistic about the inflation levels and trajectory, saying 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 the 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.
Capital Expenditure: The government’s emphasis on capital expenditure (Capex) has continued despite higher revenue expenditure requirements during the year. The Centre’s Capex has steadily increased from a long-term average of 1.7 % of GDP (FY09 to FY20) to 2.5% of GDP in FY22 PA.
Social Expenditure: Social Sector witnessed a significant increase in government spending. It has increased to Rs. 21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16.
The survey highlights the findings of the 2022 report of the UNDP on Multidimensional Poverty Index which says that 41.5 crore people exited from poverty in India between 2005-06 and 2019-20.
Climate Change and Environment: India declared the Net Zero Pledge to achieve net-zero emissions goal by 2070.
India achieved its target of 40% installed electric capacity from non-fossil fuels ahead of 2030.
About 50% cumulative electric power installed capacity will come from non-fossil fuel-based energy resources by 2030.
Agriculture and Food Management: Private investment in agriculture has increased to 9.3% in 2020-21.
MSP for all mandated crops fixed at 1.5 times of all India’s weighted average cost of production since 2018.
Industry: The credit to Micro, Small and Medium Enterprises (MSMEs) has grown by an average of around 30% since January 2022.
India has become the second-largest mobile phone manufacturer globally.
Foreign Direct Investment (FDI) flows into the Pharma Industry have risen four times, from US $180 million in FY19 to US $699 million in FY22.
External Sector: India is the largest recipient of remittances in the world receiving US$ 100 bn in 2022. Remittances are the second-largest major source of external financing after service export.
As of end-November 2022, India is the sixth-largest foreign exchange reserves holder in the world.
Current account deficit(CAD): The widening of CAD may continue as long as prices remain elevated, however, the country’s economy remains strong.
The report further says that if CAD widens further, the Indian Rupee may come under depreciation pressure.