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Editorial Articles

Issue no 46,11-17 February 2023


Economic Survey 2022-23 Highlights


·         India's GDP growth is expected to remain robust in FY24, with GDP forecast in the range of 6-6.8%. 

·         Private consumption in first half of FY23 was highest since FY15 and this has led to a boost to production activity resulting in enhanced capacity utilisation across sectors. 

·         The Capital Expenditure of Central Government increased by 63.4 per cent in the first eight months of FY23. 

·         MSME sector witnessed a credit growth of over 30.6% on average during Jan-Nov 2022.

·         Retail inflation was back within RBI's target range in November 2022. 

·         Indian Rupee performed well compared to other Emerging Market Economies in AprDec 2022. 

·         Direct Tax collections for the period April-November 2022 remain buoyant. 

·         The year witnessed enhanced employment generation with declining urban unemployment rate. There was faster net registration in Employee Provident Fund. 

·          Expansion of public digital platforms and measures to boost manufacturing output paved way for enhanced economic growth.

OUTLOOK: 2023-24 

·         Growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment. 

·         Aided by healthy financials, incipient signs of a new private sector capital formation cycle are visible. 

·         Global growth is forecasted to slow from 3.2% in 2022 to 2.7% in 2023 as per IMF's World Economic Outlook, October 2022. A slower growth in economic output coupled with increased uncertainty will dampen trade growth. The World Trade Organisation forecasts global trade growth of 1.0% in 2023 as compared to 3.5% in 2022. 

·         On the external front, risks to the current account balance stem from multiple sources. 

·         Strong domestic demand amidst high commodity prices will raise India's total import bill and contribute to unfavourable developments in the current account balance. These may be exacerbated by plateauing export growth on account of slackening global demand. 

·         Should the current account deficit widen further, the currency may come under depreciation pressure. 

·         Entrenched inflation may prolong the tightening cycle, and therefore, borrowing costs may stay 'higher for longer'.


Agriculture: India's agriculture sector has been witnessing robust growth with an average annual growth rate of 4.6 per cent over the last six years. The Economic Survey attributes the sector's growth and buoyancy to the following means and measures: 

·         Private investment in agriculture increased to 9.3% in 2020-21. 

·         MSP for all mandated crops fixed at 1.5 times of all India weighted average cost of production since 2018. 

·         Institutional Credit to the Agricultural Sector continued to grow to 18.6 lakh crore in 2021-22. Foodgrains production in India saw sustained increase and stood at 315.7 million tonnes in 2021-22. 

·         About 11.3 crore farmers were covered under the PMKISAN Scheme in its AprilJuly 2022-23 payment cycle. 

·         Rs. 13,681 crores sanctioned for Post-Harvest Support and Community Farms under the Agriculture Infrastructure Fund. 

·         Online, competitive, transparent bidding system with 1.74 crore farmers and 2.39 lakh traders put in place under the National Agriculture Market (e-NAM) Scheme. 

·         Organic Farming being promoted through Farmer Producer Organisations (FPO) under the Paramparagat Krishi Vikas Yojana (PKVY). 

·          Kisan Credit Cards have been issued to 3.89 crore eligible farmers with a KCC limit of Rs. 4,51,672 crore as on December 2022. 

·          India stands at the forefront to promote millets through the International Year of Millets initiative. 

·         The Government has set a target of Rs.18.5 lakh crores in agricultural credit flow in 2022-23.

Industries: Overall Gross Value Added (GVA) by the Industrial Sector (for the first half of FY 22-23) rose 3.7%, which is higher than the average growth of 2.8% achieved in the first half of the last decade. The following indicators point towards impressive post pandemic recovery and robust growth of Indian industries. 

·         Manufacturing PMI (Purchasing Managers' Index) remained in the expansion zone for 18 months since July 2021, and Index of Industrial Production (IIP) grew at a healthy pace. 

·         Credit to Micro, Small and Medium Enterprises (MSMEs) grew by an average of around 30% since January 2022 and credit to large industry has been showing double-digit growth since October 2022. 

