New Delhi: Finance Minister Sitharaman tabled the Economic Survey 2023-24 in Lok Sabha, pegging the economic growth at 6.5-7 percent in FY25.
The Economic Survey said “High economic growth in FY24 came on the heels of growth rates of 9.7 per cent and 7.0 per cent, in the previous two financial years, adding that the headline inflation rate is largely under control, although the inflation rate of some specific food items is elevated.
The trade deficit was lower in FY24 than in FY23, and the current account deficit for the year is around 0.7per cent of GDP.
The Economic Survey highlights that the share of India’s services exports in world services exports has risen remarkably from 0.5 per cent in 1993 to 4.3 per cent in 2022. India is now the seventh-largest services exporting country globally rising phenomenally from its 24th position in 2001.
The Economic Survey highlighted that India’s Current Account Deficit (CAD) narrowed to USD 23.2 billion (0.7 per cent of GDP) in FY24 from USD 67 billion (2 per cent of GDP) during the previous year due to a decline in merchandise trade deficit, rising net services exports and increasing remittances.
The Net services receipts increased from USD 143.3 billion during FY23 to USD 162.8 billion in FY24, primarily on account of rising exports of software, travel and business services. The remittances by Indians employed overseas, was USD 106.6 billion in FY24, against USD 101.8 billion during the previous year.
Remittances to India are forecasted to grow at 3.7 per cent to USD 124 billion in 2024 and at 4 per cent to reach USD 129 billion in 2025, emphasized the Survey.
Ranen Banerjee , Partner and Leader Economic Advisory, PwC India said, “The Chief Economic Advisor has sounded a cautious note by projecting a growth rate of 6.5-7.0% for FY25, highlighting the global uncertainties and domestic challenges. The Economic Survey has proposed a compact between the Central and state governments, corporate sector and academia to overcome the unprecedented economic scenario. There is a nudge to governments to let go of various regulations, citing the Ishopanishad. There is also a nudge to the private sector to invest in IP, machinery and equipment. Academia has been nudged to provide the necessary skills and knowledge for IP creation. There is an acknowledgment of the challenges faced by our exports, manufacturing and small and medium enterprises. There is also a hint at lowering our emphasis on manufacturing and adopting the agricultural sector too as a generator of jobs, which comes from a statement that our choices cannot be binary. We now await the Union Budget to see how these headwinds highlighted in the Economic Survey are countered by the fiscal outlays and policies.”
The Economic Survey, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance under the supervision of the chief economic adviser, provides an overview of the short-to-medium-term prospects of the economy.
The Union Budget for 2024-25 will be presented by Sitharaman on Tuesday.
