Finance Minister Nirmala Sitharaman Presents Economic Survey Ahead of Union Budget

New Delhi – A day before presenting the Union Budget 2024, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2023-24 in both houses of Parliament on Monday. She projected that India’s GDP growth rate is expected to be between 6.5% and 7% for the fiscal year 2024-25.

Sitharaman highlighted the strong position of the Indian economy, anticipating growth rates of 6.5% to 7% during 2025. She noted that inflation is under control, and India’s service exports have doubled over the past nine years.

According to the Economic Survey, the outlook for India’s financial sector is optimistic, with expectations of a normal monsoon this year bolstering the Reserve Bank of India’s inflation estimates. Despite global economic uncertainties, domestic growth drivers supported economic growth in the fiscal year 2023-24. However, geopolitical tensions and their impacts could influence the Reserve Bank of India’s monetary policy stance.

It is noteworthy that the Union Budget presented on February 1, 2024, was an interim budget due to the upcoming Lok Sabha elections, hence the Economic Survey was not presented at that time. The Economic Survey is prepared annually by the Department of Economic Affairs under the Ministry of Finance, overseen by the Chief Economic Advisor, and finalized by the Finance Minister.

The survey stated that adverse weather conditions, low reservoir levels, and crop damage over the past two years have impacted agricultural production, leading to higher food prices. It mentioned that these conditions have particularly affected the production prospects of vegetables and pulses, with food inflation based on the Consumer Food Price Index (CFPI) rising from 3.8% in 2021-22 to 6.6% in 2022-23, and 7.5% in 2023-24.

The document also highlighted the uncertainty surrounding the impact of artificial intelligence (AI) on workers across all skill levels. This issue was also addressed in the mini-document published in January ahead of the interim budget.

The Economic Survey emphasized the need for measures to boost talent and productivity through private sector investment, particularly in physical and digital connectivity, and building government capabilities. Rumki Majumdar, an economist at Deloitte India, noted that the survey stressed enhancing talent and productivity through private sector investment in skills, digital and physical infrastructure, and capacity building. She identified MSMEs, agriculture, education, and employment as key pillars for public upliftment.

Finance Minister Nirmala Sitharaman will present the Union Budget in the Lok Sabha on Tuesday. The public hopes for favorable outcomes from this budget. Experts believe that the upcoming legislative assembly elections in five states and by-elections for the Lok Sabha could influence the budget.

All eyes are on the Modi-led central government to see what kind of budget it presents to the nation this time.