·         Electronics exports increased nearly threefold, from USD 4.4 billion in FY19 to USD 11.6 Billion in FY22. 

·         India became second-largest mobile phone manufacturer globally, with the production of handsets going up from 6 crore units in FY15 to 29 crore units in FY21. 

·         Foreign Direct Investment (FDI) flows into the pharma industry increased four times, from USD 180 million in FY19 to USD 699 million in FY22. 

·         Investment of Rs 47,500 crore seen under the PLI (Production Linked Incentive) schemes in FY22, which is 106% of the designated target for the year. Production/sales worth Rs. 3.85 lakh crore and employment generation of 3.0 lakh recorded due to PLI schemes. Over 39,000 compliances reduced and more than 3500 provisions decriminalized as of January 2023.

Services Sector: India's services exports remained resilient during the COVID-19 pandemic and amid geopolitical uncertainties driven by higher demand for digital support, cloud services, and infrastructure modernization. However, contact-intensive services are set to reclaim pre-pandemic level growth rates in FY23. 

·         The services sector is expected to grow at 9.1% in FY23, as against 8.4% in FY22. 

·         Robust expansion in Services PMI, indicative of service sector activity, observed since July 2022. 

·          India was among the top ten services exporting countries in 2021, with its share in world commercial services exports increasing from 3 per cent in 2015 to 4 per cent in 2021. 

·         Credit to services sector has grown by over 16% since July 2022. 

·         USD 7.1 billion FDI equity inflows in services sector in FY22. 

·         Digital platforms are transforming India's financial services. 

·         India's e-commerce market projected to grow at 18 per cent annually through 2025.

External Sector: India diversified its markets and increased its exports to Brazil, South Africa and Saudi Arabia. To increase its market size and ensure better penetration, in 2022, CEPA with UAE and ECTA with Australia come into force. 

·         Merchandise exports were US$ 332.8 billion for AprilDecember 2022. 

·         India is the largest recipient of remittances in the world receiving USD 100 bn in 2022. Remittances are the second largest major source of external financing after service export. 

·         As of December 2022, Forex Reserves stood at US$ 563 bn covering 9.3 months of imports. 

·         As of end-November 2022, India is the sixth largest foreign exchange reserves holder in the world. The current stock of external debt is well shielded by the comfortable level of foreign exchange reserves. 

·         India has relatively low levels of total debt as a percentage of Gross National Income and short-term debt as a percentage of total debt.

Social Sector: The Government's spending on social services has shown a rising trend since FY16 with a focus on many aspects of the social wellbeing of citizens of the country. 

·         The social services expenditure witnessed an increase of 8.4% in FY21 over FY20 and another 31.4% increase in FY22 over FY21. 

·          While the social sector expenditure outlay of the Centre and State governments was 9.15 lakh crore in 2015-16, it has increased steadily to stand at 21.3 lakh crore in FY23 (BE). 

·         The share of expenditure on health in the total expenditure on social services, has increased from 21 per cent in FY19 to 26 per cent in FY23 (BE). 

·         In keeping with the recommendation of the Fifteenth Finance Commission, Central and State Governments' budgeted expenditure on the health sector reached 2.1 per cent of GDP in FY23 (BE) and 2.2% in FY22 (RE), against 1.6% in FY21. 

·         Survey highlights the findings of the 2022 report of the UNDP on Multidimensional Poverty Index which says that 41.5 crore people exit poverty in India between 2005-06 and 2019-20. (Jan-Dhan, Aadhaar, and Mobile) trinity, combined with the power of DBT, has brought the marginalised sections of society into the formal financial system, revolutionising the path of transparent and accountable governance by empowering the people. 

·         FY22 saw improvement in Gross Enrolment Ratios (GER) in schools and improvement in gender parity. GER in the primaryenrolment in class I to V as a percentage of the population in age 6 to 10 years - for girls as well as boys have improved in FY22. 

·         Out-of-pocket expenditure as a percentage of total health expenditure declined from 64.2% in FY14 to 48.2% in FY19. 

