Report Summary - Economic Survey 2022-23 | Economic Survey & Government Reports - UPSC PDF Download

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Report Summary 
Economic Survey 2022-23 
? The Finance Minister, Ms. Nirmala Sitharaman tabled 
the Economic Survey 2022-23 on January 31, 2023 in 
Parliament.  Key highlights of the Survey include: 
State of the economy 
? Gross Domestic Product (GDP): The Survey has 
estimated real GDP growth in 2023-24 at 6.5%.  It 
observed that the actual growth rate would lie in the 
range of 6-6.8%, depending on the trajectory of 
economic and political developments globally.  Growth 
in the upcoming year will be supported by domestic 
demand and increase in investment.  However, 
developments around the world, such as increase in 
interest rates by central banks, prolonged strains in 
supply chain, and geo-political conflict, pose a risk to 
economic growth.  In 2022-23, GDP is estimated to 
grow at 7% in real terms.       
? Inflation: In 2022-23, retail inflation is estimated at 
6.8%, higher than 2021-22 (5.5%).  Retail inflation 
increased to 7.8% in the month of April 2022 before 
falling to 5.7% in December 2022.  The Survey noted 
that retail inflation was driven by international crude 
oil prices and food inflation (mainly vegetable, cereals, 
and edible oil prices).  In 2022-23, inflationary 
expectations of businesses and households have 
moderated.  The Survey expects inflation in 2023-24 to 
be lower than 2022-23 on the back of less economic 
uncertainties.  However, certain global events, such as 
supply chain disruptions due to re-emergence of 
COVID-19 in China, may present risks to India’s 
domestic inflation. 
? Current account balance: India recorded a current 
account deficit of USD 36.4 billion (4.4% of GDP) in 
the second quarter of 2022-23 as compared to a deficit 
of USD 9.7 billion (1.3% of GDP) in the second 
quarter of 2021-22.  Between April-September 2022, 
India’s recorded a current account deficit of 3.3% of 
GDP due to an increase in merchandise trade deficit.  
The Survey observed that the current account deficit 
needs to be closely monitored.  Sharp rise in oil prices 
and foreign portfolio investment outflows due to rise in 
interest rates abroad put pressure on India’s Balance of 
Payments in 2022.  India’s export may be impacted by 
uncertainties around global growth.  However, 
cushioned by a surplus in export of services and 
remittances, the current account deficit would be within 
manageable limits. 
? Fiscal deficit: The central government’s fiscal deficit 
moderated to 6.7% of GDP in 2021-22, after increasing 
to 9.2% of GDP in 2020-21.  Buoyant revenue 
collection over the last two years have helped in 
bringing down the fiscal deficit.  The Survey estimated 
that the central government is on track to meet its fiscal 
deficit target for 2022-23 (6.4% of GDP).  In 2022-23, 
general government deficit is estimated to be 9.4% of 
GDP, lower than in 2021-22 (10.3% of GDP).   
? Debt: Total liabilities of the central government are 
estimated to decline from 59.2% of GDP in 2020-21 to 
56.7% of GDP in 2021-22.  Outstanding liabilities of 
the general government are estimated to be 86.5% in 
2022-23.  The Survey noted that India’s public debt 
profile is relatively stable.  Most of it is held by 
residents and is denominated in rupees (95.1% of the 
total).  External debt is entirely owed to official 
sources, which insulates it from changes in 
international capital markets.  About 98% of the debt is 
contracted at fixed interest rates, insulating from 
changes in interest rates.  Historically, nominal GDP 
growth rate has been higher than interest rates.  Steady 
economic growth will accelerate debt consolidation.    
Agriculture and allied activities       
? India’s agriculture sector has grown at an average 
annual rate of 4.6% during the last six years.  In 2021-
22, it grew by 3%, lower than 2020-21 (3.3%).  India 
has also emerged as a net exporter of agricultural 
products with exports reaching an all-time high of USD 
50.2 billion in 2021-22.  This was driven by promotion 
of farmer-producer organisations, crop diversification, 
and support provided for mechanisation and creation of 
the Agriculture Infrastructure Fund.  The Survey noted 
that the agriculture sector faces certain challenges in 
the form of climate change, fragmented land holdings, 
sub-optimal farm mechanisation, and low productivity. 
? The production of foodgrains and oil seeds has been 
increasing year-on-year.  However, wheat production 
was adversely impacted in 2022 due to an early heat 
wave.  Allied sectors of Indian agriculture, including 
livestock, forestry and logging, and fishing, are 
becoming a potential source of better farm incomes.   
? The Survey observed that there has been a consistent 
increase in institutional agricultural credit.  In 2021-22, 
agricultural credit was 13% higher than the target of Rs 
16.5 lakh crore.  The target for agricultural credit for 
2022-23 is Rs 18.5 lakh crore.     
Industry 
? Industry accounts for 31% of India’s GDP and employs 
over 12.1 crore people.  In 2022-23, the industrial 
sector is estimated to grow by 6.7%.  In the current 
financial year, the sector faced high input costs for 
imports due to the Russia-Ukraine conflict.  The 
increase in the capital expenditure of the central 
government in the post-pandemic period has crowded 
in investment from the private sector, which has 
provided a stimulus to industrial growth.  The sector 
has been helped by pent-up demand, export stimulus, 
and strengthening of corporate balance sheets. 
Page 2


