New

July 22, 2024

Blog |

Govt. Schemes

Highlights of Economic Survey 2023-24: Updates, Budget & More

Union Finance Minister Nirmala Sitharaman has presented the Economic Survey 2023-24 with an accompanying statistical data. It takes place a day before the presentation of the Union Budget 2024. India’s Prime Minister Narendra Modi said that his country is growing at 8% in a press statement. He thanked the masses for their support during the Lok Sabha elections by asserting that positive sentiment, investments, and performance are at their best.

Sitharaman is to present NDA 3.0’s first budget tomorrow: Also, this First Budget of FY 2024-25 would be the Government’s major economic document which is likely to set the direction for India to become a developed economy by 2047. There were no substantial changes in tax laws in either of the previous two budgets except for making a new tax regime default option and introducing the Standard Deduction feature. Pre-budget expectations have centered around offering tax relief to the common man to encourage spending and contain inflation, thereby initiating growth.

The government is set to bring six or more bills to Parliament during the session that will last until the 12th of August. This session is expected to be stormy with a rejuvenated Opposition, which is expected to maintain its aggressive mobilisation against the government that began in June during the first session of the 17th Lok Sabha. According to sources that attended the all-party meeting on Sunday, the opposition is planning on cornering the NDA-led BJP government on issues ranging from the NEET paper leak to the issue of railways going off track and on issues like the rising unemployment and prices.

Highlights from Economic Survey 2024.

The Economic Survey 2024 addresses the impact of AI. Artificial intelligence casts a shadow of uncertainty about its impact on workers of all skill levels - low, medium, and high. These will present barriers and obstacles to India's continued high development rates in the future years and decades. Overcoming these challenges will necessitate a broad collaboration between union and state governments, as well as the corporate sector.

India’s Nifty 50 index ascended by 26.8 percent during FY24, as against (-)8.2 percent during FY23. Indian stock market was among the best-performing markets.

According to the Economic Survey report, the PLI plan for the car sector has generated investment proposals of ₹67,690 crore. The PLI Scheme for automobiles and auto components has a budget of ₹ 25,938 Crore from FY23 to FY27. The project has received an investment of ₹67,690 Crore, with ₹14,043 Crore already invested by the end of March 2024.

FDI inflows from China can help India boost its global supply chain participation. The survey demonstrated how larger FDI inflows from China can help India participate more fully in the global supply chain while also growing exports. Currently, FDI from China in any sector requires government clearance. China ranks 22nd, accounting for only 0.37 percent (USD 2.5 billion) of total FDI equity inflows reported in India between April 2000 and March 2024.

Highlights on the Stock Market, the enormous increase of retail investors in the stock market warrants careful study. This is critical because the danger of overconfidence leading to speculation and the expectation of even bigger profits, which may not align with the actual market conditions, is a severe worry.

The Survey examines the trend in rural earnings. In FY24, rural earnings climbed by more than 5% every month year on year. On average, nominal wage rates in agriculture increased by 7.4% for men and 7.7% for women, owing to strong agricultural expansion during the period. Wage increase in non-agricultural Employment and Skill Development 289 activities was significantly lower, at 6.0% for males and 7.4% for women during the same time.

Economic Survey 2024 focuses on overseas investor interest. External investors' investment interest, of new capital inflows, was ₹38,320 crores in FY24, compared to ₹38,320 crores in FY23. This modest reduction is consistent with global trends. Many private equity investors profited from India's strong equities markets. It is a symptom of a robust market environment that provides profitable exits for investors, which will attract more investments in the coming years. However, the environment for foreign direct investment growth in the next years is not ideal for a variety of reasons. Interest rates in affluent countries are far higher than they were during and before the Covid pandemic.

Second, emerging economies must compete with developed economies' active industrial strategies, which include significant subsidies to stimulate domestic investment. Third, not withstanding the tremendous progress made over the last decade, uncertainties and interpretations about transfer pricing, taxes, import tariffs, and non-tax policies must be addressed. Finally, rising geopolitical uncertainties are expected to have a significant impact.

