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Economic survey 2023-24
Chapter 1” state of economy: steady as she goes”
Submitted in partial fulfillment of the requirements for the award of the degree of
BACHELOR OF ARTS AND LAW ( Hons.)
By
Lakshaya pratap singh
Enroll.no. 24917703823
III-E
Submitted to professor
Mr. Vinay juneja
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Introduction
The Economic Survey 2023-24 presents a comprehensive analysis of India's economic
landscape, highlighting its resilience and stability amidst global challenges. The first chapter,
"State of Economy: Steady as She Goes," delves into the key indicators that reflect the robust
performance of the Indian economy. This chapter underscores the sustained growth trajectory,
supported by strong fundamentals, inclusive policies, and strategic reforms.
In a world grappling with economic uncertainties, this survey emphasizes India’s steady
advancement in various sectors, including manufacturing, services, and agriculture. It assesses
macroeconomic stability, inflation control, fiscal prudence, and external trade dynamics,
illustrating how these elements contribute to the overall economic health.
Moreover, the chapter explores the impacts of technological innovations and digital
transformation, which play a crucial role in driving productivity and enhancing competitiveness.
By examining employment trends, investment flows, and consumption patterns, it provides a
nuanced understanding of how diverse segments of the economy are performing.
In summary, "State of Economy: Steady as She Goes," sets the stage for understanding India's
current economic situation while laying the groundwork for future growth prospects. It
underscores the government's commitment to maintaining stability and fostering an environment
conducive to sustainable development.
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The global economic scenario
The global economic scenario in 2023-24 was shaped by several key factors, including post-
pandemic recovery, inflationary pressures, supply chain disruptions, and geopolitical tensions.
Many economies focused on stabilizing growth after the impacts of COVID-19, with various
fiscal and monetary policies in place to stimulate recovery.
1. Inflation: Inflation rates remained elevated in many countries, driven by supply chain issues
and increased demand as economies reopened. Central banks, including the Federal Reserve, had
to navigate between supporting growth and controlling inflation.
2. Interest Rates: In response to inflation, several central banks began raising interest rates,
which impacted borrowing costs and investment decisions.
3. GDP Growth: Global GDP growth was forecasted to moderate compared to the rebound in
2021-2022, with emerging markets showing mixed recovery rates. Advanced economies also
faced slower growth due to more mature recovery processes.
4. Geopolitical Tensions: Ongoing geopolitical issues, including tensions related to Russia's
Ukraine invasion and U.S.-China relations, affected global trade and investment sentiment.
5. Climate and Sustainability: There was an increased focus on sustainability, with countries
committing to greener policies and investments, potentially impacting various sectors.
6. Technology and Innovation: The tech sector continued to thrive, with advancements in AI,
digital transformation, and other technologies reshaping industries.
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Overall, the landscape was complex, marked by both challenges and opportunities as countries
sought to balance recovery efforts with ongoing economic pressures.
Resilient domestic economy
The resilience of India's domestic economy in the fiscal year 2023-24 can be analyzed through
several key aspects that showcase its strength and ability to withstand external shocks and
internal challenges. Here are the main points:
1. Strong Growth Trajectory:
- GDP Growth: India continued to experience robust GDP growth rates, projected at around 6-
7%. This growth was driven by strong performance in services, manufacturing, and agriculture.
- Consumption Demand: Private consumption, which contributes significantly to GDP,
remained strong. Increased disposable incomes and rural demand contributed positively.
2. Robust Domestic Consumption:
- Urban and Rural Demand: The urban middle class's resurgence and rural income growth
fueled demand in sectors like FMCG, automobiles, and housing.
- Government Support: Various government initiatives, including direct cash transfers and
subsidies, bolstered consumer spending.
3. Investment Environment:
- Foreign Direct Investment (FDI): India continued to attract significant FDI, bolstered by
reforms aimed at simplifying regulations and enhancing ease of doing business.
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- Public and Private Investments: Government spending on infrastructure projects and private
sector investments in technology and innovation showed resilience.
4. Diversified Export Base:
- Export Growth: While global economic conditions were mixed, India's exports showed
resilience, with growth in sectors like pharmaceuticals, textiles, and IT services.
