Summary: The Indian Economy - A Review

(January 2024)

This document provides a comprehensive

summary of the Indian economy as presented by
the Government of India in January 2024. Due to
the election year, a full-fledged Economic Survey
was not presented; instead, this review serves as
an overview of India's economic progress and
outlook. It covers various aspects of the
economy, including growth trajectories, policy
reforms, sectoral performances, and future
challenges and opportunities.

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 Preface
• The Indian economy is projected to grow at or above 7% for FY24, with predictions of
maintaining this growth rate into FY25.
• If FY25 meets these growth expectations, it will mark the fourth consecutive year of growth at
or above 7% post-pandemic, highlighting the resilience and potential of the Indian economy.
• Some economists highlight the qualitative difference in growth, emphasizing that growing at or
above 7% when the global economy is struggling at 2% is significantly more valuable than higher
growth rates during times of global economic strength.
• The global economy faces challenges in sustaining post-Covid recovery due to issues like supply
chain disruptions, which have resurfaced in 2024.
• India's experience with COVID and the energy and commodity price shocks of 2022 has given it
confidence in handling emerging disturbances.
• Three major trends impacting the global and Indian economy include the end of hyper-
globalisation in manufacturing, challenges from the advent of Artificial Intelligence on service trade
and employment, and the energy transition challenge.
• India's policies and infrastructure development over the last decade position it well to tackle these
challenges, with significant increases in public sector capital investment and advancements in
physical and digital infrastructure.
• The Indian financial sector is robust, with healthy balance sheets and strong non-food credit
growth.
• Inclusive development efforts have led to improved financial health among Indian households, with
substantial increases in bank account ownership, deposits, and net financial assets as a percentage
of GDP.
• Employment rates have improved post-Covid, with significant increases in the labor force
participation rate, EPF subscribers, women's enrollment in tertiary education, and youth
employability rates.
• Significant improvements in healthcare indicators like institutional births, infant mortality rates,
and reduction in stunting have been noted.
• Economic stability has been achieved with controlled inflation, a reducing fiscal deficit, manageable
current account deficit, and strong foreign exchange reserves, contrasting with the high deficits
and inflation of 2014.
• Government policies, COVID management, and vaccination efforts, along with managing crude oil
supply, have contributed to the economy's recovery and stability.
• Resolving issues like infrastructure deficiencies and financial exclusion has raised aspirations and
expectations among the population, with many young Indians confident in achieving a better life
within their lifetime, reflecting a positive shift in national self-belief and outlook.

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 The Indian Growth Story (1950 to 2014)

1. Post-Independence to 1960s:
• India's share of world income dropped from 22.6% in 1700 to 3.8% by 1952.
• Adopted a growth strategy focused on economic sufficiency and rapid industrialisation through
state-owned enterprises (SOEs).
• Decadal average growth rate from 1952-60 was 3.9%.
• The 1960s saw growth slow down to 4.1% due to wars with China (1962) and Pakistan (1965-66),
severe drought (1965), high taxation, and economic control.

2. 1970s:
• Indian rupee devalued by 57%.
• Political instability and imposition of Emergency in 1975.
• Decadal average growth rate fell to 2.9%.
• Global economic volatilities, including oil shocks, affected growth worldwide.

3. 1980s:
• Introduction of reforms to increase domestic competitiveness, remove price controls, initiate fiscal
reforms, reduce import duties, and de-license the domestic industry.
• GDP growth improved to 5.7%.
• External shocks like the breakup of the Soviet Bloc and the Iraq-Kuwait war affected trade and
current account balances in 1990–1991.

4. 1991 Balance-of-Payments Crisis and Reforms:

• Reforms focused on liberalisation, ending the bias towards state ownership, and an inward-looking
trade strategy.
• Real GDP growth averaged 5.8% per annum in the 1990s despite the East Asian financial crisis and
other setbacks.

5. 2000s:
• Sustained economic momentum, better corporate performance, and positive investment climate.
• Global growth boom and capital flows to India.
• Implementation of Sarva Shiksha Abhiyan, National Rural Health Mission, and National Rural
Employment Guarantee Scheme.
• Decadal average growth rate was 6.3% per annum.

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• Global financial crisis in 2008 exposed vulnerabilities; bad debt in banks rose, peaking at 11.2% in
March 2018.

