 Welcome to all of you to this session on economic survey as everyone was waiting for the economic survey to release and finally the document has been released and it has been put in the public domain. So first of all, why economic survey? What is the relevance of economic survey? So let me tell you if there is only one book which can take you towards the UPSC qualification then it is only the economic survey. Because economic survey discusses everything what is happening in the economy and not only about what is happening in the economy but it also tells what is the future for the Indian economy be it's GDP, be it's inflation, be it's forex reserves everything has been discussed in the economic survey. Although it is a voluminous book it's approximately 500 pages but still the book is highly intellectual because all the professional, all the highly expertise economists of India and also the global have their role to play in preparation of the Indian economic survey. And let me tell you the historical context since 1950s this document is published annually. Annually without any break this survey has been published and once you read the survey you get the entire gist of what is happening in the Indian economy. So first of all let's do the basics. Who releases it? It is released by the Department of Economic Affairs. See Ministry of Finance under the government of India has many departments and one of the department is Department of Economic Affairs which prepares this report under the guidance of Chief Economic Advisor. So Chief Economic Advisor is the central person who is responsible to document this intellectual book. What it happens, what it includes so it includes the growth outlook for the past year that is for FY23 that means from 2022 to 2023 how the economy has performed and also it projects how the economy is going to perform in the next coming financial year that is from 2023 to 2024 and it is generally released a day before the budget is released. So budget is released generally on first step and then the survey is put into public domain by 31st of January. So first we will understand what the economic survey has to tell about GDP. See GDP is the most important parameter to gauge the status of Indian economy. Every country releases its GDP data and on that data we compare how the economy is performing. So the survey projects that the GDP growth rate to be 6 to 6.8% in 2023 to 2024 but there is a big disclaimer which the survey has put that this will depend upon the global political and economic situation. You know that if you analyze the world the past 2 to 3 years has been a world where multiple events which no one has predicted has happened be it the geopolitical crisis of Russia, Ukraine brought be it the coming geoeconomic crisis because of the black swine even pandemic. So all these situations has cumulatively acted as a big dent on the whole humanity. So the survey says that this whole GDP growth rate will depend upon how the future is with respect to political and economical development globally. But despite all of these things, see 6% is not very much. India was already growing with 7-8% it has been growing with that particular number in the past but despite all the uncertainties India will still manage to get a growth rate of 6 to 6.8% and that is incredible we will see why. But the survey says that India will remain the fastest major growing economy in the world. Despite of all the odds India will still be the leading nation in terms of the GDP growth. And lastly the survey with respect to GDP summarizes the entire thing. It says that economy has nearly recouped what was lost. You will see how renewed what had paused and re-energized what was slowing during the pandemic and since the conflict in Europe. Let me illustrate this whole summary by some figures. So you can see first of all the first figure tells you what is the GDP growth rate. So you can see in the FY20 that is from 2019 to 2020 the GDP was 3.7 and then came the pandemic and India entered along with other countries into a period of recession where the economy declined or the contracted by 6.6% in the history of when India got independent only for five times our economy has contracted and this happened during the 2020 to 2021. But after that India bounced back the GDP growth rate was 8.7% and for this financial year that is from 2022 to 2023 the GDP is predicted to be at 7% and for the coming year that is from 2023 to 2024 the GDP is estimated to grow at 6 to 6.8%. Now see this diagram basically tells so we started from here then came the pandemic and in the pandemic we declined our economy declined but see then in the next year we are again back to where we started that means India has recovered all the things which we have lost. So all the GDP which was lost during the pandemic now India in the FY20-22 has recovered all that was lost and in the next financial year you can see that India is growing strongly despite all the odds. So the survey says in short that the GDP which declined during the pandemic and the recovery of that loss has completed so that's a very good news which the survey tells now what I was saying that the world is facing a lot of crisis and then the world is facing a lot of crisis most of the global economies most of the global economies be it the best advanced economies of the best all are moving towards a recession all are moving towards a slowdown in every country there's a huge uncertainty as to how their future will be and in all these things India is still emerging as a strong player this you can see in this particular diagram the United States is projected to grow at 1.6 percent and in the next year at 1 percent you can see United Kingdom lowing to 3.0.3 percent then you can see China 4.4 percent but see India at 6.1 percent and for 2020 to 6.8 percent so you can analyze that India is the fastest major growing economy in the world so we were discussing why India is going