- Diversification of Markets: India expanded its trading partnerships, reducing reliance on
traditional markets and tapping into newer regions.
5. Robust Financial Sector
- Banking Stability: The banking sector showed resilience with improved asset quality,
reduced non-performing assets (NPAs), and increased credit growth.
- Policy Support: The Reserve Bank of India maintained accommodative monetary policies,
ensuring liquidity in the economy.
6. Agricultural Resilience
- Good Monsoons: Favorable monsoon conditions and government support for crop insurance
and irrigation contributed to agricultural growth.
- Diversification: Farmers increasingly diversified crops, reducing vulnerability to market
fluctuations and climate variability.
7. Digital Transformation
- E-commerce Growth: Rapid growth in e-commerce and digital payments bolstered various
sectors and enabled businesses to adapt to changing consumer preferences.
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- Start-up Ecosystem: India became a hub for start-ups, driving innovation and creating jobs
across sectors.
8. Social Factors
- Labor Market Recovery: Employment rates improved post-pandemic, with labor-intensive
sectors seeing a resurgence in hiring.
- Skill Development Initiatives: Government and private sector initiatives in skill
development helped in adapting to market needs.
9. Geopolitical Stability
- Regional Cooperation: India’s strategic partnerships with neighboring countries and
participation in global forums helped maintain economic stability amidst geopolitical tensions.
10. Challenges and Responses
- Global Economic Uncertainties: The government responded effectively to global
inflationary pressures through strategic measures to stabilize prices and supply chains.
- Health and Social Safety Nets: Continued investment in health infrastructure ensured
resilience against potential new waves of COVID-19 and public health challenges.
In summary, the resilience of India's domestic economy in 2023-24 can be attributed to strong
growth in consumption and investment, a diversified export base, a stable financial sector, and
effective government initiatives. These factors, combined with the nation’s proactive approach to
addressing challenges, contributed to maintaining a robust economic outlook amid global
uncertainties.
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Macroeconomic stability
The fiscal year 2023-24 highlighted the significance of macroeconomic stability in safeguarding
the growth of the Indian economy, as articulated in Chapter 1 of the Economic Survey 2023-24.
Here’s a detailed explanation of how macroeconomic stability contributed to economic growth:
1. Role of Macroeconomic Stability
Macroeconomic stability is essential for nurturing an environment conducive to sustainable
growth. It includes balanced inflation, fiscal discipline, a stable currency, and sustainable growth
rates.
2. Inflation Control
- Managed Inflation Rates: The Reserve Bank of India (RBI) maintained inflation within the
targeted range. This was crucial in ensuring purchasing power remained intact, fostering
consumer confidence and spending.
- Supply Chain Resilience: Efforts to stabilize supply chains minimized the impact of global
shocks, helping control food and fuel prices, thus safeguarding household consumption.
3. Fiscal Discipline
- Prudent Fiscal Policy: The government adhered to fiscal discipline through careful
expenditure management and revenue generation. This helped in maintaining a sound fiscal
position while allowing for targeted welfare spending.
- Investment in Infrastructure: Fiscal stability enabled increased public investment in
infrastructure projects, creating jobs and stimulating demand across various sectors.
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4. Monetary Policy Framework
- Accommodative Monetary Policy: The RBI’s accommodative stance ensured liquidity in the
financial system, enabling businesses to access capital at lower rates. This support was pivotal
for the revival of investment.
- Policy Interest Rates: By adjusting policy interest rates thoughtfully, the RBI navigated
inflationary pressures while supporting growth. This approach encouraged borrowing and
investment.
5. Exchange Rate Stability
- Stable Currency: A stable Indian Rupee helped maintain competitiveness in exports and
stabilized import costs, supporting overall economic growth. It also improved investor
confidence.
- Foreign Exchange Reserves: Adequate reserves provided a buffer against external shocks,
easing concerns about currency volatility.
6. Employment Generation
- Job Creation Initiatives: Macroeconomic stability facilitated employment generation.
Increased investment in various sectors translated into job opportunities, enhancing overall
economic output.