6. 2009-2014:
• Government sustained high growth with high fiscal deficits and loose monetary policy.
• Nominal GDP growth was high due to inflation, with annual double-digit inflation rates from 2009
to 2014.
• Faced high twin deficits: fiscal deficit at 4.9% in FY13 and current account deficit at 4.8% in FY13.
• Indian rupee depreciated annually by 5.9% between 2009 and 2014, leading to economic
stagnation.

Lessons from the growth experience till 2014

1. Transition from Closed to Open Economy:

• From 1950-1980, India had a closed economy focusing on import substitution, export subsidies,
and restrictions on technology and investment.
• Post-1980, pro-business reforms were introduced, including import liberalization, export
incentives, and favorable exchange rate policies, aimed at enhancing productivity and stimulating
demand.
• These reforms led to unsustainable investments, questionable loans, and high fiscal deficits,
culminating in the Balance of Payments (BoP) crisis of 1990-91, which triggered a shift to a market
economy with significant trade policy reforms and liberalization of FDI.

2. Transition in Investment Dynamics:

• Initially, development strategy assumed public sector savings would fuel investment. However, by
the 1970s, public sectors were consuming rather than generating savings.
• By the 1980s and 1990s, the government increased borrowing for revenue expenditure and public
sector investments, leading to a rise in public sector borrowings from 4.4% of GDP (1960-75) to 9%
by 1989-90.
• The private sector emerged as the major growth and employment engine during the 1990s and
2000s.

3. Technology as a Growth Driver:

• Pre-liberalization, India's closed economy and strategic concerns limited access to foreign
technology.
• Since the 1980s, technology has been increasingly recognized and utilized as a key driver for
economic transformation in civilian and strategic sectors.

4. State of the Economy in 2014:

• Upon assuming office in 2014, Prime Minister Modi inherited an economy experiencing challenging
times, with GDP growth at factor cost at constant prices below 5% for two consecutive years (2012-
13 and 2013-14).

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• WPI inflation in food articles averaged 12.2% annually in the five years ending 2013-14, higher than
non-food inflation.
• Structural constraints contributing to sub-5% growth included difficulties in decision-making for
project proposals, ill-targeted subsidies, a low manufacturing base, a large informal sector, and low
agricultural productivity due to various factors.

2014-2024: Decade of transformative growth

1. Economic Growth and Structural Reforms:

• The Indian economy emerged as the fastest-growing among G20 economies, with an estimated
growth of 7.3% in 2023-24, following 9.1% in FY22 and 7.2% in FY23.
• The post-pandemic recovery reduced the urban unemployment rate to 6.6%.
• Over 55% of the net new EPFO subscribers since May 2023 are in the age group of 18-25 years.
• The Pradhan Mantri Garib Kalyan Anna Yojana has been extended for 80 crore citizens until
December 2028.

2. Infrastructure Development:
• A record number of 74 airports were built in the nine years after 2014, doubling the number from
the first 67 years post-independence.
• University numbers increased from 723 in 2014 to 1,113 in 2023.
• Higher education sees more female students than male, with a Gross Enrolment Ratio (GER) for
girls at 27.9% in 2020.

3. Economic Challenges and Responses:

• FY21 saw a contraction of 5.8% in real GDP due to the global pandemic, but government responses
aided recovery.
• Despite conflicts and supply disruptions, effective management of crude oil purchases kept petrol
and diesel prices stable for over eighteen months.
• States received significant interest-free loans for infrastructure improvements, with capital
expenditure up by more than 47% in April-September 2023.

4. Financial Sector Reforms:

• Post-2000 credit boom led to a financial system crisis, addressed by reforms such as PSB
recapitalization and the introduction of IBC, improving the business environment and cleaning up
corporate balance sheets.
• Simplification of regulatory frameworks and enactment of RERA aimed at transparency and
reducing black money in real estate.

5. Taxation and Business Environment:

• Introduction of GST, reduction of corporate and income tax rates, and other reforms enhanced tax
base, compliance, and formalization of the economy.
• GST collections and taxpayer base significantly increased from FY18 to FY23.

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6. Private Sector Engagement and Disinvestment Policy:
• The government's disinvestment policy and the introduction of the New Public Sector Enterprise
Policy aim to minimize government presence in strategic sectors.
• Production Linked Incentives (PLI) and FDI policy liberalization aim to boost manufacturing and
attract investments.

