top of page

The Economic Survey 2022-23

The Economic Survey of 2023 stresses on key factors to enhance India’s medium-term growth outlook. The survey enumerates the structural reforms undertaken by the government since 2014 and how these reforms have served to create a foundation for the economy. India has taken a forward-thinking approach, undertaking reforms amidst geopolitical upheavals.

the Indian Economic Survey

Image Graphics by Team Geostrata

The survey recalls that between 1998 and 2002, the economic parameters were grim but once the temporary shocks faded away, the economy started to instil a glimmer of optimism.

The government has laid emphasis on undertaking governance reforms with the single aim of improving the ‘Ease of Doing Business’ and ‘Ease of Living’ for all citizens. The method followed has been to deepen the penetration of financial inclusion by building public digital infrastructure.

This helps in building public trust in the government which then contributes towards more credit flow in the economy. This strengthens the credit cycle and the process of capital formation in the economy. The survey goes on to claim that digital technology-based reforms have contributed immensely towards formalising the economy, which in turn drives economic opportunities.

The underlying framework of reforms undertaken since 2014 has been to enhance the productive potential of the economy and its people so that efficient resource allocation can be facilitated for the welfare of society. The reforms since 2014 were based on the broad principles of creating public goods, adopting trust-based governance, co-partnering with the private sector for development, and improving agricultural productivity.

These steps have made sure that the economy is well placed to grow faster once the temporary shocks emanating out of the pandemic & the commodity price spike due to the Russo-Ukraine conflict fade away. The survey looks confident in securing a 6.5% growth for the medium term and looks optimistic to achieve 7%-8% growth if the reforms undertaken are processed properly in the economy.

The Economic Survey explains the holistic policy adopted by the Government of India to ensure fiscal stability by sustaining debt in an environment of intense geopolitical churn. The rationale of the government behind maintaining a consistent yet sustainable debt-to-GDP ratio is working on a capex-led growth strategy.

This strategy has the potential for large-scale positive implications for medium-term growth. Capex-led investments in infrastructure-intensive sectors like roads and highways, railways, and housing and urban affairs have the potential of offering a cushion to the economy at a time of geopolitical uncertainty.

India has focused on incentivising the State Governments with concessional and at times, interest-free loans as well as relaxation in regulations to facilitate an enhanced push towards capex. This has allowed the State Governments to push for new green infrastructure projects in a bid to revolutionise development strategies.

Despite being on the receiving end of the ill effects of geopolitical conflicts, the government has not only managed to increase subsidies on necessary commodities but also reduce taxes. This has served as an additional fiscal burden as it was presented in a volatile global scenario.

Despite these additional fiscal pressures, India is believed to be on track to achieve the budget estimate for the fiscal deficit in FY23. The resilience in the fiscal performance of India has been facilitated by the recovery in economic activity and buoyancy in revenues from direct taxes and GST. The focus has been on budget transparency, tax ecosystem and rationalisation of schemes and funds to make up for the additional strength required to fend off this volatility.


World Bank, IMF, and ADB project India as the fastest-growing major economy at 6.5-7% in FY23. Capital Expenditure of the central government which increased by 63.4% in the first eight months of FY 23, is one of the major factors for the growth of the Indian economy. Private investment in capital expenditure saw a rise from Rs 2.6 lakh crore in FY 22 to Rs 3.3 lakh crore in FY 23.

Tax collection has been robust. Rs 11.9 lakh crore is expected to be collected in the form of GST in FY 23, which is a significant increase from Rs 9.4 lakh crore in FY 22. This is also a sign that the economy is bouncing back from a harsh time. In a recent report by CIBIL, it can be seen that 83% of borrowers from the Emergency Credit Line Guarantee Scheme are micro-enterprises, which means the scheme has reached people in need. Forex reserve also continues to remain strong relatively and is expected to be 563 billion dollars at the end of FY23


The survey suggests that in both urban and rural areas, labour markets have returned beyond pre-Covid levels. The urban unemployment rate has fallen from 8.3 per cent in July-September 2019 to 7.2 per cent in July-September 2022, surpassing pre-pandemic levels. This decline is due to increased employment in the organised manufacturing sector and the swift bounce back of the Indian economy.


Just like all other countries, India has faced inflation around the year. The Russia-Ukraine conflict worsened the recovery and condition of the entire global economy. Food inflation touched 7% in FY 23, due to the demand for Indian commodities in the international market which compelled domestic prices to compete with international prices. Since September 2022 double-digit inflation was observed in cereals, for which the government imposed an export duty on rice to meet domestic demands.