- Skill Development Programs: Government initiatives in upskilling the workforce aided in
aligning skills with market demand, contributing to productivity.
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7. Allied Economic Sectors
- Agricultural Support: By ensuring macroeconomic stability, the government could support
crucial sectors like agriculture through direct interventions and subsidies, enhancing rural
incomes and consumption.
- Manufacturing Boost: Stability encouraged investments in the manufacturing sector as
businesses felt more secure regarding the economic environment.
8. Resilience Against External Shocks
- Global Economic Conditions: With geopolitical tensions and global economic slowdowns,
macroeconomic stability acted as a shield, enabling India to withstand shocks better than more
vulnerable economies.
- Trade Diversification: Efforts to broaden trade partnerships reduced reliance on few
markets, supporting export growth amidst challenges.
9. Consumer and Business Confidence
- Positive Economic Indicators: Consistent growth indicators, such as improved GDP
projections, fostered confidence among consumers and businesses, driving consumption and
investment.
- Successful Reforms: Implementing reforms, especially in labor and taxation, projected a
pro-business government stance that enhanced confidence in the economy.
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10. Social Welfare Initiatives
- Targeted Social Programs: Macro stability allowed the government to fund various social
welfare schemes effectively, which bolstered rural and marginalized communities, ensuring
inclusive growth.
The macroeconomic stability of India during the fiscal year 2023-24, as outlined in Chapter 1 of
the Economic Survey, was integral to safeguarding economic growth. Through controlled
inflation, fiscal discipline, adept monetary policy, and a stable currency, India created an
environment that fostered investor confidence, consumer spending, and sustainable job creation.
This stability provided a robust foundation for the economy to navigate challenges and maintain
a positive growth trajectory even in a complex global economic landscape.
Condition of Capital expenditure and revenue expenditure
In the fiscal year 2023-24, the condition of capital expenditure and revenue expenditure in the
Indian economy was critical for overall economic health and growth, as outlined in the
Economic Survey 2023-24. Here’s a comprehensive breakdown of both types of expenditure:
1. Capital Expenditure
Capital expenditure (CapEx) refers to government spending on long-term assets aimed at
enhancing future economic growth. It includes investments in infrastructure, machinery, and
facilities.
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Key Points:
- Increased Allocation: The government allocated significant resources to capital expenditure to
bolster growth, especially in infrastructure sectors like transportation, energy, and urban
development.
- Infrastructure Development: Key projects in roads, railways, and ports were prioritized to
improve connectivity and productivity, fostering economic activity.
- Public Sector Investments: State-owned enterprises were encouraged to invest in capital
projects, contributing to economic development and job creation.
- Multiyear Planning: The approach involved a multiyear perspective for mega projects,
ensuring sustained investment flow and project completion.
2. Revenue Expenditure
Revenue expenditure (RevEx) refers to government spending on day-to-day operations and
services, including salaries, pensions, and subsidies.
Key Points:
- Sustained Welfare Spending: A substantial portion of revenue expenditure was directed
towards social welfare schemes, ensuring food security, health, and education, thereby
supporting lower-income segments.
- Maintaining Fiscal Discipline: While increasing revenue expenditure to meet social
obligations, the government aimed to balance it with the need for fiscal discipline to avoid
excessive deficits.
- Subsidy Management: The government undertook measures to manage subsidies effectively,
focusing on targeting and ensuring that benefits reached the intended recipients.
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- Current Fiscal Accountability: Revenue expenditure was scrutinized for efficiency, with
initiatives to streamline government operations and cut unnecessary costs where possible.
3. Balance Between Capital and Revenue Expenditure
Importance of Balance:
- Growth vs. Social Spending: A healthy balance between capital and revenue spending is
crucial, as too much revenue expenditure may lead to fiscal deficit while insufficient capital
spending could stifle long-term growth.
- Investment for Future Growth: Emphasizing capital expenditure helps lay the groundwork for
future economic growth; however, maintaining adequate revenue expenditure is necessary for
societal stability and immediate needs.
- Job Creation and Economic Activity: Capital expenditure directly contributes to job creation
through infrastructure projects, while revenue expenditure supports consumption and ensures
economic stability.