7. Ease of Doing Business and MSME Support:

• Decriminalization of minor economic offences and simplification of business regulations have
enhanced the business environment.
• Reforms for MSMEs, including ECLGS and TReDS, support small business growth and recovery post-
pandemic.

8. Infrastructure and Logistics Investment:

• Public spending on infrastructure rose from 2.8% of GDP in FY14 to 4.5% in FY24 (BE).
• Major programs like Bharatmala, Sagarmala, UDAN, and the National Logistics Policy 2022 have
modernized infrastructure and logistics.

9. Digitalization and Inclusive Growth:

• Digital infrastructure reforms have led to greater formalization, financial inclusion, and economic
opportunities.
• Inclusive growth policies have targeted traditionally excluded sections, with significant
achievements in providing free gas connections, building toilets, opening Jan Dhan accounts,
constructing pucca houses, and hospital admissions under Ayushman Bharat.

Challenges Confronting the Indian Economy

1. Global Economic Integration: India's growth is influenced by global developments, including

increased geoeconomic fragmentation and a move towards friend shoring and onshoring, impacting
global trade and growth.

2. Energy Security vs. Energy Transition: Balancing energy security and economic growth with the
transition to sustainable energy sources poses geopolitical, technological, fiscal, and social challenges.

3. Artificial Intelligence: AI presents challenges to employment, especially in the services sector, with
an IMF paper estimating 40% of global employment is exposed to AI.

4. Skilled Workforce: Ensuring a skilled workforce, age-appropriate learning outcomes, and a healthy
population are key policy priorities.

Overcoming Challenges

1. Skill Development: Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has trained 1.3 crore candidates,
with 24 lakh placements.

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2. Renewable Energy: Focused efforts on renewable energy have increased installed capacity to
179.57 GW, including large hydropower.

3. Technology for Inclusive Growth: Internet penetration exceeded 50% by 2022, with Aadhaar
facilitating direct benefit transfers and 200 crore monthly authentications. Financial inclusion through
the Prime Minister’s Jan Dhan Yojana, with 51.5 crore beneficiaries as of January 2024.

4. Space and Healthcare: Significant achievements in space exploration and healthcare, including the
Chandrayaan-3 mission and administering 221 crore vaccination doses through the CoWin app.

Looking Ahead

1. Economic Growth: India's growth remains strong with an official estimate of 7.3% for FY24,
supported by macroeconomic stability, digital revolution, and infrastructure development.

2. Global Presence: India's G20 Presidency and achievements in space and technology highlight its
growing importance in the global economy.

3. Policy Reforms: Continued reforms aimed at economic stability, financial sector health, and
infrastructure investment position India for sustained growth.

4. 'Amrit Kaal' and Confidence: India embarks on its 'Amrit Kaal' with optimism, viewing challenges
as stepping stones for growth and inclusive development.

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 Resilience of the Indian Economy

1. Economic Recovery Post-Pandemic:

• India demonstrated resilience with over 7% growth in two consecutive years post-COVID-19, with
the first half of FY24 showing 7.7% growth.
• Real GDP is estimated to grow at 7.3% in FY24, surpassing RBI's projection of 7% and other national
and international forecasts.

2. Economic Indicators:
• Unemployment rates declined, and economic activities increased, as shown by high-frequency
indicators like E-way bills, rail freight, port cargo traffic, steel consumption, and cement
production.
• Air travel numbers exceeded pre-COVID levels, indicating recovery in mobility.

3. Foundations of Resilience:
• Indian resilience, attributed to societal fortitude and policy measures pre and post-COVID, includes
smart COVID management, targeted fiscal policies, monetary support for MSMEs, and significant
government capital expenditure in the last three years.
• Proactive inflation management and financial sector reforms, including bank recapitalization and
the Insolvency and Bankruptcy Code (IBC), contributed to economic stability and growth.

Government Measures and Sectoral Growth

1. Domestic Economy Growth:

• Real GDP growth averaged 7.9% between FY22 and FY24, showcasing consistent post-COVID
recovery.
• Manufacturing's GVA share increased from 17.2% in FY14 to 17.7% in FY24, bolstered by the Make
in India initiative and PLI schemes.

2. Construction Sector:
• Construction's GVA share nearly returned to its FY14 level of 8.8% by FY24, supported by
government capital expenditure and regulatory measures like RERA.

