Quick Highlights/Summary Of The Economic Survey 2022-23

Here are quick highlights and summary of the Economic Survey 2022-23:

The Economic Survey 2023 pegs FY24 GDP growth at 6-6.8% with baseline growth of 6.5% vs 7% projection for FY23 and 8.7% growth in FY22 amid concerns of sticky high borrowing cost and rupee depreciation due to widening of CAD. However, FM assures of sufficient forex reserves to finance CAD and handle rupee depreciation. Survey highlights future growth triggers for the economy to be private consumption, higher capex, strengthening corporate balance sheet, credit growth revival (especially to small businesses).

In terms of fiscal prudence, Government is on track to achieve the estimated fiscal deficit of 6.4% in FY23.

• GDP growth forecast seen at 6-6.8% (base 6.5%) for FY24 vs 7% for FY23 and 8.7% in FY22
• GDP in nominal terms to be 11% for FY24
• Growth is expected to be driven by private consumption, higher capex, strengthening corporate balance sheet, credit growth to small businesses and return of migrant workers to cities.
• Inflation is projected at 6.8% in FY23
• Borrowing cost to remain higher for longer led by high inflation
• Current Account Deficit (CAD) may widen further led by elevated commodity prices, slowing world growth and global trade which may in turn put pressure on rupee
• India has sufficient forex reserves to finance CAD and intervene in forex market to manage rupee volatility
• Credit growth to small businesses remarkably high at over 30.5% in Jan-Nov'22
• Housing prices rise while inventories decline
• Central govt capex grew by 63.4% in April-Nov'22
• GST payments rise as GST paid by small businesses improved and crossed pre-pandemic levels reflecting effectiveness of targeted government intervention
• Government on track to achieve the target for fiscal deficit in FY23 led by the recovery in economic activity, buoyancy in revenues from direct taxes and GST, and realistic assumptions in the Budget.
• Fiscal deficit at the end of November 2022 stood at 58.9% of the BE, lower than the 5-year average of 104.6% of BE during the same period
• Gross tax revenue grew by 15.5% YoY from April-Nov'22, driven by robust growth in the direct taxes and GST. The growth in direct taxes in first 8 months was much higher than their corresponding longer-term averages.
• GST collections rose by 24.8% on YoY basis during April-Dec'22

(Courtesy: Prabhudas Lilladher report)