4. Challenges and Considerations
- Fiscal Deficit Management: With increased capital spending, managing the fiscal deficit
remained a challenge, as the government needed to balance growth-promoting investments with
prudent fiscal policies.
- Inflationary Pressures: The increase in expenditure could potentially lead to inflationary
pressures, requiring careful monitoring and adjustments in fiscal and monetary policy.
- Global Economic Context: Global economic uncertainties necessitated a cautious approach to
expenditure, ensuring that both CapEx and RevEx were aligned with external conditions.
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In summary, the condition of capital and revenue expenditure in the Indian economy during the
fiscal year 2023-24, as discussed in the Economic Survey 2023-24, reflects a strategic focus on
enhancing growth through increased capital spending while maintaining adequate revenue
expenditure for social welfare. This balance aimed at fostering immediate economic stability and
long-term growth, while navigating the challenges posed by fiscal deficits and global economic
conditions. The careful management of both types of expenditure is crucial for sustaining India’s
economic trajectory in a complex global environment.
Inclusive growth
In the fiscal year 2023-24, the Indian economy saw a significant shift in the approach to
inclusive growth and welfare strategies. This shift is characterized by a focus on equitable
economic development that benefits all segments of society, especially marginalized and
underserved groups. Here are the key aspects of this shift:
1. Focus on Targeted Welfare Programs
- Direct Benefit Transfers (DBT): The government enhanced the implementation of DBT
mechanisms to ensure that welfare benefits reach the intended recipients directly, reducing
leakages and inefficiencies, and increasing transparency.
- Tailored Schemes: Welfare programs were designed to meet the specific needs of different
socio-economic groups, including women, Scheduled Castes (SC), Scheduled Tribes (ST), and
economically weaker sections (EWS), ensuring a more inclusive approach.
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2. Emphasis on Employment Generation
- Job Creation Initiatives: The government prioritized initiatives to create jobs, such as skill
development programs, vocational training, and support for small and medium enterprises
(SMEs) to foster entrepreneurship among youth and marginalized communities.
- Gender Inclusion in Workforce: There was a significant push to increase women's
participation in the labor force through skill development and incentives for businesses adopting
gender-inclusive hiring practices.
3. Social Infrastructure Investment
- Healthcare and Education: Increased investments were made in healthcare and education
systems to uplift low-income families, aiming for universal access and improved quality, which
is vital for long-term inclusive growth.
- Affordable Housing: Initiatives for affordable housing aimed at providing shelter for low-
income groups were emphasized, ensuring that housing is accessible and affordable for all.
4. Agricultural Support and Sustainability
- Farmers' Welfare: Programs aimed at enhancing the income of farmers were prioritized,
including improved access to credit, subsidies for seeds and fertilizers, and initiatives for
sustainable agricultural practices.
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- Rural Development Initiatives: Rural infrastructure development was crucial in providing
greater access to markets, healthcare, and education for rural populations, contributing to overall
economic growth.
5. Digital Inclusion
- Digital Platforms for Welfare: The government promoted the use of digital platforms for
delivering services, enhancing accessibility to welfare schemes, and fostering digital literacy,
especially among rural and marginalized populations.
- E-governance Enhancements: Initiatives to digitize government services made it easier for
citizens to access benefits and services, reducing bureaucratic hurdles and empowering
individuals.
6. Collaborative Approach
- Public-Private Partnerships (PPPs): The emphasis on collaboration between government,
private sector, and civil society aimed to leverage resources and expertise, fostering more
innovative and sustainable welfare solutions.
- Community Participation: There was an increased focus on involving local communities in
decision-making processes, ensuring that welfare programs align with the actual needs and
aspirations of the people.
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7. Measuring Impact and Accountability
- Data-Driven Policies: The government emphasized data collection and analysis to monitor the
effectiveness of welfare programs and make informed policy decisions, ensuring accountability
and responsiveness.