3. Services Sector:
• The services sector's GVA share increased from 51.1% in FY14 to 54.6% in FY24, with a significant
digital transformation driven by government digitalization efforts.
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4. Demand and Supply Response:
• Growth sustained by strong domestic and external demand, pandemic management, financial
reforms, and export growth, including services exports.

Strategic Focus Areas

• Domestic Economy: Emphasis on manufacturing, construction, and services sector growth
through targeted government initiatives.
• Macroeconomic Stability: Achieved through fiscal discipline, financial sector reforms, and
inflation management.
• Human Resources: Investment in skills development and health to build a productive workforce.
• External Economy: Boosting exports and integrating with global trade systems.
• Climate Change Adaptation: Balancing energy security with the transition to renewable sources.

Outlook and Achievements

• Future Growth: India's economic growth expected to remain robust, supported by digital
revolution, regulatory support for entrepreneurship, and targeted upliftment measures.
• Global Presence: India's increasing role on the global stage, including hosting the G20 Presidency
and achievements in space exploration and digital infrastructure.
• Policy Reforms: Continuous reforms aimed at financial stability and infrastructure investment
poised to sustain growth momentum.

Domestic Economy
1. Growth of Private Final Consumption Expenditure (PFCE): PFCE's share in GDP at current
prices rose from 58.4% in the eight years before the pandemic to 60.8% in the three years ending
FY24, underscoring its role as a major growth driver.
2. Contributors to Resilience: A combination of pre-pandemic policy decisions, smart COVID
management, targeted fiscal policies, monetary policy adjustments, and a significant increase in
government capex have supported economic resilience.
3. Per Capita Real Gross National Income (GNI): Per Capita Real GNI experienced a compounded
annual growth rate (CAGR) of 5.3% from FY12 to FY20, fueled by government-led growth strategies
and market-friendly reforms.
4. Foreign Investment and Financial Sector Health: Policies promoting foreign investment,
recapitalization of banks, and monetary policy coordination have been pivotal in driving economic
growth and increasing per capita income.
5. Balance Across Consumption Components: PFCE saw balanced growth across durables, semi-
durables, and services, with double-digit growth in FY22 as pandemic restrictions eased.
6. Market Confidence and Wealth Effect: Enhanced market transparency by SEBI, increased retail
participation in the stock market, and a significant rise in demat accounts (13.9 crore by December
2023) boosted consumer confidence and spending.
7. Public Digital Infrastructure: Government focus on digital infrastructure, such as Aarogya Setu
and CoWin apps, facilitated early economic reopening post-pandemic, enhancing private consumption.
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8. E-commerce and Digital Payments: The growth of digital payment systems like UPI has
supported the rise of e-commerce, projected to grow at a CAGR of 16% from 2022 to 2026.
9. Rural Inclusiveness and Financial Inclusion: Initiatives like Pradhan Mantri Jan Dhan Yojana
(PMJDY) and Direct Benefit Transfer (DBT) have improved financial inclusiveness, reducing the rural-
urban divide and boosting consumption of aspirational goods.
10. Expansion of the Middle Class: A study by PRICE predicts the Indian middle class to grow from
432 million in 2021 to 1.02 billion in 2047, indicating a substantial shift in household income profile
and potential for increased consumption.

Enabling Investment-led Economic Growth

1. Transformation of Investment Climate: Transition from excessive borrowing in the first

millennium decade to a more sustainable investment share of GDP, facilitated by government
intervention to strengthen bank and corporate balance sheets.
2. Government Efforts and Economic Outcomes: Recapitalization of banks and strategic
disinvestment led to a revival in private corporate investment and credit disbursement, with non-food
bank credit growth rebounding to 13% in FY23.
3. Public Sector Capital Expenditure: Capital expenditure of the Public sector increased
significantly from ₹5.6 lakh crore in FY15 to ₹18.6 lakh crore in FY24, marking a strategic shift in
government spending towards capital investment.
4. Infrastructure and Policy Reforms: Streamlining of bureaucratic procedures, tax reforms, and
the PMG mechanism expedited the execution of infrastructure projects, fostering a conducive
investment climate.
5. Emergence of Private Capex Cycle: Indicators like the IIP data and corporate investments signal
the onset of a private capex upcycle post-pandemic.

