Economic Survey 2024: All the key Updates from Government's Annual Report

Parliament's Budget session is set to begin today in which Modi government will present the first budget of its third tenure. The session will be underway till August 12. Finance Minister Nirmala Sitharaman will table the economic survey at 1 pm in Lok Sabha today. She will present the budget tomorrow at 11 am.

The National Democratic Alliance (NDA) is set to present six major bills in the budget session. The bills include Finance Bill 2024, Disaster Management (Amendment) Bill, The Boilers Bill, The Bhartiya Vayuyan Vidheyak, The Coffee (Promotion and Development) Bill and The Rubber (Promotion and Development) Bill.

The Economic Survey will be presented at 1 pm in the Lok Sabha and 2 pm in the Rajya Sabha. The survey is generally presented one day before the upcoming Budget. To help policymakers comprehend and address both short- and long-term challenges, the Economic Survey of India sheds light on the country's economy.

Equity benchmark indices were trading flat on Monday ahead of the upcoming economic survey. Markets were weighed down by declines in Reliance Industries and Kotak Mahindra Bank alongside weak global cues.

As of 10:08 am, BSE Sensex remained steady at 80,635.23, up by 30 points. Whereas, NSE Nifty was trading at 24,549 level, up by just 18 points.

The Economic Survey, a crucial document that propels the nation's economy, will be introduced in the Parliament today. The document is written by the Ministry of Finance's Chief Economic Advisor (CEA). The document provides insights into the country’s economic prospects. It also sheds light about the country’s GDP growth, inflation, fiscal deficit, etc. Know more about the Economic Survey here.

Economic Survey 2024-25: Everything You Need to Know About the Country's Annual Report

Ahead of the interim budget, the government released a mini economic survey which highlighted some key points about India's growth trajectory. The economic review highlighted challenges such as impact of weak global growth due to slowdown in trade. Some of the other challenges include balancing energy security and push for renewables across the world. On the issue of employment, the document highlighted the need for a skilled workforce on the back of good education.

The interim budget was presented ahead of the general elections on February 1 by Finance Minister Nirmala Sitharaman. Some of the key highlights of the budget include announcing a corpus of Rs 1 lakh crore to promote research and development in the sunrise sectors, no changes in tax slabs, and increasing the outlay of capital expenditure by 11.1 per cent to Rs 11.11 lakh crore.

PM Modi is speaking ahead of the budget session 2024. He says that the budget will fulfill the dreams of Indians.

Ahead of presenting the Budget, Prime Minister Narendra Modi addressed the nation and said that he hoped that the Budget fulfills the promises of the people. This Budget, he said, is a significant part of Amritkaal. As the government got 5 more-year tenure by the people, he highlighted that the Budget will guide the country for the next five years. He added that the country today has a positive outlook towards growth and development.

Ahead of the upcoming Budget, Prime Minister Narendra Modi called for unity of all parties to fight together for the growth and development of the country. He highlighted that it is important to for all parties to work together to achieve the vision of making India a developed nation by 2047.

Union Defence Minister Rajnath Singh and Union Parliamentary Affairs Minister Kiren Rijiju held a meeting with all the floor leaders of the parliament on July 21.

In the meeting, the government conveyed that it's ready for discussion on all the issue but asserted that the session will be dedicated to financial business. Opposition is expected to rake up the issues of NEET paper leak case, controversy over UPSC candidate Puja Khedkar and the vacant deputy speaker position.

Prime Minister Narendra Modi has said that his budget will lay the foundation of Viksit Bharat. The Prime Minister also urged the unity of opposition parties ahead of the budget that will be presented tomorrow.

Modi highlighted that in the first session, there was an attempt to suppress the voice of the elected government and strangulate the PM’s voice in an undemocratic manner. This comes at a time when the opposition is expected to raise questions about issues, including the NEET issue. The Chief Justice of India is likely to declare its verdict about the NEET issue today.

