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Economic Survey 2023: Why is it significant and what can we expect?

1 month ago 31

With the Economic Survey of India begins the Budget session of the Parliament. The survey is presented every year, a day before the Union Budget is announced, mostly on 31 January. On Tuesday, it will be presented by the Chief Economic Advisor (CEA) V Anantha Nageswaran Tuesday after being tabled by Finance Minister Nirmala Sitharaman in the Parliament.

Here’s why we need to pay attention to the Economic Survey.

Also read: Budget 2023 Expectations LIVE Updates

What is the Economic Survey?

The Economic Survey of India is an annual report card released by the finance ministry, detailing the economic performance of the country in the financial year, which ends on 31 March 2023. It studies the economic progress and trends in every sector. It provides an account of the inflation rate, looks at challenges the country might face in the coming year, and suggests measures to tackle them.

The survey is put together by the economic division of the Department of Economic Affairs (DEA) under the guidance of the CEA. Once prepared, it is approved by the finance minister.

India’s first economic survey has presented for 1950-51 and it was announced with the Budget until 1964. It was delinked to provide context to the Budget, which now comes a day later.

The survey is divided into two parts – Part A and Part B. The first contains a holistic review of the current economic situation of the country while the second highlights issues like healthcare, poverty, climate change, and the Human Development Index, among others, reports NDTV.

Why is the Economic Survey significant?

It is a review of India’s economic development, which analyses and provides data on various sectors like industrial, agriculture, manufacturing, exports, among others. It gives an insight into the Union Budget and the country’s priorities in the upcoming financial year. It also gives recommendations for the economic progress of the country but they are not binding on the Budget.

Forecasts such as predicted Gross Domestic Project (GDP) and growth in specific sectors are part of the Economic Survey. It also throws light on the impact of government schemes and if they should be continued.

Also read: ‘India remains a bright spot’: IMF says global growth to fall 2.9 per cent in 2023

The Economic Survey is the most detailed analysis of the country’s economy conducted by the Union government. It helps the public in understanding the Budget.

What can be expected in 2023’s survey?

This year’s survey is likely to peg GDP growth at 6 to 6.8 per cent for the FY 2023-24, according to a report in Reuters.

The government survey is likely to say that growth is seen at 6.5 per cent for 2023-24 under the baseline scenario, a source told the news agency, declining to be named as the matter was confidential. This would be the slowest in three years. Nominal growth is likely to be forecast at 11 per cent for 2023-24, the person added.

Growth in the financial year beginning April 1 will remain strong relative to most global economies, led by sustained private consumption, a pick-up in lending by banks and improved capital spending by corporations, the survey will likely say, reports Reuters.

Economic Survey 2023 is expected to look at improving employment conditions in India led by stronger consumption. However, it may also point out that further pick-up in private investment is essential for job creation, according to The Times of India.

It will take note of the Consumer Price Index inflation being above the Reserve Bank of India’s comfort zone of six per cent. However, it is likely to say that increase in prices will not affect private consumption.

The pressure on the Indian rupee is likely to continue because of the tightening monetary policy, the survey is likely to warn. The country’s Current Account Deficit might also remain elevated.

The pandemic years saw a sharp increase in the Centre’s capital expenditure, with economists expecting another jump in 2023-24 to just under Rs 9 lakh crore from the budget estimate of Rs 7.5 lakh crore for this year, reports moneycontrol.

However, Chief Economic Adviser V Anantha Nageswaran warned last month that the public sector’s capex could not keep increasing at the same rapid pace. According to him, it may not be necessary or even healthy for the government’s capex to keep rising at a rapid pace as it could not only crowd out the private sector but also drive up the cost of capital in the economy.

With inputs from agencies

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