The Economic Survey 2023-24 highlights India's GDP growth projections and inflation expectations. It also addresses the challenges faced by the youth in finding productive jobs. Additionally, the survey emphasizes the importance of private sector financing for India's infrastructure development. Lastly, the full text of the survey reveals the positive short-term outlook and the need for a clear vision for long-term growth.
Sources:
https://indianexpress.com/article/business/budget/economic-survey-2023-24-highlights-9468247/
https://www.businesstoday.in/union-budget/story/budget-2024-economic-survey-2024-65-of-the-population-under-35-yet-many-lack-skills-for-a-modern-economy-438086-2024-07-22
https://money.rediff.com/news/market/private-sector-financing-crucial-for-india-s-infrastructure-economic-survey/13045820240722
https://indianexpress.com/article/business/full-text-economic-survey-2024-says-short-term-outlook-positive-long-term-requires-clear-vision-9468251/
Outline:
(00:00:00) Introduction
(00:00:42) Economic Survey 2023-24 Highlights: GDP growth projected at 6.5-7%; RBI expects inflation to be 4.5% in FY25
(00:04:02) Economic Survey 2024: 65% of the population under 35, yet many lack skills for a modern economy
(00:06:53) Private Sector Financing Crucial for India's Infrastructure: Economic Survey
(00:10:13) Full Text: Economic Survey 2024 says short-term outlook positive, long term requires clear vision
Simply Economics
Economic Survey 2023-24: GDP Growth and Inflation Projections, Job Challenges for Youth
The Economic Survey 2023-24 highlights India's GDP growth projections and inflation expectations. It also addresses the challenges faced by the youth in finding productive jobs. Additionally, the survey emphasizes the importance of private sector financing for India's infrastructure development. Lastly, the full text of the survey reveals the positive short-term outlook and the need for a clear vision for long-term growth.Sources:https://indianexpress.com/article/business/budget/economic-survey-2023-24-highlights-9468247/https://www.businesstoday.in/union-budget/story/budget-2024-economic-survey-2024-65-of-the-population-under-35-yet-many-lack-skills-for-a-modern-economy-438086-2024-07-22https://money.rediff.com/news/market/private-sector-financing-crucial-for-india-s-infrastructure-economic-survey/13045820240722https://indianexpress.com/article/business/full-text-economic-survey-2024-says-short-term-outlook-positive-long-term-requires-clear-vision-9468251/Outline:(00:00:00) Introduction(00:00:42) Economic Survey 2023-24 Highlights: GDP growth projected at 6.5-7%; RBI expects inflation to be 4.5% in FY25(00:04:02) Economic Survey 2024: 65% of the population under 35, yet many lack skills for a modern economy(00:06:53) Private Sector Financing Crucial for India's Infrastructure: Economic Survey(00:10:13) Full Text: Economic Survey 2024 says short-term outlook positive, long term requires clear vision
- Duration:
- 13m
- Broadcast on:
- 22 Jul 2024
- Audio Format:
- mp3
[Music] Good morning and welcome to Simply Economics. It's Monday, July 22nd. [Music] On today's show, the Economic Survey highlights GDP growth projected at 6.5 to 7% and the RBI expects inflation to be 4.5% in FY25. Plus, the survey reveals that 65% of the population is under 35, yet many lack skills for a modern economy. This coverage and more, up next. [Music] I'm David, and you're listening to Simply Economics. [Music] We start off with India's Economic Survey for 2023-24, which was tabled in Parliament today by Finance Minister Nirmala Sitharaman. The survey projects a real GDP growth of 6.5 to 7% for the upcoming fiscal year. It also notes that the Reserve Bank of India expects inflation to be 4.5% in FY25 and 4.1% in FY26. For more on this, we turn to our correspondent. The survey states that the Indian economy is on a strong wicked and stable footing, demonstrating resilience in the face of geopolitical challenges. Can you elaborate on that assessment? The survey does strike an optimistic tone overall, highlighting India's economic resilience. It acknowledges that the global environment has become extraordinarily difficult for reaching agreements on key issues like trade, investment, and climate. So the survey emphasizes that for India's recovery to be sustained, there needs to be heavy lifting on the domestic front. The conservative GDP growth projection of 6.5 to 7% factors in risks like potential escalation of geopolitical conflicts in 2024, which could lead to supply dislocations, higher commodity prices, and stall monetary policy easing. But overall, the survey paints a picture of an economy on stable footing, despite headwinds. The survey also touches upon the employment situation in the country. What insights does it offer in that regard? The survey points out the lack of timely data on absolute job numbers, both formal and informal, across sectors like agriculture, manufacturing, and services. This data gap admittedly includes an objective