Economic survey 2022-23 highlights

Source: The post is based on the following articles

“The Economic Survey that wasn’t” published in The Hindu on 1st February 2023.

“The Economic Survey’s growth forecast is a little too optimistic”, “An economic overview that scores on cogency” and “India’s Economic Survey has got back to its true and tested format” published in the Livemint on 1st February 2023.

“Optimistic outlook – Higher growth will need more reforms” published in the Business Standard on 1st February 2023.

“Express View on Economic Survey 2023: Reason for optimism” published in the Indian Express on 1st February 2023.

Syllabus: GS 3 – Government Budgeting.

Relevance: Economic survey 2022-23 summary.

News: The government recently released the Economic Survey 2022-23. This article presents important Economic survey 2022-23 highlights.

What are the advantages of Economic Surveys?

a) The Economic Survey is the medium in the country for a rigorous, thoughtful, and nuanced discussion of new economic ideas. Such as universal basic income, economic divergence among States, steps to improve property tax revenues using satellite technology, estimating internal migration of people, and so on.

b) It has typically been the medium to raise issues for public discussion over strategic economic matters.

c) The survey provides a report card of the government’s economic performance.

What are the challenges associated with Economic Surveys?

Government is not constitutionally bound to present the Economic Survey or to follow the recommendations that are made in it.

Historically, the survey’s recommendations are not always reflected in the Union Budget. Thus, surveys ended up becoming a collection of long opinion pieces on the Indian economy and economic matters.

What are the positives from the Economic survey 2022-23?

The Economic Survey 2022-23 summary highlights 1) recovery from the pandemic-induced disruption is complete and the “GDP growth will probably lie in the range of 6.0% to 6.8%.” This is due to a) a rebound in private consumption aided by a release of “pent-up” demand, b) a surge in exports in the initial months of 2022-23, and c) the increase in government capital expenditure, 2) Provided some new data which increases transparency. Such as on the housing market, digital infrastructure, etc, 3) Widened its coverage, with detailed chapters on climate change and the social sector, 4) Places India’s economic story in a global context with realism. 5) India is entering a new era of growth, where its citizens can look forward to a better quality of life with better-equipped schools, affordable healthcare, and increased formal employment opportunities and 6) It highlights the continuity of reforms in India. It compares the reform story of the last eight years to the 1998-2002 period. Such as “creating public goods, fostering trust-based governance, and the recent introduction of the Jan Vishwas Bill”.

What are the challenges highlighted by the Economic Survey 2022-23?

The Economic Survey 2022-23 summary 1) pointed out that the ‘Make in India’ and manufacturing gross value added (GVA) grew only at 4% (real) even before the pandemic hit, 2) Growth in private consumption has come at the cost of decreasing household financial savings, 3) The economy has seen a K-shaped recovery, 4) There is huge disguised unemployment in agriculture, 5) Reforms since 2014 have not resulted in higher growth so far because of one shock after another, 6) Balance-sheet stress in both the corporate and the banking sectors after the financial crisis will affect growth outcomes.

Global concerns: 1) Rich-world central banks are likely to keep raising interest rates. While inflation has come down, it is still nowhere near their targeted 2%, 2) Central banks have been gradually withdrawing the money they had printed and pumped into the financial system. This will keep long-term interest rates high and discourage consumption, hurting their imports and our exports, 3) Ongoing Ukraine war could affect the global economy in multiple ways.

What are the major recommendations highlighted by the Economic Survey 2022-23?

a) Capital expenditure must grow to facilitate employment despite fiscal deficit limitations, b) The private sector has all the necessary pre-conditions lined up to step up. So, they need to increase private capex spending, c) Reforms such as goods and services tax and the Insolvency and Bankruptcy Code need more work to perform as desired, d) The money should be spent on creating assets that would boost future productivity, instead of on current consumption, e) Highlighted the need to harness Nari Shakti (women power), education and skilling, f) There was a need to dismantle LIC – license, inspection and compliance, g) Provide affordable, reliable and viable power supply and h) Ensure energy security and energy transition for India to fully realize its potential.

The Survey emphatically states the Indian economy is well-placed to embark on a growth trajectory similar to what it experienced post-2003. But achieving sustained growth would require more policy interventions.