Perspective- Economic Survey 2023-24 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

On the eve of presenting the Union Budget 2024-25, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament. Spanning 522 pages and divided into 13 chapters, the Survey provides a comprehensive overview of the Indian economy, highlighting its strengths and challenges. According to the Chief Economic Advisor, the Indian economy is on solid ground, showing resilience amid geopolitical challenges. Post-Covid recovery has been consolidated, with fiscal and monetary policies ensuring economic and financial stability. However, continuous change is essential for a country with high growth aspirations. Sustained recovery requires substantial domestic efforts, especially as the global environment complicates agreements on key issues like trade, investment, and climate. The Economic Survey examines government policies, their impacts, innovations, and success stories, and assesses crucial sectors such as agriculture, industry, infrastructure, and services, identifying challenges and proposing solutions.

Sectoral Analysis

Agriculture:

• Agriculture remains the backbone of the Indian economy, significantly contributing to GDP and employment. The Survey highlights the positive impacts of government schemes like the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and the adoption of advanced farming technologies. However, challenges such as monsoon dependency, low productivity, and market access persist. To address these issues, the Survey suggests enhancing irrigation infrastructure, promoting crop diversification, and improving supply chain mechanisms.

Industry:

• The industrial sector has demonstrated promising growth, driven by initiatives like Make in India and the Production Linked Incentive (PLI) scheme. These policies have attracted investments and boosted manufacturing capabilities. Yet, the sector faces challenges like regulatory bottlenecks and infrastructure deficits. The Survey recommends streamlining regulations, improving the ease of doing business, and investing in robust infrastructure to foster industrial growth.

Infrastructure:

• Infrastructure development is crucial for economic growth. The Survey acknowledges the progress made under the National Infrastructure Pipeline (NIP) and the PM Gati Shakti plan. It emphasizes the need for sustained investments in roads, railways, ports, and urban infrastructure. Key recommendations include addressing financing challenges through innovative public-private partnerships (PPPs) and enhancing project execution capabilities.

Services:

• The services sector, a major contributor to GDP, has rebounded strongly post-pandemic. IT and IT-enabled services have led this recovery, while tourism and hospitality are gradually recovering. The Survey suggests leveraging digital technologies, promoting skill development, and encouraging startups to sustain growth in this sector. It also highlights the need for regulatory reforms and support for the gig economy.

Challenges and Solutions

• Geopolitical Challenges: Strengthening economic diplomacy, diversifying trade partners, and enhancing domestic self-reliance in critical sectors are crucial.
• Inflation: Maintaining a balanced monetary policy, ensuring an adequate supply of essential goods, and enhancing agricultural productivity can help manage inflationary pressures.
• Climate Change: Investing in green technologies, promoting sustainable practices, and adhering to international climate commitments are vital to address environmental concerns.

Way Forward

• Structural Reforms: Implementing reforms in labor laws, land acquisition, and the banking sector to enhance productivity and investment.
• Human Capital Development: Investing in education, healthcare, and skill development to build a capable and resilient workforce.
• Innovation and Technology: Promoting research and development and adopting digital technologies to drive efficiency and competitiveness.

Six Key Areas Discussed:

1. Boosting Private Investment: Encouraging private sector participation to drive economic growth and job creation.
2. Expanding MSMEs: Recognizing the growth and expansion of MSMEs as a strategic priority.
3. Agriculture as a Growth Engine: Removing policy impediments to unlock the potential of agriculture as an engine of future growth.
4. Financing Green Transition: Securing financing for the green transition to meet growing energy demands sustainably.
5. Bridging the Education-Employment Gap: Addressing the mismatch between education and employment to harness the potential of the young population.
6. Building State Capacity: Enhancing state capacity and capability to sustain and accelerate India’s progress.

Conclusion

The Economic Survey 2023-24 presents an optimistic yet pragmatic view of the Indian economy. It acknowledges significant strides in post-Covid recovery while highlighting the challenges ahead. The Survey calls for sustained efforts in policy implementation, infrastructure development, and human capital investment to navigate these challenges and propel India toward sustainable and inclusive growth. With the right strategies and a focus on domestic resilience, India can continue to strengthen its economic foundation and achieve its growth aspirations.