Agricultural Sector Policies Ensuring Food Security

1. Sector Growth and Food Production: Agricultural sector growth at an average annual rate of
3.7% from FY15 to FY23, with significant increases in food grains production, highlighting India's role as
a major global agricultural producer.
2. Government Initiatives and MSP Increases: Strategic measures including consistent MSP
increases, financial support schemes like PM-KISAN, and insurance coverage through PMFBY have
supported farmers' income and productivity.
3. Digital Inclusion and Mechanization: Platforms like e-NAM and initiatives to promote drone
technology adoption have facilitated market access and modernized agriculture practices.
4. Focus on Sustainability and Infrastructure: Investments in post-harvest infrastructure and
sustainable agriculture practices are aimed at making agriculture more resilient and productive.
5. Food Security Policies: Procurement operations under MSP and food distribution schemes like
PMGKAY ensure food security for vulnerable populations, with significant MSP outflows directly
benefiting farmers.

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6. Future Directions: Continuous innovation, technology adoption, and policy support are essential
for meeting diversified food demands and encouraging sustainable farming practices.
7. Acceleration of Industrial Growth: Industrial growth increased to 7.1% per annum from FY15 to
FY19, and despite the COVID-19 pandemic, it's projected to achieve 8% annual growth during the
triennium ending March 2024.
Government Initiatives and Results

1. Make in India and PLI Scheme: Targeted measures under 'Make in India' and the PLI scheme for
14 sectors, with ₹1.97 lakh crore outlay, approved 746 applications, and benefited 176 MSMEs
directly. Investments over ₹1.07 lakh crore led to production/sales of ₹8.7 lakh crore and generated
over 7 lakh jobs.
2. Startup India Initiative: Recognized 1.14 lakh startups creating more than 12 lakh jobs, with
significant transactions on the Open Network for Digital Commerce platform.
3. Regulatory Reforms: Decriminalization of 3,600 compliances and passing of the Jan Vishwas
Amendment Bill 2023 to decriminalize 183 provisions across 42 Central Acts.

MSME Sector Boost

1. Supportive Measures: Tax deductions for payments to MSMEs, registration of 2.24 crore MSMEs
on the Udyam portal, and 48.8 lakh enrolments under PM Vishwakarma as of December 2023.
2. Financial Schemes: Disbursement of loans amounting to ₹25.98 lakh crore under Pradhan Mantri
Mudra Yojana and raising the CGTMSE credit guarantee limit to ₹5 crore.

Logistics and Infrastructure Improvements

1. Unified Logistics Interface Platform (ULIP): Integration with 35 systems of 8 Ministries, aiming
to streamline logistics processes, with a noted decrease in logistics costs as a percentage of GDP.
2. Impact of GST and Capex on Logistics: Significant reduction in logistics costs for trucks post-GST
implementation and improvement in major ports' turnaround time from 4.2 days (FY04-FY14) to 2.9
days (FY14-FY22).
Construction Industry Growth

1. Construction Sector Growth: Measures to increase domestic steel production and focus on
affordable housing contributed to approximately 12% annual growth in construction from FY22 to
FY24.
Asset Quality and Financial Sector Resilience

1. Asset Quality Review (AQR) and PCA Framework: Implemented in FY15 to increase
transparency and admit the true liabilities in the financial sector.
2. Enactment of IBC and Banking Regulation Act Amendment: Facilitated speedier resolution of
bad debt, improving credit repayment culture. The IBC has rescued 808 corporate debtors, realizing
168.5% against liquidation value and 32% against admitted claims.

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3. Improvement in Corporate Performance Post-IBC: Resolved firms showed significant
performance improvements, including a 76% increase in average sales and a 50% rise in average total
assets.
4. Improvements in Corporate Governance and Global Rankings: Enhanced corporate
governance and India’s global ranking in resolving insolvency improved from 136 to 52 in the first
three years of IBC implementation.