Budget Session Begins Today: Govt Calls For Discussion, Opposition To Raise NEET, UPSC Controversies

Proceedings in the Parliament have begun. The session will see 16 sitting across Lok Sabha and Rajya Sabha. The session has begun with the question hour.

With the budget around the corner, Congress General Secretary Jairam Ramesh called for loan waivers for farmers, granting legal status to the Minimum Support Price (MSP). He has also highlighted that the MSP should be fixed via the Swaminathan formula. Ramesh reportedly said, “While the UPA had raised the MSP of wheat by 119 per cent and that of rice by 134 per cent, the Modi government has raised it by 47 per cent and 50 per cent, respectively.”

With Artificial Intelligence becoming an integral part of daily life, the Mini Economic Survey addressed the issue, emphasizing that AI presents a significant challenge to governments globally due to its effects on employment. The survey stressed the importance of investing in digital infrastructure to leverage AI's potential and also noted the necessity of managing its impact on jobs.

With the Union Budget all set to be presented today, the Parliament session has started. Currently, the Parliament is having a discussion on the NEET paper leak, with Education Minister Dharmendra Pradhan saying that the government has put its faith in the Supreme Court.

Meanwhile, the opposition has provided a probe into the irregularities at the exam centers. The Supreme Court has started hearing a plea on NEET re-exams today.

The Prime Minister said that he hopes the Budget will fulfill the dreams of Indians and set a roadmap for the next five years.

The Parliament has stormed in with the NEET debate. Union Education Minister Dharmendra Pradhan has accused the Congress-led UPA government of introducing the NEET exam. NEET-UG was introduced in 2013, when the Congress-led UPA was in power.

Meanwhile, opposition leader Rahul Gandhi said, "It is obvious to the whole country that there is a very serious problem in our examination system, not just in NEET but in all the major examinations."

The economic survey 2023–24 will be tabled at 1 p.m. by Finance Minister Nirmala Sitharaman in parliament today. Details of this survey will be highlighted by the Chief Economic Advisor to the Government of India, V. Anantha Nageswaran, in a press conference at 2.30 pm.

As per the report’s miniature version tabled before the Interim Budget in January this year, India can aspire to become a $7 trillion economy by 2030.

Budget 2024: Economic Survey Expected to Give Clarity on India's Growth Story

The Economic Survey 2024 has been presented in Parliament by Finance Minister Nirmala Sitharaman.

Economic Survey pegs real GDP growth at 6.5-7 per cent in financial year 2025.

Economic Survey says that the country's economy is on a strong wicket and inflation is under control. The central bank expects the country's headline inflation to be 4.5 per cent and 4.1 per cent in FY25 and FY26.

According to the Economic Survey, the nation's economy has solidified its post-Covid rebound as a result of monetary and fiscal policymakers maintaining financial and economic stability.

As per the poll, India's economy maintained its growth pace from FY23-24 in spite of a variety of external obstacles. In FY24, India's real GDP expanded by 8.2 per cent, surpassing the 8 per cent growth threshold in three of the four quarters.

1. The government's capex push and private investment growth boosted capital formation, with gross fixed capital formation rising 9 per cent in real terms in 2023–24.

2. Healthier corporate and bank balance sheets will boost private investment, with rising household capital formation evident in the real estate market.

3. Inflation fell from 6.7 per cent in FY23 to 5.4 per cent in FY24, managed by policy responses to global issues and monsoon disruptions.

4. There has been a surge in the market capitalisation of the Indian stock market.

The survey has highlighted that the banking and financial sectors of the country displayed a stellar performance in FY24. There was an improvement in bank asset quality, which signifies the commitment of the government to a healthy and stable banking sector, according to the survey.

Similarly, the primary capital markets facilitated capital formation of Rs 10.9 lakh crore during FY24, according to the survey. It adds, "As India’s financial sector undergoes this critical transformation, it must also brace for likely vulnerabilities and prepare itself with regulatory and government policy levers to intervene."

