Introduction to Economic Survey 2022 – 2023

Highlights of the Economic Survey 2022-23

• Indianeconomy staging a broad based recovery across sectors, positioning to ascend to pre-pandemic growth path in FY23
• Retailinflation is back within RBI’s target range in November 2022
• DirectTax collections for the period April-November 2022 remains buoyant
• EnhancedEmployment generation seen in the declining urban unemployment rate and in the faster net registration in Employee Provident Fund
• Creatingpublic goods to enhance opportunities, efficiencies and ease of living, trust-based governance, enhancing agricultural productivity and promoting the private sector as a co-partner in development is the focus of the government reforms
• Cleanerbalance sheets led to enhanced lending by financial institutions
• Growthin credit offtake, increased private capex to usher virtuous investment cycle
• Non-foodcredit offtake by Scheduled Commercial Banks growing in double digits since April 2022
• GrossNon-Performing Assets (GNPA) ratio of SCBs has fallen to a seven-year low of 0
• Socialsector expenditure (Centre and States combined) increases to  21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16
• Centraland State Government’s budgeted expenditure on health sector touched 1% of GDP in FY23 (BE) and 2.2% in FY22 (RE) against 1.6% in FY21
• Morethan 220 crore COVID vaccine doses administered
• Surveyhighlights the findings of the 2022 report of the UNDP on Multidimensional Poverty Index which says that 5 crore people exit poverty in India between 2005-06 and 2019-20
• Indiadeclared Net Zero Pledge, to achieve net zero emissions goal by 2070
• Amass movement LIFE– Life style for Environment launched
• NationalGreen Hydrogen Mission to enable India to be energy independent by 2047
• Privateinvestment in agriculture increases to 3% in 2020-21
• Free foodgrainsto about 4 crore beneficiaries under the National Food Security Act for one year
• About3 crore farmers were covered under PM KISAN in its April-July 2022-23 payment cycle
• Indiastands at the forefront to promote millets through the International Year of Millets initiative
• Investmentof ₹47,500 crores under the PLI schemes in FY22- 106% of the designated target for the year
• India’se-commerce market is projected to grow at 18 per cent annually through 2025
• Merchandiseexports of US$ 8 billion for April-December 2022
• Indiais the largest recipient of remittances globally receiving US$ 100 billion in 2022
• PMGatiShakti National Master Plan creates comprehensive database for integrated planning and synchronised implementation across Ministries/ Departments
• UPI-basedtransactions grew in value (121 per cent) and volume (115 per cent) terms, between 2019-2022, paving the way for its international adoption

 

Chapter : 1  State of the Economy 2022-23: Recovery Complete 

• Recovering from pandemic-induced contraction, Russian-Ukraine conflict and inflation, Indian economy is staging a broad based recovery across sectors, positioning to ascend to the pre-pandemic growth path in
• India’sGDP growth is expected to remain robust in  GDP forecast for FY24 to be in the range of 6-6.8 %.
• Privateconsumption in H1 is highest since FY15 and this has led to a boost to production activity resulting in enhanced capacity utilisation across
• TheCapital Expenditure of Central Government and crowding in the private Capex led by strengthening of the balance sheets of the Corporates is one of the growth driver of the Indian economy in the current
• Thecredit growth to the MSME sector was over 6 per cent on average during Jan-Nov 2022.
• Retailinflation is back within RBI’s target range in November
• IndianRupee performed well compared to other Emerging Market Economies in Apr-Dec2022.
• DirectTax collections for the period April-November 2022 remain
• EnhancedEmployment generation seen in the declining urban unemployment rate and in the faster net registration in Employee Provident
• Economicgrowth to be boosted from the expansion of public digital platforms and measures to boost manufacturing output

                                                                Economic growth remains resilient

 

India growth projections by various agencies for FY23

Chapter : 2  India’s Medium Term Growth Outlook: with Optimism and Hope

• Indian economy underwent wide-ranging structural and governance reforms that strengthened the economy’s fundamentals byenhancing its overall efficiency during 2014-2022.
• Withan underlying emphasis on improving the ease of living and doing business, the reforms after 2014 were based on the broad principles of creating public goods, adopting trust-based governance, co-partnering with the private sector for development, and improving agricultural
• Theperiod of 2014-2022 also witnessed balance sheet stress caused by the credit boom in the previous years and one-off global shocks, that adversely impacted the key macroeconomic variables such as credit growth, capital formation, and hence economic growth during this
• Thissituation is analogous to the period 1998-2002 when transformative reforms undertaken by the government had lagged growth returns due to temporary shocks in the  Once these shocks faded, the structural reforms paid growth dividends from 2003.
• Similarly,the Indian economy is well placed to grow faster in the coming decade once the global shocks of the pandemic and the spike in commodity prices in 2022 fade
• Withimproved and healthier balance sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has already begun, evident from the double-digit growth in bank credit over the past
• Indianeconomy has also started benefiting from the efficiency gains resulting from greater formalisation, higher financial inclusion, and economic opportunities created by digital technology-based economic
• ThusChapter 2 of the Survey shows that India’s growth outlook seems better than in the pre-pandemic years, and the Indian economy is prepared to grow at its potential in the medium

