Key Highlights of Economic Survey 2022-23

• Context:
  • Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2022-23 in the Union Parliament today. The highlights of the Survey are as follows:

• India remains the fastest-growing major economy in the world.
• Recovering from pandemic-induced contraction, the Russian-Ukraine conflict and inflation, the Indian economy is staging a broad-based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.
• India's GDP growth is expected to remain robust in FY24. GDP forecast for FY24 to be in the range of 6-6.8 %.
• Private consumption in H1 is the highest since FY15 and this has led to a boost to production activity resulting in enhanced capacity utilisation across sectors.
• India's recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pick-up in capital investment. Aided by healthy financials, incipient signs of a new private sector capital formation cycle are visible and, more importantly, compensating for the private sector's caution in capital expenditure, the government raised capital expenditure substantially.
• The credit growth to the MSME sector was over 30.6 per cent on average during Jan-Nov 2022.
• Retail inflation is back within RBI's target range in November 2022.
• Indian Rupee performed well compared to other Emerging Market Economies in Apr-Dec2022.
• Direct Tax collections for the period April-November 2022 remain buoyant.
• Enhanced Employment generation saw in the declining urban unemployment rate and in the faster net registration in Employee Provident Fund.
• Economic growth is to be boosted by the expansion of public digital platforms and measures to boost manufacturing output.

• Indian economy underwent wide-ranging structural and governance reforms that strengthened the economy's fundamentals by enhancing its overall efficiency during 2014-2022.

• With an underlying emphasis on improving the ease of living and doing business, the reforms after 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.
• The period of 2014-2022 also witnessed balance sheet stress caused by the credit boom in the previous years and one-off global shocks, that adversely impacted the key macroeconomic variables such as credit growth, capital formation, and hence economic growth during this period.
• This situation is analogous to the period 1998-2002 when transformative reforms undertaken by the government had lagged growth returns due to temporary shocks in the economy. Once these shocks faded, the structural reforms paid growth dividends from 2003.
• Similarly, the Indian economy is well placed to grow faster in the coming decade once the global shocks of the pandemic and the spike in commodity prices in 2022 fade away.
• With improved and healthier balance sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has already begun, evident from the double-digit growth in bank credit over the past months.
• The Indian economy has also started benefiting from the efficiency gains resulting from greater formalisation, higher financial inclusion, and economic opportunities created by digital technology-based economic reforms.
• Thus Chapter 2 of the Survey shows that India's growth outlook seems better than in the pre-pandemic years, and the Indian economy is prepared to grow at its potential in the medium term.

• 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 longer-term 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 Capex-led 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 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 Non-Banking 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. 

• 
• 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.
• Phase-wise reduction in the export duty of petrol and diesel
• Import duty on major inputs was brought to zero while tax on the export of iron ores and concentrates increased from 30 to 50 per cent
• The RBI’s anchoring of inflationary expectations through forward guidance and responsive monetary policy has helped guide the trajectory of inflation in the country.
• 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.
• Borrowing costs may remain 'higher for longer', and entrenched inflation may prolong the tightening cycle.

• The social sector witnessed a significant increase in government spending.
• 
• Central and State Government’s budgeted expenditure on the health sector touched 2.1% of GDP in FY23 (BE) and 2.2% in FY22 (RE) against 1.6% in FY21.
• Social sector expenditure increased to Rs. 21.3 lakh crore in FY23 (BE) from Rs. 9.1 lakh crore in FY16.
• The Aspirational Districts Programme has emerged as a template for good governance, especially in remote and difficult areas.
• JAM (Jan-Dhan, AadAadhaar, 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.
• Aadhaar played a vital role in developing the Co-WIN platform and in the transparent administration of over 2 billion vaccine doses.
• Unemployment Rate Falling:
  • Labour markets have recovered beyond pre-Covid levels, in both urban and rural areas, with unemployment rates falling from 5.8 per cent in 2018-19 to 4.2 per cent in 2020-21.
• Education:
  • The year FY22 saw improvement in Gross Enrolment Ratios (GER) in schools and improvement in gender parity. GER in the primary enrolment 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.
• Health:
  • Due to several steps taken by the government on health, 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.
  • More than 220 crore COVID vaccine doses were administered as on 06 January 2023.
  • 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.

