Union Budget 2024: The significance of the Economic Survey explained

The Economic Survey 2024, to be presented today, will evaluate India's economic recovery, growth potential, and address key challenges, setting the stage for budgetary decisions and fiscal policies

As India readies for the presentation of Finance Minister Nirmala Sitharaman’s sixth full Budget presentation on Tuesday, July 23, the Economic Survey is set to be released today, July 22. The survey – which is usually presented on January 31, a day before the FM presents the Union Budget – gets delayed during the General Election years.

In such years, like this time, the government presents a concise report, called ‘The Indian Economy – A Review’ instead of the full survey and tables an Interim Budget in February. After the elections are over and a new government is formed, the newly elected Finance Minister presents the comprehensive Economic Survey and the full Budget. 

 

The first Economic Survey was presented in the 1950-51 period in the Lok Sabha as part of the Union Budget which continued 1964, after which it was de-linked from the Budget and since then presented earlier.

What is the Economic Survey?

Economic Survey is an annual report card of the country’s financial performance in the preceding fiscal year. It is prepared by the Economics Division of the Finance Ministry’s Department of Economic Affairs under the guidance of the Chief Economic Advisor (CEA), a position currently held by V Anantha Nageswaran. 

The document analyses the nation’s key economic indicators such as Gross Domestic Product (GDP) growth, inflation, as well as the performance of various sectors. 

The survey also looks at the government’s expenditure in detail and provides insights on the country’s fiscal deficit, revealing the gap between the Centre’s spending and its income, thereby performing as a key bedrock for providing an outlook for the upcoming financial year. It also reveals the developments on the external sector and employment trend fronts, which play a key role in providing policy recommendations that often include reforms needed to address current economic challenges and enhance long-term growth prospects.

The survey further puts Indian economic performance into a global context, while revealing the importance of global trends on domestic policies.

The document is divided into two parts:

Part A looks at the country’s economic development and challenges.

Part B analyses the previous year’s performance over key themes such as healthcare, climate change, social security, poverty, education, etc.

Why is it significant?

The Economic Survey serves as a foundation for budgetary decisions by providing essential data for shaping budget proposals. It aligns fiscal policies with economic conditions and long-term goals. The survey's insights often guide policy priorities, tax reforms, spending allocations, and initiatives aimed at fostering economic growth and development.

What to expect in this year’s Economic Survey?

In 2022, the survey’s central theme was the ‘Agile Approach’, highlighting India’s economic response to the Covid-19 pandemic. By 2023, the focus shifted to ‘Recovery Complete’, emphasising the broad-based recovery from the pandemic-induced contraction, the Russia-Ukraine conflict, and inflation, returning to the pre-pandemic growth trajectory.

On the growth front, the country seems to be doing well. In July this year, the International Monetary Fund (IMF) adjusted its growth forecast for India in 2024-25 from 6.8 per cent to 7 per cent, citing improved private consumption, particularly in rural areas, despite challenging global and domestic economic conditions. The IMF’s World Economic Outlook also predicts a 6.5 per cent GDP growth for India in 2025-26.

Meanwhile, the Asian Development Bank (ADB), earlier last week, kept the country’s GDP growth projection for the current financial year (FY25) unchanged at 7 per cent.  

However, significant challenges remain. The ghosts of the pandemic years still continue to haunt the country’s employment trends. According to the latest fact sheet titled ‘Annual Survey of Unincorporated Sector Enterprises (ASUSE)’ released by the National Statistical Office (NSO) this month, the total workers employed in the vast informal sector in India — at 109.6 million — still remains below the pre-pandemic period.

The upcoming survey is anticipated to evaluate the extent of economic recovery and assess India's growth potential. It is expected to outline future scenarios and propose policy solutions. Economists suggest the survey might address key questions such as strategies to boost manufacturing growth and maintain rapid growth amidst sluggish global growth and trade.

Economic Survey FY24: Check the timing

Union Finance Minister Nirmala Sitharaman will present the Economic Survey in Parliament on Monday, July 22, 2024, a day before the Budget presentation. The document is expected to be tabled at around 1.00 pm, with Chief Economic Advisor V Anantha Nageswaran scheduled to hold a press conference at 2.30 pm.