- Feedback Mechanisms: The establishment of mechanisms for citizen feedback helped in
refining programs based on ground realities, promoting a more responsive governance
framework.
the fiscal year 2023-24 marked a pivotal shift in India’s approach to inclusive growth and
welfare, focusing on targeted, efficient, and participatory policies aimed at benefiting all sections
of society. By addressing the specific needs of marginalized groups, boosting employment,
investing in social infrastructure, and promoting digital inclusion, the government aimed to foster
a more equitable and sustainable economic environment. This approach not only aims to improve
immediate welfare but also positions India for resilient and inclusive long-term growth.
Critical Analysis
The Economic Survey 2023-24 marks a significant contribution to the understanding of India’s
economic landscape, presenting a well-rounded analysis of the current conditions and underlying
trends. The first chapter, “State of Economy: Steady as She Goes,” offers insights into the
resilience and challenges of the Indian economy post-pandemic. This essay critically analyzes
this chapter, highlighting its major points and providing a reflective conclusion on its
implications for policymakers and the general public.
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To begin with, the chapter aptly highlights the recovery trajectory of the Indian economy after
the severe impacts of the COVID-19 pandemic. It outlines the growth rate forecasted for the
fiscal year ahead, which, while indicating a moderate increase, underscores the stability that the
country has achieved in the face of international economic headwinds. The survey projects a
GDP growth rate of approximately 6-6.5%, amidst global uncertainties including supply chain
disruptions and geopolitical tensions. The phrase “steady as she goes” indeed encapsulates the
cautious optimism that characterizes the government’s economic strategy.
The survey employs an empirical approach, utilizing statistical data to substantiate its claims
regarding economic performance. For instance, the chapter discusses the resilience of key sectors
such as agriculture, manufacturing, and services, highlighting that agricultural output has
remained stable even in the face of erratic weather patterns. Importantly, the revival of the
manufacturing sector, particularly under the flagship Make in India initiative, reflects positively
on government policies aimed at enhancing domestic production and reducing import
dependency.
However, while the survey rightfully commends the government's efforts to stimulate growth, it
does not shy away from acknowledging the underlying challenges. The persistent inflationary
pressures and high unemployment rates continue to loom over the economic landscape. The
consumer price index has remained elevated, and food inflation, in particular, raises concerns
about purchasing power and food security. Although the Reserve Bank of India (RBI) has
employed various monetary policy tools to curb inflation, the interplay between interest rates,
growth, and inflation creates a precarious situation for policymakers.
Furthermore, the survey emphasizes the importance of structural reforms to sustain growth in the
long-term. The analysis of labor markets reveals significant informality, which poses challenges
to job creation and workers’ rights. Addressing these structural inefficiencies is crucial for not
only enhancing the quality of jobs but also ensuring equitable economic growth. The survey thus
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calls for a cohesive strategy that integrates skill development, entrepreneurship, and
technological innovation into the broader economic framework.
Moreover, the chapter touches upon the digital transformation that has been accelerated by the
pandemic. The emphasis on digital infrastructure and financial inclusion is particularly pertinent
in a country where a significant portion of the population has historically been excluded from
formal financial systems. While the Digital India initiative has made strides in this regard,
ensuring equitable access to technology remains a goal that requires sustained effort and
investment.
In terms of policy suggestions, the survey advocates for increased investment in infrastructure,
particularly in urban areas, to spur economic activity. The focus on green energy transition and
sustainability is also highlighted as a pathway to a resilient economy, aligning with global
mandates for sustainable development. However, the objectives outlined within the chapter,
especially those relating to environmental sustainability, must be met with actionable plans and
commitments from both public and private sectors.
In conclusion, the Economic Survey 2023-24 presents a balanced view of the Indian economy’s
status, articulating the dual facets of resilience and challenge. While the outlook remains
optimistic, the journey ahead demands that policymakers confront existing structural issues,
inflationary concerns, and the need for inclusive growth. The chapter aptly encapsulates the
essence of economic policymaking as a continuous balancing act between nurturing growth and
addressing socio-economic disparities. As India progresses through this phase, it is crucial for
stakeholders at all levels to engage with these insights, fostering a collaborative approach that
enables sustainable and inclusive economic development. The phrase “steady as she goes” serves
as both an affirmation of the current state and a reminder of the vigilance required to navigate the
complexities of the evolving global economy.
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