Chief Economic Advisor V Anantha Nageswaran
Credit: PTI Photo
Economic Survey overall key takeaways
The outlook for India's financial sector appears bright
Domestic growth drivers supported economic growth in FY24 despite uncertain global economic performance
Economy expected to grow at 6.5-7 per cent in FY25
Escalation in geopolitical conflicts and its impact may influence RBI’s monetary policy stance
Expectations of normal monsoon, and moderating global prices of imports give credence to benign inflation projections by RBI
India's policy adeptly steered through challenges, ensuring price stability despite global uncertainties
Healthier corporate and bank balance sheets will further strengthen private investment
Tax compliance gains, expenditure restraint, and digitisation help India achieve fine balance in govt's fiscal management
States should let go its grip in areas where it does not have to free up its capacity and enhance capability
Power is a prized possession of governments; it can let go of at least some of it and enjoy the lightness it creates
As financial sector undergoes critical transformation, it must brace for likely vulnerabilities originating globally or locally
Capital markets becoming prominent in India’s growth story; mkt resilient to global geopolitical and economic shocks
Short-term inflation outlook benign, but India faces a persistent deficit in pulses and consequent price pressures
AI casts huge pall of uncertainty with regard to impact on workers across all skill levels
Increased FDI inflows from China can help India enhance participation in global supply chain, boost exports
As much as 54 per cent of disease burden due to unhealthy diets; need transition towards balanced, diverse diet
Remittances to India to grow at 3.7 per cent to $124 billion in 2024, 4 per cent in 2025 to reach $129 billion
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Economic Survey on state of the economy: Key pointers
Global economic growth has been 3.2 per cent in 2023 as per the April World Economic Outlook. Diverging growth patterns have emerged among countries. The stark difference in the growth performance of countries has been on account of domestic structural issues, uneven exposure to geopolitical conflicts and the impact of monetary policy tightening.
India’s economy carried forward the momentum it built in FY23 into FY24 despite a gamut of external challenges. India's real GDP grew by 8.2 per cent in FY24, exceeding 8 per cent mark in three out of four quarters of FY24. The focus on maintaining macroeconomic stability ensured that external challenges had minimal impact on India’s economy.
The Government’s thrust on capex and sustained momentum in private investment has boosted capital formation growth. Gross Fixed Capital Formation increased by 9 per cent in real terms in 2023-24.
Moving forward, healthier corporate and bank balance sheets will further strengthen private investment. The positive trends in residential real estate market indicate that the household sector capital formation is increasing significantly.
Inflationary pressures stoked by global troubles, supply chain disruptions, and vagaries of monsoons have been deftly managed by administrative and monetary policy responses. As a result, after averaging 6.7 per cent in FY23, retail inflation declined to 5.4 per cent in FY24.
The fiscal balances of the general government have improved progressively despite expansionary public investment. Tax compliance gains driven by procedural reforms, expenditure restraint, and increasing digitisation helped India achieve this fine balance.
The external balance has been pressured by subdued global demand for goods, but strong services exports largely counterbalanced this. As a result, CAD stood at 0.7 per cent of the GDP during FY24, an improvement from the deficit of 2.0 per cent of GDP in FY23.
Indian economy has recovered and expanded in an orderly fashion post pandemic. The real GDP in FY24 was 20 per cent higher than its level in FY20, a feat that only a very few major economies achieved. Prospects for continued strong growth in FY25 beyond look good, subject to geopolitical, financial market and climatic risks.
Economic Survey on Monetary Management and Financial Intermediation: Key pointers
India’s banking and financial sectors have displayed a stellar performance in FY24.
Double-digit and broad-based growth in bank credit, gross and net non-performing assets at multi-year lows, and improvement in bank asset quality highlight the government’s commitment to a healthy and stable banking sector.
Primary capital markets facilitated capital formation of ₹10.9 lakh crore during FY24 (approximately 29 per cent of the gross fixed capital formation of private and public corporates during FY23).
The market capitalisation of the Indian stock market has seen a remarkable surge, with the market capitalisation to GDP ratio being the fifth largest in the world.
Strategy for financial inclusion has been a target-based approach, market development, strengthening infrastructure, innovation, and technology, last-mile delivery, consumer protection and financial literacy and awareness.
Financial inclusion strategy in the country has placed emphasis on the usage of accounts by enhancing direct benefit transfer flows through these accounts, promoting digital payments using RuPay cards, UPI etc.