Gross Fiscal Deficit (centre and states combined) (% of GDP)

Growth in Non-Food Credit by Scheduled Commercial Banks

 Union government’s capital expenditure as a per cent of GDP on the rise

Chapter : 3  Fiscal Developments: Revenue Relish 

• TheUnion Government finances have shown a resilient performance during the year FY23, facilitated by the recovery in economic activity, buoyancy in revenues from direct taxes and GST, and realistic assumptions in the
• TheGross Tax Revenue registered a YoY growth of 5 per cent from April to November 2022, driven by robust growth in the direct taxes and Goods and Services Tax (GST).
• Growthin direct taxes during the first eight months of the year was much higher than their corresponding longer-term
• GST has stabilised as a vital revenue source for central and state governments, with the gross GST collections increasing at 24.8 percent on YoY basis from April to December
• Union Government’s emphasis on capital expenditure (Capex) has continued despite higher revenue expenditure requirementsduring the  The Centre’s Capex has steadily increased from a long-term average of 1.7 per cent of GDP (FY09 to FY20) to 2.5 per cent of GDP in FY22 PA.
• TheCentre has also incentivised the State Governments through interest-free loans and enhanced borrowing ceilings to prioritise their spending on
• With an emphasis on infrastructure-intensive sectors like roads and highways, railways, and housing and urban affairs, the increase inCapex has large-scale positive implications for medium-term
• TheGovernment’s Capex-led growth strategy will enable India to keep the growth-interest rate differential positive, leading to a sustainable debt to GDP in the medium run.

High YoY growth in cumulative Gross GST collections from April to December Continued momentum in monthly Gross GST collections over the years

Composition of tax profile of Union Government (FY23 BE)

Growth in Centre’s direct taxes are higher than their corresponding longer term averages during the period April to November

Chapter : 4  Monetary Management and Financial Intermediation: A Good Year

• TheRBI initiated its monetary tightening cycle in April 2022 and has since raised the repo rate by 225 bps, leading to moderation of surplus liquidity
• Cleanerbalance sheets led to enhanced lending by financial
• Thegrowth in credit offtake is expected to sustain, and combined with a pick-up in private capex, will usher in a virtuous investment
• Non-foodcredit offtake by scheduled Commercial Banks (SCBs) has been growing in double digits since April
• Creditdisbursed by Non-Banking Financial Companies (NBFCs) has also been on the
• TheGross Non-Performing Assets (GNPA) ratio of SCBs has fallen to a seven-year low of 0.
• TheCapital-to-Risk Weighted Assets Ratio (CRAR) remains healthy at 0.
• Therecovery rate for the SCBs through Insolvency and Bankruptcy (IBC) was highest in FY22 compared to other channels

Policy Rates

Banking System: Improvement in Asset quality and strengthening of balance sheet

Chapter : 5  Prices and Inflation: Successful Tight-Rope Walking

• Whilethe year 2022 witnessed a return of high inflation in the advanced world after three to four decades, India caps the rise in
• While India’s retail inflation rate peaked at 7.8 per cent in April 2022, above the RBI’s upper tolerance limit of 6 per cent, the overshootof inflation above the upper end of the target range in India was however one of the lowest in the
• Thegovernment adopted a multi-pronged approach to tame the increase in price levels
• Phasewise reduction in export duty of petrol and diesel
• Importduty on major inputs were brought to zero while tax on export of iron ores and concentrates increased from 30 to 50 per cent
• Waivedcustoms duty on cotton imports e.f 14 April 2022, until 30 September 2022
• Prohibitionon the export of wheat products under HS Code 1101 and imposition of export duty on rice
• Reductionin basic duty on crude and refined palm oil, crude soyabean oil and crude sunflower oil
• TheRBI’s anchoring of inflationary expectations through forward guidance and responsive monetary policy has helped guide the trajectory of inflation in the
• The one-year-aheadinflationary expectations by both businesses and households have moderated in the current financial year.
• Timelypolicy intervention by the government in housing sector, coupled with low home loan interest rates propped up demand and attracted buyers more readily in the affordable segment in
• An overall increase in composite Housing Price Indices (HPI) assessment and Housing Price Indices market prices indicates a revivalin the housing finance sector. A stable to moderate increase in HPI also offers confidence to homeowners and home loan financiers in terms of the retained value of the
• India’s inflation management has been particularly noteworthy and can be contrasted with advanced economies that are still grapplingwith sticky inflation