The edible oil market in India is vulnerable as 60% of total consumption is met by imports. Russia and Ukraine constituted 15% of India’s edible oil imports. The absence of imports from Russia and Ukraine has resulted in a shrinkage in the supply of edible oil, which has caused a sharp rise in its price.

Wholesale Price Index (WPI) which was 10.7% in April declined to 4.95% in December 2022, due to the reduction of food articles, mineral oils, crude petroleum, natural gas, and chemicals. The consumer Price Index (CPI) rose to 7.8% in April due to an increase in the prices of services, later cooling down to 5.7% in December 2022. Crude oil constitutes 40% of the total CPI index. Considering that India imports almost 80% of its crude oil needs, a rise in the price of crude oil was a major contributor to CPI inflation.


Inflation had severely impacted most of the developing economies in the world. The change in RBI’s policy stance in FY23 led to a moderation of surplus liquidity conditions that prevailed during the pandemic years. Transmission in monetary policy is well underway as lending and deposit rates increased following the hike in policy rates.

A status quo was maintained by the Monetary Policy Committee with the policy repo rate between May 2020 and February 2022 after implementing a 115 bps reduction between March 2020 and May 2020.

However, retail inflation has crossed the upper limit of RBI’s tolerance band since January 2022. This was due to the surplus liquidity conditions that prevailed post-Covid-19 as a reaction and response to the Reserve Bank’s conventional and unconventional monetary measures adopted to accommodate the pandemic-induced economic difficulties. The RBI’s move to hike the CRR by 50 bps resulted in a withdrawal of primary liquidity to the tune of ₹87,000 crore from the banking system.

In conclusion, monetary management has experienced setbacks with high liquidity in the economy imposed by RBI in response to the pandemic.



The industry sector, which is a significant part of the Indian economy, constituted 31% of the GDP on average during FY21 and FY22. Real Gross Value Added growth in FY23 over FY22 is 6.7% which is a very healthy indicator and can be attributed to schemes like PM Gatishakti which provide infrastructure for the development of industries.

The sector witnessed modest growth of 4.1% compared to strong growth of 10.3% in FY22. Estimates for FY23 show improvement in overall industrial growth, especially the manufacturing sector which is catalysed by the capital expenditure of Central and State governments in the country. Private investment has gathered momentum with the electricity sector gaining a maximum amount of Rs 0.35 lakh crore, one of the main reasons being the shift towards electrification and a green economy.

Eight core industries comprising coal, cement, oil, natural gas, steel, fertilisers, electricity, and refinery products have seen steady growth which continued in FY23 and will aid the overall development of the nation. Bank credit to the industry, especially MSMEs has seen a significant increase from 17.7% in January 2020 to 23.7% in November 2022. FDI inflow to the manufacturing unit which was $21.3 billion in FY22 has been trimmed this year due to the Russia-Ukraine conflict and global economic downtrends.

It is expected to increase in the coming days as it is projected that the Indian economy will grow despite the global slowdown. RAMP scheme initiated in FY23 will provide a total outlay of Rs 6062.4 crore over a period of five years which will improve MSMEs’ access to market, credit, and technology.


Social infrastructure sets the foundation for a society with a higher quality of life while also indirectly contributing to economic development and social advancement. The Government’s spending on social services has seen an upward trend in recent times and now accounts for 26.6% of total General Government expenditure.


FY22 saw improvement in Gross Enrolment Ratios (GER) in schools and improvement in gender parity and a steady decline in school dropouts. The RTE Act, improvements in school infrastructure and facilities, residential hostel buildings, availability of teachers, free textbooks, and the PM POSHAN Scheme have all played an important role in increasing enrolment.


The number of Sub-centres, Primary Health Centres (PHCs), and Community Health Centres (CHCs) has expanded dramatically over the previous eight years, also the government has strengthened health infrastructure to address upcoming challenges. Major government initiatives like eSanjeevani, Ayushman Bharat, and PMSBY have benefitted numerous people in the country.


Agriculture and related activities are predicted to grow at 3.5% in FY 2022-23. Government policies such as encouraging crop diversification, providing predictable returns through price support, and supporting farmer-producer organisations have helped the agricultural and allied industry function effectively in recent years.

The government is focusing on organic and natural farming, with programmes such as the Paramparagat Krishi Vikas Yojana (PKVY) assisting needy farmers. The flow of institutional finance to the agriculture sector has gradually increased, supporting its expansion.

