The Economic Survey for 2023-24, a key document released by the Indian government, is typically awaited with great anticipation as it sets the tone for the Union Budget and offers a detailed analysis of the nation’s economic situation. However, the latest survey comes across as somewhat defensive. While it does a commendable job of highlighting the numerous challenges facing India, it falls short in addressing the deep-seated issues that have led to the country’s economic vulnerabilities, especially in light of rising nationalism and the pressing threat of climate change.
A Defensive Tone
One of the most noticeable aspects of the 2023-24 Economic Survey is its defensiveness. This seems to stem from both external pressures and internal shortcomings. The global economic environment remains highly unstable, with inflation, geopolitical tensions, and economic slowdowns in major economies creating significant uncertainty. Domestically, the Indian economy is grappling with its own set of issues—rising inequality, a slow labor market recovery, and environmental degradation among them.
The Survey often appears more focused on defending past government decisions than on critically assessing the current economic scenario. This is evident in how it presents India’s economic performance, frequently emphasizing relative successes while minimizing or overlooking significant concerns. For example, while the Survey acknowledges sluggish growth in certain sectors, it primarily attributes these challenges to global factors, rather than thoroughly examining the structural issues within the Indian economy itself.
Challenges Identified, But Causes Overlooked
The Survey deserves credit for recognizing the major challenges confronting India’s economy. It identifies issues such as inflation, the fiscal deficit, unemployment, and the need for increased public investment. It also acknowledges global economic uncertainties, the ongoing energy crisis, and the risks posed by climate change. However, the Survey often fails to delve deeply into these issues to uncover the underlying causes.
Take inflation, for example. The Survey notes that inflation, particularly in food and fuel prices, is a significant challenge. However, it doesn’t fully explore the structural factors contributing to inflationary pressures, such as supply chain disruptions, speculative practices, and insufficient agricultural policies. Similarly, while the Survey recognizes the slow recovery in the job market, it doesn’t sufficiently address the systemic issues exacerbating unemployment, such as the lack of formal sector jobs, a skills mismatch, and inadequacies in the education system.
Nationalism and Economic Policy
One of the more glaring omissions in the Survey is its failure to critically examine the rise of nationalism and its impact on economic policy. In recent years, there has been a noticeable shift towards nationalist economic policies, with a focus on self-reliance (Atmanirbhar Bharat) and a push for indigenous production. While these initiatives aim to reduce dependency on foreign goods and bolster domestic industries, they also carry the risk of unintended consequences, such as protectionism.
The Survey touches on these policies but does not provide a thorough analysis of their long-term impact. For instance, while self-reliance efforts have led to higher tariffs on imports, which protect domestic industries, they could also result in higher consumer prices and potential trade tensions with other countries. The Survey’s lack of critical engagement with these issues suggests a reluctance to challenge the dominant economic narrative.
Moreover, the Survey does not fully address how rising nationalism might affect India’s international trade relationships and its position in the global economy. In an increasingly interconnected world, isolationist policies could undermine India’s ability to participate in global supply chains and access international markets. This omission is significant, given the vital role of exports and foreign investment in driving India’s economic growth.
Climate Change: An Urgent Issue Overlooked
Another major shortcoming of the Economic Survey is its approach to climate change. While the document acknowledges climate change as a critical issue, it does not convey the urgency required to address it effectively. The Survey highlights government initiatives in renewable energy and afforestation but stops short of presenting a comprehensive strategy to tackle climate change in line with the severity of the crisis.
The discussion on climate change in the Survey is framed more in terms of opportunities than risks. It emphasizes the potential for green growth and job creation in renewable energy sectors but does not adequately address the significant threats posed by climate change to agriculture, water resources, and public health. Furthermore, the Survey does not thoroughly explore the economic costs of inaction, such as the potential for climate-related disasters to derail economic growth and exacerbate poverty and inequality.
The Survey’s treatment of climate change reflects a broader trend in Indian policymaking, where environmental issues often take a backseat to short-term economic considerations. This is a risky approach, as the impacts of climate change are already being felt across the country in the form of more frequent and severe weather events, declining agricultural yields, and increasing water scarcity.
Questionable Assumptions and Odd Arguments
The Economic Survey also contains some questionable assumptions and arguments. For example, its discussion on economic growth is notably optimistic. The Survey projects robust growth rates for the coming years, despite significant global economic challenges. While optimism is not inherently problematic, the growth projections seem to rest on overly optimistic assumptions about the global economic recovery and India’s ability to attract foreign investment.
Another area of concern is the Survey’s stance on fiscal policy. It argues for continued fiscal consolidation, even in the face of an urgent need for public investment in critical areas such as infrastructure, healthcare, and education. This approach seems disconnected from the realities on the ground, where underinvestment in these areas has contributed to persistent inequalities and hampered economic development.
The Survey’s emphasis on fiscal prudence also overlooks the potential benefits of counter-cyclical fiscal policies, particularly during times of economic uncertainty. Given the current global economic volatility, there is a strong case for increased public spending to stimulate growth and build resilience against future shocks.
A Missed Opportunity
The Economic Survey for 2023-24 is a mixed document. While it successfully identifies the challenges facing the Indian economy, it falls short of providing the depth of analysis necessary to address these challenges effectively. The document’s defensive tone and its reluctance to critically engage with nationalist policies and the climate crisis make it a missed opportunity to chart a clear and sustainable path forward for India’s economy.
As economic and environmental challenges become increasingly interconnected, the need for comprehensive and forward-thinking economic policy has never been greater. The Economic Survey should serve as a blueprint for addressing these challenges, but this year’s edition feels more like a defense of the status quo than a roadmap for the future. Moving forward, it will be crucial for policymakers to adopt a more critical and holistic approach to economic planning, one that considers both the immediate needs of the population and the long-term sustainability of the economy.
Disclaimer: The thoughts and opinions stated in this article are solely those of the author and do not necessarily reflect the views or positions of any entities represented and we recommend referring to more recent and reliable sources for up-to-date information.
