Economic Survey 2024 Highlights: GDP Growth, Economy, Stock Market and More

The Economic Survey 2023-24, released on July 22 by India’s Finance Minister Nirmala Sitharaman, highlights a robust recovery in GDP growth, averaging around 8% over the past three years. It also reports a significant moderation in inflation, which has decreased to 5.4% in FY24. Looking ahead, the survey conservatively projects that India’s real GDP will grow between 6.5% and 7% in FY25.

What is the Economic Survey?

The Economic Survey, as the name suggests, is an annual document released by the Ministry of Finance, surveying India’s economy in the past financial year (2023-2024). It provides a detailed account of various sectors of the economy, such as agriculture, manufacturing, services, infrastructure, and more.

In this comprehensive document, the Finance Ministry reviews the government’s financial performance and the state of the economy up to March 31.

The Economic Survey is typically released a day before the Union Budget is tabled, making it an essential precursor to understanding the government’s fiscal plans and priorities.

Economic Survey 2024 Updates

Finance Minister Nirmala Sitharaman presented the Economic Survey 2023-24 to Parliament on the opening day of the Budget Session, July 22, 2024. The survey, which includes a detailed statistical appendix, reports a robust recovery of the Indian economy following the pandemic and suggests a positive outlook for the financial sector, though it also warns of possible vulnerabilities. This event precedes the first Budget of the newly elected NDA government under Prime Minister Narendra Modi, marking their third consecutive term.

Economic Survey 2024 Live Highlights

1) Economic Survey on GDP Growth

Chief Economic Advisor V. Anantha Nageswaran highlighted the sustained momentum in the Indian economy, stating, “We are now one quarter into the new financial year, and even high-frequency indicators show that the economy is maintaining the momentum seen until the end of March 2024, when we grew at 8.4%.”

The Economic Survey 2023-24 reports:

An average growth rate of around 8% over the past three years leading up to March 2024.
Real GDP now 20% above pre-pandemic levels.
India’s real GDP is projected to grow between 6.5% and 7% in FY25, according to the survey’s conservative estimate.

The swift recovery from the pandemic is evident:

FY24’s real GDP is significantly higher than FY20’s, marking a compound annual growth rate (CAGR) of 4.6% from FY20, despite a 5.8% decline in FY21 due to the pandemic.
The current GDP level has nearly aligned with the pre-pandemic trajectory by the fourth quarter of FY24.
Over the decade ending in FY20, India experienced an average annual growth rate of 6.6%, which broadly reflects the economy’s long-term growth potential.
This sets a positive backdrop for economic prospects in FY25.

2) Inflation Moderated in FY24 (Declined to 5.4% in FY24)

The Economic Survey 2023-24 highlights key factors influencing inflation and measures taken to address them:

Inflation caused by global issues, supply chain disruptions, and unpredictable monsoons was effectively managed by government policies and monetary responses.
Retail inflation decreased from an average of 6.7% in FY23 to 5.4% in FY24, the lowest since the pandemic.
The Economic Survey attributed inflation spikes in FY22 and FY23 to the Covid-19 pandemic, geopolitical tensions, and supply chain issues.
Government actions and RBI measures were credited for maintaining retail inflation at 5.4% in FY24.
The reduction in FY24’s retail inflation was due to lower core inflation in goods and services.
Improved supply of key inputs led to a decrease in core consumer durables inflation in FY24.
Adverse weather conditions continued to pressure food prices.
Long-term inflation outlook will rely on better price monitoring, market intelligence, and increased domestic production of essentials like pulses and edible oils.

3) All-India Annual Unemployment Rate Declining

The Economic Survey highlights a significant decline in the unemployment rate, which dropped to 3.2% in 2022-23. Employment levels have rebounded from pandemic impacts in both urban and rural areas.

India’s workforce stands at approximately 56.5 crore, with over 45% employed in agriculture, 11.4% in manufacturing, 28.9% in services, and 13.0% in construction.
Female labor force participation has increased over the last six years, rising from 23.3% in 2017-18 to 37% in 2022-23, driven primarily by rural women.