Commercial banks and insurance companies, even as they aim to achieve greater market penetration, must keep in mind levels of financial literacy in the country, avoid over lending mis selling and address grievances such that the financial cycle stays healthy as long as possible.
As India’s financial sector undergoes critical transformation, it must brace for likely vulnerabilities originating globally or locally, the government and regulators have to be agile and flexible to intervene with policy and regulatory levers, as required.
Economic Survey on prices and inflation: Key pointers
Inflation moderated in FY24
During FY22 and FY23, the COVID-19 pandemic, geopolitical tensions, and supply disruptions contributed to rising inflationary pressures globally. In India, consumer goods and services faced price hikes due to international conflicts and adverse weather conditions impacting food costs.
However, in FY24, the Central Government’s timely policy interventions and the Reserve Bank of India’s price stability measures helped maintain retail inflation at 5.4 per cent - the lowest level since the pandemic.
The policy interventions yielded positive results
The global energy price index experienced a sharp decline in FY24. On the other hand, the Central Government announced price cuts for LPG, petrol, and diesel. As a result, retail fuel inflation stayed low in FY24.
In August 2023, the price of domestic LPG cylinders was reduced by Rs 200 per cylinder across all markets in India. Since then, LPG inflation has been in the deflationary zone, starting from September 2023.
Similarly, in March 2024, the Central Government lowered the prices of petrol and diesel by Rs 2 per litre. Consequently, retail inflation in petrol and diesel used in vehicles also moved to the deflationary zone in March 2024.
India’s policy adeptly steered through challenges, ensuring price stability despite global uncertainties
Core inflation declined to 4-years low
The decrease in retail inflation in FY24 was driven by a fall in core inflation - both goods and services. Core services inflation eased to a nine-year low in FY24; at the same time, core goods inflation also declined to a four-year low.
In FY24, core consumer durables inflation declined due to an improved supply of key input materials to industries. This was a welcome change after the progressive increase in consumer durables inflation between FY20 and FY23.
The transmission of monetary policy to core inflation was unambiguous. In response to rising inflationary pressure, the RBI has increased the repo rate gradually by 250 basis points since May 2022. Consequently, core inflation declined by around four percentage points between April 2022 and June 2024.
Food prices are under pressure due to adverse weather conditions
Food inflation has been a global concern over the past two years. Within India, the agriculture sector faced challenges due to extreme weather events, depleted reservoirs, and crop damage, which impacted farm output and food prices. Consequently, food inflation stood at 6.6 per cent in FY23 and increased to 7.5 per cent in FY24.
Unfavourable weather conditions in FY24 constrained food production. Tomato prices rose due to region-specific crop disease, early monsoon rains, and logistical disruptions. Onion prices spiked because of rainfall during the last harvest season affecting rabi onion quality, delayed sowing of Kharif onion, prolonged dry spells impacting Kharif production, and trade-related measures by other countries.
However, the government took appropriate administrative actions, including dynamic stock management, open market operations, subsidised provision of essential food items and trade policy measures, which helping to mitigate food inflation.
Higher inflation in States correlated with a wider rural-to-urban inflation gap
In FY24, most States and Union Territories witnessed decreased inflation rates, with 29 out of 36 recording rates below 6 per cent - consistent with the overall decline in all-India average retail inflation compared to FY23.
States with elevated food prices tend to experience higher rural inflation due to the greater weightage of food items in the rural consumption basket. Additionally, inter-state variation in inflation is more pronounced in rural areas than urban areas.
Besides, States experiencing higher overall inflation tend to have a wider rural-to-urban inflation gap, with rural inflation surpassing urban inflation.
The short-term outlook is positive, long term requires a clear vision
Going forward, the RBI projects inflation to fall to 4.5 per cent in FY25 and 4.1 per cent in FY26, assuming normal monsoon and no external or policy shocks. Similarly, the IMF forecasts inflation of 4.6 per cent in 2024 and 4.2 per cent in 2025 for India.
Further, the World Bank predicts declining global commodity prices in 2024 and 2025, driven by lower energy, food, and fertiliser prices. This may help bring down domestic inflation in India.
However, achieving long-term price stability requires a clear forward-looking vision. Hence assessing progress in developing modern storage and processing facilities for fruits and vegetables is crucial to manage seasonal price spikes.