The Economic Survey reiterates that employment creation occurs mostly in the private sector. Many (but not all) of the factors influencing economic growth, job creation, and productivity, as well as the activities required to address them, fall under the purview of state governments. India needs a tripartite agreement to meet its citizens' greater and rising ambitions.

In terms of financial performance, the business sector has never had it better. A survey of over 33,000 enterprises revealed that, between FY20 and FY23, the Indian corporate sector's profit before taxes virtually doubled. According to newspaper headlines, the corporate profits-to-GDP ratio reached a 15-year high in fiscal year 24. According to businessline, the corporate earnings for the Nifty-500 universe increased by 30% in the previous fiscal year to ₹14.11 lakh crore from ₹10.88 lakh crore in FY23. The nominal GDP increased by 9.6 percent yearly to ₹295 lakh crore (₹269 lakh crore)1. Hiring and compensation growth have hardly kept up with it. However, firms benefit from increased employment and worker remuneration.

The Union government reduced taxes in September 2019 to encourage capital formation. Between fiscal years 2019 and 2023, the private sector's non-financial Gross Fixed Capital Formation (GFCF) increased by 52% in current prices. During the same time span, the general government (including states) experienced a cumulative growth of 64%. According to the Economic Survey report, the margin does not appear to be particularly wide.

Economic Survey of GDP Growth showed a strong 8.2% GDP growth in the previous fiscal year. However the Economic Survey for 2023-24 predicts current fiscal economic growth of 6.5-7%. The Finance Ministry chose a conservative prediction in the current Economic Survey 2023-24, despite market expectations of significantly higher growth rates.

Extreme weather occurrences, reduced reservoir levels, and damaged crops all had a negative impact on farm output and food prices in fiscal years 23 and 24. So, food inflation based on the Consumer Food Price Index (CFPI) rose from 3.8% in FY22 to 6.6% in FY23 and 7.5% in FY24.

The growth of global capability centers (GCCs) has also strengthened India's services exports, propelling the industry forward.

According to the Economic Survey, which was presented in Parliament on Monday, demand under the Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGS) is not a true indicator of rural distress but is instead primarily linked to the State's institutional capacity and, to some extent, different minimum wages and other considerations.

India produced significantly more defense equipment: Economic SurveyIndia increased its defense production significantly between FY17 and FY23, going from ₹74,054 crore to ₹108,684 crore, which increased defense exports. The nation has made the shift from being a weapons importer to one of the top 25 exporters of weaponry.

Economic Survey claims that programs like ACC battery storage, FAME-II, and PLI helped the auto sector expand. Several government initiatives supported the automobile sector in the fiscal year 2024 (FY24), when the nation produced around 49 lakh passenger cars, 9.9 lakh three-wheelers, 214.7 lakh two-wheelers, and 10.7 lakh commercial vehicles, according to the Economic Survey released on Monday.

Financial Analysis India has made considerable progress in producing and exporting smartphones domestically, particularly with the introduction of the Production Linked Incentive (PLI) program in 2020. These days, the sector's main driver of growth is exports. Smartphone exports increased by 42.2% in FY24 (year over year), placing them in the top five export products from India that are classified as six-digit HS product categories.

Growing engagement in global value chains (GVCs) is highlighted in the Economic Survey 2024. India's top exports of GVC services are IT and technology-enabled services.

According to the Economic Survey FY 24, the government-backed Open Network for Digital Commerce (ONDC) has logged over 68 million transactions since its founding. With 9 million transactions a month, it has quickly grown outside of the mobility and food and beverage industries.

INDC for agriculture: Approximately 5,700 FPOs become members of the network

The Economic Survey 2024 states that there is potential for the ONDC network to significantly enhance the standard of living for farmers and craftspeople. Farmers Producers Organizations, or FPOs, have joined the network at a rate of about 5,700, and as of Q4 of FY24, they had completed over 23,000 transactions between them. The digital applications of the Small Farmers' Agri-Business Consortium (SFAC) and the National Agriculture Market (eNAM) have also been incorporated into the network.