Record Consumer Price Inflation in 2022 Calendar Year

Composite HPI for All-India – Recovering Housing House

Chapter : 6  Social Infrastructure and Employment: Big Tent 

• SocialSector witnessed significant increase in government
• Centraland State Government’s budgeted expenditure on health sector touched 1% of GDP in FY23 (BE) and 2.2% in FY22 (RE) against 1.6% in FY21.
• Socialsector expenditure increases to  21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16.
• Surveyhighlights the findings of the 2022 report of the UNDP on Multidimensional Poverty Index which says that 5 crore people exit poverty in India between 2005-06 and 2019-20.
• TheAspirational Districts Programme has emerged as a template for good governance, especially in remote and difficult
• eShramportal developed for creating a National database of unorganised workers, which is verified with  As on 31 December 2022, a total of over 28.5 crore unorganised workers have been registered on eShram portal.
• JAM(Jan-Dhan, Aadhaar, and Mobile) trinity, combined with the power of DBT, has brought the marginalised sections of society into the formal financial system, revolutionising the path of transparent and accountable governance by empowering the
• Aadhaar played avital role in developing the Co-WIN platform and in the transparent administration of over 2 billion vaccine
• Labourmarkets have recovered beyond pre-Covid levels, in both urban and rural areas, with unemployment rates falling from 8 per cent in 2018-19 to 4.2 per cent in 2020-21.
• The year FY22 saw improvement in Gross Enrolment Ratios (GER) in schools and improvement in gender parity. GER in the primary-enrolment in class I to V as a percentage of the population in age 6 to 10 years – for girls as well as boys have improved in
• Dueto several steps taken by the government on health, out-of-pocket expenditure as a percentage of total health expenditure declined from 2% in FY14 to 48.2% in FY19.
• InfantMortality Rate (IMR), Under Five mortality rate (U5MR) and neonatal Mortality Rate (NMR) have shown a steady
• Morethan 220 crore COVID vaccine doses administered as on 06 January,
• Nearly22 crore beneficiaries have been verified under the Ayushman Bharat Scheme as on 04 January,  Over 1.54 lakh Health and Wellness Centres have been operationalized across the country under Ayushman Bharat.

Trends in social service sector expenditure by General Government (Combined Centre and States)

Chapter : 7  Climate Change and Environment: Preparing to Face the Future

• India declared the Net Zero Pledge to achieve net zero emissions goal by
• India achieved its target of 40 per cent installed electric capacity from non-fossil fuels ahead of
• The likely installed capacity from non-fossil fuels to be more than 500 GW by 2030 resulting in decline of average emission rate by around 29% by 2029-30, compared to 2014-15.
• India to reduce emissions intensity ofits GDP by 45% by 2030 from 2005 levels.
• About 50% cumulative electric power installed capacity to come from non-fossil fuel-based energy resources by
• Amass movement LIFE– Life style for Environment
• Sovereign Green Bond Framework (SGrBs) issued in November
• RBI auctions two tranches of ₹4,000 crore Sovereign Green Bonds (SGrB).
• NationalGreen Hydrogen Mission to enable India to be energy independent by 2047.
• Green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum to be developed by 2030. Cumulativereduction in fossil fuel imports over ₹1 lakh crore and creation of over 6 lakh jobs by 2030 under the National green Hydrogen Mission. Renewable energy capacity addition of about 125 GW and abatement of nearly 50 MMT of annual GHG emissions by
• The Survey highlights the progress on eight missions under the NAP on CC to address climate concerns and promote sustainable
• Solar power capacity installed, a key metric under the National Solar Mission stood at 6 GW as on October 2022.
• India becoming a favored destination for renewables; investments in 7 years stand at USD 1 billion.
• 8 lakh individual household toilets and 6.2 lakh community and public toilets constructed (August 2022) under the National Missionon Sustainable Habitat.