Beyond this, the medium to long-term inflation outlook will be shaped by the strengthening of price monitoring mechanisms and market intelligence as well as focused efforts to increase the domestic production of essential food items like pulses and edible oils for which India has a great degree of import dependence.
Economic Survey on external sector: Key pointers
India’s external sector remained strong amidst on-going geopolitical headwinds accompanied by sticky inflation.
India’s rank in the World Bank’s Logistics Performance Index improved by six places, from 44th in 2018 to 38th in 2023, out of 139 countries.
India is adding more export destinations, signalling regional diversification of exports.
The moderation in merchandise imports and rising services exports have improved India’s current account deficit which narrowed 0.7 per cent in FY24.
India’s services exports grew by 4.9 per cent to $341.1 billion in FY24, with growth largely driven by IT/software services and ‘other’ business services.
India is the top remittance recipient country globally, with remittances reaching a milestone of $120 billion in 2023.
India witnessed positive net foreign portfolio investment inflows in FY24 supported by strong economic growth, a stable business environment, and increased investor confidence.
At the end of March 2024, India’s forex reserves were sufficient to cover more than 10 months of its projected imports for FY25 and 98 per cent of its external debt.
India’s external debt has been sustainable over the years, with the external debt to GDP ratio standing at 18.7 per cent at the end of March 2024.
Challenges such as slowing global GDP growth (i.e, fall in global demand) and an all-time rise in trade protectionism (i.e, weakening globalisation) can pose a significant downside risk. In this context, both the government and the private sector must focus on removing barriers and implementing steps to boost India’s expert competitiveness.
Economic Survey on medium-term outlook: Key pointers
The Medium-term growth outlook will happen in the context of the following global trends, namely, increased geo-economic fragmentation, a global push for self-reliance, looming climate change, rise of technology as the biggest strategic differentiator and limited policy space for countries across the world.
Going forward the Government’s focus must turn to bottom-up reform and strengthening the plumbing of governance so that the structural reforms of the last decade yield strong, sustainable, balanced and inclusive growth.
Key areas of policy focus in the short to medium term include job and skill creation, tapping the full potential of the agriculture sector, addressing MSME bottlenecks, managing India’s green transition, deftly dealing with the Chinese conundrum, deepening the corporate bond market, tackling inequality and improving our young population’s quality of health.
The growth strategy for Amrit Kaal is predicated on six key areas. Firstly, there must be a deliberate focus on boosting private investment. Secondly, the growth and expansion of India’s Mittelstand (MSMEs) is a strategic priority. Thirdly, the potential of agriculture as an engine of future growth must be recognised and policy impediments removed. Fourthly, there is a need to secure the financing of green transition in India. Fifthly, the education-employment gap must be bridged. And finally, focused building of state capacity and capability is required for sustaining and accelerating India’s progress.
In the medium term, the Indian economy can grow at a rate of 7 per cent plus on a sustained basis if we build on the structural reforms undertaken over the last decade. This requires a tripartite compact between the Union Government, State Governments and the private sector.
Economic Survey on climate change & energy transition: Key pointers
India has adopted the mission-mode approach to address climate change. A report by the International Finance Corporation recognises India’s efforts to achieve committed climate actions, highlighting that it is the only G20 nation in line with 2-degree centigrade warming.
India has made significant progress on climate action in terms of an increase in its renewable energy capacity and improvement in energy efficiency. As of 31 May 2024, the share of non-fossil sources in the installed electricity generation capacity has reached 45.4 per cent. Further, the country has reduced the emission intensity of its GDP from 2005 levels by 33 per cent in 2019.
India’s energy needs are expected to grow 2 to 2.5 times by 2047 to meet a growing economy's developmental priorities and aspirations. Considering that resources are limited, the pace of energy transition would need to factor in alternative demands on the resources for improving resilience to climate change and for sustained social and economic development.
Expanding renewable energy and clean fuels will increase demand for land and water. Most renewables are land-intensive and demand the highest land use requirements among the different energy sources. Further, the expansion of renewable energy requires battery storage technologies which in turn require the availability of critical minerals. The source of such minerals is, however, geographically concentrated.
Recognising the importance of energy efficiency measures in accelerating clean energy transitions while supporting energy security, the Government has taken several steps to improve energy efficiency.
The country has taken many measures to improve the business environment and catalyse greater quantum of resources. The Government undertook the issue of sovereign green bonds amounting to Rs 16,000 Crore in January-February 2023 to raise proceeds for public sector projects that would contribute to the efforts to reduce the intensity of the economy's emissions, followed by Rs 20,000 Crore raised through sovereign green bonds in October-December 2023.