4) Positive Outlook for the Real Estate Sector

Housing demand is anticipated to increase with rapid urbanization, though legacy stalled projects remain a challenge.
The sector is poised for significant transformation as urbanization progresses.
Improved corporate and bank balance sheets are expected to further enhance private investment.
Positive trends in the residential real estate market indicate a notable rise in household sector capital formation.
Over the past decade, real estate and dwelling ownership have contributed over 7% to the gross value added (GVA), highlighting their crucial role in the economy.

5) Higher Private Sector Financing Key to Building Quality Infrastructure

Enhanced private sector financing and new resource mobilization are essential for building quality infrastructure.
Achieving this will require policy and institutional support from the central government, with state and local governments also playing a critical role.
There is a need to improve data capture and reporting mechanisms for infrastructure investments, including detailed tracking across various projects and sectors.
Current databases are inadequate for assessing infrastructure demand and monitoring the use of facilities in different sub-sectors.

6) Economic Survey 2024 Advises Caution for Retail Investors in Stock Market

Retail investors are advised to adopt a cautious approach, as their expectations for future stock market returns may be overly optimistic despite strong past performance.
The surge in retail investment calls for careful consideration to avoid overconfidence and speculation that could misalign with actual market conditions.
The financial sector should grow in tandem with economic development to support the banking sector and address capital needs.
Over-financialization of the economy is a concern for a developing country like India and should be managed carefully.

7) Growth and Opportunities in India’s Tourism Sector

The tourism sector offers significant opportunities for job creation amid challenges in services and manufacturing due to AI, protectionism, and supply issues.
Post-pandemic, India’s tourism industry saw a resurgence with over 92 lakh foreign tourist arrivals in 2023, reflecting a 43.5% year-on-year increase.
The hospitality industry expanded significantly in 2023, adding 14,000 new rooms to accommodate the growing number of tourists.
Improvements in tourist services, infrastructure, and workforce skills are essential, as highlighted by the World Economic Forum’s 2024 Travel and Tourism Development Index (TTDI).

8) Impact of Extreme Weather on Agriculture and Rising Food Prices

Extreme weather, low reservoir levels, and crop damage have negatively impacted farm output and increased food prices over the past two years.
Adverse weather conditions particularly affected the production of vegetables and pulses.
Food inflation rose significantly, with the Consumer Food Price Index (CFPI) increasing from 3.8% in FY22 to 6.6% in FY23, and further to 7.5% in FY24.

9) India’s Renewable Energy Sector to Attract Investments Worth Rs 30.5 trillion by 2030

The Renewable Energy (RE) sector is projected to attract approximately Rs 30.5 lakh crore in investments in India from 2024 to 2030.
Achieving the 500GW renewable energy target by 2030 requires mobilizing finance, securing competitive investment terms, and addressing land acquisition challenges.

10) Advancements and Investments in India’s Telecom Sector

The government will allocate 5% of the Universal Services Obligation Fund (USOF) for telecommunications technology research and development.
The USOF, now renamed Digital Bharat Nidhi, currently has a corpus of around ₹80,000 crore.
This allocation aims to support R&D and commercialization in the telecom sector, addressing the need for substantial and patient capital.

Download Economic Survey Summary PDF: Steps to follow

To download the Economic Survey 2023-34, follow these steps:

Visit this link:https://www.indiabudget.gov.in/economicsurvey/
You can either download the Economic Survey chapter-wise or download the full document. The chapter-wise download is listed on the page.
For the entire document download, click on “Download Economic Survey”

FAQs on Economic Survey 2024

1. Why is the Economic Survey important for policymakers?

It guides policymakers by analyzing economic challenges and suggesting strategies to enhance economic performance.

2. What sectors are expected to drive growth according to the survey?

Growth is anticipated in technology, manufacturing, and services, supported by strategic policy measures.

3. How does the Economic Survey impact the stock market?

It offers insights into economic trends and potential government policies, affecting investor confidence and market behavior.