Net Zero Pledges of countries (the Year pledged is on top of the bars)

 

 Increasing installed Electricity Generation Capacity with a rising share of nonfossil fuel-based capacity

Chapter : 8  Agriculture and Food Management 

• The performance of the agriculture and allied sector has been buoyant over the past several years, much of which is on account of the measures taken by the government to augment crop and livestock productivity, ensure certainty of returns to the farmers through price support, promote crop diversification, improve market infrastructure through the impetus provided for the setting up of farmer- producer organisations and promotion of investment in infrastructure facilities through the Agriculture Infrastructure
• Private investment in agriculture increases to 3% in 2020-21.
• MSP for all mandated crops fixed at 5 times of all India weighted average cost of production since 2018.
• Institutional Credit to the Agricultural Sector continued to grow to 6 lakh crore in 2021-22
• Food grains production in India saw sustained increase and stood at 7 million tonnes in 2021-22.
• Freefoodgrains to about 4 crore beneficiaries under the National Food Security Act for one year from January 1, 2023.
• About 3 crore farmers were covered under the Scheme in its April-July 2022-23 payment cycle.
• Rs13,681 crores sanctioned for Post-Harvest Support and Community Farms under the Agriculture Infrastructure
• Online,Competitive, Transparent Bidding System with 74 crore farmers and 2.39 lakh traders put in place under the National Agriculture Market (e-NAM) Scheme.
• Organic Farming being promoted through Farmer Producer Organisations (FPO) under the Paramparagat Krishi Vikas Yojana (PKVY).
• India stands at the forefront to promote millets through the International Year of Millets

 

Crowding in of Private investment in agriculture

 Continued Increase in Institutional Credit to Agriculture Sector (₹ lakh crore)

Chapter : 9  Industry: Steady Recovery 

• Overall Gross Value Added (GVA) by the Industrial Sector (for the first half of FY 22-23) rose 7 per cent, which is higher than the average growth of 2.8 per cent achieved in the first half of the last decade.
• Robust growth in Private Final Consumption Expenditure, export stimulus during the first half of the year, increase in investment demand triggered by enhanced public capex and strengthened bank and corporate balance sheets have provided a demand stimulus to industrial
• The upply response of the industry to the demand stimulus has been
• PMImanufacturing has remained in the expansion zone for 18 months since July 2021, and Index of Industrial Production (IIP) grows at a healthy
• Creditto Micro, Small and Medium Enterprises (MSMEs) has grown by an average of around 30% since January 2022 and credit to large industry has been showing double-digit growth since October
• Electronics exports rise nearly threefold, from US $4.4 billion in FY19 to US $11.6 Billion in
• India has become thesecond-largest mobile phone manufacturer globally, with the production of handsets going up from 6 crore units in FY15 to 29 crore units in
• ForeignDirect Investment (FDI) flows into the Pharma Industry has risen four times, from US $180 million in FY19 to US $699 million in
• The Production Linked Incentive (PLI) schemes introduced across 14 categories, with an estimated capex of ₹4 lakh crore over thenext five years, to plug India into global supply  Investment of ₹47,500 crores has been seen under the PLI schemes in the FY22, which is 106% of the designated target for the year. Production/sales worth ₹3.85 lakh crore and employment generation of 3.0 lakh have been recorded due to PLI schemes.
• Over39,000 compliances have been reduced and more than 3500 provisions decriminalized as of January

PMI Manufacturing remains in expansionary zone Sub-indices of IIP growing at a healthy pace (Apr-Nov)

 Sector-wise FDI Equity Inflows in 2022-23 during April-September 2022

Chapter : 10 Services: Source of Strength

• The services sector is expected to grow at 1% in FY23, as against 8.4% (YoY) in FY22.
• Robust expansion in PMI services, indicative of service sector activity, observed since July
• Indiawas among the top ten services exporting countries in 2021, with its share in world commercial services exports increasing from 3 per cent in 2015 to 4 per cent in
• India’s services exports remained resilient during the Covid-19 pandemic and amid geopolitical uncertainties driven by higher demand for digital support, cloud services, and infrastructure
• Creditto services sector has grown by over 16% since July
• US$1 billion FDI equity inflows in services sector in FY22.
• Contact-intensiveservices are set to reclaim pre-pandemic level growth rates in FY23.
• Sustained growth in the real estatesector is taking housing sales to pre-pandemic levels, with a 50% rise between 2021 and 2022.
• Hotel occupancy rate has improved from 30-32% in April 2021 to 68-70% in November
• Tourism sector is showing signs of revival, with foreign tourist arrivals in India in FY23 growing month-on-month with resumption of scheduled international flights and easing of Covid-19
• Digital platforms are transforming India’s financial
• India’s e-commerce market isprojected to grow at 18 per cent annually through 2025.

