The Indian economy continues to expand, demonstrating resilience amidst geopolitical challenges, according to the Economic Survey 2023-24 tabled by Finance Minister Nirmala Sitharaman in Parliament on Monday.
The 476-page Economic Survey report highlights that the Indian economy has consolidated its post-COVID recovery, with fiscal and monetary policies ensuring economic and financial stability.
However, the survey warns that global volatility could hinder the achievement of ambitious growth targets.
“For the recovery to be sustained, there has to be heavy lifting on the domestic front because the environment has become extraordinarily difficult to reach agreements on key global issues such as trade, investment and climate,” the Survey states.
It points out that public investment has been crucial for capital formation in recent years. “Public investment has sustained capital formation in the last several years even as the private sector shed its balance sheet blues and began investing in FY22. Now, it has to receive the baton from the public sector and sustain the investment momentum in the economy. The signs are encouraging,” the Survey states.
The report highlights that high economic growth in FY24 followed growth rates of 9.7% and 7.0% in the previous two financial years.
It notes that while headline inflation is largely under control, certain food items remain elevated in price. The trade deficit for FY24 was lower compared to FY23, and the current account deficit is approximately 0.7% of GDP. Additionally, the current account registered a surplus in the last quarter of the financial year, and foreign exchange reserves are robust.
According to the Survey, non-financial private-sector capital formation, measured in current prices, grew significantly in FY22 and FY23 after a decline in FY21. Despite a two-year decline in investment in machinery and equipment during FY20 and FY21, there has been a strong rebound. Early data for FY24 suggests continued expansion in private sector capital formation, though at a slower pace.
The Survey calls for a tripartite approach to achieve developed nation status amid unprecedented global challenges. “The tripartite compact that this country needs to become a developed nation amidst emerging unprecedented global challenges is for governments to trust and let go, for the private sector to reciprocate the trust with long-term thinking and fair conduct and for the public to take responsibility for their finances and their physical and mental health.”
The Economic Survey 2023-24, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance under the supervision of the Chief Economic Adviser, provides an insight into the state of the economy and various indicators for the fiscal year 2023-24 (April-March).
(With inputs from agencies)