Banking Sector Recovery

1. Decline in GNPA Ratio: Continued decline in GNPA ratio since March 2019, aided by deleveraging
and regulatory interventions.
2. Capitalization and CRAR Improvement: Recapitalization efforts improved the Credit to Risk-
Weighted Asset Ratio (CRAR), enabling banks to exit the RBI’s prompt corrective action framework.
3. Credit Growth Revival: Introduction of schemes like ECLGS to extend credit to MSMEs, with a
CAGR of 14.2% in bank credit to MSMEs from FY19 to FY24.
4. Capital Expenditure and Infrastructure Lending: Government’s focus on capital expenditure
bolstered the credit cycle, with bank credit to the infrastructure sector growing at a CAGR of 4.2%
between FY19 and FY24.
Asset Quality and Financial Sector Resilience

1. Asset Quality Review (AQR) and PCA Framework: Implemented in FY15 to increase
transparency and admit the true liabilities in the financial sector.
2. Enactment of IBC and Banking Regulation Act Amendment: Facilitated speedier resolution of
bad debt, improving credit repayment culture. The IBC has rescued 808 corporate debtors, realizing
168.5% against liquidation value and 32% against admitted claims.
3. Improvement in Corporate Performance Post-IBC: Resolved firms showed significant
performance improvements, including a 76% increase in average sales and a 50% rise in average total
assets.
4. Improvements in Corporate Governance and Global Rankings: Enhanced corporate
governance and India’s global ranking in resolving insolvency improved from 136 to 52 in the first
three years of IBC implementation.
Banking Sector Recovery

1. Decline in GNPA Ratio: Continued decline in GNPA ratio since March 2019, aided by deleveraging
and regulatory interventions.
2. Capitalization and CRAR Improvement: Recapitalization efforts improved the Credit to Risk-
Weighted Asset Ratio (CRAR), enabling banks to exit the RBI’s prompt corrective action framework.
3. Credit Growth Revival: Introduction of schemes like ECLGS to extend credit to MSMEs, with a
CAGR of 14.2% in bank credit to MSMEs from FY19 to FY24.
4. Capital Expenditure and Infrastructure Lending: Government’s focus on capital expenditure
bolstered the credit cycle, with bank credit to the infrastructure sector growing at a CAGR of 4.2%
between FY19 and FY24.

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 Expansion of the Big Tent under the New Welfare Approach
• 30.3 crore Ayushman Bharat cards created and 6.2 crore hospital admissions
(as of January 17, 2024)
• More than 1.6 lakh primary healthcare facilities upgraded toAyushman Arogya
Mandir (erstwhile AB-HWCs) (as of December 13, 2023)
• More than 17.4 crore patients availed e-Sanjeevani OPD services in Ayushman
Affordable and
Arogya Mandir (as of November 3, 2023)
Wholesome Health
• 10,000 Janaushadhi Kendras across the country, selling medicines at 50-90 per
cent cheaper rates compared to market rates (as of November 30, 2023)
• 16 per cent decline in TB incidence between 2015 and 2022,with 18 per cent
reduction in mortality.
• one crore beneficiaries of Janani Suraksha Yojana in
FY22

• National Education Policy introduced in 2020 – structuralreform in education

• National Curriculum Framework for Foundational Stage (NCF FS) launched on
20th October 2022. Based on this, Learning Teaching Material (JaduiPitara)
and Textbooks have been launched in 2023
• PARAKH (Performance Assessment, Review, and Analysis of Knowledge for
Holistic Development), launched in 2023for setting norms and implementing
activities related to student assessment.
• Scheme for 14,500 PM-SHRI Schools to emerge as modelschools for NEP
Revamped Education • NIPUN Bharat Mission for universal acquisition of foundational literacy and
numeracy by 2026-27
• Expansion of digital learning through Swayam Prabha and MOOCs – 200
channels with more than 13,000 contents produced for telecast in 31
languages.

Achievements of Samagra Shiksha from 2018-19 to 2023-24

• 3,062 schools upgraded at Elementary, Secondary andHigher Secondary
level.
• 235 new residential schools and hostels opened
• 97,364 schools strengthened, including additionalclassrooms
• 1.2 lakh Schools covered under ICT and digital initiatives
• 8,619 Schools covered under Vocational Education
• 28,447 Separate girls’ toilets constructed

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 • 1.4 crore candidates trained under PM Kaushal Vikas Yojana since 2015 (as
of December 13, 2023)
• Skill India Digital platform launched in September 2023, bringing all skill
initiatives together.
• 26.9 lakh apprentices engaged under the National Apprenticeship
Largescale Skilling Promotion Scheme (as of September 30, 2023).
• Craftsmen Training Scheme for 1.1 crore persons at ITIsin 2014-22.
• Entrepreneurship Training for 2 lakh beneficiaries between April 2018 and
March 2023.
• PM Vishwakarma scheme launched in September 2023to provide end-to-
end support to artisans and craftspeople, including skill upgradation,
collateral-free concessional loans of up to ₹3 lakh

