Context: In the absence of the traditional Economic Survey for the upcoming interim budget amid the 2024 general elections, the government has introduced the "Indian Economy – A Review."

• The Lok Sabha elections have necessitated the presentation of an interim budget, but a full budget and economic survey will be declared only after the election results.

Economic Survey 2024

• The Economic Survey 2024 won't be shown before Budget 2024 this year due to the General Election process. It would be released after the elections before the final budget is released. 

• Instead, a report on India's last 10 years called 'Indian Economy–A Review' has been released by the Centre. This report, prepared by Chief Economic Advisor V Anantha Nageswaran, also gives a sneak peek into the future outlook of the economy.

About Indian Economy Review 2024

• Not a Economic Survey: It is not an Economic Survey of India, which it says will be presented before the full Budget after the general elections.

• Why no Economic Survey This Year: 2024 is an election year and the regular Budget process may be disrupted if there is a change in government.

• Economic Survey is a document prepared by the Chief Economic Advisor (CEA) and presented by the Finance Minister in Lok Sabha, typically a day ahead of the Union Budget on February 1 each year. 

Theme of Indian Economy Review 2024

• It is divided into two main chapters, each detailing various aspects of India’s economic development, challenges, and resilience.

Chapter 1: Indian Economy- Past, Present, and Future

• This chapter provides a comprehensive overview of India’s economic journey since independence, focusing on different time periods and their characteristics. 

• It discusses the initial focus on industrialization, the economic challenges and reforms in subsequent decades, the financial and policy shifts in the 2000s, and the impact of recent global events like the pandemic. 

• It also outlines the significant reforms and strategies implemented in the last decade, contributing to India’s transformative growth.

Chapter 2: What Made the Indian Economy Resilient?

• It delves into the factors that contributed to the resilience of the Indian economy, especially in the face of recent global challenges. 

• It examines various policy measures, reforms, and initiatives across sectors like finance, manufacturing, digital infrastructure, and public welfare. 

• It highlights the government’s efforts in ensuring sustained economic growth and addresses how these strategies have helped India navigate complex global scenarios effectively.

Potential as World’s Third-Largest Economy: Indian Economy  Review 2024

• Looking towards 2030, India is poised to become the world’s third-largest economy, targeting a $7-trillion GDP. This aspiration is supported by the rapid development in public sector infrastructure, financial health, and initiatives like Jan Dhan Yojana, which has significantly improved household financial stability and inclusive development.

• 2030 Outlook: India could surpass Japan and Germany, becoming the third-largest economy.

• GDP Target: Aim to reach a $7-trillion economy by 2030.

• Public Sector Investment: Significant increase in infrastructure investment over the last decade.

• Financial Sector: Strong and healthy, with growing non-food credit.

• Jan Dhan Yojana: Fifty-one crore bank accounts under Jan Dhan Yojana now have total deposits of over Rs 2.1 lakh crore. 

• Over 55 per cent of them are women. 

• Net Financial Assets: Improvement in household financial assets to GDP ratio.

• India is the third-largest fintech economy in the world after the USA and the UK.

Key Highlights of Indian Economic Review 2024

• In the recent review of the Indian economy, several key points underscore the country’s economic trajectory, focusing on achievements, challenges, and future prospects.

Growth Projections

• India is positioned to become a $5 trillion economy within the next three years, with a potential to reach $7 trillion by 2030. The GDP growth rate for FY24 is anticipated to surpass 7.2%, outpacing the global economy struggling to achieve a growth rate exceeding 3%. This marks the third consecutive year of India achieving a growth rate exceeding 7%.

Structural Reforms and Positive Impact

• The review emphasizes the positive impact of structural reforms undertaken over the past decade. These reforms include a rise in public sector investment, a robust financial sector, and significant non-food credit growth, all contributing to the moderate yet consistent growth of the Indian economy.