• India is one of the most vulnerable regions despite having contributed only about 4% in the cumulative global emissions (for the period 1850-2019) and maintaining its per capita emission at far less than the world average.
• India has integrated the development goals with ambitious climate action goals.
• India now has 75 Ramsar sites for wetlands, in addition to various regulatory and promotional measures to protect and conserve mangroves.
• Continued river conservation and rejuvenation efforts are underway through Namami Gange and National River Conservation Plan (NRCP).
• Action to reduce carbon emissions and adapt to the changing climatic conditions are required urgently as the world has already started to experience its consequences. 
• It is estimated that by 2030, about 700 million people worldwide will be at risk of displacement by drought alone (U.N. SDG Portal).
• The IPCC’s Sixth Assessment Report (AR6) notes that high human vulnerability global hotspots are found particularly in West, Central & East Africa, South Asia, Central, and South America, Small Island Developing States, and the Arctic. 
• Asia is most vulnerable to climate change, especially to extreme heat, flooding, sea level rise, and erratic rainfall.
• Many experts also warn of the availability of rare earth elements (REE) and critical minerals (CM), that are essential for generating renewable energy, to be the next geopolitical battleground as crude oil has been over the last fifty years.
• Countries have to take action to make their people resilient and adapt to climate change. 
• India has contributed only 4 per cent (until 2019) to the cumulative global emissions and its per capita emission is far less than the world average.
• In 2008, India launched the National Action Plan on Climate Change (NAPCC), establishing eight National Missions, covering several initiatives and a slew of measures in the area of solar, water, energy efficiency, forests, sustainable habitat, sustainable agriculture, sustaining Himalayan ecosystem, capacity building and research and development (R&D).
• National Adaptation Fund for Climate Change (NAFCC), a central sector scheme, was initiated in 2015-16 to support adaptation activities in the States and Union Territories (UTs) of India that are vulnerable to the adverse effects of climate change. It supports adaptation action, in, inter alia, agriculture, water, forestry, livestock, and restoring ecosystems. At present (November 2022), 28 projects are under implementation.
• The Government of India submitted its updated NDC on August 26, 2022 with enhanced targets translating the vision of the Hon’ble PM expressed through the “Panchamrit” at the UNFCCC COP 26 in Glasgow in November 2021.
• This period has seen a sizeable enhancement in the share of installed electricity capacity in solar and wind energy from 8.9 per cent in 2014-15 to 25.1 per cent in 2022-23 (April-Sept).
• Including the large hydro, the share of non-fossil sources in total installed electricity capacity is estimated to be about 40.4 per cent (on 31.09.2022) compared to 27.3 percent in 2014-15.
• Status of Forest and Tree Cover
  • The forest and tree cover in India has shown a gradual and steady trend of increase in the last one and a half decades.
  • The country ranks third globally with respect to the net gain in average annual forest area between 2010 and 2020.
  • Schemes like the Green India Mission (GIM), Compensatory Afforestation Fund Management and Planning Authority (CAMPA), National Afforestation Programme (NAP), Green Highway Policy – 2015, Policy for enhancement of Urban Greens, National Agro-forestry Policy, and Sub-Mission on Agro-forestry (SMAF), etc. have helped in achieving it.
• Carbon Stock in india’s Forest and tree Cover
  • The Indian State of Forest Report (ISFR) estimates the carbon stock of forests to be about 7,204 million tonnes in 20197, which is an increase of 79.4 million tonnes of carbon stock as compared to the estimates of the previous assessment for 2017. This translates into carbon emissions sequestrated through forest and tree cover to be 30.1 billion tonnes of CO2 equivalent.  
  • Among the Indian States, Arunachal Pradesh has the maximum carbon stock in forests (1023.84 million tonnes), followed by Madhya Pradesh (609.25 million tonnes.
• Preservation of ecosystems: a Critical adaptation action
  • India has 75 Ramsar sites covering an area of 13.3 lakh ha, and 49 of these have been added in the last 8 years.
  • As per a recent study, certain mangrove species in Chilika and Sundarbans along the east coast and Dwarka and Porbandar along the west coast of India are likely to reduce and shift landward by 2070 due to a decline in suitable habitats in response to precipitation and sea level changes.
  • The National Coastal Mission Programme on ‘Conservation and Management of Mangroves and Coral Reefs’ is being implemented. Regulatory measures are implemented through Coastal Regulation Zone (CRZ) Notification (2019) under the Environment  (Protection) Act, 1986; the Wild Life (Protection) Act, 1972; the Indian Forest Act, 1927; the Biological Diversity Act, 2002; and rules under these acts as amended from time to time.
