India recovered, expanded in orderly fashion from pandemic: Economic Survey 2023-24

The Indian economy has recovered and expanded in an orderly fashion post-pandemic and the real Gross Domestic Product (GDP) in 2023-24 was 20 per cent higher than its level in pre-pandemic 2019-20, according to the Economic Survey 2023-24 tabled on Monday in the Parliament.

This, as per the Survey document, is a feat that only a very few major economies had achieved.

“Prospects for continued strong growth in FY25 beyond look good, subject to geopolitical, financial market and climatic risks,” the Economic Survey noted.

Global economic growth has been 3.2 per cent in 2023 as per the World Economic Outlook published this year in April by the International Monetary Fund (IMF). 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.

But, India’s economy carried forward the momentum it built in 2022-23 into 2023-24 despite a gamut of external challenges, the Economic Survey said.

India’s real GDP grew by 8.2 per cent in 2023-24, exceeding 8 per cent mark in three out of four quarters of 2023-24.

“The focus on maintaining macroeconomic stability ensured that external challenges had minimal impact on India’s economy,” the survey said.

The government’s thrust on capital expenditure and sustained momentum in private investment has boosted capital formation growth, it noted. Gross Fixed Capital Formation increased by 9 per cent in real terms in 2023-24.

Moving forward, healthier corporate and bank balance sheets, the Economic Survey noted, will further strengthen private investment.

“The positive trends in residential real estate market indicate that the household sector capital formation is increasing significantly” stated the Survey.

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 2022-23, retail inflation declined to 5.4 per cent in 2023-24.

“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, the current account deficit (CAD) stood at 0.7 per cent of the GDP during 2023-24, an improvement from the deficit of 2.0 per cent of GDP in 2022-23.

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in Parliament today. The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and formulated under the supervision of the chief economic adviser, gives insights into the state of the economy and various indicators of 2023-24 (April-March) and some outlook for the current year.

Sitharaman is set to present the Union Budget for 2024-25 in Parliament tomorrow. With this Budget presentation, Sitharaman is set to surpass the record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget between 1959 and 1964 as finance minister. Sitharaman’s upcoming budget speech will be her seventh.