to be the fastest major growing economy in the world so the survey tries to put out some basic substantial proof that why India will be the leading country in terms of GDP growth so the first survey says that there is a huge rebound of private consumption what do you mean by private consumption so private consumption is a basically a consumption which is made by people like you and me what we do we go we buy car we buy phones we buy laptop we go and eat food so all these consumptions is the major strength of Indian economy let me tell you India's GDP car approximately 55 to 60 percent of our GDP growth rate comes from this private consumption and this private consumption was declining because of pandemic a lot of people were jobless a lot of people whose salary was going to increase it did not get so in this context the private consumption which constitutes 55 to 60 percent of GDP wasn't declined but the survey says that it is now rebouncing in a very strong manner second the survey says that you know that India always used to give subsidies India always used to give some freebies culture there was a freebie culture which was promoted but since two to three years this government has focused in a very strong manner in terms of capital expenditure capital expenditure means construction of road railways highways all those infrastructures which has a multiplier effect because if you construct a road then the economy gains by double but if you give freebies if you give subsidies there is no productivity which is comes to the economy so that is why the survey says that the quality of expenditure done by government is shifting more towards scapegoats and less towards the freebies or the subsidies and because of this huge push towards capital expenditure the private players which were reluctant to invest in India now they are feeling confident that yes government is standing government spending in the right manner so let us also support the government so because of the qualitative shift in terms of where and how the government is spending the private persons are also coming into the picture and they are also investing the third union universal vaccination coverage you know that India has the record number of vaccination in the shortest period of time and because of that the contacts based services what do you mean by contact based services like hospitality sector hotels tourism spa so this is again a very important sector for the Indian economy right and because in the pandemic the tourism was shut all the services which were based on human to human contact were shut but now because of the near universal vaccination coverage the services industry is also growing at a very great pace fourth the survey says that all those migrant workers because of the lockdown where they went back to the villages now they have again came back to the urban cities so all those construction sector where there was a huge shortfall of migrant workers now it is not the case finally very important thing the survey says that there's no twin bill balance sheet program you know that since 2015 or in the 2015 India was facing this very big problem what do you mean by no twin balance sheet it basically says that the balance sheet of the corporate and the balance sheet of the public sector banks both are in a very poor state both are in a very poor state let me give you an example for example i am a company i have taken 100 crore of loan but i'm not able to repay that loan back so my balance sheet has gone and the bank which has given me the loan now uskabi balance sheet has gone right so both the balance sheet gets disturbed so this problem india was facing in 2015 but due to many different different steps which has been taken by government now there is a tata bye bye to this twin balance sheet problem india has now a very robust public sector banks and also the state of the corporates which were highly over leveraged at one point of time their balance sheet has also consolidated right so now india does not have any twin balance sheet problem so in all this context the survey says that everything sounds very optimistic for india and hence india after the pandemic or after the this war when the things will settle down india will emerge in a much more stronger manner than anyone has expected now inflation again inflation is a very important parameter to gauge and understand how the economy is because you know that inflation does not affect the rich inflation does not affect the rich but what is inflation inflation basically is like a tax on the poor because by inflation most of the things becomes out of reach for the poor population for example if the prices of onion increases how can a poor person afford that so that is why inflation is again a very important parameter and survey says that the rbi has projected the headline inflation at 6.8% you already know that in terms of inflation india has kept a tolerance limit that is in india the inflation has to be from 2% to 6% and if it is beyond 6% then that means that inflation has failed or inflation is not as per what the government wants to be so but because of the pandemic when the supply chain was disrupted because of the geosupportical uncertainty because of Russia-Ukraine war and the energy prices being shot up in all this context not only india but globally every country is facing high level of inflation you can see this graph so this particular graph is for advanced economy 7.2 is the average inflation which these countries are facing you know that US and every country has a high level of inflation and then similarly the developing countries also has a high level of inflation but despite all these things india was able to keep the inflation beyond a particular level that means although it is more than 6% but still it has not exceeded too much as everyone was predicting that in india economy it might even go to double digit so although the inflation is beyond what