  • As per the ISFR 2021, the mangrove cover in the country has increased by 364 sq. km. in 2021 as compared to 2013.
• River Conservation and rejuvenation
  • The Government is working on mapping and converging the 5Ps’ – People, Policy, Plan, Programme and Project.
  • The government has recently released Detailed Project Reports (DPR) for the rejuvenation of 13 major rivers prepared by the Indian Council of Forestry Research and Education (ICFRE), Dehradun in consultation with the State Forest Departments and other line Departments.
  • Works proposed under these DPRs include afforestation on riverbanks leading to increased green cover, measures to contain soil erosion, recharge the groundwater table, sequester carbon dioxide, catchment area treatment, ecological restoration, moisture conservation, livelihood improvement & income generation, etc.
• Approach to transition to Renewable Energy Sources
  • The target to achieve 40 per cent of the installed electric capacity from nonfossil fuel sources by 2030 submitted in 2015 NDCs has already been achieved.
  • India is now striving to achieve the target of 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030, in line with updated NDCs.
  • As per the Renewables 2022 Global Status Report, during the period 2014 -2021, total investment in renewables stood at US$ 78.1 billion in India.
  • Investment in renewable energy has been close to or higher than US$ 10 billion per year since 2016, except for a dip in 2020 likely due to various Covid-19 restrictions.
  • The likely installed capacity by the end of 2029-30 is expected to be more than 800 GW of which non-fossil fuel would be more than 500 GW.
• Green Hydrogen-a critical source of alternate energy
  • Green hydrogen is an important element of India’s Long Term Low Emissions Development Strategy (LT-LEDS).
  • The Government approved the National Green Hydrogen Mission on January 4, 2023 with an initial outlay of ₹19,744 crore. The Mission will facilitate demand creation, production, utilisation and export of Green Hydrogen and mobilisation of over ₹8 lakh crore of investment by 2030.
• Long-Term Low Emissions Development Strategy (LT-LEDS)
  • Focus on the rational utilisation of national resources with due regard to energy security.
  • Rapid expansion of green hydrogen production, increasing electrolyser manufacturing capacity in the country, and a three-fold increase in nuclear capacity by 2032, alongside the overall development of the power sector
  • Increased use of biofuels, increase electric vehicle penetration and the increased use of green hydrogen fuel 
  • Climate-resilient urban development 
• Finance for Sustainable Development
  • Union Budget 2022-23 announced the issue of Sovereign Green Bonds that will help the government to tap the requisite finance from potential investors for deployment in public sector projects aimed at reducing the carbon intensity of the economy. 
  • A Green Finance working committee has also been set up to oversee and validate key decisions on the issuance of Sovereign green bonds.
• Major decisions at COP27
  • India participated in COP 27, with a focus on mainstreaming the theme of LiFE – Lifestyle for Environment.
  • India invited all countries to join the LiFE movement, which is a pro-people and pro-planet effort seeking to shift the world from mindless and wasteful consumption to mindful and deliberate utilisation of natural resources.
• India's Initiatives at the International Stage
  • International Solar Alliance (ISA)
  • Coalition for Disaster Resilient Infrastructure (CDRI)
  • Leadership Group for Industry Transition (LeadIT)
• Other Environemental Initiatives
  • India ranks eighth in the world and fourth in Asia among the mega-diverse countries in the world.
  • India and Nepal signed a Memorandum of Understanding (MoU) in August 2022 on biodiversity conservation.
  • India is home to 53 Tiger Reserves with about 75% of the wild tiger population at the global level. India achieved the goal of doubling the tiger numbers in 2018, four years before the targeted year 2022.
  • In addition, 17 Tiger Reserves in the country have CA|TS international accreditation, and two have received International Tx2 Award.
  • The population of Asiatic Lions has shown a steady increase, with a population of 674 individuals (2020), 28.87% higher than the 523 lions in 2015.
  • As an attempt to reduce pollution the MoEFCC notified the Plastic Waste Management Amendment Rules, 2021, on August 12, 2021.
  • On July 1, 2022, a ban was imposed on the manufacture, import, stocking, distribution, sale and use of identified single-use plastic items, which have low utility and high littering potential, all across the country.
  • The Government published the Battery Waste Management Rules, 2022, to ensure environmentally sound management of waste batteries.
  • The Government notified the E-Waste (Management) Rules, 2022 that will launch a new Extended Producer Responsibility (EPR) regime for e-waste recycling.

