growth to the Micro, Small, and Medium

Enterprises (MSME) sector to name the major

SUMMARY
ones.
THE ECONOMIC SURVEY 2022-23

India to witness GDP growth of 6.0 % to 6.8

% in 2023-24, depending on the trajectory of
economic and political developments globally.

The optimistic growth forecasts stem from a

number of positives like the rebound of private
consumption given a boost to production
activity, higher Capital Expenditure (Capex),
near-universal vaccination coverage enabling
people to spend on contact-based services, The Union Minister for Finance & Corporate

such as restaurants, hotels, shopping malls, Affairs Smt. Nirmala Sitharaman tabled the

and cinemas, as well as the return of migrant Economic Survey 2022-23 in Parliament

workers to cities to work in construction sites today, which projects a baseline GDP growth

leading to a significant decline in housing of 6.5 % in real terms in FY24. The projection

market inventory, the strengthening of the is broadly comparable to the estimates

balance sheets of the Corporates, a provided by multilateral agencies such as the

well-capitalised public sector banks ready to World Bank, the IMF, and the ADB and by

increase the credit supply and the credit RBI, domestically.

 The Survey says, in real terms, the economy is
expected to grow at 7 % for the year ending
March 2023. This follows an 8.7 % growth in
the previous financial year.
Despite the three shocks of COVID-19,
Russian-Ukraine conflict and the Central
Banks across economies led by Federal
Reserve responding with synchronised policy
rate hikes to curb inflation, leading to
appreciation of US Dollar and the widening of
the Current Account Deficits (CAD) in net
It says, growth is expected to be brisk in FY24 importing economies, agencies worldwide
as a vigorous credit disbursal, and capital continue to project India as the fastest-growing
investment cycle is expected to unfold in India major economy at 6.5-7.0 % in FY23.
with the strengthening of the balance sheets of
the corporate and banking sectors. Further
support to economic growth will come from
the expansion of public digital platforms and
path-breaking measures such as PM
GatiShakti, the National Logistics Policy, and
the Production-Linked Incentive schemes to
boost manufacturing output.