Credit expansion is still strong and is mostly being driven by personal and business loans. The transmission of earlier rate rises has also accelerated deposit growth, leading to deposit repricing and increased accretion to term deposits. Non-banking financial organizations (NBFCs) have increased lending, with loans to the sector and personal loans driving this growth. Their asset quality has also improved.

The Economic Survey for 2023–24 stated that while exports of goods and services from India are expected to rise this fiscal year due to the improving fortunes of advanced economies, the expansion of the products trade could be distorted by geopolitical fragmentation and protectionism, which would negatively affect India's external sector.

Growth in credit to agriculture and allied activities was in double digits during FY24.

Agricultural credit had increased nearly 1.5 times from ₹13.3 lakh crore in FY21 to ₹20.7 lakh crore in FY24. The Kisan Credit Card (KCC) scheme has played a pivotal role in providing timely and hassle-free credit to farmers, with over 7.4 crores operative KCC accounts at the end of 2023. Increased credit disbursal to the agricultural sector continued in April and May 2024 with bank credit to agriculture and allied sectors growing by 19.7 percent and 21.6 percent YoY, respectively

The Economic Survey identified programs that improved credit flow to the MSME sector, such as the

1. Trade Receivables Discounting System (TReDS).

2. Change in the definition of MSMEs.

3. MSMEs can register on the Udyam Portal, and

4. The Credit Guarantee Scheme (CGS) for MSEs has been revamped.

SEBI has implemented a number of measures to boost market liquidity for distressed assets. FPIs can invest in debt instruments issued by corporations in bankruptcy, as well as security receipts issued by Asset Reconstruction corporations (ARCs). There is no minimum investor limit or residual maturity requirement for FPIs in these assets. FPI investment in ARC-issued SRs increased from ₹10,000 crore to ₹14,482 crore in FY2221. SEBI also established a new channel in 2022, the Special Situation Fund, a subset of the Alternative Investment Funds, to participate in the distressed asset market.

Developed nations adopting carbon taxes, even as their energy use is increasing owing to AI. Even as industrialized countries prepare to impose a carbon tax at the border on imports packed with carbon, they are ramping up energy demand like never before, thanks to their preoccupation with allowing AI to steer, take over, and dominate natural intellect.

Along with the continued focus on government capex, more jobs in the formal sector must be generated. Beyond FY2025, we expect the government to continue prioritising capital spending, both directly and through interest-free loans to state budgets.

Green steel is poised to play a “pivotal role” in reshaping the future of the sector “as the world moves towards a low-carbon economy.

Economic Survey warns against agri export ban, saying it should only be imposed in rare circumstances. Export bans on agricultural produce, including sugar, should be used only in rare circumstances, as it is easier for consumers to substitute or cut use than for farmers to suffer significant losses as a result of arbitrary prohibitions, according to the Economic Survey for 2023-24.

Survey proposes E-RUPI for fertilizer subsidy transmission to farmers. Observing that fertiliser administration reforms have been carried out in many countries, the Economic Survey said it is time for similar reforms in India, where the requirement is assessed based on standard rules and the quantity of subsidised fertiliser is fixed according to land records.

Find the full details of economic survey list here.

Featured Posts

The Urban Learning Internship Program

How to Start Mahila Gruh Udyog: Products List & Ideas

Khelo India Programme: Objectives and Verticals

No Income Tax for Small Businesses upto 2 crore

Key Highlights of RBI Monetary Policy 2025

Deen Dayal Upadhyaya Antyodaya Yojana (DAY - NULM)

Union Budget 2024: All Highlights

Amnesty Scheme: Meaning, Types, and Latest Updates

Featured Posts

You might also like

Import and Export under GST

OIDAR Services Under GST

Amalgamation: Meaning, Objectives, Features, and Types