The survey has said that the timely intervention by the RBI and the price stability by the government helped curtail retail inflation to 5.4 per cent, which is the lowest level since the pandemic. "With the commitment of the Reserve Bank of India (RBI) to the goal of price stability and policy actions by the Central Government, India successfully managed to keep retail inflation at 5.4 percent in FY24, the lowest level since the COVID-19 pandemic period (‘pandemic’ hereinafter)," adds the survey.

The Global Energy Price Index saw a sharp decline in FY24, according to the survey. The measures by the central government to cut the price of LPG, petrol, and diesel led to lower LPG and petroleum product inflation. Domestic LPG cylinder prices were lowered by Rs 200 per cylinder in all national markets in August 2023. Consequently, since September 2023, the LPG inflation rate has been in the deflationary zone.

The government provides farmers with MSP for 23 commodities and cash support via PM-KISAN, along with frequent loan waivers, according to the survey. Irrespective of these efforts, current policies often work against each other, harming farmers, the environment, and public health. "A panoply of policies—by national and sub-national governments—working at crosspurposes with each other is hurting farmers’ interests and destroying soil fertility," says the survey. 

Thus, policy reorientation could greatly benefit the farming sector, restoring confidence in the state's ability to lead toward a better future, it adds.

Also Read: Economic Survey 2024 Suggests Excluding Food from Consumer Price Index

As per the Economic Survey, the overcapacity in China’s manufacturing sector is leading to economic coercion among emerging markets and developing economies. To mitigate the “monopolistic practices” emerging from this manufacturing prowess, countries like Turkey and Brazil have taken steps to increase Chinese FDI.

Similarly, the Economic Survey expects India to plug itself into the Chinese supply chain either by relying solely on exports or partially through Chinese investments.

As FM Nirmala Sitharaman presented the Economic Survey 2023-24 ahead of the budget, markets seem to have taken a muted tone.

Benchmark indices started the day on a volatile tone before falling in the red territory. At 01:30 pm, the 30-share index, BSE, was trading at 80,536 level, down by 68 points. Meanwhile, NSE Nifty loomed around 24,500 level, down by a mere 17 points.

Food inflation in the country increased to 7.5 per cent in FY24 from 6.6 per cent in FY23. Extreme weather events, depleted reservoirs, and crop damage affected food prices. This, in turn, led to an increase in food inflation.

Check out other updates- All the Key Highlights of the Economic Survey

The Economic Survey suggests the revival of institutional mechanisms or the creation of new ones that can facilitate dialogue between the Centre and states. This is important for making policy changes that can improve the standing of India’s MSME sector. “Much of the action has to happen at the level of sub-national (state and local) governments,” it notes.

It also recommends training programmes for MSME entrepreneurs in aspects such as enterprise management, human resource management, financial management, and technology.

The current market euphoria largely owing to increased retail participation and market capitalisation, has left experts on a mixed reaction path. However, the recent survey has clearly pointed out that market capitalisation to GDP ratio is not necessarily sign of economic advancement.

"The market capitalisation to GDP ratio is not necessarily a sign of economic advancement or sophistication. Financial assets are claims on real goods and services. If equity market claims on the real economy are excessively high, it is a harbinger of market instability rather than market resilience," the survey read.

There has been a decrease in the unemployment rate in the country to 3.2 per cent in 2022–23. This is accompanied by a rise in labor force participation in the country. Regarding employment, the workforce as a whole consists of 57.3 per cent self-employed individuals and 18.3 per cent unpaid laborers in household enterprises. 

Similarly, the net payroll additions under EPFO have more than doubled in the past five years, signaling healthy growth in formal employment, according to the survey.

Recognizing the skill gap existing in the country, the survey highlights that 1 in 2 college graduates are not readily employable. In other words, around 51.25 per cent of the youth are deemed employable. 

