A day before presenting the budget, the Finance Minister presents the Economic Survey of the country. This is a review document that provides information on key developments in the economy over the past 12 months. It also highlights the policy initiatives, the performance of development programs, and the prospects of the economy. This document is prepared by the Ministry of Finance and the Department of Economic Affairs. The survey analyses the economic issues and provides reasons for the same. It is segmented into two parts where Part A consists of major economic developments in the year and a broad review of the economy, while Part B covers specific issues such as social security, poverty, education, healthcare, human development, and climate. The economy survey also provides useful insights into the country’s growth outlook, inflation rate and projection, forex reserves, and trade deficits.

Nirmala Sitharaman, the Finance Minister, presented an economic survey for FY 2022-23, before presenting the budget for the upcoming year. Following are the highlights of the economic survey.

1. Recovery from the Pandemic – Indian economy is experiencing a broad recovery across sectors, recovering from the contraction due to the pandemic, the Russian-Ukraine war, and inflation. According to the economic survey, the Indian economy is once again on the growth path, as it was before the pandemic.
2. Balance Sheet Stress – The Indian economy has undergone structural and governance reforms that have strengthened the fundamentals and enhanced the overall efficiency during 2014-2022. However, balance sheet stress caused by the credit boom and global shocks has adversely impacted credit growth, capital formation, and hence economic growth. The economic situation is analogous to the 1998-2002 era when reforms lagged due to shocks in the economy and paid dividends from 2003.
3. GDP Growth – GDP growth is expected to remain robust in FY 2024 and is forecasted to be in the range of 6 – 6.8 per cent. Private consumption has led to a boost in production activity. This has increased capacity utilisation across sectors.
4. Tax Revenue – Gross Tax Revenue increased by 15.5 per cent, year-on-year basis, from April to November 2022. Gross GST collections have increased at 24.8 per cent year on year basis during the same period.
5. Capital Expenditure – Capital expenditures by the government and by corporates with strong balance sheets are driving the growth of the Indian economy. The government’s capital expenditure stood at 2.5 per cent of GDP during the last financial year and has steadily increased from a long-term average of 1.7 per cent of GDP.
6. Foreign Exchange – Indian Rupee performed well compared to other emerging economies. Forex Reserves stood at USD 563 billion covering 9.3 months of imports, making India the sixth largest forex reserve holder in the world. India is also the largest recipient of foreign remittances with USD 100 billion in receipts in 2022. These remittances are the second largest source of external financing, after service exports.
7. Credit Growth – Reserve Bank of India (RBI) has adopted monetary tightening since April 2022 and has raised the repo rate by 225 basis points. Cleaner balance sheets have allowed banks to lend more. Lending by NBFCs has also increased. The Gross Non-Performing Assets (GNPA) ratio of commercial banks has fallen to a seven-year low of 5.0 while Capital-to-Risk Weighted Assets Ratio (CRAR) has remained healthy at 16.0. Credit Growth to the MSME sector was over 30.6 per cent on average.
8. Retail Inflation – India’s retail inflation rate peaked at 7.8 per cent in April 2022, higher than RBI’s upper tolerance limit of 6 per cent. However, according to the economic survey, this overshoot of inflation above the tolerance level was the lowest in the world. Retail inflation is back within Reserve Bank’s target range in November 2022.
9. Inflation Control – The government has adopted a multi-pronged approach to ease inflation. Prices of fuels have been decreased in a phased manner. Import duty on inputs was brought down to zero, while the same on the export of iron ores and concentrates was increased from 30 to 50 per cent to protect domestic industry. Meanwhile, customs duty on the import of cotton was waived from April 14 to September 30 to ease the cotton shortage. The export of wheat and rice has been curbed through different measures. Customs duty on the import of palm oil, soya bean and sunflower oil has been reduced to control prices.
10. Housing – Composite Housing Price Indices (HPI) have increased indicating a revival in the housing finance sector. Timely policy intervention and low home loan interest rates have been the key reasons for the same.