• 1,14,902 DPIIT-recognized startups across 763 districts of the country (as of

October 31, 2023)
• 44.5 crore loans worth ₹26.1 lakh crore were sanctioned under the MUDRA
Yojana, with 68 per cent of accounts belonging to women entrepreneurs.
• Under PMSVANidhi, 82.3 lakh loans were sanctioned toover 58 lakh street
vendors, with a total value exceeding ₹ 10,922.4 crore (as of January 11,
Entrepreneurship
2024)
• Under DAY-NRLM, 9.5 crore women mobilised into 87.4lakh Self-Help Groups
under DAY-NRLM (as of December 2023)
• Under Stand-Up India, 2.1 lakh loans have been sanctioned, of which 84 per
cent have been sanctioned towomen entrepreneurs (as of November 24,
2023)

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 Basic Amenities • 11 crore toilets and 2.3 lakh community toilet complexes were constructed
under Swachh Bharat Mission- Grameen (as of January 11, 2024).
• 10.8 crore households provided tap water connection under
Jal Jeevan Mission (as of January 11, 2024).
• Under PM-AWAS-Urban and PM-AWAS-Gramin, 79 lakhand 2.5 crore houses
were constructed for the poor in the last 9 years (as of January 8, 2024 and
January 11, 2024).
• 10 crore LPG connections provided under PM Ujjwala Yojana since 2016 (as
of January 8, 2024)
• 21.4 crore rural households electrified under Saubhagya
since 2015 (as of March 31, 2019)
• Digital India: 4.5 lakh common service centres set up in rural areas (as of
November 30, 2023)

• 51.4 crore accounts opened under PM Jan Dhan Yojana

(as of January 3, 2024).
• 18.5 crore and 41.0 crore enrolments under PM Jeevan Jyoti Yojana and PM
Social Security Suraksha Beema Yojana, respectively (as of November 15, 2023).
• Atal Pension Yojana (launched in 2015) total subscriber base has risen to
6.1 crore (as of December 31, 2023)
• Assured pension for 49.7 lakh unorganised workers enrolled under PM
Shram Yogi Maandhan Yojana (as of
December 31, 2023).

Women-led Development: Tapping the Gender Dividend

1. Women’s Reservation Bill (Nari Shakti Vandan Adhiniyam - NSVA): Passed in September
2023, emphasizing women-led development as a priority during India's G20 Presidency.
2. Impact of Women in Governance: Empirical associations show improved institutions and
investments in public goods closely linked to women’s concerns, enhancing child health and primary
education outcomes.
3. Financial Services Access: PM Jan Dhan Yojana significantly increased the proportion of women
with bank accounts, enhancing their control over household resources.
4. Women-led SHGs and Economic Empowerment: Positive effects on women’s economic, social,
and political empowerment through DAY-NRLM, targeting the creation of 2 crore ‘Lakhpati Didis’.
5. Human Capital Formation: Significant female participation in Skill India Mission, PM Kaushal
Vikas Yojana, PM Mudra Yojana, and Stand-Up India, promoting entrepreneurship and skill
development among women.
6. Improvements in Quality of Life: Initiatives like Swachh Bharat Mission, Ujjwala Yojana, and Jal
Jeevan Mission have significantly impacted women by reducing drudgery and care burden.
7. Asset Ownership and Decision-making: PM AWAS Yojana has led to significant asset ownership
among women, improving household decision-making and reducing domestic violence.

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8. Education and Health Initiatives: Focus on "Beti Bachao, Beti Padhao" and Sukanya Samriddhi
Yojana has improved the educational and health outcomes for the girl child.

Employment Landscape Transformation

1. Employment Trends: Notable transformation marked by declining unemployment rates from 6%

in 2017-18 to 3.2% in 2022-23, and a rise in the labor force participation rate.
2. Rising Youth Employment: Decline in youth unemployment rates from 17.8% in 2017-18 to 10%
in 2022-23, with an expansion in youth labor force participation.
3. Rising Female Labour Force Participation Rate (FLFPR): FLFPR increased from 23.3% in 2017-
18 to 37% in 2022-23, with significant growth in rural areas, indicating a structural shift towards more
skilled agricultural labor and away from elementary agriculture labor.
4. Agricultural Workforce Shifts: Structural shift within agriculture, with men moving to non-
agricultural sectors and women becoming more involved in skilled agricultural work.