analysis of the labor market. However, the annual survey of unincorporated enterprises for 2022-23 does provide some insights. It shows that overall employment in these enterprises fell slightly from 11.1 crore in 2015-16 to 10.96 crore. Manufacturing saw a reduction of 54 lakh workers, but job gains in trade and services helped limit the overall reduction to around 16.45 lakh between the two periods. The survey also notes the two major economic shocks India faced in quick succession, the bad debt issue and the COVID pandemic. While asserting that it's difficult to conclude that India's ability to create jobs is structurally impaired, the survey does acknowledge that the task is cut out going forward. Finally, let's turn to the inflation outlook. What are the projections on that front? Assuming a normal monsoon and no further external or policy shocks, the RBI expects headline inflation to be 4.5% in FY25 and 4.1% in FY26. The IMF's projections are broadly in line, pegging India's inflation at 4.6% in 2024 and 4.2% in 2025. The survey characterizes the current headline inflation rate as largely under control, although it does flag elevated inflation for some specific food items. But the overall tone on inflation appears to be one of cautious optimism, with the central bank and IMF projections indicating a gradual easing of price pressures over the next couple of years. Thank you for those insights on India's latest economic survey. The GDP growth and inflation projections, as well as the employment assessment, will certainly provide much food for thought as the union budget approaches. Speaking of which, the survey reveals that while India's economy is growing, the country faces significant challenges in creating productive jobs. Here to discuss the findings is our simply economics correspondent. So what does the survey reveal about India's employment landscape? The survey paints a complex picture. India has a massive workforce of nearly 565 million people, but the distribution of employment remains a major issue. While the services sector continues to be a significant employer, the construction sector has gained prominence due to the government's infrastructure push. However, many of these construction jobs are informal and low paid, highlighting the need for better employment opportunities, especially for those leaving agriculture. The report also mentions that India's working age population will continue to expand until 2044. What does this mean for job creation? This demographic trend puts immense pressure on the economy to generate jobs. The survey estimates that India will need to create nearly 7.85 million non-farm jobs annually to meet the growing demand. This requires accelerating job creation in organized manufacturing and services, while also enhancing agricultural productivity. It's a daunting task, but one that is crucial for India's long-term economic growth and social stability. Another challenge mentioned in the survey is the skill gap. Can you elaborate on that? Absolutely. India has a young population with 65% under the age of 35. However, many of these young people lack the skills required by a modern economy. The survey cites data showing that only about 51.25% of the youth are deemed employable, though this is an improvement from previous years. The Ministry of Skill Development and Entrepreneurships 2022-23 Annual Report also highlights several obstacles in the skilling and entrepreneurship landscape that need to be addressed. So what efforts are being made to tackle these employment and skilling challenges? The government is undertaking comprehensive efforts to address these issues, which are detailed in the employment chapter of the economic survey. Solving these challenges is seen as essential for India to harness its demographic dividend and ensure sustainable economic growth. It will require a multi-pronged approach, including reforms in education and training, creating an enabling environment for businesses and investing in sectors with high job creation potential. Thanks for that insightful analysis of India's employment landscape and the challenges ahead, David. Moving on to another key aspect of the Indian economy, India's economic survey for 2023-24 was tabled in Parliament today, highlighting the need for increased private sector financing and resource mobilization to build quality infrastructure in the country. The survey notes that facilitating this will require policy and institutional support from both the central and state governments. For more on this, we're joined by our economics correspondent. So tell us, what are some of the key takeaways from this year's economic survey when it comes to infrastructure financing? Well, David, the economic survey really emphasizes the crucial role that private sector financing will need to play in developing India's infrastructure in the coming years. It points out that while government spending and support is important, ultimately attracting more