According to Survey, India’s economic growth

in FY23 has been principally led by private
consumption and capital formation and they
have helped generate employment as seen in
the declining urban unemployment rate and in
the faster net registration in Employee
Provident Fund. Moreover, World’s
second-largest vaccination drive involving
more than 2 billion doses also served to lift
consumer sentiments that may prolong the
rebound in consumption. Still, private capex
soon needs to take up the leadership role to put supported by the extended Emergency Credit
job creation on a fast track. Linked Guarantee Scheme (ECLGS) of the
Union government. It adds that the recovery of
MSMEs is proceeding apace, as is evident in
the amounts of Goods and Services Tax (GST)
they pay, while the Emergency Credit Linked
Guarantee Scheme (ECGLS) is easing their
debt servicing concerns.
Apart from this, increase in the overall bank
credit has also been influenced by the shift in
borrower’s funding choices from volatile bond
markets, where yields have increased, and
external commercial borrowings, where
interest and hedging costs have increased,
towards banks. If inflation declines in FY24
and if real cost of credit does not rise, then
credit growth is likely to be brisk in FY24.
It also points out that the upside to India’s
The Capital Expenditure (Capex) of the central
growth outlook arises from (i) limited health
government, which increased by 63.4 % in the
and economic fallout for the rest of the world
first eight months of FY23, was another
from the current surge in Covid-19 infections
growth driver of the Indian economy in the
in China and, therefore, continued
current year, crowding in the private Capex
normalisation of supply chains; (ii)
since the January-March quarter of 2022. On
inflationary impulses from the reopening of
current trend, it appears that the full year’s
China’s economy turning out to be neither
capital expenditure budget will be met. A
significant nor persistent; (iii) recessionary
sustained increase in private Capex is also
tendencies in major Advanced Economies
imminent with the strengthening of the balance
(AEs) triggering a cessation of monetary
sheets of the Corporates and the consequent
tightening and a return of capital flows to India
increase in credit financing it has been able to
amidst a stable domestic inflation rate below 6
generate.
%; and (iv) this leading to an improvement in
Dwelling on halt in construction activities
animal spirits and providing further impetus to
during the Pandemic, the Survey underscores
private sector investment.
that vaccinations have facilitated the return of
The Survey says, the credit growth to the
migrant workers to cities to work in
Micro, Small, and Medium Enterprises
construction sites as the rebound in
(MSME) sector has been remarkably high,
consumption spilled over into the housing
over 30.6 %, on average during Jan-Nov 2022,
market. This is evident in the housing market
witnessing a significant decline in inventory
overhang to 33 months in Q3 of FY23 from 42
months last year.
It also says that the Mahatma Gandhi National
Rural Employment Guarantee Scheme
(MGNREGS) has been directly providing jobs
in rural areas and indirectly creating
opportunities for rural households to diversify
their sources of income generation. Schemes
like PM-Kisan and PM Garib Kalyan Yojana
have helped in ensuring food security in the
country, and their impact was also endorsed by
the United Nations Development Programme
(UNDP). The results of the National Family
Health Survey (NFHS) also show
improvement in rural welfare indicators from
FY16 to FY20, covering aspects like gender,
fertility rate, household amenities, and women
empowerment.
The Survey notes with optimism that Indian
economy appears to have moved on after its
encounter with the pandemic, staging a full
recovery in FY22 ahead of many nations and
positioning itself to ascend to the
pre-pandemic growth path in FY23. Yet in the
current year, India has also faced the challenge
of reining in inflation that the European strife It, however, cautions that the challenge of the
accentuated. Measures taken by the depreciating rupee, although better performing
government and RBI, along with the easing of than most other currencies, persists with the
global commodity prices, have finally likelihood of further increases in policy rates
managed to bring retail inflation below the by the US Fed. The widening of the CAD may
RBI upper tolerance target in November 2022. also continue as global commodity prices
remain elevated and the growth momentum of
the Indian economy remains strong. The loss
of export stimulus is further possible as the
slowing world growth and trade shrinks the
global market size in the second half of the frailties of the Chinese economy further
current year. contributed to weakening the growth forecasts.
Therefore, the Global growth has been Slowing global growth apart from monetary
projected to decline in 2023 and is expected to tightening may also lead to a financial
remain generally subdued in the following contagion emanating from the advanced
years as well. The slowing demand will likely economies where the debt of the non-financial
push down global commodity prices and sector has risen the most since the global
improve India’s CAD in FY24. However, a financial crisis. With inflation persisting in the
downside risk to the Current Account Balance advanced economies and the central banks
stems from a swift recovery driven mainly by hinting at further rate hikes, downside risks to
domestic demand, and to a lesser extent, by the global economic outlook appear elevated.
exports. It also adds that the CAD needs to be
closely monitored as the growth momentum of India’s Economic Resilience and Growth
the current year spills over into the next. Drivers :
The Survey brings to the fore an interesting The Survey points out that factors like
fact that in general, global economic shocks in monetary tightening by the RBI, the widening
the past were severe but spaced out in time, of the CAD, and the plateauing growth of
but this changed in the third decade of this exports have essentially been the outcome of
millennium, as at least three shocks have hit geopolitical strife in Europe. As these
the global economy since 2020. developments posed downside risks to the
It all started with the pandemic-induced growth of the Indian economy in FY23, many
contraction of the global output, followed by agencies worldwide have been revising their
the Russian-Ukraine conflict leading to a growth forecast of the Indian economy
worldwide surge in inflation. Then, the central downwards. These forecasts, including the
banks across economies led by the Federal advance estimates released by the NSO, now
Reserve responded with synchronised policy broadly lie in the range of 6.5-7.0 %.
rate hikes to curb inflation. The rate hike by
the US Fed drove capital into the US markets
causing the US Dollar to appreciate against
most currencies. This led to the widening of
the Current Account Deficits (CAD) and
increased inflationary pressures in net
importing economies.
The rate hike and persistent inflation also led
to a lowering of the global growth forecasts for
2022 and 2023 by the IMF in its October 2022
update of the World Economic Outlook. The
 it is a reflection of India’s underlying
economic resilience; of its ability to recoup,
renew and re-energise the growth drivers of
the economy. India’s economic resilience can
be seen in the domestic stimulus to growth
seamlessly replacing the external stimuli. The
growth of exports may have moderated in the
second half of FY23. However, their surge in
FY22 and the first half of FY23 induced a shift
in the gears of the production processes from
mild acceleration to cruise mode.
Manufacturing and investment activities
consequently gained traction. By the time the
growth of exports moderated, the rebound in
domestic consumption had sufficiently
matured to take forward the growth of India’s
economy. Private Consumption as a
percentage of GDP stood at 58.4 % in Q2 of
FY23, the highest among the second quarters
of all the years since 2013-14, supported by a
rebound in contact-intensive services such as
trade, hotel and transport, which registered
sequential growth of 16 % in real terms in Q2
of FY23 compared to the previous quarter.