The Government of India’s Mission LiFE is envisaged as a mass movement to address climate change and foster sustainable living based on conservation and moderation principles. The Government supports voluntary environmental actions such as the Green Credit Programme (GCP), which incentivises individuals, communities, private sector industries, and companies to participate in environment-positive activities by offering green credits as rewards.
India has led several international initiatives towards climate change mitigation and building resilience. The International Solar Alliance (ISA), One World, One Sun, One Grid (OSOWOG), the Coalition for Disaster Resilient Infrastructure (CDRI), the Infrastructure for Resilient Island States’ (IRIS) and the Leadership Group for Industry Transition (LeadIT) are some of such important examples.
Economic Survey on social sector: Key pointers
The Indian economy is moving forward with a reformed approach to welfare, focused on empowerment, saturation approach, universal access to necessities, efficiency, cost-effectiveness, and enhanced participation of the private sector and civil society.
The education sector is bustling with the across-the-board transformation led by the NEP 2020, focusing on Foundational Literacy and Numeracy for every child passing the third standard. The ‘Poshan bhi Padhai bhi’ programme for early childhood education aims to develop the world’s largest, universal, high-quality preschool network at Anganwadi Centres.
In healthcare, Ayushman Bharat is not only saving lives but also saving generations from the debt trap. More than 34.7 crore Ayushman Bharat cards have been generated, and the scheme has covered 7.37 crore hospital admissions. Considering the multiplier effect of low costs, the scheme saves more than 1.25 lakh crore of out-of-pocket expenditure for poor and deprived families.
The challenge of ensuring mental health is intrinsically and economically valuable, as the lack of it can lead to significant productivity loss and rise in healthcare costs. Overusing smartphones and the Internet are associated with the ‘great rewiring of childhood’.
Women-led development emanates from social, economic, and political empowerment. The DAY-NRLM programme covers over 89 million women through 8.3 million Self Help Groups. It has been empirically associated with women's empowerment, reduced social evils, higher participation in village institutions, and better access to government schemes.
A host of enabling programmes reinforces better quality of life in the hinterland. The self-help movement has come far in its outreach, and the social capital stands to gain from professional assistance in marketing and management.
MGNREGS demand is not a real indicator of rural distress but is predominantly linked with the State’s institutional capacity, the difference in minimum wages, etc.
Governance and unity of purpose at all levels of government remain key for the successful implementation of a social programme. To maximise the efficiency of translating spending into outcomes, many channels at the ground level need to be unclogged.
Economic Survey on employment & skill development: Key pointers
Indian labour market indicators have improved in the last six years, with the unemployment rate declining to 3.2 per cent in 2022-23.
Rising youth and female participation in the workforce presents an opportunity to tap the demographic and gender dividend.
The net payroll additions under EPFO have more than doubled in the past five years, signalling healthy growth in formal employment.
With artificial intelligence taking root in several spheres of economic activity, steering technological choices towards collective welfare is key. Employers owe it to themselves to strike a balance between deploying technology and labour.
To generate and sustain quality employment, agro-processing and care economy are two promising candidates.
The Government has implemented measures to boost employment, foster self-employment, and promote worker welfare.
The rise in the number of candidates undergoing skill development through the Government’s flagship programmes has underlined the thrust to ‘Skill India’.
Many regulatory chokeholds, such as those related to land use, building codes, restricting sectors and hours open to women’s employment, hold back employment generation. Releasing them is guaranteed to boost employment and raise women’s labour force participation rate.
Economic Survey on agriculture & food management: Key pointers
The sector has registered an average annual growth rate of 4.18 per cent at constant prices over the last five years. As per provisional estimates for 2023-24, the growth rate of the agriculture sector stood at 1.4 per cent at constant prices.
The allied sectors of Indian agriculture are steadily emerging as robust growth centres and promising sources for improving farm incomes. From 2014-15 to 2022-23, the livestock sector grew at an impressive Compound Annual Growth Rate (CAGR) of 7.38 per cent at constant prices. The fisheries sector has grown at a compound annual rate of 8.9 per cent between 2014-15 and 2022-23 (at constant prices).
The government’s priority has been to provide timely, cost-effective, and adequate credit that reduces the dependence on non-institutional credit and increases investment. The measures have reduced the share of non-institutional credit from 90 per cent in 1950 to 23.40 per cent in 2021-22.
