The Economic Survey 2023-24, which was tabled in Parliament on Monday, projected India's GDP to grow at 6.5-7% in 2024-25, down from a high of 8.2% in the preceding financial year, while cautioning that escalation of geopolitical conflicts may have bearing on growth prospects. The projection in the Economic Survey is a tad lower than the RBI's growth estimates of 7.2%.
Equity benchmark indices Sensex and Nifty ended lower on Monday, dragged down by heavy selling pressure in Reliance Industries and Kotak Mahindra Bank ahead of the Union Budget 2024. Besides, a weak trend in global equity markets also hit investors sentiment, traders said. Falling for the second day in a row, the 30-share BSE Sensex fell 102.57 points to settle at 80,502.08. During the session, it tanked 504 points to 80,100.65. The NSE Nifty dipped 21.65 points to 24,509.25.
India requires an investment support of $1.4 trillion to become a net-zero economy by 2070 and raising financial resources for adaptation and mitigation action of this scale is an "unprecedented challenge", according to the Economic Survey. The Survey said India's climate action has been largely financed through domestic resources and the flow of international finance has been "very limited". Citing the Reserve Bank of India's data, the report said bridging the "substantial funding gap" necessitates allocating 2.5% of India's annual Gross Domestic Product to green finance. "Preliminary estimates indicate that the aggregate investment support required by India to achieve its 2070 net-zero target will be $1.4 trillion at an average of $28 billion per year. Raising financial resources for climate change adaptation and mitigation actions of this scale is an unprecedented challenge," the Economic Survey said.
The full budget of the new government will be tabled on Tuesday, July 24 with strong expectations running across industries in forms of sops, PLI schemes, rationalization of tax structure and relaxations for corporates, GST benefits, revision in income tax slabs and more being the key demands from the Finance Minister Nirmala Sitharaman. Read details here
Economic Survey 2023-24, released on Monday, underlined that Reserve Bank of India's (RBI's) vigil over the banking and financial system and its prompt regulatory actions ensure that the system can withstand any macroeconomic or systemic shock. "Data from the RBI's Financial Stability Report of June 2024 show that the asset quality of scheduled commercial banks (SCBs) has improved, with the gross non-performing asset (GNPA) ratio declining to 2.8 per cent in March 2024, a 12-year low," it stated. Read details here.
Finance Minister Nirmala Sitharaman is set to create history when she presents her seventh straight Budget on Tuesday for the fiscal 2024-25, surpassing the record of former prime minister Morarji Desai. The full Budget for the 2024-25 fiscal (April 2024 to March 2025) will be her seventh straight. She will better Desai's record, who presented consecutive five full budgets and one interim budget between 1959 to 1964. This year will witness two budgets - an interim one in February and a full one this month. The presentation on July 23 will be the first Budget by the BJP-led NDA government since it was re-elected last month.
The Economic Survey 2024, authored by Chief Economic Advisor V. Anantha Nageswaran, has now joined the raging debate surrounding futures & options (F&O), or derivatives in a broader context. "Derivatives trading holds the potential for outsized gains. Thus, it caters to humans' gambling instincts and can augment income if profitable," states the survey, while raising the point of "if profitable."
Economic Survey 2024 showed that Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) collectively raised Rs 39,024 crore during FY24. This capital influx was more than five times the amount raised in FY23.The survey further highlighted that the resource mobilisation by infrastructure sectors through debt and equity issuances in the capital market was just over Rs 1,00,000 crore during FY24. REITs have raised Rs 18,840 crore from year 2019 to 2024 while Infrastructure investment trusts (InvITs) raised a total of Rs 1,11,294 crore in the last five years (2019-2024). Read details here.
The Economic Survey said the advent of Artificial Intelligence casts a "huge pall of uncertainty" with regard to impact on workers across all skill levels. The Economic Survey 2023-24 predicted that the new-age technology, while turbocharging productivity, has the potential to disrupt employment in certain sectors. The Survey described AI as "phenomenal in its rapid pace of innovation and ease of diffusion" but also cautioned that the future of work will be reshaped by it. "... The advent of Artificial Intelligence casts a huge pall of uncertainty as to its impact on workers across all skill levels -- low, semi and high," it said.
The Economic Survey tabled in Parliament provided a broad estimate of the number of jobs that the economy has to generate. The Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce, according to the Survey. It further said that everyone in the working age will not seek jobs. Some of them will be self-employed and some of them will be employers too. More than jobs, the Survey added, economic growth is about generating livelihoods. Governments at all levels and the private sector will have to strive together for it. "Consequently, the Indian economy needs to generate an average of nearly 78.5 lakh jobs annually until 2030 in the non-farm sector to cater to the rising workforce," the Survey said.
The Economic Survey stated that the gig workforce is expected to expand to 2.35 crore by 2029-30. The survey stated that gig workers are expected to form 6.7 per cent of the non-agricultural workforce or 4.1 per cent of the total livelihood by 2029-30. Read full details here
Chief Economic Advisor V. Anantha Nageswaran on Monday said the households in India are not in distress and investing in fully in financial instruments. Addressing a media conference after the Economic Survey was tabled in the Parliament ahead of the Union Budget 2024, CEA Nageswaran said in the last four years, retail investors have increased their investment in stock markets through systematic investment plans. Read details
According to Economic Survey, Over the last two years extreme weather, lower reservoir levels and crop damage have affected farm output and led to higher food prices. "In FY23 and FY24, the agriculture sector was affected by extreme weather events, lower reservoir levels, and damaged crops that adversely affected farm output and food prices. So, food inflation based on the Consumer Food Price Index increased from 3.8% in FY22 to 6.6% in FY23 and further to 7.5% in FY24," the survey said.
"India's inflation targeting framework should consider targeting inflation, excluding food. Higher food prices are, more often, not demand-induced but supply-induced," the Economic Survey 2023-24 said. While retail inflation, measured by the movement in consumer price index, was at 5.08 per cent in June, food inflation was 9.36 per cent. The RBI has kept interest rates unchanged since February 2023 on inflationary concerns.
Capital markets are becoming more prominent in India's growth story, with an expanding share in capital formation and investment landscape on the back of technology, innovation and digitisation, according to the Economic Survey 2023-24 tabled in Parliament today.
"The exemplary performance of the Indian stock market compared to the world and emerging markets over the years can be primarily attributed to India’s resilience to global geo-political and economic shocks, its solid and stable domestic macroeconomic outlook, and the strength of the domestic investor base," said Finance Minister Nirmala Sitharaman in Parliament.