·         Infant Mortality Rate (IMR), Under Five mortality rate (U5MR) and neonatal Mortality Rate (NMR) have shown a steady decline. 

·         Nearly 22 crore beneficiaries have been verified under the Ayushman Bharat Scheme as on 04 January, 2023. Over 1.54 lakh Health and Wellness Centres have been operationalized across the country under Ayushman Bharat.


·         Domestic private consumption remained buoyant in November 2022, as indicated by Motilal Oswal's Economic Activity Index. The index estimates that private consumption grew at a fivemonth high pace of 5.6 per cent YoY, driven by auto sales and broad-based expansion of services 

·         The near-universal coverage of vaccination in India was the single most important reason that brought people out to the streets to reexperience the "bazaar" as the marketplace was rapidly populated with service providers returning to resume business. 

·         The rebound in consumption has also been supported by the release of "pent-up" demand. RBI's most recent survey of consumer confidence released in December 2022 pointed to improving sentiment with respect to current and prospective employment and income conditions. 

·         The banking sector in India responded in equal measure to the demand for credit. The Year-on-Year growth in credit since the January-March quarter of 2022 has moved into double-digits and is rising across most sectors.


 A slowdown in global growth has led to slower export growth, but the combined value of goods and services exports in current dollars for April - December 2022 is 16 per cent higher than in April-December 2021.The export stimulus for the Indian economy persisted in the first half of FY23. In this half of the year, exports of goods and services as a share of GDP have been the highest since FY16. Export growth may slow further in the second half of the current financial year and remain weak beyond that, too, if the global economy falls into recession. However, the strong domestic consumption growth and investment revival is expected to keep industrial production humming.


·         The recent geopolitical conflict aggravated global supply disruptions and adversely impacted the prices of fuel, food, and other essential commodities. The Government of India's fiscal policy response to the crisis comprised of a judicious mix of increasing food and fertiliser subsidies on the one hand and a reduction in taxes on fuel and certain imported products on the other. 

·         The Union Government finances have shown a resilient performance during the year FY23, facilitated by the recovery in economic activity, buoyancy in revenues from direct taxes and GST, and realistic assumptions in the Budget. 

·         The Gross Tax Revenue registered a YoY growth of 15.5 per cent from April to November 2022, driven by robust growth in the direct taxes and Goods and Services Tax (GST). 

·         Growth in direct taxes during the first eight months of the year was much higher than their corresponding longerterm averages. 

·         GST has stabilised as a vital revenue source for central and state governments, with the gross GST collections increasing at 24.8 per cent on YoY basis from April to December 2022. 

·         Union Government's emphasis on capital expenditure (Capex) has continued despite higher revenue expenditure requirements during the year. The Centre's Capex has steadily increased from a long-term average of 1.7 per cent of GDP (FY09 to FY20) to 2.5 per cent of GDP in FY22 PA. 

·         The Centre has also incentivised the State Governments through interest-free loans and enhanced borrowing ceilings to prioritise their spending on Capex. 

·         With an emphasis on infrastructure-intensive sectors like roads and highways, railways, and housing and urban affairs, the increase in Capex has large-scale positive implications for medium-term growth. 

·         The Government's Capexled growth strategy will enable India to keep the growth-interest rate differential positive, leading to a sustainable debt to GDP in the medium run. 

·         The fiscal deficit of the Union Government, which reached 9.2 per cent of GDP during the pandemic year FY21, has moderated to 6.7% of GDP in FY22 PA and is further budgeted to reach 6.4 per cent of GDP in FY23. 

·         The fiscal deficit of the Union Government at the end of November 2022 stood at 58.9% of the BE, lower than the five-year moving average of 104.6 per cent of BE during the same period.