This number has, however, increased from around 34 per cent to 51.3 per cent in the last decade.

The National Pension System (NPS, is expected to grow rapidly in the private sector. An increasing number of corporate employees and self-employed professionals are looking forward to joining the NPS, according to the survey.

Additionally, "There is a potential for NPS in rural areas for larger farmers, traders, and those with lumpy incomes." This is because the NPS does not require a standard monthly contribution. Complete financial inclusion requires each family member to have a pension account.

The survey also says that given the long-term nature of pensions, encouragement is needed from employers, intermediaries, the government, and the pension regulator to motivate people, especially young adults, to join a pension scheme.

Last year, global exports of goods and services growth fell to 0.5 per cent from 5.2 per cent YoY in 2022. Amidst that, Indian total exports grew 2.63 per cent, thanks to buoyancy in services exports.

The economic survey points to a stronger rebound in GFCF that propped up growth as India emerged from the pandemic. While the government has shouldered a larger responsibility to invest in infrastructure, private investment in IP and machinery too has been strong growing cumulatively at 35 per cent in four years. But investment in dwellings and structures has been even stronger pointing to a higher inclination among households to save in physical assets.

In 29 out of 36 states, the inflation rate was less than 6 per cent. This was consistent with the decline in the average retail inflation rate in FY24 compared to FY23. 

The survey also found that the inter-state variation calculated through the standard deviation is higher in rural than urban inflation. Additionally, higher overall inflation in states also exhibits a wider rural-to-urban inflation gap.

While highlighting that there is a persistent deficit in pulses and consequent price pressures, the survey says that more efforts are needed to expand the area under pulses. The country should focus on including lentils, tur and urad in more districts and rice-fallow areas.

To add to it, promoting the summer cultivation of urad and moong in areas with assured irrigation facilities is the need of the hour.

Artificial Intelligence has created significant uncertainty for workers at all levels—low, semi, and high. This poses barriers to India's sustained high growth rates in the coming years, according to the survey. Overcoming these challenges requires a strong partnership between union and state governments and the private sector.

The social impact of AI on labor markets and job displacement is not well understood and could potentially favor capital over labor in income distribution, adds the survey.

"The Economic Survey implicitly stresses that in the medium term, growth needs to be supported by the private corporate sector as well as the state governments. Managing inflation, on the other hand, is not just the prerogative of the RBI and its MPC, and would require active intervention by the Centre, especially in the arena of food price management. The realisation of both these paradigms is crucial to ensure an optimal growth-inflation mix over the medium term," said Ms. Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA.

The economic survey highlights that investment intentions have shifted significantly across sectors over time. While they have decreased in industries like computers and chemicals, they have increased in new and futuristic sectors.

Recently, investment intentions have surged in areas such as renewables, AI, data centers, EVs and batteries, green hydrogen and semiconductors.

In 2022, India became a top destination for AI-related FDI, attracting 122 projects from multinational companies like ABB, Accenture, Deloitte, IBM, and Microsoft, the survey read.

The Chief Economic Advisor has sounded a cautious note by projecting a growth rate of 6.5-7.0 per cent for FY25, highlighting the global uncertainties and domestic challenges. The Economic Survey has proposed a compact between the Central and state governments, corporate sector and academia to overcome the unprecedented economic scenario.

There is a nudge to governments to let go of various regulations, citing the Ishopanishad. There is also a nudge to the private sector to invest in IP, machinery and equipment. Academia has been nudged to provide the necessary skills and knowledge for IP creation.

There is an acknowledgment of the challenges faced by our exports, manufacturing and small and medium enterprises. There is also a hint at lowering our emphasis on manufacturing and adopting the agricultural sector too as a generator of jobs, which comes from a statement that our choices cannot be binary.

We now await the Union Budget to see how these headwinds highlighted in the Economic Survey are countered by the fiscal outlays and policies.