Agriculture Sector

• The Indian agriculture sector has been growing at an average annual growth rate of 4.6 per cent during the last six years. It grew by 3.0 per cent in 2021-22 compared to 3.3 per cent in 2020-21.
• In recent years, India has also rapidly emerged as the net exporter of agricultural products. In 2020-21, exports of agriculture and allied products from India grew by 18 per cent over the previous year.
• During 2021-22, agricultural exports reached an all-time high of US $50.2 billion.
• This can be attributed to the steps taken by the government to augment crop and livestock productivity, ensure certainty of returns to the farmers through price support, promote crop diversification, improve market infrastructure through the impetus provided for the setting up of farmer-producer organisations and promotion of investment in infrastructure facilities through the Agriculture Infrastructure Fund.
• Private investment in agriculture increased to 9.3% in 2020-21.
• The Union Budget for 2018-19 announced that farmers in India would be given an MSP of at least one and a half times the cost of production. 
• The Government has introduced the Interest Subvention Scheme (ISS), now renamed Modified Interest Subvention Scheme (MISS), to provide short-term credit to farmers at subsidised interest rates. Institutional Credit to the Agricultural Sector continued to grow to 18.6 lakh crore in 2021-22.
• Under the Sub Mission on Agricultural Mechanisation (SMAM), State Governments are being assisted in training and demonstrating agricultural machinery and helping farmers procure various farm machinery and equipment besides setting up Custom Hiring Centres (CHC).
• India has 44.3 lakh organic farmers, the highest in the world, and about 59.1 lakh ha area was brought under organic farming by 2021-22. 
• The Government has been promoting organic farming by implementing two dedicated schemes, i.e., Paramparagat Krishi Vikas Yojana (PKVY) and Mission Organic Value Chain Development for North Eastern Region (MOVCDNER).
  • Bhartiya Prakratik Krishi Paddhati (BPKP), a sub-scheme of PKVY, was launched to assist farmers in adopting traditional indigenous practices for encouraging all forms of ecological farming, including Zero-Budget Natural Farming (ZBNF).
• PM KISAN Scheme launched to supplement the financial needs of land-holding farmers. It has helped farmers towards productive investment in agricultural activities. This, through a multiplier effect, has contributed to the overall improvement of the farm sector.
• Agriculture Infrastructure Fund (AIF), a financing facility for the creation of post-harvest management infrastructure and community farm assets.
• Pradhan Mantri Fasal Bima Yojana (PMFBY): PMFBY is currently the largest crop insurance scheme in the world in terms of farmer enrolments, averaging 5.5 crore applications every year and the third largest in terms of the premium received.
• Mission for Integrated Development of Horticulture (MIDH), to promote horticulture covering fruits, vegetables, root and tuber crops, spices, flowers, plantation crops etc.
• The National Agriculture Market (e-NAM) Scheme in 2016 to create an online transparent, competitive bidding system to ensure farmers get remunerative prices for their produce.