the tolerance limit of 6% is but still the inflation has not been out of reach this is because the survey says this is because you know that in india who is responsible to control the inflation it is the primary responsibility of the RBI and in RBI also there is a monetary policy committee which is constituted only for this purpose that they have to control or they have to keep the level of inflation from 2 to 6% so the work done by the RBI monetary committee was incredible and hence the Indian inflation did not end out of reach so you can see that this is a graph that how interest rates were increased you know that when inflation rises the interest rate has also to increase why because interest is what interest rate basically tells you at what cost you can borrow the money so if the inflation is high that means the supply of money exceeds then what is required so in that case generally the central bank increases the interest rate so that the cost of borrowing increases so if the cost of borrowing increases then less people will go and take the loans and if the less people will go and take the loan then the supply of the money will reduce and hence the inflation will also come down right to do that RBI has been constantly or RBI monetary policy committee has been constantly increasing the interest rate in terms of economy we call it as a reporate right so reporate has been constantly increasing so you can see in 8th April 2022 it was at 4% and finally in the last month 7th December last to last month the interest rate or the reporate has increased to 6.5% and because of this calibrated increase in a very step by step manner our inflation has not crossed what other countries are facing because if you compare Sri Lanka if you compare Pakistan if you compare Turkey all those countries are facing double digit of inflation so in that context our inflation is hovering around 7% 8% at the max now fiscal deficit again a very important parameter to gauge the status of economy what do you mean by fiscal deficit you know that governments what the government gets and the what the government spends there is a complete mismatch so suppose government gets 100 and government has to spend 200 that means government is facing a deficit of 100 rupees so that is known as fiscal deficit that is known as fiscal deficit so fiscal deficit also very important parameter because if government recklessly take loan if government recklessly spends a lot of money then the economy the macroeconomic stability of the economy come a stability of the economy comes into problems right so you can see that the fiscal deficit right it was in f by 20 9.2 now it has come down to 6.4 you know that our target is to achieve a fiscal deficit of 4.5% by 25 26 so in that context the fiscal deficit is again on the declining trend it is not again on the declining standard because if the government why there's a limit there's a limit because you have to control what the government spends because if you don't have any limit or if you don't have any plan then government can borrow any amount of money and hence because if government borrows a lot of money and spends recklessly then the inflation will rise and hence the stability of the country comes into crisis and similarly the fiscal deficit of the state you can see it's 3.4 percent right so for the center it is on the declining trend and for the state also it is around 3 to 4 percent the fiscal deficit now comes to the tax collection so tax collection the graph has been put by the economic survey right so for the f by 23 you can see that out of 100 rupees which the government gets 28 comes from the GST 26 comes from the corporate income tax 26 comes from the personal income tax 26 comes from the excise duty and 8 percent comes from the customs so you can see that GST which was a game changer tax based revolution now has very much stabilized so the unpredictability which was with GST now has gone and the GST has emerged as a very stable tax so you can see that there has been a robust increase in terms of GST collection now if we do the sectoral growth trends how different different sectors of the economy are performing you know that there are three sectors one is the agriculture second is the industry and the third one is services if we compare all the three sectors let us see which sector has performed well and which sector has not performed well so as per the survey the agriculture sector has been the most resilient sector in the entire pandemic or in the entire game of the picture you can see that it grew it grew also during the pandemic so during the pandemic it grew at 3.3 percent you know you can see the industry minus 3.3 you can see the services minus 7.7 minus 7.8 but despite all the sector showing a recession the agriculture sector was very strong and it was very resilient sector so you can see that agriculture sector is expected to grow at 3.5 percent the government target is 4 percent ticker so it is close to that 3.5 percent if you see the industrial sector this is where the problem is you know that India manufacturing is very much poor as compared to other countries but our services sector is very good services that means tourism services that means software so like companies like tcs vipro so India has a very good services sector but when it comes to industrial sector or the manufacturing sector India is not that good so we can see that industrial growth shattered during the pandemic it was at minus 3.3 but let me tell you that during the 2018-19 before the pandemic also industrial growth rate was in the negative figure so things are not going good in terms of industrial growth but services sector although it contracted during the pandemic but now you can see it is growing in a very fast manner so overall if you see the agriculture sector is performing good industrial sector is performing optimum as usual always it happens but the services sector is the key sector which