In this Article, we will be covering ECONOMIC SURVEY 2024
The Economic Survey 2024 offers a detailed examination of India’s economic performance in the fiscal year 2023-24 and outlines the government’s projections and policy directions for the future. Here’s a comprehensive breakdown of its key findings and the associated legal frameworks:
I. Macroeconomic Overview
Economic Growth:
GDP Growth: India’s GDP grew by 8.2% in FY24, bolstered by strong domestic consumption, robust investment demand, and recovery in agriculture and manufacturing. Projections for FY25 indicate a GDP growth rate of 6.5%-7%, reflecting the government’s focus on improving structural reforms and promoting investment.
Sectoral Performance: Agriculture grew at an annual rate of 4.18%, industrial growth reached 9.5%, and services accounted for 55% of GDP. The services sector remained a significant contributor to economic stability, driven by IT, finance, and real estate.
Inflation Management:
Current Scenario: Inflation dropped from 6.7% in FY23 to 5.4% in FY24. This was achieved through the Reserve Bank of India’s (RBI) monetary policies, such as tightening liquidity and adjusting interest rates. Targeted legal measures include the Inflation Targeting Framework under the RBI Act, allowing for dynamic interest rate adjustments to curb inflation.
Future Outlook: Inflation is expected to decrease further to 4.5% in FY25 and 4.1% by FY26, assuming a stable monsoon and no major external shocks. Legislative changes may include enhanced frameworks for regulating essential commodities to control prices during disruptions.
Fiscal Deficit:
The fiscal deficit declined from 6.4% of GDP in FY23 to 5.6% in FY24, reflecting better tax collection and disciplined government spending. This improvement aligns with India’s commitment to fiscal consolidation under the Fiscal Responsibility and Budget Management (FRBM) Act, which aims to ensure fiscal discipline and reduce debt.
Current Account Deficit (CAD):
The CAD reduced to 0.7% of GDP from 2.0% in FY23, driven by strong services exports and lower imports. Policies promoting Make in India and Atmanirbhar Bharat (self-reliance) have legally incentivized domestic production, contributing to this improvement.
II. Sector-Specific Developments & Legal Interventions
Agriculture:
Performance: The agriculture sector saw consistent growth at 4.18% over the last five years. However, policy challenges such as labor shortages, input costs, and market access persist.
Legal Reforms: The government is focusing on removing legal hurdles to agricultural productivity. Notable laws include amendments to the Essential Commodities Act and contract farming legislation, which aim to deregulate agricultural markets and encourage private sector participation. These laws support more flexible pricing mechanisms and reduce restrictions on stock limits.
MSMEs and Private Investment:
Growth and Legal Support: The MSME sector remains a cornerstone of India’s economic strategy, with laws providing incentives for growth. The MSME Development Act is pivotal, offering benefits like easier credit access and tax breaks. Future reforms aim to improve insolvency laws, making bankruptcy procedures more MSME-friendly.
Private Investment: Legal initiatives are being rolled out to boost private investment. Amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at expediting resolutions and encouraging investor confidence. The National Infrastructure Pipeline (NIP) provides legal backing for extensive public-private partnership models.
Banking and Finance:
Banking Sector Health: The banking sector demonstrated resilience with double-digit credit growth and reduced Non-Performing Assets (NPAs). The regulatory framework under the Banking Regulation Act has been strengthened to enforce stricter governance in banks, ensuring the health of financial institutions.
Legal Changes: The Insolvency and Bankruptcy Code (IBC) continues to be pivotal in resolving bad debts. Amendments are being considered to accelerate bankruptcy processes and protect creditors’ rights .
Green Transition and Sustainability:
Policy Initiatives: India is advancing towards sustainable energy by focusing on renewable energy sources like solar, wind, and biofuels. The National Green Hydrogen Mission has been legally reinforced to provide subsidies and tax benefits for green energy projects.
Legal Framework: Environmental laws, including the Environment Protection Act and Air (Prevention and Control of Pollution) Act, have been strengthened to regulate emissions and industrial pollution. Legislative efforts to streamline clearances for green projects are underway.
III. Social Sectors and Welfare
Healthcare:
Ayushman Bharat Scheme: Over 34.7 crore health cards have been issued under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), covering over 7.37 crore hospital admissions. The scheme’s legal framework under the National Health Authority Act ensures its effective implementation across states.
Legal Expansion: The government is looking to expand the legal framework to cover more diseases and extend healthcare to underprivileged sections through public-private partnerships in healthcare infrastructure
Education and Employment:
Education Reforms: The National Education Policy (NEP) 2020 remains a cornerstone for educational reform, focusing on improving foundational literacy and bridging the education-employment gap. The Right to Education (RTE) Act is being aligned with NEP goals to improve access to quality education
Employment Laws: The survey also highlights a decrease in unemployment to 3.2% and increased participation in skill development programs. Legal reforms under the Skill Development and Entrepreneurship Act ensure a continuous upskilling of the workforce
Welfare and Social Security:
Labor Laws: India is undergoing significant labor law reforms, aiming to consolidate and simplify labor regulations into four labor codes: wages, industrial relations, social security, and occupational safety. These laws aim to provide better protection for workers while enhancing ease of business.
Social Security Programs: Legal provisions under the Social Security Code provide for enhanced coverage of social welfare programs, including pension schemes and insurance for unorganized workers.
IV. Key Legal Recommendations and Future Directions
Legal Support for Green Financing:
The survey advocates for stronger legal frameworks to support green financing. Proposals include creating more robust tax incentives for green bonds and simplifying the legal process for raising funds for renewable energy projects.
Agricultural Reforms:
Legal reforms to facilitate contract farming and e-NAM (electronic national agricultural market) integration are on the agenda. These reforms aim to give farmers greater access to markets, reduce middlemen, and improve price realization.
Investment Laws:
To boost foreign direct investment (FDI), the survey suggests further easing of legal restrictions on foreign ownership in key sectors, such as defense and telecom. The Foreign Exchange Management Act (FEMA) may see amendments to streamline investment procedures.
Digital Economy Laws:
Laws promoting digital infrastructure are critical, especially in areas such as cybersecurity and data protection. The upcoming Data Protection Bill will provide legal guidelines for handling digital data, critical for e-commerce and IT services
Conclusion
The Economic Survey 2024 highlights India’s strong economic recovery, despite global challenges. It emphasizes the role of law in shaping a sustainable, inclusive, and resilient economy. By enhancing legal frameworks in key areas such as finance, agriculture, and green energy, the government is aiming to secure long-term growth while addressing social inequalities and environmental concerns.