Allied Sectors

• The livestock sector grew at a CAGR of 7.9 per cent during 2014-15 to 2020-21 (at constant prices), and its contribution to total agriculture GVA (at constant prices) has increased from 24.3 per cent in 2014-15 to 30.1 per cent in 2020-21.
• The annual average growth rate of the fisheries sector has been about 7 per cent since 2016-17 and has a share of about 6.7 per cent in total agriculture GVA.
• Recognising the growing importance of allied sectors, the Committee on Doubling Farmers’ Income (DFI, 2018) considers dairying, livestock, poultry, fisheries and horticulture as high-growth engines and has recommended a focussed policy with a concomitant support system for the allied sector.
• As a part of the Aatmanirbhar Bharat (ANB) stimulus package, the Animal Husbandry Infrastructure Development Fund (AHIDF) worth ₹15,000 crore was launched in 2020. 
• National Livestock Mission (NLM) scheme has been restructured for 2021-22 to 2025-26. It focuses on entrepreneurship development and breeds improvement in poultry, sheep, goat and piggery, including feed and fodder development. 
• Pradhan Mantri Matsya Sampada Yojana (PMMSY) to drive sustainable and responsible development of the fisheries sector while ensuring socio-economic development of the fishers, fish farmers and fish workers. 
• The cooperative societies, especially in the agriculture, dairy and fisheries sectors, provide the rural population with livelihood opportunities and a financial safety net with a communitybased approach.

Food Processing Sector

• During the last five years ending FY21, the food processing industries sector has been growing at an average annual growth rate of around 8.3 per cent.
• As per the latest Annual Survey of Industries (ASI) 2019-20, 12.2 per cent of persons in the registered manufacturing sector were employed in the food processing sector.
• The value of agri-food exports, including processed food exports, was about 10.9 per cent of India's total exports during 2021-22.
• The Ministry of Food Processing Industries, through the component schemes of Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), provide financial assistance for the overall growth and development of the food processing sector.
• Prime Minister's Formalisation of Micro Food Processing Enterprises (PMFME) Scheme to enhance the competitiveness of individual micro-enterprises in the unorganised segment and promote the formalisation of this sector by providing financial, technical and business support for upgradation/setting up of 2 lakh micro units in the country. The scheme adopts the One District One Product approach to reap the benefit of scale in procuring inputs, using shared services and marketing products
• The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) has the specific mandate to incentivise investments to create global food champions.

Food Security

• The Government is currently running the most extensive legislation-based food security programme in the world, covering about 80 crore of India's population under the National Food Security Act (NFSA), 2013.
• To remove the financial burden of the poor, the government will spend more than ₹2 lakh crore in this period on food subsidies under NFSA and other welfare schemes.
• The Government launched a citizen-centric and technology-driven scheme called the One Nation One Ration Card (ONORC) that enables intra-State and inter-State portability of ration cards.
• The food subsidy bill was higher during 2020-21 and 2021-22 in comparison to other years as a result of the free food distribution programme of the government under the PMGKAY.

• Industry holds a prominent position in the Indian economy, accounting for 31% of GDP, on average, during FY12 and FY21 and employing over 12.1 crore people.
• Manufacturing GVA, which contributes more than 50 per cent of industrial GVA, has grown at an even higher rate when compared to overall GVA.
• In FY23, the Industry sector witnessed modest growth of 4.1 per cent compared to the strong growth of 10.3 per cent in FY22.
• Strong external demand also served the Indian industry well in FY22 when manufactured exports soared, responding to a rebound in global growth. Trade had also recovered and grown as bottlenecks in global supply chains eased.
• The supply response of the industry to the demand stimulus has been robust, as seen in high-frequency indicators. The PMI-Manufacturing, for example, has remained in the expansionary zone for 18 months since July 2021.
• The sustained growth of manufacturing output is also seen within the overall IIP producing consumer durables in sync with the “pent-up” consumption demand.
• Robust growth in the production of capital goods and infrastructure/construction goods is indicative of the beginnings of an investment cycle in the private sector in the next financial year.
• The growth in the eight core industries has held steady, reflecting a broad momentum in industrial activity.
• The manufacturing landscape shows uneven growth across various categories.
• Growth in bank credit has kept pace with industrial growth, with a sequential surge evident since January 2022.
• While a large share of bank credit continues to be assigned to large industries, credit to MSMEs has also seen a significant increase in part assisted by the introduction of the ECLGS, which supports around 1.2 crore businesses of which 95 per cent are MSMEs.
• The growth in credit to MSME was buttressed by rebounding consumption levels, particularly in the services sector.
• While the growth in total credit has been driven by an increase in credit demanded by MSMEs, large industries have also begun to increase the pace of their credit offtake since the beginning of FY23.
• Annual FDI equity inflows in the manufacturing sector have been steadily increasing over the last few years. It jumped from US$ 12.1 billion in FY21 to US$ 21.3 billion in FY22.
• A rebound in FDI inflows is, however, expected as the Indian economy sustains its high growth while monetary tightening the world over eventually eases with the weakening of inflationary pressures.
• The government has implemented an investor-friendly FDI policy under which FDI up to 100 per cent is permitted through automatic route in most sectors.
• India continues to open up its sectors to global investors by raising FDI limits, removing regulatory barriers, developing infrastructure, and improving the business environment.
• While the contribution of the MSME sector to overall GVA rose from 29.3 per cent in FY18 to 30.5 per cent in FY20, the economic impact of the pandemic caused the sector’s share to fall to 26.8 per cent in FY21. 
• The government’s initiative of the Samadhaan Portal, set up under the Micro, Small and Medium Enterprises Development (MSMED) Act to monitor the outstanding dues to the MSME sector, is helping MSMEs in resolving their cashflow difficulties.
• The government has also initiated the ‘Raising and Accelerating MSME Performance’ scheme (RAMP) in FY23. The World Bank-supported scheme aims at strengthening institutions and governance at the Centre and State, improving Centre-State linkages and partnerships and improving access of MSMEs to market and credit, technology upgradation and addressing issues of delayed payments and greening of MSMEs.