Despite the downward revision, the growth

estimate for FY23 is higher than for almost all
major economies and even slightly above the
average growth of the Indian economy in the
decade leading up to the pandemic.
IMF estimates India to be one of the top two
fast-growing significant economies in 2022.
Despite strong global headwinds and tighter
domestic monetary policy, if India is still
expected to grow between 6.5 and 7.0 %, and
that too without the advantage of a base effect,
Although domestic consumption rebounded in larger capital budget supported by the centre’s
many economies, the rebound in India was grant-in-aid for capital works and an
impressive for its scale. It contributed to a rise interest-free loan repayable over 50 years.
in domestic capacity utilisation. Domestic Also, a capex thrust in the last two budgets of
private consumption remains buoyant in the Government of India was not an isolated
November 2022. Moreover, RBI’s most recent initiative meant only to address the
survey of consumer confidence released in infrastructure gaps in the country. It was part
December 2022 pointed to improving of a strategic package aimed at crowding-in
sentiment with respect to current and private investment into an economic landscape
prospective employment and income broadened by the vacation of non-strategic
conditions. PSEs (disinvestment) and idling public sector
The Survey also points to another recovery assets.
and adds that the “release of pent-up demand”
was reflected in the housing market too as
demand for housing loans picked up.
Consequently, housing inventories have
declined, prices are firming up, and
construction of new dwellings is picking up
pace and this has stimulated innumerable
backward and forward linkages that the
construction sector is known to carry. The
universalisation of vaccination coverage also
has a significant role in lifting the housing
market as, in its absence, the migrant Here, three developments support this firstly
workforce could not have returned to construct the significant increase in the Capex budget in
new dwellings. FY23, as well as its high rate of spending,
Apart from housing, construction activity, in secondly direct tax revenue collections have
general, has significantly risen in FY23 as the been highly buoyant, and so have GST
much-enlarged capital budget (Capex) of the collections, which should ensure the full
central government and its public sector expending of the Capex budget within the
enterprises is rapidly being deployed. budgeted fiscal deficit. The growth in revenue
Going by the Capex multiplier estimated for expenditure has also been limited to pave the
the country, the economic output of the way for higher growth in Capex and thirdly the
country is set to increase by at least four times pick-up in private sector investment since the
the amount of Capex. States, in aggregate, are January-March quarter of 2022. Evidence
also performing well with their Capex plans. shows an increasing trend in announced
Like the central government, states also have a
projects and capex spending by the private being booked at regular intervals and their
players. Non-Performing Assets (NPAs) being
fast-tracked for quicker resolution/liquidation
by the Insolvency and Bankruptcy Board of
India (IBBI). At the same time, the
government has been providing adequate
budgetary support for keeping the PSBs
well-capitalized, ensuring that their Capital
Risk-Weighted Adjusted Ratio (CRAR)
remains comfortably above the threshold
levels of adequacy. Nonetheless, financial
strength has helped banks make up for lower
debt financing provided by corporate bonds
and External Commercial Borrowings (ECBs)
so far in FY23. Rising yields on corporate
bonds and higher interest/hedging costs on
ECBs have made these instruments less
While an increase in export demand, rebound
attractive than the previous year.
in consumption, and public capex have
RBI has projected headline inflation at 6.8 %
contributed to a recovery in the
in FY23, which is outside its target range. At
investment/manufacturing activities of the
the same time, it is not high enough to deter
corporates, their stronger balance sheets have
private consumption and also not so low as to
also played a big part equal measure to
weaken the inducement to invest.
realising their spending plans. As per the data
on non-financial debt from the Bank for
Macroeconomic and Growth Challenges in
International Settlements, in the course of the
the Indian Economy :
last decade, Indian non-financial private sector
After the impact of the two waves of the
debt and non-financial corporate debt as a
pandemic seen in a significant GDP
share of GDP declined by nearly thirty
contraction in FY21, the quick recovery from
percentage points.
the virus in third wave of Omicron contributed
The banking sector in India has also responded
to minimising the loss of economic output in
in equal measure to the demand for credit as
the January-March quarter of 2022.
the Year-on-Year growth in credit since the
Consequently, output in FY22 went past its
January-March quarter of 2022 has moved into
pre-pandemic level in FY20, with the Indian
double-digits and is rising across most sectors.
economy staging a full recovery ahead of
The finances of the public sector banks have
many nations. However, the conflict in Europe
seen a significant turnaround, with profits
necessitated a revision in expectations for
economic growth and inflation in FY23. The government raised capital expenditure
country’s retail inflation had crept above the substantially.
RBI’s tolerance range in January 2022 and it Budgeted capital expenditure rose 2.7 times in
remained above the target range for ten months the last seven years, from FY16 to FY23,
before returning to below the upper end of the re-invigorating the Capex cycle. Structural
target range of 6 % in November 2022. reforms such as the introduction of the Goods
It says that the Global commodity prices may and Services Tax and the Insolvency and
have eased but are still higher compared to Bankruptcy Code enhanced the efficiency and
pre-conflict levels and they have further transparency of the economy and ensured
widened the CAD, already enlarged by India's financial discipline and better compliance, the
growth momentum. For FY23, India has Survey added.
sufficient forex reserves to finance the CAD Global growth is forecasted to slow from 3.2
and intervene in the forex market to manage % in 2022 to 2.7 % in 2023 as per IMF’s
volatility in the Indian rupee. World Economic Outlook, October 2022. A
slower growth in economic output coupled
with increased uncertainty will dampen trade
growth. This is seen in the lower forecast for
growth in global trade by the World Trade
Organisation, from 3.5 % in 2022 to 1.0 % in
2023.
On the external front, risks to the current
account balance stem from multiple sources.
While commodity prices have retreated from
record highs, they are still above pre-conflict
levels. Strong domestic demand amidst high
Outlook : 2023-24 : commodity prices will raise India’s total
Dwelling on the Outlook for 2023-24, the import bill and contribute to unfavourable
Survey says, India’s recovery from the developments in the current account balance.
