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Source- This post on the Key Highlights of Economic Survey 2023-24 has been created based on the article “Economic Survey 2023-24: Indian economy likely to grow by 6.5% to 7% this year” published in “The Hindu” on 23 July 2024.
Why in the news?
The recently released Economic Survey projects India’s real GDP growth to be between 6.5% and 7% in 2024-25.
Key Highlights of Economic Survey 2023-24:
1) The Indian economy is expected to grow by 6.5% to 7% this year, with prospects of achieving over 7% growth in the coming years.
2) The economy has largely recovered to pre-COVID growth trends without sustaining permanent damage.
3) The Economic Survey emphasizes the need to address inequality and unemployment as top policy priorities. It encourages the Central and State governments to reduce regulatory burdens on businesses to foster economic growth.
4) The Survey suggests several steps to address inequality, improve the health of the young population, bridge the education-employment gap, and reboot India’s skilling initiatives to better align with industry needs.
5) Private Sector’s Role: Corporates benefit from increased demand driven by employment and income growth. The Survey warns against short-term thinking that could weaken economic linkages.
6) The Survey notes that reforms such as the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code are maturing and yielding results. It calls for “next-gen” reforms that are bottom-up in nature to achieve sustainable and inclusive growth.
7) Strategy for Future Growth: The Economic Survey proposes a six-pronged strategy:
i) Boost private sector investments organically and steadily.
ii) Finance the green transition.
iii) Remove obstacles for micro, small, and medium enterprises (MSMEs).
iv) Tap into agriculture’s growth potential with intelligent, farmer-friendly policies.
v) Enhance state capacity.
vi) Foster consensus among governments, businesses, and social sectors.
7) Investment Challenges:
i) While improved balance sheets are expected to drive private sector investment, concerns over cheaper imports from countries with excess capacity, such as China, remain.
ii) Attracting foreign direct investment (FDI) will be challenging due to higher interest rates and developed countries’ incentives for domestic investments.
8. Land and Infrastructure Reforms:
i) The Survey highlights the need to deregulate land use norms for factories and consolidate farmland to improve crop yields.
ii) However, it does not mention reforms to land acquisition laws, despite their importance for infrastructure projects.
9. The Economic Survey concludes that sustained growth of over 7% in the medium term is achievable with continued reforms.
10. A tripartite compact between the Centre, States, and the private sector is essential for maintaining this growth trajectory.
UPSC Syllabus: Indian Economy