• The electronics industry continues to ascend in importance as its applications become pervasive, particularly in the socio-economic development of a country. Electronics, supported by continuously improving communication services, will significantly enhance productivity, efficient service delivery, and social transformation.
• India aims to reach US$300 billion worth of electronics manufacturing and US$ 120 billion in exports by FY263, supported by the vision of a US$ 1 trillion digital economy by 2025. 
• The major drivers of growth in this industry are mobile phones, consumer electronics, and industrial electronics. In the mobile phone segment, India has become the second-largest mobile phone manufacturer globally, with the production of handsets going up from six crore units in FY15 to 31 crore units in FY22.

• In the wake of rising international coal prices, the power sector curtailed coal import drastically from 69 MT in FY20 to 45 MT in FY21 and further to 27 MT in FY22.
• As domestic coal production could not keep pace with its rising demand from power-generating plants, its availability got limited.
• Resultantly, in April 2022, even as coal offtake rose to meet higher demand, coal stock with power plants, as on 31st April 2022, fell to 8 days from 12 days a year ago.
• The government undertook several steps on a priority basis through April and May of 2022 to address the supply constraints of coal. 
• Foreign Direct Investment (FDI) flows into the Pharma Industry has increased four times, from US $180 million in FY19 to US $699 million in FY22.
• The Production Linked Incentive (PLI) schemes introduced across 14 categories, with an estimated capex of ₹4 lakh crore over the next five years, to plug India into global supply chains.
• Investment of ₹47,500 crores has been seen under the PLI schemes in the FY22, which is 106% of the designated target for the year.
• Production/sales worth ₹3.85 lakh crore and employment generation of 3.0 lakh have been recorded due to PLI schemes.
• Over 39,000 compliances have been reduced and more than 3500 provisions decriminalized as of January 2023.

• The services sector is expected to grow at 9.1% in FY23, as against 8.4% (YoY) in FY22.
• Robust expansion in PMI services, indicative of service sector activity, has been 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 percent in 2015 to 4 percent in 2021.
• India’s services exports remained resilient during the Covid-19 pandemic amid geopolitical uncertainties driven by higher demand for digital support, cloud services, and infrastructure modernization.
• The credit to services sector has grown by over 16% since July 2022.
• US$ 7.1 billion FDI equity inflows in the services sector in FY22.
• Contact-intensive services are set to reclaim pre-pandemic level growth rates in FY23.
• Sustained growth in the real estate sector is taking housing sales to pre-pandemic levels, with a 50% rise between 2021 and 2022.
• The hotel occupancy rate has improved from 30-32% in April 2021 to 68-70% in November 2022.
• The tourism sector is showing signs of revival, with foreign tourist arrivals in India in FY23 growing month-on-month with the resumption of scheduled international flights and the easing of Covid-19 regulations.
• Digital platforms are transforming India’s financial services.
• India’s e-commerce market is projected to grow 18 percent annually through 2025.