India's current account balance (CAB) recorded a deficit of US$ 36.4 billion (4.4 per cent of GDP) in Q2FY23 in contrast to a deficit of US$ 9.7 billion (1.3 per cent of GDP) during the corresponding period of the previous year. The widening of the Current Account Deficit (CAD) in the second quarter of FY23 was mainly on account of a higher merchandise trade deficit of US$83.5 billion and an increase in net investment income outgo. For the period April- September 2022 (H1FY23), India recorded a CAD of 3.3 per cent of GDP on the back of an increase in the merchandise trade deficit, as compared with 0.2 per cent in H1FY22. However, a comparison with the position of the CAB for selected countries shows that India's CAD is modest and within manageable limits.

MONETARY DEVELOPMENTS The year 2022 marked the return of high inflation, especially in advanced economies, after nearly four decades. Inflation did not spare emerging economies either. These developments led to an unprecedented, synchronous, and sharp cycle of monetary tightening across countries. 

·         The RBI initiated its monetary tightening cycle in April 2022 and has since raised the repo rate by 225 bps, leading to moderation of surplus liquidity conditions. 

·         Cleaner balance sheets led to enhanced lending by financial institutions. 

·         The growth in credit offtake is expected to sustain, and combined with a pick-up in private capex, will usher in a virtuous investment cycle. 

·         Non-food credit offtake by scheduled Commercial Banks (SCBs) has been growing in double digits since April 2022. 

·         Credit disbursed by NonBanking Financial Companies (NBFCs) has also been on the rise. 

·         The Gross Non-Performing Assets (GNPA) ratio of SCBs has fallen to a seven-year low of 5.0. The Capital-to-Risk Weighted Assets Ratio (CRAR) remains healthy at 16.0. 

·         The recovery rate for the SCBs through Insolvency and Bankruptcy (IBC) was highest in FY22 compared to other channels.

PRICES & INFLATION While the year 2022 witnessed a return of high inflation in the advanced world after three to four decades, India caps the rise in prices. The Government adopted a multi-pronged approach to tame the increase in price levels: phase wise reduction in export duty of petrol and diesel; omport duty on major inputs were brought to zero while tax on export of iron ores and concentrates increased from 30 to 50%; waived customs duty on cotton imports w.e.f. 14 April 2022, until 30 September, 2022; prohibition on the export of wheat products under HS Code 1101 and imposition of export duty on rice; and reduction in basic duty on crude and refined palm oil, crude soyabean oil and crude sunflower oil. 

·         Consumer price inflation in India went through three phases in 2022. A rising phase up to April 2022 when it crested at 7.8%, then a holding pattern at around 7% up to August 2022 and then a decline to around 5.7% by December 2022. 

·         While India's retail inflation rate peaked at 7.8 per cent in April 2022, above the RBI's upper tolerance limit of 6 per cent, the overshoot of inflation above the upper end of the target range in India was however one of the lowest in the world. 

·         The RBI's anchoring of inflationary expectations through forward guidance and responsive monetary policy has helped guide the trajectory of inflation in the country. 

·         The one-year-ahead inflationary expectations by both businesses and households have moderated in the current financial year. 

·          Timely policy intervention by the government in housing sector, coupled with low home loan interest rates propped up demand and attracted buyers more readily in the affordable segment in FY23. 

·         An overall increase in composite Housing Price Indices (HPI) assessment and Housing Price Indices market prices indicates a revival in the housing finance sector. A stable to moderate increase in HPI also offers confidence to homeowners and home loan financiers in terms of the retained value of the asset. 

·         India's inflation management has been particularly noteworthy and can be contrasted with advanced economies that are still grappling with sticky inflation rates. 

·         RBI's Monetary Policy Committee increased the policy repo rate under the Liquidity Adjustment Facility (LAF) by 225 basis points from 4.0% to 6.25% between May and December 2022.

CAPITAL MARKETS Global macroeconomic uncertainty, unprecedented inflation, monetary policy tightening, volatile markets, etc., resulted in hurting investor sentiments, leading to a downbeat performance of global capital markets in FY23. Though global macroeconomic and financial market developments exercised some influence on Indian capital markets, India's capital market had a good year, overall. 