Promotion of greater efficiency in the use of inputs and sustainable production methods through Per Drop More Crop (PDMC), a micro irrigation scheme, and the actions under the National Mission on Sustainable Agriculture (NMSA), including the use of alternative and organic fertilisers are a few examples of initiatives being undertaken to improve productivity and sustainability. An area of 90.0 lakh hectares has been covered under micro irrigation in the country under the PDMC from 2015-16 to 2023-24 as of 6th February 2024.
To facilitate the adoption of smart agriculture technologies, the government has taken up digital initiatives such as the Digital Agriculture Mission and e-National Agriculture Market (e-NAM), with the latter allowing better price discovery. The Digital Agriculture Mission 2021–2025 aims to modernise agriculture through advanced technologies like AI, remote sensing, drones, etc
The government has taken various measures to promote cooperatives and farmer-producer organisations. Cooperatives are vital in aggregating produce, enhancing bargaining power, and ensuring better market access to small and marginal farmers, thereby preventing exploitation by intermediaries and traders. As of 29 February 2024, 8,195 FPOs have registered under the new FPO scheme.
Recognising the need to increase investments in agriculture, the government launched the Agriculture Infrastructure Fund (AIF). In addition, the Government has been implementing the Agriculture Marketing Infrastructure (AMI) to improve the extent of storage infrastructure. As of 30th April 2024, 48357 projects were sanctioned for storage infrastructure with Rs 4,570 Crore released as subsidy, and 20878 other projects are also under progress with Rs 2084 Crore released as subsidy under AMI. As of 5th July 2024, AIF mobilised an investment of Rs 73194 Crore.
To facilitate the growth of the food processing sector, the Government has taken several initiatives like Pradhan Mantri Kisan Sampada Yojana (PMKSY), Production Linked Incentive Scheme for the Food Processing Industry (PLISFPI) Prime Minister's Formalisation of Micro Food Processing Enterprises (PMFME) Scheme for the development of food processing in the country.
To remove the financial burden of the poor, the Government decided to continue to provide free food grains to about 81.35 crore beneficiaries (i.e., Antyodaya Anna Yojana (AAY) households and Priority Households (PHH) beneficiaries) under the PMGKAY for a further period of five years.
Efforts must be made to encourage production patterns and practices in various geographies that are consistent with their agro-climatic characteristics and natural resources. Agriculture policies must be consistent with climate imperatives and water security. Investment in technology, production methods, marketing infrastructure, and reduction in post-harvest losses need to be scaled up. E-NAM, promoting FPOs, and allowing cooperatives to participate in agri-marketing can improve the market infrastructure and allow better price discovery. Improving the market infrastructure by incentivising states can be explored.
Economic Survey on Industries: Key pointers
Economic growth of 8.2 per cent in FY24 was supported by an industrial growth rate of 9.5 per cent. Within the four industrial sub-sectors, manufacturing and construction nearly reached double-digit growth, while mining & quarrying and electricity & water supply also experienced significant positive growth in FY24.
Despite the pandemic and consequent impairment of manufacturing value chains, the manufacturing sector achieved an average annual growth rate of 5.2 per cent in the last decade. Major growth drivers are chemicals, wood products and furniture, transport equipment, pharmaceuticals, machinery, and equipment.
India became a net exporter of finished steel over the past decade. The steel sector achieved its highest levels of production and consumption during FY24.
Coal production has accelerated over the past five years, reducing import dependence. In FY24, India produced 997.2 million tonnes of coal, imported 261 million tonnes, and consumed 1233.86 million tonnes.
India’s pharmaceutical market, currently valued at $50 billion, is the world's third largest by volume. With a diverse product range that includes generic drugs, active pharmaceutical ingredients, bulk drugs, over-the-counter medications, vaccines, biologics, and biosimilars, the Indian pharmaceutical industry maintains a strong global presence.
India is the world's second-largest clothing manufacturer and one of the top five exporting nations. In FY24, the export of textiles and apparel, including handicrafts, increased by 1 per cent, reaching Rs 2.97 lakh Crore.
India's electronics manufacturing sector has experienced significant growth since 2014, accounting for an estimated 3.7 per cent of the global market share in FY22. Domestic production of electronic items increased significantly to Rs 8.22 lakh Crore, while exports rose to Rs 1.9 lakh Crore in FY23.