is taking quickly the India's growth story then comes the goods trade outlook goods merchandise trade outlook so you know that India generally India imports more goods than what it exports okay India imports more goods than what it exports why because in India the manufacturing has not been developed that significantly as you can see in other countries for example like China so generally in India most of the goods you can see laptop phone everything is imported from outside right so that is why India has a trade deficit trade deficit means the amount which we get through export and the amount which we have to spend to get our import is always higher so always the import value is higher than the export value and hence we run a deficit so see you can see the deficit deficit minus 60.2 billion dollar 54.6 billion dollar 62 81 billion dollar and 75 billion dollar so 75 billion dollar that deficit head so this dollar deficit basically depletes our products reserve this dollar deficit basically depletes our products reserve and for country like China they have a trade balance and India has a trade deficit in terms of goods but when you compare the services sector this is the sector which has performed or which has been performing very appropriately very up to the mark and that is why Indian services sector is always having a trade balance that means we export more than what we import and that is why India always earns dollar because any international transaction has to happen in dollar so if we are sending a good then we are getting dollar and if we are buying a good we have to sell dollar we have to spend dollar so because we export more than what we import so you can see that in India services sector is always positive and you can see that survey says that in this year also the trend will remain the same and we will be earning huge forex reserve because of the positive trade balance in the services sector and that is why because we earn dollars over here so this dollar we are using to fund the deficit which we are facing in the merchandise goods right now there is one big problem with the survey says although the problem is not that much but the survey says that because of the geopolitical uncertainty because of the geoeconomic crisis which the world is facing things might turn the other way when it comes to the current account deficit you know that when we prepare the scheme of balance of payment so there are two accounts one is the capital account and the other one is the current account what do you mean by capital account capital account is basically the flow of fdi fpi and other things and what do you mean by current account basically that trades in goods and services so generally if you compare the current account it is always deficit because the value of things which we export all the goods and services combined the amount which we export and the amount which we import so the import value is much more higher we have already seen this you can see that in terms of goods trade we are negative but in terms of services trade we are positive but when you add this negative positive becomes in a net negative but still we are net negative and that is why our current account deficit which includes mostly the trades in goods and services apart from other things also so trades and services if you combine but both the things still we are negative so generally the current account deficit was hovering around 1-2 percent but this quarter the last quarter it came down to 4.4 percent and this is a very worrying sign because you know generally if the CAD current account deficit is with is from 3 to 4 percent it's fine but when it crops at 4 percent then the thing starts to become problematic and you know that why you know because we have to get the oil imported and because of the Russia Ukraine ball the energy prices are shot up so in that case our import cost rises second global commodity you know that inflation is a global phenomena every country is facing inflation so in that context the global commodity prices is also on a rise and third whenever the current account deficit increases the rupee starts to depreciate the rupee starts to depreciate and that is why you will always hear in news that rupee has touched it all time low it all time high so this is the reason whenever the current account deficit by dense the rupee straight away comes under the attack but the survey says that although it is a worrying thing but that does not mean that India is going to face a very severe crisis because you know that what is current account deficit it is a deficit that means we are going how much dollar we are getting and how much dollar we are using to buy the imported goods so when you export you earn dollar and when you import you use your dollar because of the deficit we spend more dollar but from where we will get that extra dollar we will be getting that dollar from our forex reserves India has a good forex reserve so because India has a good forex reserves then that is why despite the CAD despite the current account deficit reaching to its all time low still because the forex is so good that is why we are able or we are confident that there will be not a big problem so you can see that this graph basically tells you the forex reserve so quarter 3 in the FY 23 the forex is approximately 563 billion dollars so that's a huge number right so that is why India does not have a very big problem because India can use the dollar reserves from here to fund its current account deficit and this graph basically tells you the import cover so currently import is import cover import cover is basically even if you don't do any trade and the reserves which you have so how long you can get the things imported with the same reserve which you have so for example if India has 563 billion dollar and if we don't earn any dollar from tomorrow so till how long we can get the things imported what we are importing so for eight