·         Although the year so far has been lackluster in terms of fund mobilisation through IPOs, the number of SMEs coming out with public offer has been quite encouraging. Compared to FY22 (until November 2021), this year, not only did the number of SMEs coming with IPOs almost double, but the total funds raised by them were almost three times the funds raised by them in the same period last year. 

·         This year also witnessed the largest IPO ever in the history of India. In May 2022, the Central Government diluted its stake in the Life Insurance Corporation (LIC) of India and listed it on the stock exchanges, thereby making LIC's IPO the largest IPO ever in India and the sixth biggest IPO globally of 2022. Listing of LIC accounted for more than a third of resources mobilised in the primary equity market until November 2022 

·         In April-December 2022, global stock markets declined because of geopolitical uncertainty. On the contrary, the Indian stock market saw a resilient performance, with the Nifty 50 registering a return of 3.7% during the same period. 

·         At the end of December 2022, Sensex closed 3.9% higher from its closing level on March 31, 2022. 

·         Among major emerging market economies, India outperformed its peers in April-December 2022.


·         India declared the Net Zero Pledge to achieve net zero emissions goal by 2070. 

·         India achieved its target of 40% installed electric capacity from non-fossil fuels ahead of 2030. 

·         The likely installed capacity from non-fossil fuels to be more than 500 GW by 2030 resulting in decline of average emission rate by around 29% by 2029-30, compared to 2014-15.

·         India to reduce emissions intensity of its GDP by 45% by 2030 from 2005 levels. 

·         About 50% cumulative electric power installed capacity to come from nonfossil fuel-based energy resources by 2030. 

·          A mass movement LiFE ('Lifestyle for Environment') launched. 

·         Sovereign Green Bond Framework (SGrBs) issued in November 2022. RBI auctioned two tranches of Rs. 4,000 crore Sovereign Green Bonds (SGrB). 

·         National Green Hydrogen Mission (NGHM) to enable India to be energy independent by 2047. 

·         Green Hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum to be developed by 2030. Cumulative reduction in fossil fuel imports over Rs. 1 lakh crore and creation of over 6 lakh jobs by 2030 under (NGHM). Renewable energy capacity addition of about 125 GW and abatement of nearly 50 MMT of annual GHG emissions by 2030. 

·         The Survey highlights the progress on eight missions under the National Action Plan for Climate Change (NAPCC) to address climate concerns and promote sustainable development. 

·         Solar power capacity installed, a key metric under the National Solar Mission stood at 61.6 GW as on October 2022. 

·         India becoming a favoured destination for renewables; investments in 7 years stand at USD 78.1 billion. 

·         62.8 lakh individual household toilets and 6.2 lakh community and public toilets constructed (August 2022) under the National Mission on Sustainable Habitat.



According to Survey, India's economic growth in FY23 has been principally led by private consumption and capital formation and they have helped generate employment as seen in the declining urban unemployment rate and in the faster net registration in Employee Provident Fund. Moreover, the world's second-largest vaccination drive involving more than 2 billion doses also served to lift consumer sentiments that may prolong the rebound in consumption. Still, private capex soon needs to take up the leadership role to put job creation on a fast track.

The Survey emphasises that growth is inclusive when it creates jobs. Both official and unofficial sources confirm that employment levels have risen in the current financial year, as the Periodic Labour Force Survey (PLFS) shows that the urban unemployment rate for people aged 15 years and above declined from 9.8% in the quarter ending September 2021 to 7.2% one year later (quarter ending September 2022). This is accompanied by an improvement in the Labour Force Participation Rate (LFPR) as well, confirming the emergence of the economy out of the pandemic-induced slowdown early in FY23. 

·         Labour markets have recovered beyond pre-COVID levels, in both urban and rural areas, with unemployment rates falling from 5.8% in 2018-19 to 4.2% in 2020-21. 

·         Quarterly urban employment data shows progress beyond pre-pandemic levels as the unemployment rate declined from 8.3 per cent in JulySeptember 2019 to 7.2 per cent in July-September 2022. 

·         Reflecting rising formalisation of employment, net addition to EPFO payroll is steadily moving upward after swiftly rebounding from COVID-19, with the majority share coming from the youth. 