pandemic was relatively quick, and growth in These may be exacerbated by plateauing
the upcoming year will be supported by solid export growth on account of slackening global
domestic demand and a pickup in capital demand. Should the current account deficit
investment. It says that aided by healthy widen further, the currency may come under
financials, incipient signs of a new private depreciation pressure.
sector capital formation cycle are visible and Entrenched inflation may prolong the
more importantly, compensating for the private tightening cycle, and therefore, borrowing
sector’s caution in capital expenditure, the costs may stay ‘higher for longer’. In such a
scenario, global economy may be
characterised by low growth in FY24. In FY21, the Government announced the
However, the scenario of subdued global Emergency Credit Line Guarantee Scheme,
growth presents two silver linings – oil prices which succeeded in shielding micro, small and
will stay low, and India’s CAD will be better medium enterprises from financial distress. A
than currently projected. The overall external recent CIBIL report (ECLGS Insights, August
situation will remain manageable. 2022) showed that the scheme has supported
MSMEs in facing the COVID shock, with 83
% of the borrowers that availed of the ECLGS
being micro-enterprises. Among these micro
units, more than half had an overall exposure
of less than Rs10 lakh.
Furthermore, the CIBIL data also shows that
ECLGS borrowers had lower non-performing
asset rates than enterprises that were eligible
for ECLGS but did not avail of it. Further, the
GST paid by MSMEs after declining in FY21
has been rising since and now has crossed the
pre-pandemic level of FY20, reflecting the
financial resilience of small businesses and the
effectiveness of the pre-emptive government
India’s Inclusive Growth : intervention targeted towards MSMEs.
The Survey emphasises that growth is Moreover, the scheme implemented by the
inclusive when it creates jobs. Both official government under the Mahatma Gandhi
and unofficial sources confirm that National Rural Employment Guarantee Act
employment levels have risen in the current (MGNREGA) has been rapidly creating more
financial year, as the Periodic Labour Force assets in respect of “Works on individual’s
Survey (PLFS) shows that the urban land” than in any other category. In addition,
unemployment rate for people aged 15 years schemes like PM-KISAN, which benefits
and above declined from 9.8 % in the quarter households covering half the rural population,
ending September 2021 to 7.2 % one year later and PM Garib Kalyan Anna Yojana have
(quarter ending September 2022). This is significantly contributed to lessening
accompanied by an improvement in the labour impoverishment in the country.
force participation rate (LFPR) as well, The UNDP Report of July 2022 stated that the
confirming the emergence of the economy out recent inflationary episode in India would have
of the pandemic-induced slowdown early in a low poverty impact due to well-targeted
FY23. support. In addition, the National Family
Health Survey (NFHS) in India shows
improved rural welfare indicators from FY16 importing economies. The fourth challenge
to FY20, covering aspects like gender, fertility emerged as faced with the prospects of global
rate, household amenities, and women stagflation, nations, feeling compelled to
empowerment. protect their respective economic space, thus
So far, India has reinforced the country’s belief slowing cross-border trade affecting overall
in its economic resilience as it has withstood growth. It adds that all along, the fifth
the challenge of mitigating external challenge was festering as China experienced a
imbalances caused by the Russian-Ukraine considerable slowdown induced by its policies.
conflict without losing growth momentum in The sixth medium-term challenge to growth
the process. India’s stock markets had a was seen in the scarring from the pandemic
positive return in CY22, unfazed by brought in by the loss of education and
withdrawals by foreign portfolio investors. income-earning opportunities.
India’s inflation rate did not creep too far The Survey notes that like the rest of the
above its tolerance range compared to several world, India, too, faced this extraordinary set
advanced nations and regions. of challenges but withstood them better than
India is the third-largest economy in the world most economies.
in PPP terms and the fifth-largest in market In the last eleven months, the world economy
exchange rates. As expected of a nation of this has faced almost as many disruptions as
size, the Indian economy in FY23 has nearly caused by the pandemic in two years. The
“recouped” what was lost, “renewed” what conflict caused the prices of critical
had paused, and “re-energised” what had commodities such as crude oil, natural gas,
slowed during the pandemic and since the fertilisers, and wheat to soar. This strengthened
conflict in Europe. the inflationary pressures that the global
economic recovery had triggered, backed by
The global economy battles through a massive fiscal stimuli and
unique set of challenges : ultra-accommodative monetary policies
The Survey narrates about six challenges faced undertaken to limit the output contraction in
by the Global Economy. The three challenges 2020. Inflation in Advanced Economies (AEs),
like COVID-19 related disruptions in which accounted for most of the global fiscal
economies, Russian-Ukraine conflict and its expansion and monetary easing, breached
adverse impact along with disruption in supply historical highs. Rising commodity prices also
chain, mainly of food, fuel and fertilizer and led to higher inflation in the Emerging Market
the Central Banks across economies led by Economies (EMEs), which otherwise were in
Federal Reserve responding with synchronised the lower inflation zone by virtue of their
policy rate hikes to curb inflation, leading to governments undertaking a calibrated fiscal
appreciation of US Dollar and the widening of stimulus to address output contraction in 2020.
the Current Account Deficits (CAD) in net
The Survey underlines that Inflation and enhancing agricultural productivity
monetary tightening led to a hardening of bond and promoting the private sector as a
yields across economies and resulted in an co-partner in development is the focus
outflow of equity capital from most of the of the government reforms
economies around the world into the ● Cleaner balance sheets led to
traditionally safe-haven market of the US. The enhanced lending by financial
capital flight subsequently led to the institutions
strengthening of the US Dollar against other ● Growth in credit offtake, increased
currencies – the US Dollar index strengthened private capex to usher virtuous
by 16.1 % between January and September investment cycle
2022. The consequent depreciation of other ● Non-food credit offtake by Scheduled
currencies has been widening the CAD and Commercial Banks growing in double
increasing inflationary pressures in the net digits since April 2022
importing economies. ● Gross Non-Performing Assets (GNPA)
ratio of SCBs has fallen to a
seven-year low of 5.0
HIGHLIGHTS ● Social sector expenditure (Centre and

