Economic Survey 2023-24

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Contents
State of the Economy......................................................................................................................................... 2
Monetary Management and Financial Intermediation ..................................................................................... 3
Prices and Inflation ............................................................................................................................................ 4
External Sector ................................................................................................................................................... 5
Medium Term Outlook ...................................................................................................................................... 6
Climate Change & Energy Transition ................................................................................................................. 7
Social Sector ....................................................................................................................................................... 7
Employment and Skill Development.................................................................................................................. 8
Agriculture & Food Management ...................................................................................................................... 9
Industry ............................................................................................................................................................ 10
Services ............................................................................................................................................................ 10
Infrastructure ................................................................................................................................................... 11
Climate Change & India ................................................................................................................................... 12

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State of the Economy

Growth in 2024-25 is expected to be supported by strong domestic investment demand, improved
agricultural performance, and an increase in merchandise and services exports.

On the other hand, the survey recognised that geopolitical risks leading to supply-chain
distortions, higher commodity prices, increased protectionism, and reviving inflationary pressures
can adversely impact economic growth.

GDP Growth

• India's real GDP grew by 8.2 per cent in FY24, exceeding 8 per cent mark in three out of four
quarters of FY24
• Real GDP recorded to be 20% higher than its level in FY 20
• On supply side, Gross value added (GVA) grew by 7.2 per cent in FY24 (at 2011-12 prices)
• India’s real GDP is projected to grow between 6.5–7 per cent in 2024-25

Growth in Taxes

• The growth in gross tax revenue (GTR) was estimated to be 13.4 per cent in FY24,
translating into tax revenue buoyancy of 1.4.
• There was a 15.8% growth in direct taxes and a 10.6% increase in indirect taxes over FY23
• Net taxes at constant prices grew by 19.1 per cent in FY24
• 55% of tax collected accrued from direct taxes and remaining 45% from indirect taxes

Inflation – Retail inflation reduced from 6.7 per cent in FY23 to 5.4 per cent in FY24

Current Account Deficit – Current Account Deficit (CAD) stood at 0.7 per cent of the GDP ($23.2
Billion) during FY24, an improvement from the deficit of 2.0 per cent of GDP in FY23. The
improvement in the current account balance was because of a decrease in merchandise trade
deficit, increasing net services exports, and increasing remittances

Free Food Grains – Government has been able to ensure free food grains to 81.4 Crore people.

Sector Wise Share – Shares of the agriculture, industry and services sectors in overall GVA at
current prices were 17.7%, 27.6% and 54.7% respectively in FY24

Capital Expenditure – The capital expenditure for FY24 stood at ₹9.5 lakh crore, an increase of
28.2 per cent on a YoY basis, and was 2.8 times the level of FY20

Exports – The exports (merchandise and services) in FY24 grew by 0.15%, while the total imports
declined by 4.9% stated the survey

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Monetary Management and Financial Intermediation

RBI maintained a steady policy rate throughout the year with overall inflation rate under control.
Monetary Policy committee (MPC) maintained the status quo on the policy repo rate at 6.5% in
FY24. Consequently core inflation declined by 4% from April 2022 to June 2024.

Banking
• Credit disbursal by Scheduled Commercial Banks (SCBs) stood at ₹164.3 lakh crore, growing
by 20.2 per cent at the end of March 2024
• Growth in broad money (M3), was 11.2% year on year (YoY) as on 22 March 2024,
compared to 9% a year ago
• The banks have shown multi-year lows in NPAs, improvement in asset quality and a double
digit growth in bank credit.

