FM Sitharaman Presents Economic Survey 2023-24: Key Insights and Projections

Kumar Rakesh
New Delhi, 22nd July. Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 along with the statistical appendix in the Lok Sabha today. The Economic Survey is an essential annual document released by the Centre before the Union Budget, designed to review the current state of the economy and project its short-to-medium-term prospects.

Prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance, under the supervision of the chief economic adviser, the Economic Survey has been a staple of the budget process since its inception in 1950-51. Initially part of the budget documents, it was separated in the 1960s and is now tabled a day before the Budget presentation. Sitharaman is scheduled to present the Union Budget 2024-25 tomorrow.

The Economic Survey 2023-24 projects a real GDP growth of 6.5–7 percent for FY25, reflecting a conservative estimate given that market expectations are higher. Inflation forecasts from the RBI and the IMF suggest that India’s consumer price inflation will move closer to the target by FY26. The RBI anticipates a headline inflation rate of 4.5 percent in FY25 and 4.1 percent in FY26, while the IMF projects 4.6 percent for 2024 and 4.2 percent for 2025.

Remittances to India are expected to grow by 3.7 percent to USD 124 billion in 2024 and by 4 percent to USD 129 billion in 2025. The Survey highlights that unhealthy diets contribute to 54 percent of the disease burden, underscoring the need for a transition to a more balanced and diverse diet.

In terms of foreign direct investment, increased inflows from China could enhance India’s role in the global supply chain and boost exports. However, the rise of artificial intelligence poses uncertainties for workers across all skill levels. The Survey also notes that while short-term inflation appears manageable, India continues to face price pressures due to a deficit in pulses.

Capital markets are increasingly significant in India’s growth story, demonstrating resilience against global geopolitical and economic shocks. The financial sector is undergoing critical transformation, and must prepare for potential vulnerabilities. The Survey advocates for governments to relinquish some power to improve efficiency and balance fiscal management through tax compliance, expenditure restraint, and digitisation.

The performance of India’s banking and financial sectors has been stellar in FY24. The Central Government’s timely policy interventions and the Reserve Bank of India’s measures kept retail inflation at 5.4 percent, the lowest level since the pandemic. Core inflation also decreased, with core services inflation hitting a nine-year low and core goods inflation dropping to a four-year low.

Food inflation, however, rose from 6.6 percent in FY23 to 7.5 percent in FY24. Despite this, most States and Union Territories saw decreased inflation rates in FY24, with 29 out of 36 recording rates below 6 percent. The Survey also highlights the need for India to generate 7.85 million jobs annually in the non-farm sector until 2030.