The government has taken many recent initiatives to improve the ease of doing business, reduce compliance burden and alleviate logistic and infrastructural bottlenecks. The PLI schemes for key sectors have attracted significant investments, boosted production, sales and exports and generated jobs, particularly in the case of white goods.
Keeping in view India’s vision of becoming ‘Aatmanirbhar’, over Rs 1.28 Lakh Crore of investment was reported until May 2024, which has led to production/sales of Rs 10.8 Lakh Crore and employment generation (direct & indirect) of over Rs 8.5 Lakh under PLI scheme.
To support the MSME sector, Union Budget 2023-24 allocated Rs 9,000 Crore to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Since its inception, the scheme has approved 91.76 Lakh guarantees amounting to Rs 6.78 Lakh Crore.
To foster innovation and startup culture in India, the government has taken various interventions like notification of Patent Rules 2024, passing of the Anusandhan National Research Foundation (ANRF) bill 2023 and The Bharat Startup Knowledge Access Registry.
The number of granted patents increased seventeen-fold from 5978 in 2014-15 to 103057 in 2023-24. More than 45 per cent of the recognised start-ups are emerging from Tier 2/3 cities. From around 300 start-ups in 2016, the number of DPIIT-recognised start-ups increased to more than 1.25 Lakh by the end of March 2024.
Sectors with widely scattered production units like textiles, and the MSME sector in general, seek solutions to constraints of supply chain management, market access and formalisation. Interventions may include ensuring support systems to develop MSME projects and their bankability and adequate financing arrangements for such projects; targeted facilitation and incentivisation of employment-intensive MSME segments; progressively easing the compliance requirements with a single-window mechanism for clearances; providing grassroots-level facilitation to ensure market access to MSME products; and, government-industry-academia collaboration to upskill the workforce.
Two common requirements across industries relate to incentivising R&D and innovation and improving the skill levels of the workforce. With respect to both, industry must take the lead. With active collaboration between industry and academia and emphasis on vocational education in curriculums, India can meet the skill shortage more effectively than hitherto.
Upgrading the statistics on the industry, like an updated index of industrial production and State level variants of such indices, will help in understanding the emerging geographical patterns of production.
Economic Survey on services: Key pointers
The services sector continues to significantly contribute to India's growth, accounting for about 55 per cent of the total size of the economy in FY24.
As per the Provisional Estimates, the services sector is estimated to have grown by 7.6 per cent in FY24.
The services Purchasing Managers’ Index (PMI) has remained above 50 since August 2021, implying continuous expansion for the last 35 months. In March 2024, services PMI soared to 61.2, marking one of the sector's most significant sales and business activity expansions in nearly 14 years.
Globally, India’s services exports constituted 4.4 per cent of the world's commercial services exports in 2022. Post-pandemic, services exports have maintained a steady momentum and accounted for 44 per cent of India’s total exports in FY24.
FY24 ended with an outstanding services sector credit of Rs 45.9 lakh crore in March 2024, with a YoY growth of 22.9 per cent.
Passenger traffic originating in Indian Railways increased by about 5.2 per cent in FY24 compared to the previous year.
Revenue-earning freight in FY24 (excluding Konkan Railway Corporation Limited) witnessed an increase of 5.3 per cent in FY24 over the previous year.
The aviation sector in India has grown substantially, with a 15 per cent YoY increase in total air passengers handled at Indian airports in FY24.
The tourism sector in India is expanding significantly. India's share of foreign exchange earnings in world tourism receipts increased from 1.38 per cent in 2021 to 1.58 per cent in 2022.
The residential real estate market demonstrated a promising trend in 2023, with demand and new supply experiencing double-digit growth.
Global Capability Centres (GCCs) in India have grown significantly, from over 1,000 centres in FY15 to more than 1,580 centres by FY23.
The number of technology start-ups in India rose from around 2,000 in 2014 to approximately 31,000 in 2023.
The Indian e-commerce industry is expected to cross $350 billion by 2030.
Two significant transformations are reshaping India's services landscape: the rapid technology-driven transformation of domestic service delivery and the diversification of India's services exports.
The emerging job demands in the services sector entail greater and more focussed skills. Focus areas should include Blockchain, Artificial Intelligence (AI), Machine Learning, Internet of Things, Cybersecurity, Cloud Computing, Big Data Analytics, Augmented Reality, Virtual Reality, 3D Printing, and Web and Mobile Development.