11. Health – Centre and State Government’s expenditure on the health sector was 2.1% of GDP in FY 2023 (Budgeted), 2.2% in FY 2022 (Estimated) as against 1.6% in FY 2021 (Actual). Social expenditure has increased from 9.1 lakh crore in FY 2016 (Actual) to 21.3 lakh crore in FY 2023 (Budgeted). Due to several steps taken, out-of-pocket expenditure as a percentage of total health expenditure has declined from 64.2 per cent in FY 2014 to 48.2 per cent in FY 2019. More than 220 crore Covid vaccine doses have been administered, as on January 6, 2023.
12. Employment – eShram portal developed for creating a National database of unorganised workers, verified with Aadhaar, has over 28.5 crore unorganised workers registered on it, as on December 31, 2022. Unemployment rates have fallen from 5.8 per cent in FY 2019 to 4.2 per cent in FY 2021.
13. Climate Change – India has declared to achieve a net zero emissions goal by 2070. The target of 40 per cent installed electric capacity from non-fossil fuels has been already achieved, ahead of its target of 2030. Installed capacity from non-fossil fuels will be more than 500 GW by 2030. RBI has also auctioned two tranches of INR 4,000 crore Sovereign Green Bonds (SGB). National Green Hydrogen Mission is expected to make India energy independent by 2047. Green hydrogen production capacity of at least 5 million metric tonnes per annum is expected to be developed by 2030. Solar power capacity installed under the National Solar Mission stood at 61.6 GW as on October 2022.
14. Rural Development – 8 lakh individual household toilets and 6.2 lakh community and public toilets constructed
15. Agriculture – Private investment in agriculture has increased to 9.3% in FY 2021. Institutional credit to agriculture has increased to 18.6 lakh crore in FY 2022. Free food grains were provided to about 81.4 crore beneficiaries for one year. National Agriculture Market (e-NAM) has 1.74 crore farmers with 2.39 lakh traders bidding on the platform.
16. Manufacturing sector – Overall Gross Value Added (GVA) by the industries rose 3.7 per cent in the first half of FY 2023, higher than the average growth of 2.8 per cent in the first half of the last decade. Merchandise exports were USD 332.8 billion for April-December 2022. Electronics exports have increased threefold from USD 4.4 billion in FY 2019 to USD 11.6 billion in FY 2022. India has become the second-largest mobile phone manufacturer with 29 crore units being produced in FY 2021, rising from 6 crore units in FY 2015. Foreign Direct Investment (FDI) inflow in the Pharma sector has increased four times from USD 180 million in FY 2019 to USD 699 million in FY 2022. Over 39,000 compliances and 3500 provisions have been reduced or decriminalized.
17. The service sector – India is among the top ten service exporting countries in FY 2021 with its share in such global exports increasing from 3 per cent in 2015 to 4 per cent in 2021. Credit to the service sector has grown 16 per cent since July 2022 while the FDI equity inflows to the service sector stood at USD 7.1 billion in FY 2022. The hotel occupancy rate has improved from 30-32 per cent in April 2021 to 68-70 per cent in November 2022. The E-commerce market is projected to grow at 18 per cent annually through 2025.
18. Infrastructure – 1009 projects worth INR 5.5 lakh crore have been completed while 89,151 projects costing INR 141.4 lakh crore are under progress. In-principal approval has been granted to 56 projects with a total cost of INR 57,870 crore under the viability gap funding, from FY 2015 to FY 2023. 10,457 km of roads and highways were constructed in FY 2022 compared to 6,061 km in FY 2016. 2,359 Kisan rails transported 7.91 lakh tonnes of perishables.
19. Electricity –2 lakh GWh of electricity was generated during FY 2022 compared to 15.9 lakh GWh during FY 2021. The entire target capacity of 40 GW has been sanctioned for the development of 59 solar parks in 16 states. Installed power capacity has increased from 460.7 GW in FY 2021 to 482.2 GW in FY 2022.
20. Digitalisation – UPI transactions grew 121 per cent in value and 115 per cent in volume between FY 2019 and FY 2022. The telephone subscriber base in India stands at 117.8 crores with 44.3 per cent in rural India. 98 per cent of the total telephone connections are wireless. Tele-density in India stood at 84.8 per cent in FY 2022.