Key Highlights from Economic Survey 2023

What’s in today’s article?

• Why in News? 
• Key Highlights from Economic Survey 2023

Why in News?  

• The Union Finance Minister, Nirmala Sitharaman, tabled the Economic Survey for the Financial Year 2022-23, after the President’s address, on the first day of the Union Budget Session 2023-24.

Key Highlights from Economic Survey 2023 

• GDP Growth – 
  • India has already become the world’s 5^th largest economy in the 75^th year of Independence.
  • The Economic Survey estimates that India’s nominal Gross Domestic Product (GDP) will reach $3.5 Trillion by the end of March, 2023. 
  • 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.
  • It further said the fundamentals of the Indian economy are sound as it enters its “Amrit Kaal” – the 25-year journey towards its centenary as a modern, independent nation.
• Impact of Goods and Services Tax – 
  • Goods and Services Tax collection is showing a higher buoyancy than the pre-GST system. 
  • Giving a 5-year analysis of tax collection pre- and post-GST, the survey said the taxes which were subsumed in the Goods and Services Tax had a buoyancy of one. 
    • However, the buoyancy improved to 1.1 after the GST implementation on July 1, 2017.
  • Tax buoyancy highlights the relationship between the change in the government’s tax revenue growth and the changes in GDP. When a tax is buoyant, it shows an increase in its revenue rate without increasing the tax rate.
• Startups in India – 
  • DPIIT-recognized startups created 2.69 lakh jobs in 2022, compared to 1.98 lakh in 2021.
  • About 48% of the startups are from Tier-II & III cities.
• Credit flow to MSMEs – 
  • Credit flow to Micro, Small and Medium-scale Enterprises (MSMEs) has seen a significant increase, assisted in part by the introduction of the Emergency Credit Linked Guarantee Scheme (ECLGS).
  • As of November 2022, 1.2 crore MSME units availed the ECLGS scheme and raised collateral-free resources for Rs 3.6 lakh crore.
• Skill Upgradation – 
  • The Survey noted that formal vocational/technical training for the age group 15-29 years rose from 2.8% in 2018-19 to 4.1% in 2020-21.
  • Under the Pradhan Mantri Kaushal Vikas Yojana 2.0, between 2017 and 2023, about 1.1. crore persons have been trained. 
• Information Technology Industry – 
  • The Information Technology-Business Process Management (IT-BPM) industry showed resilience during the Covid-19 pandemic. 
  • It registered 15.5% growth during the financial year 2021-22.
• Growth of FinTech & E-Commerce Sector – 
  • The e-commerce sector “witnessed a renewed push and a sharp increase in penetration in the aftermath of the pandemic,” the Economic Survey 2022-23 said.
  • The growth was also fueled by – 
    • Growing internet penetration, 
    • Rise in smartphone adoption, 
    • Innovation in mobile technologies, and 
    • Increased adoption of digital payments.
• The sector is projected to grow at 18% annually.
• Significance of Green Hydrogen – 
  • Green hydrogen is hydrogen produced by splitting water by electrolysis. This produces only hydrogen and oxygen.
  • According to the Economic Survey 2022-23, green hydrogen will be crucial for: 
    • India’s economic development, 
    • energy security and 
    • achieving decarbonization of harder to abate sectors such as fertilizers, refining, methanol, maritime shipping, iron & steel, etc. 
• Shipbuilding Industry – 
  • The Survey identifies the shipbuilding industry as a strategically important industry due to its role in energy security, national defence, and the development of the heavy engineering industry. 
  • The Survey noted that it has the potential to increase the contribution of the industry and the services sector to the national GDP.
• The industry has the potential to strengthen the mission of an ‘Aatmanirbhar Bharat’, the survey said.

Q1) When was the first Economic Survey Published?

The first Economic Survey of India was presented in 1950-51 as part of the Union Budget. After 1964 it was separated from the Budget and presented each year during the Budget Session before the presentation of the budget.

Q2) Who prepares the Economic Survey?

The Department of Economic Affairs, Ministry of Finance presents the Survey in the Parliament every year, just before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser of India.

This document is presented to both Houses of Parliament during the Budget Session.

Source:  Summary of Economic Survey 2023  |   The Hindu