The Economic Survey document will give an insight into the state of the economy and various indicators for 2023-24 (April-March) and some outlook for the current year.

New Delhi: The wait for the full Budget 2024-25 is almost over as the Union government is set to present the Economic Survey on Monday.

A day before the budget presentation, Union Finance Minister Nirmala Sitharaman will present the pre-budget document in Parliament.

What is an Economic Survey?

The Economic Survey document, prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and under the supervision of the Chief Economic Adviser, will provide information on the state of the economy and various indicators for 2023-24 (April). -March) and some outlook for the current year.

The Economy Survey document may also give some idea about the tone and texture of the actual Budget 2024-25, which will be presented on Tuesday.

The first economic survey came into existence in 1950-51, when it was a part of the budget documents. In the 1960s, it was separated from the budget documents and presented on the eve of the Union Budget.

The most important feature that many will find is its central theme.

In 2022, the central theme was 'Agile Approach', which focused on India's economic response to the Covid-19 pandemic. In 2023, it is 'recovery complete', when the economy has made a broad-based recovery from the pandemic-induced contraction, Russian-Ukraine conflict and inflation and climbed back to pre-pandemic growth paths.

Generally, along with the sectoral chapters, the survey document also adds new need-based chapters that require focus.

All eyes will be on the major announcements made by the Finance Minister and the government's far-reaching guidance on the economy as a whole.

With this upcoming budget presentation, Finance Minister Nirmala Sitharaman will surpass the record set by former Prime Minister Morarji Desai, who presented five annual budgets and one interim budget as Finance Minister between 1959 and 1964. Sitharaman's upcoming budget speech will be his seventh. Manmohan Singh, Arun Jaitley, P. Chidambaram and Yashwant Sinha have been overtaken by Sitharaman.

move ceremony

An important event before the presentation of the budget is the 'Halwa Samarambh'. A few days before the presentation of the budget, it is a tradition for the government to hold a 'Halwa Samarambh' to mark the beginning of the printing of budget documents.

This year, the Halwa ceremony marking the final stage of the budget preparation process for the full budget of 2024-25 was held on July 16 in North Block in the presence of Finance Minister Sitharaman, Minister of State Pankaj Chaudhary and Secretaries. Officers and employees involved in budget preparation and collection process were present on this occasion.

The halwa ceremony is significant as it also marks the beginning of the Finance Ministry's lockdown, which means no official is allowed to go outside the Ministry's premises. Everyone in the budget team is allowed to leave only after the budget documents are presented to Parliament. The printing of the Union Budget in the basement located in North Block has been a permanent feature since 1980.

On Budget Day, Tuesday, the Finance Minister will present the Union Budget in the Lok Sabha at 11 am. The budget speech will outline the government's fiscal policies, revenue and expenditure proposals, tax reforms and other important announcements.

The budget is then discussed and debated in detail in both houses of Parliament, allowing members to scrutinize its provisions, raise concerns and propose amendments. After presentation and approval by Parliament, the Union Budget initiates a series of post-Budget activities aimed at implementing its provisions and achieving the outline objectives.

On the morning of the Budget, the Finance Minister will go to the North Block, where the Finance Ministry is located. She will meet the secretaries of her ministry and then accompany them to the President's residence to seek permission before presenting the budget. Half an hour before the presentation of the budget, a cabinet meeting is held under the chairmanship of the prime minister, where the ministers are briefed on the budget and the approval of the cabinet is sought.

Like some previous full Union budgets, the 2024 budget will also be delivered in a paperless format.

State of the economy

The Reserve Bank of India in its latest monetary policy meeting has raised the GDP forecast for the current year 2024-25 to 7.2 percent from the previous 7 percent. The economy has grown at over 7 percent over the past few years on the strength of domestic demand.

The International Monetary Fund (IMF), in its latest outlook, has raised India's growth forecast for 2024 to 7 percent from the previous 6.8 percent, with the country maintaining its position as the fastest growing among emerging markets and developing economies.

The IMF had earlier forecast a growth rate of 6.5 percent for 2024, revised it to 6.8 percent and now 7 percent. India is the fastest growing major economy.

According to official data from the Government of India, the country's GDP grew by an impressive 8.2 percent in the fiscal year 2023-24. India's economy is projected to grow by 7.2 percent in 2022-23 and 8.7 percent in 2021-22, respectively.

Looking at inflation, the RBI has projected it at 4.5 per cent for 2024-25.

Rising food prices have become a headache for Indian consumers, as food inflation doubled year-on-year in June. Food inflation almost doubled to 8.36 per cent last month compared to 4.63 per cent recorded in the same month of 2023, the data showed.

India's headline retail inflation rate tightened in June, dampened by rising food prices in the past few months.

Retail inflation in India is within the RBI's comfort level of 2-6 percent but above the ideal of 4 percent. Barring the recent hiatus, the RBI has hiked the repo rate by a cumulative 250 basis points from May 2022 in its fight against inflation. Raising interest rates is a monetary policy tool that generally helps suppress demand in the economy, which in turn helps lower inflation. Repo rate is the interest rate at which RBI lends to other banks.

While foodgrains have been consistently driving up inflation, the Reserve Bank recently said that the shock to foodgrain prices is too long to be considered transitory.

Highlights of the Interim Budget presented on February 1, 2024

The government has proposed to increase capital expenditure outlay by 11.1 per cent to Rs 11.11 lakh crore in 2024-25, which is 3.4 per cent of GDP. Capital expenditure, or capex, is used to set up long-term physical or fixed assets.

Considering the fiscal deficit, the government projected a 5.1 percent of gross domestic product (GDP) for 2024-25. In 2023-24, the government had set a fiscal deficit target of 5.9 percent of gross domestic product (GDP) for 2023-24. The fiscal deficit for 2023-24 has come down to 5.8 percent. The government intends to bring the fiscal deficit below 4.5 percent of GDP in the fiscal year 2025-26.

The difference between total revenue and total expenditure of the government is called fiscal deficit. It is an indication of the total borrowing required by the government.

To provide relief to the citizens, the central government neither pinched nor increased the tax burden on the citizens.

The Interim Union Budget 2024 was presented on February 1, as the country was due to hold general elections later in the year.

The Interim Budget takes care of the financial needs of the medium term until the government is formed after the Lok Sabha elections, after which the full budget is to be presented by the new government.

The strength seen in domestic demand-private consumption and investment-finds its roots in the reforms and measures taken by the government over the last 10 years.

Also, robust GDP growth projections, inflation at manageable levels, political stability and signs of monetary policy tightening by the central bank have all contributed to painting a bright picture of the Indian economy.

According to estimates, India is expected to become the third largest economy in the world with a GDP of US$ 5 trillion in the next three years. Thereafter, India can aspire to become a USD 7 trillion economy in the next six to seven years (by 2030).