ECONOMIC SURVEY 2022-23 States combined) increases to Rs. 21.3

lakh crore in FY23 (BE) from Rs. 9.1
lakh crore in FY16
● Indian economy staging a broad based ● Central and State Government’s
recovery across sectors, positioning to budgeted expenditure on health sector
ascend to pre-pandemic growth path in touched 2.1% of GDP in FY23 (BE)
FY23 and 2.2% in FY22 (RE) against 1.6%
● Retail inflation is back within RBI's in FY21
target range in November 2022 ● More than 220 crore COVID vaccine
● Direct Tax collections for the period doses administered
April-November 2022 remains ● Survey highlights the findings of the
buoyant 2022 report of the UNDP on
● Enhanced Employment generation Multidimensional Poverty Index
seen in the declining urban which says that 41.5 crore people exit
unemployment rate and in the faster poverty in India between 2005-06 and
net registration in Employee Provident 2019-20
Fund ● India declared Net Zero Pledge, to
● Creating public goods to enhance achieve net zero emissions goal by
opportunities, efficiencies and ease of 2070
living, trust-based governance,
● A mass movement LIFE– Life style Union Minister for Finance and Corporate
for Environment launched Affairs, Smt. Nirmala Sitharaman,
● National Green Hydrogen Mission to presented the Economic Survey 2022-23 in
enable India to be energy independent the Union Parliament today. The highlights
by 2047 of the Survey are as follows :
● Private investment in agriculture
increases to 9.3% in 2020-21 State of the Economy 2022-23 : Recovery
● Free foodgrains to about 81.4 crore Complete :
beneficiaries under the National Food
Security Act for one year ● Recovering from pandemic-induced
● About 11.3 crore farmers were contraction, Russian-Ukraine conflict
covered under PM KISAN in its and inflation, Indian economy is
April-July 2022-23 payment cycle staging a broad based recovery across
● India stands at the forefront to sectors, positioning to ascend to the
promote millets through the pre-pandemic growth path in FY23.
International Year of Millets initiative ● India's GDP growth is expected to
● Investment of ₹47,500 crores under remain robust in FY24. GDP forecast
the PLI schemes in FY22- 106% of for FY24 to be in the range of 6-6.8
the designated target for the year %.
● India’s e-commerce market is ● Private consumption in H1 is highest
projected to grow at 18 % annually since FY15 and this has led to a boost
through 2025 to production activity resulting in
● Merchandise exports of US$ 332.8 enhanced capacity utilisation across
billion for April-December 2022 sectors.
● India is the largest recipient of ● The Capital Expenditure of Central
remittances globally receiving US$ Government and crowding in the
100 billion in 2022 private Capex led by strengthening of
● PM GatiShakti National Master Plan the balance sheets of the Corporates is
creates comprehensive database for one of the growth driver of the Indian
integrated planning and synchronised economy in the current year.
implementation across Ministries/ ● The credit growth to the MSME sector
Departments was over 30.6 % on average during
● UPI-based transactions grew in value Jan-Nov 2022.
(121 %) and volume (115 %) terms, ● Retail inflation is back within RBI's
between 2019-2022, paving the way target range in November 2022.
for its international adoption
 ● Indian Rupee performed well by the credit boom in the previous
compared to other Emerging Market years and one-off global shocks, that
Economies in Apr-Dec2022. adversely impacted the key
● Direct Tax collections for the period macroeconomic variables such as
April-November 2022 remain credit growth, capital formation, and
buoyant. hence economic growth during this
● Enhanced Employment generation period.
seen in the declining urban ● This situation is analogous to the
unemployment rate and in the faster period 1998-2002 when
net registration in Employee Provident transformative reforms undertaken by
Fund. the government had lagged growth
● Economic growth to be boosted from returns due to temporary shocks in the
the expansion of public digital economy. Once these shocks faded,
platforms and measures to boost the structural reforms paid growth
manufacturing output. dividends from 2003.
● Similarly, the Indian economy is well
placed to grow faster in the coming
India’s Medium Term Growth Outlook : decade once the global shocks of the
with Optimism and Hope : pandemic and the spike in commodity
prices in 2022 fade away.
● Indian economy underwent ● With improved and healthier balance
wide-ranging structural and sheets of the banking, non-banking
governance reforms that strengthened and corporate sectors, a fresh credit
the economy's fundamentals by cycle has already begun, evident from
enhancing its overall efficiency during the double-digit growth in bank credit
2014-2022. over the past months.
● With an underlying emphasis on ● Indian economy has also started
improving the ease of living and doing benefiting from the efficiency gains
business, the reforms after 2014 were resulting from greater formalisation,
based on the broad principles of higher financial inclusion, and
creating public goods, adopting economic opportunities created by
trust-based governance, co-partnering digital technology-based economic
with the private sector for reforms.
development, and improving ● Thus Chapter 2 of the Survey shows
agricultural productivity. that India's growth outlook seems
● The period of 2014-2022 also better than in the pre-pandemic years,
witnessed balance sheet stress caused and the Indian economy is prepared to
 grow at its potential in the medium ● The Centre has also incentivised the
term. State Governments through
interest-free loans and enhanced
borrowing ceilings to prioritise their
spending on Capex.
Fiscal Developments : Revenue Relish : ● With an emphasis on
infrastructure-intensive sectors like
● The Union Government finances have roads and highways, railways, and
shown a resilient performance during housing and urban affairs, the increase
the year FY23, facilitated by the in Capex has large-scale positive
recovery in economic activity, implications for medium-term growth.
buoyancy in revenues from direct ● The Government’s Capex-led growth
taxes and GST, and realistic strategy will enable India to keep the
assumptions in the Budget. growth-interest rate differential
● The Gross Tax Revenue registered a positive, leading to a sustainable debt
YoY growth of 15.5 % from April to to GDP in the medium run.
November 2022, driven by robust
growth in the direct taxes and Goods
and Services Tax (GST).
● Growth in direct taxes during the first Monetary Management and Financial
eight months of the year was much Intermediation : A Good Year :
higher than their corresponding ● The RBI initiated its monetary
longer-term averages. tightening cycle in April 2022 and has
● GST has stabilised as a vital revenue since raised the repo rate by 225 bps,
source for central and state leading to moderation of surplus
governments, with the gross GST liquidity conditions.
collections increasing at 24.8 % on ● Cleaner balance sheets led to
YoY basis from April to December enhanced lending by financial
2022. institutions.
● Union Government's emphasis on ● The growth in credit offtake is
capital expenditure (Capex) has expected to sustain, and combined