to ten months for ten months we can still get that the things imported you know that during 1991 when India had a balance of payment crisis so this is what was happening India was left with no dollar reserves so that is why India was not able to import anything right so forex reserve is that's why very crucial because you know that India is a highly dependent on the import of oil and when we don't have dollar from where we are going to import the oil so that is why the survey says that although the current account deficit is going to be a problem but still we have a huge big forex reserve and also the import cover is for approximately 10 months so that is good coming to climate change one of the new imagination discourse which the world is seeing climate change it is a new reality and India you know that despite India being a developing country and India's contribution to this whole climate injustice or the whole climate catastrophe is very less but India has been a leading player in terms of climate climate-led activism so you can see that how India has progressed so the survey tries to say that how India is performing in terms of its climate activism so you can see that we started with national action plan on climate change we went to the COP 27 where we renewed our NDCs you know that Panchamit where prime minister has given five major goals one of the goals is that India will become net zero by 2070 right then share of renewable energy has increased out of the total electricity and then finally you see that this year also sorry last year the government has launched this flagship scheme that is known as national green hydrogen mission and this year we have launched this sovereign green bond right so the survey says that India has performed more than what it needs to when it comes to climate activism next come to unemployment so unemployment you know that this is again a very big issue for India India is generally called as a jobless growth or India has generally said that India is not you know generating much more jobs but but the survey says that this is not the case survey says that if you see the unemployment rate so in 2018-19 the unemployment rate was 5.8% but next year it is 4.8% and then the another next year it is 4.2% that means our unemployment is on decline our unemployment is on decline similarly you know labor force participation ratio what do you mean by labor force participation ratio it is that how many people are either in the job or plus how many people who are looking for job right so that means how many people are participating in the economy so that is also on right so you can see that 55.6 percent of the people were doing then 56.8 and then 57.5 so overall the survey says that although the unemployment you know shot up during the pandemic now once the pandemic when the dust has settled India's labor force participation and India's labor market has recovered what was before the pandemic finally you know that social infrastructure is also very important India being a welfare state it is very crucial that the economic pie if it increases then it is redistributed among the poor people also and going by that principle the government has allocated a huge fund towards the social infrastructure and you can see that it was 25.2 lakh crore and now it has increased to 26.6 lakhs 6 lakh crore so that's that mean that government is spending a huge amount of expenditure also on the social infrastructure that means health education and other schemes finally the survey concludes that you know that India is entering the period of Amritkal it started last year and by 2047 Indian have taken a pledge that we are going to a developed economy so in that context the survey says that the fundamentals of Indian economy are sound as it enters the Amritkal the 25 year journey towards the centenary as a modern independent nation right so Amritkal is a very important period and the survey also sells also tells that this Amritkal will not only a growth story for India but India will also act as a model voice for the developing world and in that context the survey categorically puts that how India is going to look and how India is going to shape the world in the in its period of Amritkal by saying that we will consider our growth as based on the principle of Vasudev Kutumbukam that is one earth one family and one shared humanity so in that context the survey says that although India will be developing India will be growing much faster and India will become a developed country by 2047 but this growth will not only be for India but this growth it is it will be for the entire humanity the growth will be based on model principles of equality the growth will be based on the principle of inclusion and the growth will try to deliver the objective or to deliver the crisis which the whole humanity is facing so the economic survey concludes everything in a much more optimistic note and it says that Indian fundamental economic principles are very strong and India is bound to grow India is bound to grow despite anything happened India might be declining to some extent but no one can stop the rise of India because all our economic fundamentals are in a very strong place and this growth the survey says is not only for India but this growth will help the humanity to be a better place so I hope that this survey you get a brief introductions but this let me tell you my friends this is only an introduction there will be a huge detailed analysis in-depth analysis both from the brilliant's perspective both from the main's perspective for interview and in general so everything everything will be explained to you in as simple manner as it can be so that the economic survey and the coming budget you are very much familiar with and you don't commit any mistake in the exam so you have to wait for some time and the detail analysis is just right on the way to you in the coming days continue watching us thank you