·         As per Annual Survey of Industries 2019-20, employment in the organised manufacturing sector has maintained a steady upward trend over time, with the employment per factory also increasing gradually. 

·         Employment has been rising faster in factories employing more than 100 workers than in smaller ones, suggesting scaling up of manufacturing units. 

·         YoY decline in monthly demand for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGN-REGS) work is emanating from normalisation of the rural economy due to strong agricultural growth and a swift bounce-back from COVID-19. 

·         The noticeable rise in Rural Female Labour Force Participation Rate (FLFPR) from 19.7% in 2018-19 to 27.7% in 2020-21 is a positive development. 

·         As on 31 December 2022, total over 28.5 crore unorganised workers have been registered on e-Shram portal. 

·         According to broad status in employment, the share of selfemployed increased and that of regular wage/salaried workers declined in 2020-21 vis-à-vis 2019-20, driven by trend in both rural and urban areas. 

·         Share of workers engaged in agriculture rose marginally from 45.6% in 2019-20 to 46.5% in 2020- 21, the share of manufacturing declined-faintly from 11.2% to 10.9%, the share of construction increased from 11.6% to 12.1%, and share of trade, hotel & restaurants declined from 13.2% to 12.2%, over the same period. 

·         Regular employees constituted the majority of workers across sectors, with a share of 86.4 per cent in the total workforce in Q4FY22. Contractual employees formed a relatively small proportion of the workforce, except in manufacturing and construction. 

·         Nominal rural wages have increased at a steady positive rate during FY23 (till November 2022). In agriculture, the YoY rate of growth of nominal wage rates in agriculture was 5.1 per cent for men and 7.5 per cent for women, during the period AprilNovember 2022. In non-agricultural activities, the growth of nominal wage rates was 4.7 per cent for men and 3.7 per cent for women, during the same period. 

·         The Labour Force Participation Rate for males has gone up to 57.5% in 2020-21, as compared to 55.6% in 2018-19. Female Labour Force Participation Rate has gone up to 25.1% in 2020-21 from 18.6% in 2018-19. There is a notable rise in Rural Female Labour Force Participation Rate from 19.7% in 2018-19 to 27.7% in 2020-21.


While the role of traditional infrastructure has been well recognised, in recent years, the role of digital infrastructure in socio-economic development of the country has assumed an increased importance. The Survey states that in the coming years, the availability and spread of digital infrastructure will contribute significantly to economic growth. 

·         Unified Payment Interface (UPI): UPI-based transactions grew in value (121%) and volume (115%) terms, between 2019-22, paving the way for its international adoption. 

·         Telephone and Radio - For Digital Empowerment: Total telephone subscriber base in India stands at 117.8 crore (as of Sept, 22), with 44.3 per cent of subscribers in rural India. More than 98 per cent of the total telephone subscribers are connected wirelessly. The overall tele-density in India stood at 84.8 per cent in March 22. 200 per cent increase in rural internet subscriptions between 2015 and 2021. Prasar Bharati (India's autonomous public service broadcaster) - broadcasts in 23 languages, 179 dialects from 479 stations. Reaches 92 per cent of the area and 99.1 per cent of the total population. 

·         Digital Public Goods: Achieved lowcost accessibility since the launch of Aadhaar in 2009. Under the Government schemes, MyScheme, TrEDS, GEM, e-NAM, UMANG has transformed market place and has enabled citizens to access services across sectors. Under Account Aggregator, the consent-based data sharing framework is currently live across over 110 crore bank accounts. Open Credit Enablement Network aims towards democratising lending operations while allowing end-to-end digital loan applications. National AI portal has published 1520 articles, 262 videos, and 120 government initiatives and is being viewed as viewed as a tool for overcoming the language barrier e.g., 'Bhashini'. Legislations are being introduced for enhanced user privacy and creating an ecosystem for standard, open, and interoperable protocols underlining robust data governance.

(Compiled by EN Team)

Source: Economic Survey 2022- 23/PIB