continued despite higher revenue with a pick-up in private capex, will
expenditure requirements during the usher in a virtuous investment cycle.
year. The Centre's Capex has steadily ● Non-food credit offtake by scheduled
increased from a long-term average of Commercial Banks (SCBs) has been
1.7 % of GDP (FY09 to FY20) to 2.5 growing in double digits since April
% of GDP in FY22 PA. 2022.
 ● Credit disbursed by Non-Banking ○ Waived customs duty on
Financial Companies (NBFCs) has cotton imports w.e.f 14 April
also been on the rise. 2022, until 30 September
● The Gross Non-Performing Assets 2022
(GNPA) ratio of SCBs has fallen to a ○ Prohibition on the export of
seven-year low of 5.0. wheat products under HS
● The Capital-to-Risk Weighted Assets Code 1101 and imposition of
Ratio (CRAR) remains healthy at export duty on rice
16.0. ○ Reduction in basic duty on
● The recovery rate for the SCBs crude and refined palm oil,
through Insolvency and Bankruptcy crude soyabean oil and crude
(IBC) was highest in FY22 compared sunflower oil
to other channels. ● The RBI’s anchoring of inflationary
expectations through forward
Prices and Inflation : Successful Tight-Rope guidance and responsive monetary
Walking : policy has helped guide the trajectory
● While the year 2022 witnessed a of inflation in the country.
return of high inflation in the ● The one-year-ahead inflationary
advanced world after three to four expectations by both businesses and
decades, India caps the rise in prices. households have moderated in the
● While India’s retail inflation rate current financial year.
peaked at 7.8 % in April 2022, above ● Timely policy intervention by the
the RBI’s upper tolerance limit of 6 %, government in housing sector, coupled
the overshoot of inflation above the with low home loan interest rates
upper end of the target range in India propped up demand and attracted
was however one of the lowest in the buyers more readily in the affordable
world. segment in FY23.
● The government adopted a ● An overall increase in composite
multi-pronged approach to tame the Housing Price Indices (HPI)
increase in price levels assessment and Housing Price Indices
○ Phase wise reduction in export market prices indicates a revival in the
duty of petrol and diesel housing finance sector. A stable to
○ Import duty on major inputs moderate increase in HPI also offers
were brought to zero while tax confidence to homeowners and home
on export of iron ores and loan financiers in terms of the retained
concentrates increased from value of the asset.
30 to 50 %
 ● India’s inflation management has been power of DBT, has brought the
particularly noteworthy and can be marginalised sections of society into
contrasted with advanced economies the formal financial system,
that are still grappling with sticky revolutionising the path of transparent
inflation rates. and accountable governance by
empowering the people.
Social Infrastructure and Employment : Big ● Aadhaar played a vital role in
Tent : developing the Co-WIN platform and
● Social Sector witnessed significant in the transparent administration of
increase in government spending. over 2 billion vaccine doses.
● Central and State Government’s ● Labour markets have recovered
budgeted expenditure on health sector beyond pre-Covid levels, in both
touched 2.1% of GDP in FY23 (BE) urban and rural areas, with
and 2.2% in FY22 (RE) against 1.6% unemployment rates falling from 5.8
in FY21. % in 2018-19 to 4.2 % in 2020-21.
● Social sector expenditure increases to ● The year FY22 saw improvement in
Rs. 21.3 lakh crore in FY23 (BE) from Gross Enrolment Ratios (GER) in
Rs. 9.1 lakh crore in FY16. schools and improvement in gender
● Survey highlights the findings of the parity. GER in the primary-enrolment
2022 report of the UNDP on in class I to V as a percentage of the
Multidimensional Poverty Index population in age 6 to 10 years - for
which says that 41.5 crore people exit girls as well as boys have improved in
poverty in India between 2005-06 and FY22.
2019-20. ● Due to several steps taken by the
● The Aspirational Districts Programme government on health, out-of-pocket
has emerged as a template for good expenditure as a percentage of total
governance, especially in remote and health expenditure declined from
difficult areas. 64.2% in FY14 to 48.2% in FY19.
● eShram portal developed for creating a ● Infant Mortality Rate (IMR), Under
National database of unorganised Five mortality rate (U5MR) and
workers, which is verified with neonatal Mortality Rate (NMR) have
Aadhaar. As on 31 December 2022, a shown a steady decline.
total of over 28.5 crore unorganised ● More than 220 crore COVID vaccine
workers have been registered on doses administered as on 06 January,
eShram portal. 2023.
● JAM (Jan-Dhan, Aadhaar, and ● Nearly 22 crore beneficiaries have
Mobile) trinity, combined with the been verified under the Ayushman
 Bharat Scheme as on 04 January, 2030. Cumulative reduction in fossil
2023. Over 1.54 lakh Health and fuel imports over ₹1 lakh crore and
Wellness Centres have been creation of over 6 lakh jobs by 2030
operationalized across the country under the National green Hydrogen
under Ayushman Bharat. Mission. Renewable energy capacity
Climate Change and Environment : addition of about 125 GW and
Preparing to Face the Future : abatement of nearly 50 MMT of
● India declared the Net Zero Pledge to annual GHG emissions by 2030.
achieve net zero emissions goal by ● The Survey highlights the progress on
2070. eight missions under the NAP on CC
● India achieved its target of 40 % to address climate concerns and
installed electric capacity from promote sustainable development.
non-fossil fuels ahead of 2030. ● Solar power capacity installed, a key
● The likely installed capacity from metric under the National Solar
non-fossil fuels to be more than 500 Mission stood at 61.6 GW as on
GW by 2030 resulting in decline of October 2022.
average emission rate by around 29% ● India becoming a favored destination
by 2029-30, compared to 2014-15. for renewables; investments in 7 years
● India to reduce emissions intensity of stand at USD 78.1 billion.
its GDP by 45% by 2030 from 2005 ● 62.8 lakh individual household toilets
levels. and 6.2 lakh community and public
● About 50% cumulative electric power toilets constructed (August 2022)
installed capacity to come from under the National Mission on
non-fossil fuel-based energy resources Sustainable Habitat.
by 2030.
● A mass movement LIFE– Life style Agriculture and Food Management :
for Environment launched. ● The performance of the agriculture
● Sovereign Green Bond Framework and allied sector has been buoyant
(SGrBs) issued in November 2022. over the past several years, much of
● RBI auctions two tranches of ₹4,000 which is on account of the measures
crore Sovereign Green Bonds (SGrB). taken by the government to augment
● National Green Hydrogen Mission to crop and livestock productivity, ensure
enable India to be energy independent certainty of returns to the farmers
by 2047. through price support, promote crop
● Green hydrogen production capacity diversification, improve market
of at least 5 MMT (Million Metric infrastructure through the impetus
Tonne) per annum to be developed by provided for the setting up of
 farmer-producer organisations and ● India stands at the forefront to