The government’s initiatives like PM Kisan to offer income support, boost institutional financing and insurance through the PMFBY, and push for Kisan Credit Card have been substantial for the sector’s growth. PM KISAN has benefitted nearly 11.3 crore farmers in its April-July 2022-23 payment cycle.


Realising the role of cooperatives in rural economic transformation, the government is formulating a New National Cooperation Policy to strengthen the cooperative movement in India.


The Economic Survey emphasises the need for a well-developed food processing sector with improved facilities such as cold storage and better transportation for increasing export earnings, ensuring better farmers' returns and providing employment opportunities.


The best-performing sector is the service sector which is estimated to grow at 9.1% in FY 2022-23. Despite bearing the brunt of the Covid outbreak, the service sector has expanded rapidly and will be the key driver of development in the following fiscal year. The robust demand in the post-pandemic rebound, the removal of mobility restrictions, near-universal vaccine coverage, and pre-emptive government actions are all contributing to this expansion.

Bank lending to the services sector has increased dramatically and saw 21.3% year-on-year growth in November 2022 fuelling the sector’s growth. India is among the top ten services exporting countries with services exports registering a growth of 27.7 % during April-December 2022. This resilient growth is driven by increased demand for digital support, cloud services, and infrastructure modernization.


With the end of the pandemic, India's tourism industry is also beginning to recover and return to post-pandemic levels. Also, India can capitalise on its G20 presidency to promote it as a “major tourist destination”.


With the change in people’s attitude towards owning a home, real estate has witnessed growth surpassing the pre-pandemic levels facing pent-up demand in Tier II and Tier III city's residential real estate markets.


The accelerated pace of digitalisation has resulted in IT-BPM revenue growth, registering a 15.5 % YoY increase during FY22. E-Commerce has also witnessed substantial growth due to higher smartphone adoption, increased internet usage, and digital payments.


The Economic survey summarises the main causes of disruptions in the external sector. There were several challenges faced by India’s external sector including the COVID-19-related disruptions in economies, the Russian-Ukraine conflict and the resultant disruption in the global supply chain, mainly impacting food, fuel and fertilisers.

Another challenge arose from the response of the Central Banks across economies which included synchronised policy rate hikes to curb inflation, which caused the appreciation of the US Dollar and the widening of the Current Account Deficits (CAD) in net importing economies. Amidst the prospects of global stagflation, nations felt compelled to protect their respective economic space, thus slowing cross-border trade and affecting overall growth.

Finally, as China experienced a considerable slowdown induced by its new economic policies, it affected overall global trade and further contributed to the fall of the Indian rupee.

Yet, the survey notes that India fared better than most economies and certain factors like the rise in prices of crude oil were beyond the control of an individual nation. The conflict between Russia and Ukraine did not only cause the rise of prices of critical commodities such as crude oil but also of others like natural gas, fertilisers, and wheat.

This strengthened the inflationary pressures that the global economic recovery triggered. Given the backdrop of the pandemic, many countries had already imposed fiscal measures to contain inflation yet the war triggered the economic recovery to new lows than ever before.

The survey also highlights that inflation and monetary tightening led to a hardening of bond yields across economies and resulted in an outflow of equity capital from most of the economies around the world into the “traditionally safe-haven market of the US”. This further protected the US and strengthened the US dollar.

The consequent depreciation of other currencies has been widening the CAD and increasing inflationary pressures in economies throughout the world. In conclusion, the external sector growth has to be considered with caution as the inflationary pressures and conflict in Europe prevails.


The survey also emphasises India’s commitment to transition towards a green economy, mentioning the commitments made by India at international platforms like COP 27 as well as the ‘Nationally Determined Contributions’. India’s leading role in shaping the future of climate action through initiatives like the International Solar Alliance (ISA) and the Coalition of Disaster Resilient Infrastructure (CDRI) is observed by the survey as being productive in shaping the view of the world towards climate crisis & climate emergency.

The survey makes an interesting projection of the optimal mix of installed energy capacity that India might possess in 2029-2030. The idea is to reduce the reliance on hydrocarbons for environmental as well as political reasons since India imports the majority of its energy, which exposes it to energy security risks.

India is spearheading one of the world’s most ambitious clean energy transitions and has remained steadfast in its commitment to combating climate change. The survey advises on India’s climatic ambitions, which require resources to be dedicated to the cause of climate change, in addition to, what is needed for the country’s development goals.

According to the survey, obligations on climate should be matched with the on-time availability of climate finance, technology, and inputs like critical minerals, while not jeopardising the socio-economic development objectives and aspirations of least developed countries at the cost of the developed countries.




bottom of page