Fintech and Stock Market Milestones

• India has emerged as the third-largest fintech economy globally, following the USA and the UK. Additionally, surpassing Hong Kong, India now holds the fourth position in the global stock market rankings. This achievement is attributed to both domestic and global investor interest, coupled with a continuous flow of Initial Public Offerings (IPOs).

Financial Inclusion Impact

• The Pradhan Mantri Jan Dhan Yojana has played a crucial role in increasing the percentage of women holding bank accounts. The report highlights a substantial rise from 53% in 2015-16 to an impressive 78.6% in 2019-21.

Women’s Participation and Empowerment

• Various initiatives, including the Skill India Mission, Start-Up India, and Stand-Up India, have led to a significant increase in the female labor force participation rate (LFPR), rising from 23.3% in 2017-18 to 37% in 2022-23. The Gross Enrolment Ratio (GER) for females in higher education has seen a fourfold increase, reaching 27.9% in FY21 from 6.7% in FY01. Overall GER has more than doubled from 24.5% to 58.2% between FY05 and FY22.

MSME Dynamism and Economic Efficiency

• Micro, Small, and Medium Enterprises (MSMEs) are experiencing heightened dynamism due to supportive government measures. The implementation of the Goods and Services Tax (GST), along with domestic market integration and increased incentives for production, has led to improved economic efficiency and reduced logistics costs.

Cautious Outlook

• While celebrating these achievements, the review maintains a cautious outlook on future growth and inflation, acknowledging global uncertainties and challenges that may impact India’s economic trajectory.

Challenges and Opportunities: Indian Economy Review 2024

• Challenges such as geopolitical conflicts, supply chain disruptions, and the global shift towards AI and green energy are acknowledged. However, India’s effective management of COVID and its balanced approach towards energy transition demonstrate its resilience and adaptability.

• Global Risks: Geopolitical conflicts and supply chain disruptions.

• Technological Progress: AI and global manufacturing shifts.

• Energy Transition: Balancing economic growth and green energy initiatives.

• Vaccination Impact: Contributed to quick economic recovery.

• Oil Supply Management: Notable in maintaining economic stability.

Future Outlook: Indian Economy Review 2024

• The future outlook is bright, with rising aspirations among Indians, a healthier financial sector, and an anticipated continuous GDP growth above 7%, reflecting India’s strong economic fundamentals and potential for further growth.

• Aspirations and Confidence: Rising expectations among young Indians.

• All-inclusive Welfare Approach: It  is expected to contribute to the enlargement of the consumption base through the expansion of the middle class.

• GDP Growth Above 7%: Possible in the coming years, driven by structural reforms and financial sector strength.

• Hyper-globalisation Shift: Moving away from global manufacturing dependency.

• Artificial Intelligence Impact: Challenges in service trade and employment.

• Energy Transition: Balancing economic growth with green energy initiatives.

What is Economic Survey?

• Every year before the Union Finance minister reads out the Union Budget in the parliament, the government shares another crucial annual document -- the Economic Survey of India. 

• The document is a yearly report, which is prepared by the Economics Division of the Department of Economic Affairs under the Ministry of Finance, that provides an overview of the Indian economy in the financial year that is coming to a close.

• The Economic Survey of India was first presented in 1950-51 and at that time, it was a part of the main Union Budget.

• In the year of General Elections, the Centre tables the survey only when the full annual financial statement is presented.

• The Economic Survey basically takes a close look at the developments in the Indian economy in different sectors, such as agriculture, services, industries, public finance, and infrastructure, over the last 12 months. It also gives an overview of exports, imports, foreign exchange reserves, and money supply during the fiscal.

• It highlights the policy initiatives of the government, summarizes the performance on major development programmes, and shows the growth prospects of the economy.

What are the basic components of the Economic Survey?

• The survey has two parts: Part A and Part B. Part A gives details of the major economic developments in the year and a broad review of the economy. The second part covers specific topics such as social security, poverty, education, healthcare, human development, and climate.