Broad-based growth in the Services sector

 Services Exports remained resilient amid geopolitical uncertainties

Chapter : 11  External Sector 

• Merchandiseexports were US$ 8 billion for April-December 2022.
• Indiadiversified its markets and increased its exports to Brazil, South Africa and Saudi
• Toincrease its market size and ensure better penetration, in 2022, CEPA with UAE and ECTA with Australia come into
• Indiais the largest recipient of remittances in the world receiving US$ 100 bn in 2022. Remittances are the second largest major source of external financing after service export
• As of December 2022, ForexReserves stood at US$ 563 bn covering 3 months of imports.
• Asof end-November 2022, India is the sixth largest foreign exchange reserves holder in the
• Thecurrent stock of external debt is well shielded by the comfortable level of foreign exchange
• Indiahas relatively low levels of total debt as a percentage of Gross National Income and short-term debt as a percentage of total debt.

Top Remittance recipients of the World during 2022 (Estimated)

Debt ratios: Cross-country comparison for 2021

Chapter : 12 Physical and Digital Infrastructure 

Government’s Vision for Infrastructure Development

• Public Private Partnerships

• In-Principal Approval granted to 56 projects with Total Project Cost of ₹57,870.1 crore under the VGF Scheme, from 2014-15 to 2022-
• IIPDFScheme with ₹150 crore outlay from FY 23-25 was notified by the government on 03 November,

• National Infrastructure Pipeline

• 89,151projects costing ₹141.4 lakh crore under different stages of implementation
• 1009projects worth ₹5.5 lakh crore completed
• NIPand Project Monitoring Group (PMG) portal linkage to fast-track approvals/ clearances for projects

• National Monetisation Pipeline

• ₹0 lakh crore is the estimated cumulative investment potential.
• ₹9 lakh crore monetisation target achieved against expected ₹0.8 lakh crore in FY22.
• FY23target is envisaged to be ₹1.6 lakh crore (27 per cent of overall NMP Target)

• GatiShakti

• PMGatiShakti National Master Plan creates comprehensive database for integrated planning and synchronised implementation across Ministries/
• Aimsto improve multimodal connectivity and logistics efficiency while addressing the critical gaps for the seamless movement of people and

Electricity Sector and Renewables

• Ason 30 September 2022, the government has sanctioned the entire target capacity of 40 GW for the development of 59 Solar Parks in 16
• 2lakh GWh electricity generated during the year FY22 compared to 15.9 lakh GWh during FY21.
• Thetotal installed power capacity (industries having demand of 1 Mega Watt (MW) and above) increased from 7 GW on 31 March 2021 to 482.2 GW on 31 March 2022.

Making Indian Logistics Globally Competitive

• NationalLogistics Policy envisions to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem in the country for accelerated and inclusive
• Rapidincrease in National Highways (NHs) /Roads Construction with 10457 km NHs/roads constructed in FY22 compared to 6061 km in
• Budgetexpenditure increased from ₹1.4 lakh crore in FY20 to ₹2.4 lakh crore in FY23 giving renewed push to Capital
• 2359Kisan rails transported approximately 91 lakh tonnes of perishables, as of October 2022.
• Morethan one crore air passengers availed the benefit of the UDAN scheme since its inception in
• Neardoubling of capacity of major ports in 8
• InlandVessels Act 2021 replaced 100-year-old Act to ensure hassle free movement of Vessels promoting Inland Water

India’s Digital Public Infrastructure

• Unified Payment Interface (UPI)

• UPI-basedtransactions grew in value (121 per cent) and volume (115 per cent) terms, between 2019-22, paving the way for its international

• Telephone and Radio – For Digital Empowerment

• Totaltelephone subscriber base in India stands at 8 crore (as of Sept,22), with 44.3 per cent of subscribers in rural India.
• Morethan 98 per cent of the total telephone subscribers are connected
• Theoverall tele-density in India stood at 8 per cent in March 22.
• 200per cent increase in rural internet subscriptions between 2015 and
• PrasarBharati (India’s autonomous public service broadcaster) – broadcasts in 23 languages, 179 dialects from 479  Reaches 92 per cent of the area and 99.1 per cent of the total population.

• Digital Public Goods

• Achievedlow-cost accessibility since the launch of Aadhaar in 2009
• Underthe government schemes, MyScheme, TrEDS, GEM, e-NAM, UMANG has transformed market place and has enabled citizens to access services across sectors
• UnderAccount Aggregator, the consent-based data sharing framework is currently live across over 110 crore bank
• OpenCredit Enablement Network aims towards democratising lending operations while allowing end-to-end digital loan applications
• NationalAI 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 g. ‘Bhashini’.
• Legislationsare being introduced for enhanced user privacy and creating an ecosystem for standard, open, and interoperable protocols underlining robust data

Central Government has sharply increased Capital Expenditure in the last two consecutive years