Key Highlights: Economic Survey 2024

Syllabus: GS3/Economy

Context

• The finance minister tabled the Economy survey in the Parliament, a day ahead of the Budget presentation.

About Economic Survey

• It is prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance. 
  • It is formulated under the supervision of the chief economic adviser.
• The Economic Survey was first introduced in 1950-51as part of the Budget documents.
  • It was separated in the1960s and is now presented a day before the Union Budget.
• The Economic Survey comprises two parts.
  • The document’s first part includes the country’s economic developments and challenges. 
  • It also offers an overall review on the economy. The second part is focused on the past financial year.

The Economic Survey 2024 highlights several key aspects of India’s economic performance and challenges.

1. Economic Growth and Stability:

   • India’s economy grew over 7% for the third consecutive year, with Gross Value Added (GVA) at 7.2%.
   • Real GDP in FY24 was 20% higher than in FY20, indicating strong growth potential.
   • Current Account Deficit (CAD) improved to 0.7% of GDP in FY24 from 2.0% in FY23.
   • External debt-to-GDP ratio was sustainable at 18.7%.

2. Banking Sector:

   • Bank credit growth was robust, with both gross and net NPAs at multi-year lows, indicating stability.

3. Inflation Dynamics:

   • Overall inflation was 5.4%, the lowest since the pandemic.
   • Core inflation decreased significantly, driven by both goods and services.
   • Food inflation, however, increased to 7.5% in FY24 due to various challenges in the agriculture sector.

4. Foreign Investments and External Sector:

   • Net FDI inflows declined, but gross FDI inflows remained steady.
   • India’s logistics performance improved, and export diversification increased.
   • Services exports grew by 4.9% to USD 341.1 billion in FY24.
   • Remittances reached USD 120 billion in 2023, making India the top recipient globally.
   • Positive net foreign portfolio investment supported by economic growth and stability.

5. Energy and Environment:

   • India’s energy needs are expected to grow significantly by 2047.
   • Share of non-fossil sources in electricity generation capacity reached 45.4%.
   • Emission intensity of GDP reduced by 33% from 2005 levels.

6. Employment and Skill Development:

   • Formal employment growth showed a positive trend.
   • Services sector remains a major job creator.
   • Emerging job demands include skills in Blockchain, AI, IoT, cybersecurity, etc.
   • The economy needs to create 7.85 million non-farm jobs annually until 2030.

7. Socio-Economic Issues:

   • The survey highlighted mental health issues for the first time, emphasizing the need for comprehensive community-based approaches.
   • It also addressed challenges in agriculture, MSMEs, green transition, inequality, and healthcare quality.

Overall, the Economic Survey 2024 underscores India’s resilience amidst global challenges, while outlining strategic priorities for sustainable and inclusive growth.

Source: ET