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▪ The Gross Non-Performing Assets (GNPA) ratio declining to 2.8% in March 2024, a
12-year low
▪ Return on equity and return on assets ratios for scheduled commercial banks stood
at 13.8% and 1.3%, respectively, as of March 2024
▪ Industrial credit growth was 8.5% compared to 5.2 per cent a year ago

Insolvency & Bankruptcy Code – IBC has been recognised as an effective solution for the twin
balance sheet problem, in the last 8 years. 31,394 corporate debtors involving a value of Rs 13.9
Lakh Crore have been disposed off as of March 2024

Financial Markets

• Primary capital markets facilitated capital formation of ₹10.9 lakh crore during FY24
• The market capitalisation of the Indian stock market has seen a remarkable surge, with the
market capitalisation to GDP ratio being the fifth largest in the world
• Indian microfinance sector emerges as the second largest in the world after China

Performance of States

• State governments have shown improvement in their finances.

▪ Unaudited estimates of finances for a set of 23 states, suggests that the gross fiscal
deficit of 23 states was 8.6 per cent lower than the budgeted figure of ₹9.1 lakh crore
▪ This implies that fiscal deficit as a per cent of GDP for these states came in at 2.8 per
cent as against a budgeted 3.1 per cent

Prices and Inflation

Due to central Government’s timely policy interventions and the RBI’s price stability measures
helped maintain retail inflation at 5.4%. The Survey noted that India’s short term inflation outlook
is benign. However, long-term price stability may need certain measures. These include:
• Expansion in cultivation of pulses
• Developing modern storage facilities for vegetables
• Effective monitoring of build-up of prices from the farm gate to the final consumer

Petrol, Diesel and LPG

• Central Government announced price cuts for LPG, petrol, and diesel. As a result, retail fuel
inflation stayed low in FY24
▪ In August 2023, the price of domestic LPG cylinders was reduced by ₹200 per cylinder
across all markets in India.
▪ Centre lowered the prices of petrol and diesel by ₹2 per litre

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Core Inflation
• Core services inflation eased to a nine-year low in FY24; at the same time, core goods
inflation also declined to a four-year low
• In FY24, core consumer durables inflation declined due to an improved supply of key input
materials to industries

Food Inflation – Food inflation increased from 6.6% in FY 23 to 7.5% in FY 24. This was driven by
higher food inflation caused by Russia-Ukraine war and domestic weather conditions

Performance of Agriculture sector – Agriculture sector faced challenges due to extreme weather
events, depleted reservoirs, and crop damage, which impacted farm output and food prices.

Performance of States – 29 States and Union Territories recorded inflation below 6% in FY24

Future Projections
• The RBI projects inflation to fall to 4.5 per cent in FY25 and 4.1 per cent in FY26
• IMF forecasts inflation of 4.6 per cent in 2024 and 4.2 per cent in 2025 for India

External Sector
India’s external sector remained strong amidst on-going geopolitical headwinds accompanied by
sticky inflation. India’s rank in the World Bank’s Logistics Performance Index improved by six
places, from 44th in 2018 to 38th in 2023, out of 139 countries

Current Account Deficit – India’s current account deficit narrowed to 0.7 per cent in FY24 due to
moderation in merchandise imports and rising services exports

Exports
• The exports (merchandise and services) in FY24 grew by 0.15%, while the total imports
declined by 4.9%
• India’s share in global goods exports was 1.8% in FY24, against an average of 1.7 per cent
during FY16-FY20
• India’s services exports grew by 4.9% to USD 341.1 billion in FY24, with growth largely
driven by IT/software services and ‘other’ business services

Remittances – India is the top remittance recipient country globally, with remittances reaching a
milestone of USD 120 billion in 2023

External Debt – India’s external debt has been sustainable over the years, with the external debt
to GDP ratio standing at 18.7% at the end of March 2024

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Forex Reserves
• The ratio of foreign exchange reserves to total debt stood at 97.4% as of March 2024
• Forex reserves as of the end of March 2024 were sufficient to cover 11 months of projected
imports

Tourism – India’s share in world tourism receipts increased from 1.38% in 2021 to 1.58% in 2022

Risks to external sector – Risks to India’s external sector include: (i) fall in demand from major
trading partners, (ii) rising trade costs, (iii) volatility in commodity prices, and (iv) changes in trade
policies by major trading partners.