A report by Capital Economics suggests that the advent of AI might moderate India's services export growth, potentially reducing it by 0.3-0.4 percentage points annually over the next decade. This highlights the significance of the relatively less skill-dependent tourism sector for employment generation. Consequently, public policy should focus on enhancing the tourism sector.
Upskilling through government and industry collaboration can enable India to become a high-value partner in areas such as cybersecurity, enterprise management, and other specialised areas.
Economic Survey on infrastructure: Key pointers
Buoyant public sector investment has had a pivotal role in funding large-scale infrastructure projects in the recent years.
The average pace of NH construction increased by ~3 times from 11.7 km per day in FY14 to ~34 km per day by FY24.
Capital expenditure on Railways has increased by 77 percent in the past 5 years, with significant investments in the construction of new lines, gauge conversion and doubling.
In FY24, new terminal buildings at 21 airports have been operationalised which has led to an overall increase in passenger handling capacity by approximately 62 million passengers per annum.
India’s rank in the International Shipments category in the World Bank Logistics Performance Index has improved to 22nd in 2023 from 44th in 2014.
The clean energy sector in India saw new investment of Rs 8.5 lakh crore ($102.4 billion) between 2014 and 2023.
UJALA Scheme resulted in an estimated energy savings of 48.42 billion kWh per year, GHG emission reduction of 39.30 million tonne CO2 per year, and annual monetary savings of Rs 19,335 crore in consumer electricity bills.
945 km of metro rail or RRTS lines are operational, and 939 km are under construction in 27 cities. ~86 km of metro rail/RRTS lines operationalised in FY24.
Under Jal Jeevan Mission (JJM), the provision of tap water connection has increased to more than 14.89 crore rural households (76.12 per cent).
India has 55 active space assets which include 18 communication satellites, nine navigation satellites, five scientific satellites, three Meteorological Satellites, and 20 Earth Observation satellites.
The total number of mobile towers in the country is 8.02 lakh as of June 2024 while number of Base Transceiver Stations (BTSs) stood at 29.37 lakh and 5G BTSs were 4.5 lakh.
The DigiLocker platform has now reached over 26.28 crore registered users and over 674 crore documents.
Khelo India programme: In FY2024, 38 new infrastructure projects were sanctioned, and 58 projects were completed.
Given that infrastructure-creation efforts in India are currently predominantly public sector-led, a higher level of private sector financing and resource mobilisation from new sources will be crucial for India to continue down the path of building quality infrastructure. Facilitating this would not only require policy and institutional support from the Central Government, but State and Local Governments would have to play an equally important role.
Existing databases fall short on assessing the demand for infrastructure and tracking the utilisation of facilities. The construction of an index that tracks the utilisation rates would shed light on sub-sectors where there is either an oversupply or a shortfall.
Statistics on the infrastructure sector can be derived from several available databases. However, aggregation of information - on both financial flows and physical progress - is difficult now. A roadmap and an action plan for systematic collection of information on infrastructure-oriented financial flows are essential.Similarly, project-wise and sector-wise information on physical progress, now maintained in different formats and frequencies, need to be reexamined and revised to facilitate a complete picture.
What Economic Survey says on climate change & India
Current global strategies for climate change are flawed and not universally applicable.
- The Western approach does not seek to address the root of the problem, i.e. overconsumption, but rather chooses to substitute the means to achieve overconsumption.
- The global pursuit of energy-guzzling technologies such as Artificial Intelligence and mining rare earth minerals in large quantities has only contributed to higher fossil fuel consumption. This is directly at odds with the stated objectives of climate change mitigation.
- Their practices ignore humans’ underlying relationship with Nature, with other people, with materiality and with themselves.
A one-size-fits-all approach will not work, and developing countries need to be free to choose their own pathways since they are tasked with balancing developmental goals with meaningful climate action.
India, despite significant strides in climate action, often faces criticism for not aligning with Western solutions. This criticism stems from a lack of appreciation for India's unique social and cultural fabric, which is already rich with sustainable development ideas.
Adopting the practices of the West could prove to be disastrous for India where culture, economy, societal norms are already intertwined with the environment.
India’s ethos emphasises a harmonious relationship with nature, offering sustainable solutions to problems plaguing market societies. For instance:
- The process of meat production adopted in the developed world presents credible food security risks and a threat of permanently degrading the land, water and natural resources critical for our survival. The reliance on human-edible crops to feed livestock has set into motion a food-feed competition as less than half the cereals produced today go towards direct human consumption. These figures are even lower for many developed economies.