 
 
  
 
    
      
   
Report Summary 
Economic Survey 2022-23 
? The Finance Minister, Ms. Nirmala Sitharaman tabled 
the Economic Survey 2022-23 on January 31, 2023 in 
Parliament.  Key highlights of the Survey include: 
State of the economy 
? Gross Domestic Product (GDP): The Survey has 
estimated real GDP growth in 2023-24 at 6.5%.  It 
observed that the actual growth rate would lie in the 
range of 6-6.8%, depending on the trajectory of 
economic and political developments globally.  Growth 
in the upcoming year will be supported by domestic 
demand and increase in investment.  However, 
developments around the world, such as increase in 
interest rates by central banks, prolonged strains in 
supply chain, and geo-political conflict, pose a risk to 
economic growth.  In 2022-23, GDP is estimated to 
grow at 7% in real terms.       
? Inflation: In 2022-23, retail inflation is estimated at 
6.8%, higher than 2021-22 (5.5%).  Retail inflation 
increased to 7.8% in the month of April 2022 before 
falling to 5.7% in December 2022.  The Survey noted 
that retail inflation was driven by international crude 
oil prices and food inflation (mainly vegetable, cereals, 
and edible oil prices).  In 2022-23, inflationary 
expectations of businesses and households have 
moderated.  The Survey expects inflation in 2023-24 to 
be lower than 2022-23 on the back of less economic 
uncertainties.  However, certain global events, such as 
supply chain disruptions due to re-emergence of 
COVID-19 in China, may present risks to India’s 
domestic inflation. 
? Current account balance: India recorded a current 
account deficit of USD 36.4 billion (4.4% of GDP) in 
the second quarter of 2022-23 as compared to a deficit 
of USD 9.7 billion (1.3% of GDP) in the second 
quarter of 2021-22.  Between April-September 2022, 
India’s recorded a current account deficit of 3.3% of 
GDP due to an increase in merchandise trade deficit.  
The Survey observed that the current account deficit 
needs to be closely monitored.  Sharp rise in oil prices 
and foreign portfolio investment outflows due to rise in 
interest rates abroad put pressure on India’s Balance of 
Payments in 2022.  India’s export may be impacted by 
uncertainties around global growth.  However, 
cushioned by a surplus in export of services and 
remittances, the current account deficit would be within 
manageable limits. 
? Fiscal deficit: The central government’s fiscal deficit 
moderated to 6.7% of GDP in 2021-22, after increasing 
to 9.2% of GDP in 2020-21.  Buoyant revenue 
collection over the last two years have helped in 
bringing down the fiscal deficit.  The Survey estimated 
that the central government is on track to meet its fiscal 
deficit target for 2022-23 (6.4% of GDP).  In 2022-23, 
general government deficit is estimated to be 9.4% of 
GDP, lower than in 2021-22 (10.3% of GDP).   
? Debt: Total liabilities of the central government are 
estimated to decline from 59.2% of GDP in 2020-21 to 
56.7% of GDP in 2021-22.  Outstanding liabilities of 
the general government are estimated to be 86.5% in 
2022-23.  The Survey noted that India’s public debt 
profile is relatively stable.  Most of it is held by 
residents and is denominated in rupees (95.1% of the 
total).  External debt is entirely owed to official 
sources, which insulates it from changes in 
international capital markets.  About 98% of the debt is 
contracted at fixed interest rates, insulating from 
changes in interest rates.  Historically, nominal GDP 
growth rate has been higher than interest rates.  Steady 
economic growth will accelerate debt consolidation.    
Agriculture and allied activities       
? India’s agriculture sector has grown at an average 
annual rate of 4.6% during the last six years.  In 2021-
22, it grew by 3%, lower than 2020-21 (3.3%).  India 
has also emerged as a net exporter of agricultural 
products with exports reaching an all-time high of USD 
50.2 billion in 2021-22.  This was driven by promotion 
of farmer-producer organisations, crop diversification, 
and support provided for mechanisation and creation of 
the Agriculture Infrastructure Fund.  The Survey noted 
that the agriculture sector faces certain challenges in 
the form of climate change, fragmented land holdings, 
sub-optimal farm mechanisation, and low productivity. 
? The production of foodgrains and oil seeds has been 
increasing year-on-year.  However, wheat production 
was adversely impacted in 2022 due to an early heat 
wave.  Allied sectors of Indian agriculture, including 
livestock, forestry and logging, and fishing, are 
becoming a potential source of better farm incomes.   
? The Survey observed that there has been a consistent 
increase in institutional agricultural credit.  In 2021-22, 
agricultural credit was 13% higher than the target of Rs 
16.5 lakh crore.  The target for agricultural credit for 
2022-23 is Rs 18.5 lakh crore.     
Industry 
? Industry accounts for 31% of India’s GDP and employs 
over 12.1 crore people.  In 2022-23, the industrial 
sector is estimated to grow by 6.7%.  In the current 
financial year, the sector faced high input costs for 
imports due to the Russia-Ukraine conflict.  The 
increase in the capital expenditure of the central 
government in the post-pandemic period has crowded 
in investment from the private sector, which has 
provided a stimulus to industrial growth.  The sector 
has been helped by pent-up demand, export stimulus, 
and strengthening of corporate balance sheets. 
Economic Survey 2022-23   
 