investment from the private sector, both domestic and foreign will be key to building the kind of high quality infrastructure that India needs to sustain its economic growth and development goals. And what about the role of state and local governments in this process? The survey mentions them as well. Absolutely, the survey makes it clear that this has to be a collaborative effort across different levels of government. While the central government needs to provide the right policy frameworks and institutional mechanisms to facilitate greater private investment, state and local authorities will also have to step up in terms of identifying viable projects, ensuring efficient execution, and creating an overall conducive environment for infrastructure development on the ground. Coordination between the center and states will be crucial. The survey also seems to suggest that there are some data and reporting gaps when it comes to tracking infrastructure investments currently. Could you elaborate on that? Yes, this is an important point that the survey brings up. It notes that to get a truly comprehensive and granular picture of the state of infrastructure financing in the country, there is a need to improve data capture and reporting mechanisms across different investment instruments, sectors, and at the individual project level. Better data can help policymakers identify gaps, track progress, and make more informed decisions to optimize resource allocation and attract targeted investments in the infrastructure space. So it sounds like the key message is that going forward, a higher level of private sector participation and more robust data systems will be critical to meeting India's huge infrastructure needs and realizing the country's economic potential. I think that sums it up well. The survey is essentially laying down a roadmap for the kind of ecosystem and approaches that will be required to mobilize the massive amount of capital that India will need to build out its infrastructure in the coming decades. And of course, this assumes even greater significance in the context of the government's ambitious targets and initiatives around areas like renewable energy, transportation, urban development, and so on. Thanks for those insights. It will certainly be interesting to see how some of these recommendations translate into concrete policy actions and results on the ground. On a related note, India's Economic Survey for 2023-24 was tabled in Parliament today by Finance Minister Nirmala Sitharaman, one day before the government presents its union budget. The survey, authored by Chief Economic Advisor V. Anantha Nageswaran, paints a picture of India's economy weathering external challenges. For more, we turn to our economics correspondent, James. The survey states India's GDP grew by an impressive 8.2% in the last fiscal year, despite global headwinds. What factors enabled this robust growth? The survey credits the government's focus on maintaining macroeconomic stability for minimizing the impact of external challenges on India's economy. It highlights that real GDP growth exceeded 8% in three out of four quarters last fiscal year. This suggests the economy carried forward strong momentum from the previous year. Proactive policy interventions and the central bank's measures to tame inflation also played key roles. Speaking of inflation, the survey notes it has moderated significantly from the previous year. What were the key drivers behind this? Indeed, retail inflation averaged 6.7% in fiscal year 2023, but declined sharply to 5.4% in fiscal 2024, the lowest level since the pandemic. The survey attributes this to the government's timely policy actions and the Reserve Bank of India's price stability measures. It's worth noting that India faced inflationary pressures from multiple fronts, global issues, supply chain disruptions, and uneven monsoons. Deafed administrative and monetary policy responses helped manage these pressures. As India looks ahead, what are the key economic priorities outlined in the survey? The survey lays out several focus areas for the coming year. Maintaining macroeconomic stability will likely remain a top priority given the uncertain global environment. The government is also expected to continue its push for capital expenditure to boost growth and job creation. Measures to support domestic demand, improve the ease of doing business, and attract foreign investment could be other key themes. Overall, the survey strikes a positive tone on India's economic prospects, notwithstanding near-term challenges. Thanks for breaking down the economic survey for us, James. It certainly sets the stage as the government prepares to unveil the union budget tomorrow, where we can expect the finance minister to address measures for supporting growth, job creation, and fiscal discipline. And with that, we wrap up our stories for today. Thanks for listening to Simply Economics. We'll see you back here tomorrow. [MUSIC] [BLANK_AUDIO]