- Traditional farming practices in the developing world offer one solution to the problem. Repurposing farm waste and by-products from other agricultural activities as animal feed not only lowers the financial and environmental cost of meat production but also brings balance to the natural cycle. Shifting livestock to human-inedible feed can free up significant shares of global arable land to address global hunger.
- Similarly, the adoption of nucleated families akin to the Western model of living places significant land and resource requirements on the environment, as the growth in urban nucleated settlements gives rise to the tendency of urban sprawl. Furthermore, these living spaces are highly inefficient, dominated by concrete, closed spaces, less ventilation and exacting higher energy costs during the summers.
- A shift towards multi-generational households, as it was traditionally, would create the pathway towards sustainable housing. Sourcing materials and labour locally for the construction of houses, central courtyards with well-ventilated spaces, and avenues for natural lighting and cooling would all exert a positive externality on the environment by lowering resource and energy requirements. Such a household would also prove immensely beneficial for the elderly.
Given that the push for environmental protection and sustainable development must be in accordance with the cyclic temperament of Nature, India and the “Mission LiFE” initiative can help. The initiative brings individual responsibility to the forefront and believes that many small, consistent, and pro-planet actions at the individual level will collectively work to make a substantial difference.
Mission LiFE encompasses a comprehensive but non-exhaustive list of 75 LiFE Actions for adoption by individuals to live more sustainably. At its heart, it promotes mindful consumption instead of overconsumption, encourages a circular economy and the reuse of waste products, eating local plant-based cuisines with a low ecological footprint, saving water and energy.
India should learn, understand and adopt its rooted sustainable practices and embrace others’ only when they suit its needs and are sustainable, environmentally and climatically. That way, Indians will address their wants without letting them hurt Nature.
Some Economic Survey FAQs
How to access older Economic Surveys?
IndiaBudget—a government portal run by the Ministry of Finance—has copies of every Economic Survey presented since 1957-58.
What comprises Economic Survey?
An Economic Survey, in simple terms, is a survey that is conducted to review the financial developments of the country in the last fiscal year.
Who drafts the Economic Survey?
While the Economic Survey is presented by the Union Finance Minister in the Parliament, it is not the minister who drafts the financial document. Drafting of the document, rather, is left to the Chief Economic Advisor (CEA) of India and their team.
Chief Economic Adviser to address press at 2:30 pm
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Economic Survey nudges states to speed up implementation of labour codes
Chief Economic Adviser begins press conference
Have to chart path to Viksit Bharat amid global headwinds: CEA
Private capex has recovered after the decline seen in 2021: CEA
He noted this has gone up in dwelling aspect.
Households are not in distress: CEA
The CEA noted that households are investing and not showing signs of distress.
Monsoons not proceeding as IMD told us ahead of onset: CEA
The CEA noted that agriculture sector would be impacted accordingly.
PLI schemes gathering momentum: CEA
Turnaround times in Indian ports have improved: CEA
India's contribution to global value chain trade has gone up: CEA
Inflation pressures well under control: CEA
Quality of Modi government's expenditure improving: CEA
State of employment in India 'heartening': CEA
Land consolidation key to boosting agricultural yields: CEA
He noted that this falls to state governments.
The CEA also observed that India has been grappling with a rainfall challenge.
CEA shares framework to make Indian farming sector engine for growth
Number of patents filed have gone up 17 times in last 9 years: CEA
Floor area and car parking space mandates need to be reworked for improved manufacturing capacities, deduces CEA
India needs to create approx 78.5 lakh jobs per annum till 2030 in non-farm sector: CEA
Boosting women participation rates also falls with state governments, notes CEA
India could see short-term negative impact on jobs due to AI: CEA
Impact of AI not very well understood across the world, notes CEA. Some of the business process outsourcing jobs may be taken over by AI.
India could have a short-term negative impact due to AI before benefits are seen. It thus falls on IT companies to decide how to deploy technology, noted the CEA.
West moving away from China could lead to deepening trade deficits: CEA
The CEA urged on the need for balance.
Nobody is in denial about climate change, especially those living in Delhi: CEA
The mantra for reforms is all about grunt work: CEA
It requires the Centre, State and local governments to work in tandem, the CEA noted.
Optimistic about India's economic growth, but mindful of challenges: CEA
He explained why the growth rate was projected between 6.5-7 per cent.