Medium Term Outlook

• The government will focus on following key areas in the short to medium term –

▪ Job and skill creation

▪ Tapping the full potential of the agriculture sector
▪ Addressing MSME bottlenecks
▪ Managing India’s green transition
▪ Dealing with the Chinese conundrum
▪ Deepening the corporate bond market
▪ Tackling inequality
▪ Improving our young population’s quality of health

• Growth Strategy in Amrit Kaal will be focused on 6 areas –

▪ Boosting private investment

▪ Expansion of MSMEs
▪ Agriculture as growth engine
▪ Financing green transition
▪ Bridging education-employment gap
▪ Building capacity of States

• A tripartite coordination among the Union Government, State Governments and the private
sector is required for Indian economy to grow at more than 7%

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Climate Change & Energy Transition

A report by the International Finance Corporation recognises India’s efforts to achieve committed
climate actions. It has highlighted that India is the only G20 nation in line with 2-degree centigrade
warming.

Energy Needs – India’s energy needs are projected to grow 2 to 2.5 times by 2047

Investments in Clean Energy – The clean energy sector attracted investments of Rs.8.5 Lakh
Crores between 2014 and 2023

Non-Fossil Sources – As of 31 May 2024, the share of non-fossil sources in the installed electricity
generation capacity has reached 45.4%

Emission Intensity – The country has reduced the emission intensity of its GDP from 2005 levels by
33% in 2019

Growth of GDP and Emission – India’s GDP between 2005 and 2019 has grown with a Compound
Annual Growth Rate (CAGR) of about 7%, whereas the emissions grew at a CAGR of about 4%

Energy Savings – Total annual energy savings of 51 million tonnes of oil equivalent translates to a
total annual cost savings of ₹1,94,320 Crore and emissions reduction of around 306 million tonnes

Green Bonds – Government issued sovereign green bonds amounting to ₹16,000 Crore in January-
February 2023 followed by ₹20,000 Crore in October-December 2023

Social Sector
The new welfare approach focuses on increasing the impact per rupee spent. The digitisation of
healthcare, education and governance has been a force multiplier for every rupee spent on a
welfare programme.

Direct Benefit Transfer – Rs.36.9 lakh crore having been transferred via DBT since its inception in
2013

GDP v/s Welfare Expenditure – Between FY18 and FY24, nominal GDP has grown at a CAGR of
around 9.5% while the welfare expenditure has grown at a CAGR of 12.8%

Inequality – Gini coefficient, an indicator of inequality, has declined from 0.283 to 0.266 for the
rural sector and from 0.363 to 0.314 for the urban sector of the country

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Health
• More than 34.7 crore Ayushman Bharat cards have been generated, and the scheme has
covered 7.37 crore hospital admissions
• The challenge of ensuring mental health is intrinsically and economically valuable.
▪ 22 mental disorders are covered under the Ayushman Bharat – PMJAY health
insurance

Education
• ‘Poshan Bhi Padhai Bhi’ programme for early childhood education aims to develop the
world’s largest, universal, high-quality preschool network at Anganwadi Centres
• The rise in enrolment in higher education has been driven by underprivileged sections such
as SC, ST and OBC, with a faster growth in female enrolment across sections,
witnessing 31.6 per cent increase since FY15

Patents – India is making rapid progress in R&D, with nearly one lakh patents granted in FY24,
compared to less than 25,000 patent grants in FY20

Gender Budget – The government has provisioned Rs.3.10 Lakh Crores for welfare and
empowerment of women in FY 25. This shows a 38.7% rise vis-à-vis FY 2024 and 218.8% rise vis-à-
vis FY 2014

Housing and Roads

• Under PM-AWAS-Gramin, 2.63 crore houses were constructed for the poor in the last nine
years (as of 10 July 2024)
• 15.14 lakh km road construction completed under Gram Sadak Yojana since 2014-15 (as of
10 July 2024)