India's External Sector Performance

1. Merchandise Trade Resilience: Record-high levels of exports since FY22, with merchandise
exports rising over 50% and services exports by 120% from FY13 to FY23. FY23 saw the highest-ever
merchandise export of USD 451.1 billion.
2. Export and Import Dynamics: Despite global challenges, India's merchandise trade balance
improved from a deficit of USD 189.2 billion in April-November 2022 to USD 166.4 billion in the same
period in 2023.
3. Service Exports Niche: India has established itself in knowledge-based economy sectors,
particularly in software services, which consistently make up almost half of the service exports.
4. Total Exports Growth: Significant increase since FY22, reaching USD 781.4 billion in FY23. Efforts
to boost production capacity and export promotion aim for a USD 2 trillion export target by 2030.

Current Account and Remittances

1. Current Account Balance: Service exports and remittances have kept India’s current account
balance within a comfortable range, especially after FY14. The CAD dropped to USD 17.5 billion in H1
of FY24 from USD 48.8 billion in the previous year.
2. Worker Remittances: India is the world's largest recipient, with USD 125 billion in 2023,
benefiting from a shift towards high-skilled employment in high-income countries.

Capital Account and Foreign Investment

1. Capital Account Surplus: Positive balance on the capital account in H1 of FY24, leading to an
accretion of USD 27 billion in foreign exchange reserves since the end of FY23.
2. Foreign Portfolio Investors (FPIs): Increased exposure to Indian markets by USD 28.8 billion in
H1 of FY24, indicating a potential for reaching new milestones in portfolio investments.

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3. Foreign Direct Investment (FDI): Continuous reforms and incentives have kept India a preferred
destination for foreign investments, with a CAGR of 28.0% in FDI during FY13-FY23.

Rupee Stability and Foreign Exchange Reserves

1. Rupee Stability: The Indian rupee emerged as one of the strongest-performing currencies
compared to others since March 2023, reflecting macroeconomic stability and confidence in India’s
external position.
2. Foreign Exchange Reserves: Stood at USD 623.2 billion as of 29 December 2023, providing a
robust buffer for external debt, which is comfortably managed at 18.6% of GDP as of September 2023.

Way Forward and Climate Action

1. External Sector Outlook: Despite global challenges, continued reforms and strategic measures
are expected to sustain momentum in foreign investments and remittances, supporting India's growth
trajectory.
2. Climate Action Commitment: India prioritizes resilient growth while addressing climate action
needs, emphasizing the importance of developed countries providing resources to developing nations
for climate initiatives.
Economic Growth and Development Goals

1. Third-Largest Economy: India is expected to become the third-largest economy within the next
three years, targeting a GDP of USD 5 trillion.
2. Developed Country by 2047: The government aims for India to achieve the status of a
‘developed country’ by 2047, emphasizing reforms across governance, health, education, land, and
labor.

Strength of Domestic Demand

1. Growth Rate Over Last Three Years: Driven by robust domestic demand, India has maintained a
growth rate of 7%+ due to reforms and government measures enhancing private consumption and
investment.
2. Investment in Infrastructure: Investments in both physical and digital infrastructure, alongside
measures to boost manufacturing, have strengthened the supply side, contributing to economic
activity.
Prospects for Higher Growth Rate

1. Potential for Growth Above 7% by 2030: With rapid infrastructure development, improvements
in balance sheets from the IBC, and expanding digital infrastructure, India's growth rate could
significantly exceed 7% by 2030.
2. Institutional and Technological Efficiency: Technological advancements and international
collaborations in production, coupled with efforts to speed up human capital formation, are enhancing
institutional efficiency.

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3. Improving Investment Climate: Ongoing enhancements in the ease of doing business and the
favorable investment climate are poised to sustain economic momentum.

Impact of GST and Monetary Policy

1. Unification of Domestic Markets: GST adoption incentivizes large-scale production and reduces
logistics costs, expanding the tax base to strengthen Union and state finances.
2. Inflation Management and Interest Rate Stability: The RBI's credibility in managing inflation
anchors inflationary expectations, ensuring a stable interest rate environment for long-term
investments and spending.

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