  
     
 
? The importance of electronics manufacturing has been 
increasing.  India aims to achieve USD 300 billion in 
electronics manufacturing with USD 120 billion in 
exports by 2025-26.  High growth on both fronts 
indicate that India is on track to achieve these targets.  
Production-linked incentive schemes will help attain 
economies of scale in domestic production of 
electronics goods.   
? The volatility in international commodity prices and 
disruptions in supply of raw materials can adversely 
impact industrial growth.  Normalcy in China from 
COVID-19 can increase commodity demand and lead 
to higher prices.  However, industrial output should 
continue to grow based on resilient domestic demand.    
Services sector 
? The services sector recovered swiftly in 2021-22 after 
bearing the maximum burden of the pandemic.  In 
2021-22, the services sector grew by 8.4% as compared 
to a contraction of 7.8% in 2020-21.  In 2022-23, the 
services sector is estimated to grow by 9.1%.  The 
contact-intensive services sub-sector recovered to its 
pre-pandemic level driven by pent-up demand, easing 
mobility restrictions, and near-universal vaccination.  
The sector is likely to be the growth driver in 2023-24. 
? The Survey observed that the pandemic brought a 
change in individual home buyers’ sentiment in favour 
of owning a house.  With easing of curbs, there was an 
increase in interest in the residential housing sector.  
Improved affordability due to lower interest rates, 
reduction in circle rates, and cut in stamp duties on 
immovable property transactions have played an 
important role in the rebound of the real estate sector.  
The recent measure to reduce import duties on steel 
products, iron ore and steel intermediaries will help 
check the increase in housing prices. 
? The e-commerce sector witnessed a sharp increase in 
penetration in the aftermath of the pandemic.  
Lockdowns and mobility restrictions disrupted 
consumer behaviour and gave an impetus to online 
shopping.  There was also an increase in adoption of 
digital solutions by MSMEs.   
Infrastructure 
? Increase in infrastructure investment provides a critical 
push to the potential growth of the economy.  The 
central government has given increased impetus to 
infrastructure development and investment in recent 
years when capital expenditure by the private sector 
has been subdued.  Capital expenditure in 2022-23 is 
targeted at 7.5 lakh crore, 35.4% higher than 2021-22. 
? To sustain the investment drive, the National 
Infrastructure Pipeline (NIP) has provided a forward-
looking roadmap of investible projects of around Rs 
111 lakh crore between 2019-20 and 2024-2025.  
Currently, the NIP has 8,964 projects with a total 
investment of more than Rs 108 lakh crore under 
different stages of implementation.  The transport 
sector constitutes more than half of these projects. 
Employment 
? Labour markets have recovered beyond pre-COVID 
levels in both urban and rural areas.  The 
unemployment rate decreased from 5.8% in 2018-19 to 
4.2% in 2020-21.  There was also an increase in the 
rural female labour force participation rate from 19.7% 
in 2018-19 to 27.7% in 2020-21.  Unemployment rate 
in urban areas decreased from 8.3% in July-September 
2019 to 7.2% in July-September 2022.    
? The number of persons demanding work under 
MGNREGS was seen at levels similar to the pre-
pandemic period during July-November 2022.  The 
decline in monthly demand for work under the scheme 
is driven by normalisation of the rural economy.  The 
number of works done under MGNREGS has steadily 
increased over the years with 85 lakh completed works 
in 2021-22 and 70.6 lakh completed works in 2022-23 
as on January 9, 2023.  Works done on individual’s 
land, such as creating animal sheds, farm ponds, and 
horticulture plantations, has increased under the 
scheme which leads to positive impact on agricultural 
productivity and income per household. 
Insurance and pension 
? Insurance penetration (insurance premiums to GDP 
ratio) in India increased from 2.7% in 2000 to 4.2% in 
2021.  The Survey noted that life insurance penetration 
in India was 3.2% in 2021.  However, most life-
insurance products sold in India are savings-linked 
with only a small protection component.  Hence, 
households remain exposed to a significant financing 
gap in the event of the premature death of the primary 
breadwinner.  Government schemes and financial 
inclusion initiatives have driven insurance adoption and 
penetration across all segments.  An increase in FDI 
limit for insurance companies and digitisation of the 
insurance market is likely to facilitate growth. 
? In June 2015, the central government launched the Atal 
Pension Yojana (APY) with a focus on underprivileged 
and low-income individuals employed in the 
unorganised sector.  India’s pension sector has 
expanded since the introduction of the National 
Pension Scheme (NPS) and APY.  The coverage of 
population under NPS and APY as a share of total 
population increased from 1.2% in 2016-17 to 3.7% in 
2021-22.  The Survey noted that there is significant 
scope for growth in India’s pension sector as per capita 
income is expected to rise in the future.      
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