Employment and Skill Development

Indian labour market indicators have improved in the last six years, with the unemployment rate
declining to 3.2% in 2022-23

Unemployment Data

• The quarterly urban unemployment rate for people aged 15 years and above declined to 6.7
percent in the quarter ending March 2024
• According to PLFS, more than 45 per cent of the workforce is employed in agriculture, 11.4
per cent in manufacturing, 28.9 per cent in services, and 13.0 percent is in construction
• According to PLFS, youth (age 15-29 years) unemployment rate has declined from 17.8 per
cent in 2017-18 to 10 per cent in 2022-23

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EPFO Data
• Nearly two-thirds of the new subscribers in the EPFO payroll have been from the 18-28
years band
• The EPFO membership numbers grew by an impressive 8.4 per cent CAGR between FY15
and FY24
• The yearly net payroll additions to the EPFO more than doubled from 61.1 lakh in FY19 to
131.5 lakh in FY24

Wages Per Worker – During FY15-FY22, the wages per worker in rural areas grew at 6.9 per cent
CAGR vis-à-vis a corresponding 6.1 per cent CAGR in urban areas

Employment in Factories – Number of factories employing more than 100 workers saw 11.8 per
cent growth over FY18 to FY22

Expansion of Gig Workforce – The gig workforce is expected to expand to 2.35 crore by 2029–30

Future Projections
• Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in
the non-farm sector to cater to the rising workforce
• Compared to 50.7 crore persons in 2022, the country would need to care for 64.7 crore
persons in 2050
• Direct public investment equivalent to 2 per cent of GDP has the potential to generate 11
million jobs, nearly 70 per cent of which will go to women

Agriculture & Food Management

Agriculture and allied sector registered an average annual growth rate of 4.18 per cent at constant
prices over the last five years. The sector grew at a rate of 1.4% in 2023-24, as against a growth
rate of 4.7% in 2022-23. This was due to a decrease in foodgrain production driven by delayed and
poor monsoons. It is estimated that for every rupee invested in agricultural research (including
education), there is a payoff of ₹ 13.85.

Credit Data – As of 31 January 2024, the total credit disbursed to agriculture amounted to ₹ 22.84
lakh Crore

Kisan Credit Card – As of January 31, 2024, banks issued 7.5 crores Kisan Credit Card (KCC) with a
limit of ₹9.4 lakh crores

Irrigation – An area of 90 lakh hectares has been covered under micro irrigation in the country
under the Per drop more crop (PDMC) from 2015-16 to 2023-24

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Allied Activities – Allied activities such as livestock and fisheries have performed better than
traditional crops. Between 2014- 15 and 2022-23, the share of livestock in agriculture gross value
added increased from 24.3% to 30.4% while the share of fisheries increased from 4.4% to 7.3%
respectively

Industry
Economic growth of 8.2% in FY24 was supported by an industrial growth rate of 9.5%
Manufacturing Sector
• The manufacturing sector grew by 9.9% in FY 24. It achieved an average annual growth rate
of 5.2 per cent in the last decade. The drivers of growth were –
▪ Chemicals, wood products and furniture, transport equipment, pharmaceuticals,
machinery, and equipment

Sector Wise Data

• India’s pharmaceutical market stands as world's third largest by volume with the valuation
of USD 50 billion
• India is the world's second-largest clothing manufacturer and one of the top five exporting
nations
• India's electronics manufacturing sector accounts for an estimated 3.7% of the global
market share in FY22

PLI Schemes – PLI schemes attracted over ₹1.28 Lakh Crore of investment until May 2024, which
has led to production/sales of ₹10.8 Lakh Crore and employment generation (direct & indirect) of
over ₹8.5 Lakh

Services
Two significant transformations are reshaping India's services landscape: the rapid technology-
driven transformation of domestic service delivery and the diversification of India's services
exports. Services sector contribution to the overall Gross Value Added (GVA) has now reached to
the level prior to pandemic i.e. about 55%. The services sector has the highest number of active
companies (65 per cent). A total number of 16,91,495 active companies exist in India as of 31
March 2024

Service Exports

• Globally, India’s services exports constituted 4.4% of the world's commercial services
exports in 2022 and accounted for 44% of India’s total exports in FY 24. India’s service
exports reached USD 341.1 billion in FY24.

