“Cherry-Picked View Of The Economy… Ridiculous Lies”: Congress On Economic Survey

In response to the Government of India’s Economic Survey released today, Congress’ general secretary in charge of Communications Jairam Ramesh criticised the report, calling it a “cherry-picked view of the economy”. Ramesh stated that India is currently facing its most precarious economic situation in many years and expressed hope that the upcoming Budget would address the country’s realities.

Economic Survey 2023-24 was tabled in Parliament today by Finance Minister Nirmala Sitharaman. The Economic Survey is an annual document prepared by the Ministry of Finance, specifically by the Department of Economic Affairs and presented in the Parliament before the Union Budget and serves as a comprehensive report on the state of the Indian economy over the past financial year.

Ramesh highlighted several key issues from the Economic Survey 2023-24, which he believes paints an overly optimistic picture of the economy. He pointed out that food inflation remains unchecked at nearly 10% per year, with specific food prices like cereals, vegetables, spices, and milk growing at rapid rates, severely affecting the poor and middle class.

The Economic Survey, according to the Congress, also reveals a deeply unequal economic recovery post-COVID, with rural India lagging significantly. For example, sales of two-wheelers in rural areas, a key indicator of consumer demand and economic growth, are still below 2018 levels. The Modi government’s inconsistent import-export policies have been detrimental to farmers, with unplanned export bans and cheap imports negatively impacting incomes across crops such as wheat, paddy, pulses, onions, sugar, and edible oils, the statement said.

Additionally, Ramesh criticised the housing sector’s performance, noting that residential real estate sales in 2023 have only just returned to 2013 levels. He also addressed the failure of the government’s policies in generating private investment, citing that generous handouts to the corporate sector, like the Rs. 1.5 lakh crore corporate tax cut and the Rs 2 lakh crore PLI scheme, have not led to increased investment or hiring. The Economic Survey, according to Congress, acknowledges that private sector investment in machinery, equipment, and intellectual property products has grown by only 35% over four years, indicating a troubling trend.

The statement said trade policy failures have further weakened India’s manufacturing capabilities, with the percentage of imports from China rising from 11% to 16% since 2014, and this influx of imports has harmed domestic MSMEs, making them uncompetitive and leading to shutdowns.

Congress said the Economic Survey highlights slow investment in manufacturing and employment growth, and R&D spending as a percentage of GDP is lower than in 2014, moreover, CMIE data shows private investment plans are at a 20-year low.

Ramesh also noted the significant unemployment issue, which the Economic Survey itself acknowledges by stating that India needs to create nearly 80 lakh jobs annually for the next 20 years. Despite the Make in India initiative, manufacturing sector employment has been subdued. Ramesh argued that the government’s current strategy relies on data manipulation and temporary measures, and a significant shift in economic strategy is necessary to meet employment targets.

The Economic Survey, according to Ramesh, contains some “ridiculous lies,” notably the claim that abject poverty has nearly been eliminated. He countered this by stating that half of all Indians cannot afford three meals a day, one-third of children are stunted, one-fourth are not fully immunized, and about two-thirds of the population depends on free food grains provided under the National Food Security Act.

The Economic Survey projects a conservative real GDP growth of 6.5–7% for FY24, recognizing that market expectations are higher. India’s economy maintained momentum from FY23 into FY24, despite external challenges, with real GDP growing by 8.2% and exceeding 8% in three of the four quarters. Gross Value Added (GVA) increased by 7.2%, and net taxes grew by 19.1%. Retail inflation decreased from 6.7% in FY23 to 5.4% in FY24, while the Current Account Deficit (CAD) improved to 0.7% of GDP from 2.0% in the previous year. India’s real GDP in FY24 was 20% higher than in FY20, reflecting a robust post-pandemic recovery. Tax revenue split was 55% from direct taxes and 45% from indirect taxes, with the government providing free food grains to 81.4 crore people and progressively enhancing capital spending.