• Merchandise exports were US$ 332.8 billion for April-December 2022.
• 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.
• India is the largest recipient of remittances in the world receiving US$ 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.

Government’s Vision for Infrastructure Development

• Public Private Partnerships
  • In-Principal Approval was granted to 56 projects with a Total Project Cost of ₹57,870.1 crore under the VGF Scheme, from 2014-15 to 2022-23.
  • IIPDF Scheme with ₹150 crore outlay from FY 23-25 was notified by the government on 03 November 2022.
• National Infrastructure Pipeline
  • 89,151 projects costing ₹141.4 lakh crore under different stages of implementation
  • 1009 projects worth ₹5.5 lakh crore completed
  • NIP and Project Monitoring Group (PMG) portal linkage to fast-track approvals/ clearances for projects.
• National Monetisation Pipeline
  • ₹ 9.0 lakh crore is the estimated cumulative investment potential.
  • ₹ 0.9 lakh crore monetization target achieved against expected ₹0.8 lakh crore in FY22.
  • FY23 target is envisaged to be ₹1.6 lakh crore (27 percent of the overall NMP Target).
• GatiShakti
  • PM GatiShakti National Master Plan creates a comprehensive database for integrated planning and synchronized implementation across Ministries/ Departments.
  • Aims to improve multimodal connectivity and logistics efficiency while addressing the critical gaps for the seamless movement of people and goods.
• Electricity Sector and Renewables
  • As on 30 September 2022, the government has sanctioned the entire target capacity of 40 GW for the development of 59 Solar Parks in 16 states.
  • 17.2 lakh GWh of electricity was generated during the year FY22 compared to 15.9 lakh GWh during FY21.
  • The total installed power capacity (industries having a demand of 1 Mega Watt (MW) and above) increased from 460.7 GW on 31 March 2021 to 482.2 GW on 31 March 2022.
• Making Indian Logistics Globally Competitive
  • National Logistics Policy envisions developing a technologically enabled, integrated, cost-efficient, resilient, sustainable, and trusted logistics ecosystem in the country for accelerated and inclusive growth.
  • The rapid increase in National Highways (NHs) /Roads Construction with 10457 km NHs/roads constructed in FY22 compared to 6061 km in FY16.
  • Budget expenditure increased from ₹1.4 lakh crore in FY20 to ₹2.4 lakh crore in FY23 giving a renewed push to Capital expenditure.
  • 2359 Kisan rails transported approximately 7.91 lakh tonnes of perishables, as of October 2022.
  • More than one crore air passengers availed the benefit of the UDAN scheme since its inception in 2016.
  • Near doubling of capacity of major ports in 8 years.
  • Inland Vessels Act 2021 replaced the 100-year-old Act to ensure hassle-free movement of Vessels promoting Inland Water Transport.

India’s Digital Public Infrastructure

• Unified Payment Interface (UPI)
  • UPI-based transactions grew in value (121 percent) and volume (115 percent) terms, between 2019-22, paving the way for its international adoption.
• Telephone and Radio – For Digital Empowerment
  • The total telephone subscriber base in India stands at 117.8 crores (as of Sept,22), with 44.3 percent of subscribers in rural India.
  • More than 98 percent of the total telephone subscribers are connected wirelessly.
  • The overall teledensity in India stood at 84.8 percent on March 22.
  • 200 percent increase in rural internet subscriptions between 2015 and 2021.
  • Prasar Bharati (India’s autonomous public service broadcaster) – broadcasts in 23 languages, and 179 dialects from 479 stations. Reaches 92 percent of the area and 99.1 percent of the total population.
• Digital Public Goods
  • Achieved low-cost accessibility since the launch of Aadhaar in 2009
  • Under the government schemes, MyScheme, TrEDS, GEM, e-NAM, UMANG has transformed the marketplace 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 democratizing lending operations while allowing end-to-end digital loan applications
  • The National AI portal has published 1520 articles, 262 videos, and 120 government initiatives and is being viewed as a tool for overcoming the language barrier e.g. ‘Bhashini’.
  • Legislations are being introduced for enhanced user privacy and to create an ecosystem for standard, open, and interoperable protocols underlining robust data governance.