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▪ Computer services and business services exports accounted for about 73 per cent of
India’s services exports and witnessed a 9.6 per cent growth YoY in FY24
▪ India's share in digitally delivered services exports globally increased to 6.0 per cent
in 2023 from 4.4 per cent in 2019

Credit Growth – FY24 ended with an outstanding services sector credit of ₹45.9 lakh crore in
March 2024, with a YoY growth of 22.9 per cent

Sector Wise Data

• Aviation – The aviation sector in India has grown substantially, with a 15 per cent YoY
increase in total air passengers handled at Indian airports in FY24
▪ Air cargo handled at Indian airports increased by 7 per cent YoY to 33.7 lakh tonnes
in FY24
• Railways – Passenger traffic originating in Indian Railways increased by about 5.2 per cent
in FY24 compared to the previous year
▪ Revenue-earning freight in FY24 (excluding Konkan Railway Corporation Limited)
witnessed an increase of 5.3 per cent in FY24 over the previous year
• Tourism – Tourism industry witnessed over 92 lakh foreign tourist arrivals in 2023, implying
a YoY increase of 43.5 per cent
• Real Estate – In 2023, residential real estate sales in India were at their highest since 2013,
witnessing a 33 per cent YoY growth, with a total sale of 4.1 lakh units in the top eight cities
• E-Commerce – The Indian e-commerce industry is expected to cross USD 350 billion by 2030
• Telecom – The overall tele-density (number of telephones per 100 population) in India
increased from 75.2 per cent in March 2014 to 85.7 per cent in March 2024. The internet
density also increased to 68.2 per cent in March 2024
▪ As of 31 March, 2024, 6,83,175 kilometers of Optical Fibre Cable (OFC) has been laid,
connecting a total of 2,06,709 Gram Panchayats (GPs) by OFC in the BharatNet phase
I & II

Infrastructure
Public sector investment has had a pivotal role in funding large-scale infrastructure projects in the
recent years India’s rank in the International Shipments category in the World Bank Logistic.
Performance Index has improved to 22nd in 2023 from 44th in 2014

National Highways – The average pace of NH construction increased by nearly 3 times from 11.7
km per day in FY14 to around 34 km per day by FY24

Railways – Capital expenditure on Railways has increased by 77% in the past 5 years, with
significant investments in the construction of new lines, gauge conversion and doubling
▪ Indian Railways to introduce Vande metro trainset coaches in FY 25

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Airports – In FY24, new terminal buildings at 21 airports have been operationalised which has led
to an overall increase in passenger handling capacity by approximately 62 million passengers per
annum

Energy Sector – The clean energy sector in India saw new investment of ₹8.5 lakh crore (USD
102.4 billion) between 2014 and 2023

Space – India has 55 active space assets, including 18 communication, 9 navigation, 5 scientific, 3
meteorological and 20 earth observation satellites.

Digital Infrastructure – The Digi locker platform has over 26.28 crore registered users and over
674 crore registered documents.

Climate Change & India

• Current global strategies for climate change are flawed and not universally applicable.
• The Western approach does not seek to address the root of the problem, i.e.
overconsumption, but rather chooses to substitute the means to achieve overconsumption.
• A one-size-fits-all approach will not work, and developing countries need to be free to
choose their own pathways.
• India’s ethos emphasizes a harmonious relationship with nature, in contrast to the culture
of over consumption in other parts of the developed world.
• Shift towards the ‘traditional multi-generational households’ would create the pathway
towards sustainable housing.
• “Mission LiFE” focuses on human-nature harmony promoting mindful consumption than
over consumption that lies at the root of global climate change problem.

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