promotion of investment in promote millets through the
infrastructure facilities through the International Year of Millets initiative.
Agriculture Infrastructure Fund. Industry : Steady Recovery :
● Private investment in agriculture ● Overall Gross Value Added (GVA) by
increases to 9.3% in 2020-21. the Industrial Sector (for the first half
● MSP for all mandated crops fixed at of FY 22-23) rose 3.7 %, which is
1.5 times of all India weighted average higher than the average growth of 2.8
cost of production since 2018. % achieved in the first half of the last
● Institutional Credit to the Agricultural decade.
Sector continued to grow to 18.6 lakh ● Robust growth in Private Final
crore in 2021-22 Consumption Expenditure, export
● Foodgrains production in India saw stimulus during the first half of the
sustained increase and stood at 315.7 year, increase in investment demand
million tonnes in 2021-22. triggered by enhanced public capex
● Free foodgrains to about 81.4 crore and strengthened bank and corporate
beneficiaries under the National Food balance sheets have provided a
Security Act for one year from demand stimulus to industrial growth.
January 1, 2023. ● The supply response of the industry to
● About 11.3 crore farmers were the demand stimulus has been robust.
covered under the Scheme in its ● PMI manufacturing has remained in
April-July 2022-23 payment cycle. the expansion zone for 18 months
● Rs 13,681 crores sanctioned for since July 2021, and Index of
Post-Harvest Support and Community Industrial Production (IIP) grows at a
Farms under the Agriculture healthy pace.
Infrastructure Fund. ● Credit to Micro, Small and Medium
● Online, Competitive, Transparent Enterprises (MSMEs) has grown by an
Bidding System with 1.74 crore average of around 30% since January
farmers and 2.39 lakh traders put in 2022 and credit to large industry has
place under the National Agriculture been showing double-digit growth
Market (e-NAM) Scheme. since October 2022.
● Organic Farming being promoted ● Electronics exports rise nearly
through Farmer Producer threefold, from US $4.4 billion in
Organisations (FPO) under the FY19 to US $11.6 Billion in FY22.
Paramparagat Krishi Vikas Yojana ● India has become the second-largest
(PKVY). mobile phone manufacturer globally,
with the production of handsets going
 up from 6 crore units in FY15 to 29 ● India’s services exports remained
crore units in FY21. resilient during the Covid-19
● Foreign Direct Investment (FDI) flows pandemic and amid geopolitical
into the Pharma Industry has risen four uncertainties driven by higher demand
times, from US $180 million in FY19 for digital support, cloud services, and
to US $699 million in FY22. infrastructure modernization.
● The Production Linked Incentive ● Credit to services sector has grown by
(PLI) schemes introduced across 14 over 16% since July 2022.
categories, with an estimated capex of ● US$ 7.1 billion FDI equity inflows in
₹4 lakh crore over the next five years, services sector in FY22.
to plug India into global supply ● Contact-intensive services are set to
chains. Investment of ₹47,500 crores reclaim pre-pandemic level growth
has been seen under the PLI schemes rates in FY23.
in the FY22, which is 106% of the ● Sustained growth in the real estate
designated target for the year. sector is taking housing sales to
Production/sales worth ₹3.85 lakh pre-pandemic levels, with a 50% rise
crore and employment generation of between 2021 and 2022.
3.0 lakh have been recorded due to ● Hotel occupancy rate has improved
PLI schemes. from 30-32% in April 2021 to 68-70%
● Over 39,000 compliances have been in November 2022.
reduced and more than 3500 ● Tourism sector is showing signs of
provisions decriminalized as of revival, with foreign tourist arrivals in
January 2023. India in FY23 growing
month-on-month with resumption of
Services : Source of Strength : scheduled international flights and
● The services sector is expected to easing of Covid-19 regulations.
grow at 9.1% in FY23, as against ● Digital platforms are transforming
8.4% (YoY) in FY22. India’s financial services.
● Robust expansion in PMI services, ● India’s e-commerce market is
indicative of service sector activity, projected to grow at 18 % annually
observed since July 2022. through 2025.
● India was among the top ten services
exporting countries in 2021, with its External Sector :
share in world commercial services ● Merchandise exports were US$ 332.8
exports increasing from 3 % in 2015 billion for April-December 2022.
to 4 % in 2021.
 ● India diversified its markets and IIPDF Scheme with ₹150 crore outlay
increased its exports to Brazil, South from FY 23-25 was notified by the
Africa and Saudi Arabia. government on 03 November, 2022.
● To increase its market size and ensure
better penetration, in 2022, CEPA with ● National Infrastructure Pipeline :
UAE and ECTA with Australia come 89,151 projects costing ₹141.4 lakh
into force. crore under different stages of
● India is the largest recipient of implementation
remittances in the world receiving 1009 projects worth ₹5.5 lakh crore
US$ 100 bn in 2022. Remittances are completed
the second largest major source of NIP and Project Monitoring Group
external financing after service export (PMG) portal linkage to fast-track
● As of December 2022, Forex Reserves approvals/ clearances for projects
stood at US$ 563 bn covering 9.3 ● National Monetisation Pipeline : ₹ 9.0
months of imports. lakh crore is the estimated cumulative
● As of end-November 2022, India is investment potential.
the sixth largest foreign exchange ₹ 0.9 lakh crore monetisation target
reserves holder in the world. achieved against expected ₹0.8 lakh
● The current stock of external debt is crore in FY22.
well shielded by the comfortable level FY23 target is envisaged to be ₹1.6
of foreign exchange reserves. lakh crore (27 % of overall NMP
● India has relatively low levels of total Target)
debt as a percentage of Gross National ● GatiShakti : PM GatiShakti National
Income and short-term debt as a Master Plan creates comprehensive
percentage of total debt. database for integrated planning and
synchronised implementation across
Physical and Digital Infrastructure : Ministries/ Departments.
Aims to improve multimodal
1) Government’s Vision for connectivity and logistics efficiency
Infrastructure Development : while addressing the critical gaps for
● Public Private Partnerships : the seamless movement of people and
In-Principal Approval granted to 56 goods.
projects with Total Project Cost of
₹57,870.1 crore under the VGF 2) Electricity Sector and Renewables :
Scheme, from 2014-15 to 2022-23. ● As on 30 September 2022, the
government has sanctioned the entire
target capacity of 40 GW for the
 development of 59 Solar Parks in 16 movement of Vessels promoting
states. Inland Water Transport.
● 17.2 lakh GWh electricity generated
during the year FY22 compared to 4) India’s Digital Public Infrastructure
15.9 lakh GWh during FY21. :
● The total installed power capacity ● Unified Payment Interface (UPI) :
(industries having demand of 1 Mega UPI-based transactions grew in value
Watt (MW) and above) increased from (121 %) and volume (115 %) terms,
460.7 GW on 31 March 2021 to 482.2 between 2019-22, paving the way for
GW on 31 March 2022. its international adoption.

