Economic Survey 2023-24: Advanced infrastructure and robust service sector usher Indian Economy into promising future

The Economic Survey is an annual report on the Indian economy, providing an overview of the previous year's performance, current status, growth prospects, challenges, and policy recommendations. The Economic Survey 2024 shows that the Indian economy has consolidated its post-COVID recovery, with real GDP growing by 8.2% in FY 2023-24, exceeding the 8% mark in three out of four quarters.

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The survey also highlights India's resilience to external challenges. Gross Fixed Capital Formation increased by 9% due to government investment and steady private investment. Retail inflation declined to 5.4% due to effective administrative and monetary policy initiatives.?

India remains resilient amid geopolitical challenges, with a stable footing. The external balance was pressured by subdued global demand for goods, but strong services and exports counterbalanced this, resulting in CAD standing at 0.7% of GDP during FY 2023-24. The outlook for continued growth beyond FY 2024-25 is positive despite geopolitical, financial market, and climate risks.

Big on Banking?

Bank credit growth in India has been robust during FY 2023-24, with credit disbursal reaching ?164.3 lakh crore, a 20.2% increase from the 15% growth in March 2023. The external benchmark-based lending rate and the one-year median marginal cost-of-funds-based lending rate increased by 250 bps and 175 bps, respectively, during the tightening cycle.?

Non-banking financial companies' lending accelerated, with personal loans and industry loans showing improved asset quality. India is also poised to become one of the fastest-growing insurance markets and the second-largest microfinance sector globally.

Service and Infrastructure: Powerful Propellers

The services sector in India is a significant contributor to the country's growth, accounting for 55% of the economy in FY 2023-24. It has seen a real growth rate of over 6% in the last decade, except for the pandemic-affected FY 2020-21. Post-pandemic services exports have maintained momentum, accounting for 44% of India's total exports. Additionally, service imports decreased by 2.1% YoY due to reduced global freight rates.?

As per the expectations of economists and industrialists, the infrastructure sector has seen significant growth due to the focus on road, rail, air connectivity, sanitation, and digital infrastructure, with the Central and State Governments contributing 49% and 29%, respectively, between 2019 and 2023.

Above all, the Economic Survey 2023-24 highlights India's resilience to external challenges, with Gross Fixed Capital Formation increasing by 9% due to government and private investment. India remains resilient amid geopolitical challenges, with CAD standing at 0.7% of GDP during FY 2023-24. Bank credit growth in India has been robust, with credit disbursal reaching ?164.3 lakh crore, a 20.2% increase from March 2023. The services sector, accounting for 55% of the economy, has seen a real growth rate of over 6% in the last decade amidst overwhelming growth in the infrastructure sector.