3) Making Indian Logistics Globally ● Telephone and Radio - For Digital

Competitive : Empowerment : Total telephone
● National Logistics Policy envisions subscriber base in India stands at
developing a technologically enabled, 117.8 crore (as of Sept,22), with 44.3
integrated, cost-efficient, resilient, % of subscribers in rural India.
sustainable and trusted logistics More than 98 % of the total telephone
ecosystem in the country for subscribers are connected wirelessly.
accelerated and inclusive growth. The overall tele-density in India stood
● Rapid increase in National Highways at 84.8 % in March 22.
(NHs) /Roads Construction with 200 % increase in rural internet
10457 km NHs/roads constructed in subscriptions between 2015 and 2021.
FY22 compared to 6061 km in FY16. Prasar Bharati (India’s autonomous
● Budget expenditure increased from public service broadcaster) -
₹1.4 lakh crore in FY20 to ₹2.4 lakh broadcasts in 23 languages, 179
crore in FY23 giving renewed push to dialects from 479 stations. Reaches 92
Capital expenditure. % of the area and 99.1 % of the total
● 2359 Kisan rails transported population.
approximately 7.91 lakh tonnes of
perishables, as of October 2022. ● Digital Public Goods : Achieved
● More than one crore air passengers low-cost accessibility since the launch
availed the benefit of the UDAN of Aadhaar in 2009.
scheme since its inception in 2016. Under the government schemes,
● Near doubling of capacity of major MyScheme, TrEDS, GEM, e-NAM,
ports in 8 years. UMANG has transformed market
● Inland Vessels Act 2021 replaced place and has enabled citizens to
100-year-old Act to ensure hassle free access services across sectors
Under Account Aggregator, the
consent-based data sharing framework
is currently live across over 110 crore
bank accounts.
Open Credit Enablement Network
aims towards democratising lending
operations while allowing end-to-end
digital loan applications
National AI portal has published 1520
articles, 262 videos, and 120
government initiatives and is being
viewed as viewed as a tool for
overcoming the language barrier e.g.
‘Bhashini’.
Legislations are being introduced for
enhanced user privacy and creating an
ecosystem for standard, open, and
interoperable protocols underlining
robust data governance.

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