Summary of Economic Survey 2024-25
Green Energy Corridor (GEC) projects: Initiated to facilitate renewable power evacuation and reshaping of the grid for future requirements. GEC-I is under implementation in eight States with cumulative achievement of 9,111 circuit kilometer (ckm) transmission lines and 21,303 MVA substations. GEC-II is under implementation in seven States.
New Solar Power Scheme (for Particularly Vulnerable Tribal Groups (PVTG) Habitations/Villages: Launched on 04 January 2024 under the Pradhan Mantri Janjati Adivasi Nyaya Maha Abhiyan for electrification of one lakh un-electrified PVTG households located in 18 States and one Union Territory by provision of off-grid solar systems where electricity supply through grid is not techno-economically feasible.
Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM): As of 31 March 2024, 166 MW decentralized solar capacity has been installed and 3.26 lakh agricultural pumps have been solarized under the Scheme.
Production Linked Incentive Scheme for National Programme on High Efficiency Solar Photovoltaic (PV) Modules: To achieve manufacturing capacity of GW scale in High Efficiency Solar PV modules with outlay of ₹24,000 crore. As of 31 March 2024, four manufacturers have started manufacturing of solar PV modules.
Solar Parks Scheme: To provide solar power developers with a plug and play model, by facilitating necessary infrastructure along with all statutory clearances. Scheme has a sanctioned capacity of 39.7 GW for the development of 56 Solar Parks in 13 States. Solar projects of capacity 11.59 GW have been commissioned in these parks and the remaining capacity is at various stages of implementation.
PM - Surya Ghar: Muft Bijli Yojana aimed to install rooftop solar plants in one crore households with a total financial outlay of ₹75,021 crore and to be implemented until FY27. This is expected to enable an installation of around 30 GW of residential rooftop solar capacity and 40-45 GW of overall rooftop solar capacity addition by FY27.
CPSU Scheme Phase-II (Government Producer Scheme): Aimed at setting up grid-connected solar PV power projects by PSUs and the Government organisations, using domestically manufactured solar PV cells and modules, with VGF support for self-use or use by the Government or Government entities. Out of the 8.2 GW capacity of solar PV power plants, about 1.66 GW capacity has been commissioned and the balance is under implementation as of 31 March 2024.
Wind Power: Wind energy is led by indigenous wind power industry and strong project ecosystem, operation capabilities and a manufacturing base of 18 GW per annum18. As of 31 March 2024, the wind power installed capacity has grown by about 2.1 times during the past 10 years to about 45.89 GW. As per REN21 Report, India stands fourth in wind power installed capacity in the world19.
Bio Energy Programme: The National Bioenergy Programme notified in November 2022 to be implemented from 1April 2022 to 31 March 2026 in two phases. As of 31 March 2024, installed capacity of biomass power and cogeneration projects was about 9.4 GW (grid-connected) and 0.92 GWeq. (off-grid), waste to energy projects capacity was 249.74 MW (grid-connected) and 336.06 MWeq. (off grid). Under biogas programme, about 51.04 lakhs of small biogas plants and 349 medium size biogas plants (10.6 MWeq.) have been installed.
National Green Hydrogen Mission: Approved in January 2023 with outlay of ₹19,744 crore. The mission targets to achieve about 5 million metric tonne (MMT) of annual Green Hydrogen production capacity, associated renewable energy capacity of about 125 GW, ₹8 lakh crore in total investments, and 50 MMT CO2 annual emission expected to be averted by year 2030.
National Framework for Promoting Energy Storage Systems (ESS): ESS can be used for storing energy available from RE sources to be used at other times of the day. This can bring down the variability of generation in RE sources, improving grid stability, enabling energy/peak shifting, providing ancillary support services, and enabling larger renewable energy integration. Benefit consumers by bringing down peak deficits, peak tariffs, reduction of carbon emissions, deferral of transmission and distribution, capex, and energy arbitrage.
Guidelines to promote development of Pumped Storage Projects (PSP): Amongst the various technologies available for addressing the above requirement of storage and ancillary services, pumped storage projects (PSPs) are clean, MW scale, domestically available, time tested and internationally accepted. Guidelines to promote development of PSPs were issued by the Ministry of Power in April 2023.
Revamped distribution sector scheme (RDSS): RDSS was launched in 2021 to help distribution companies improve operational efficiencies and financial sustainability by providing result-linked financial assistance to strengthen supply infrastructure based on meeting pre-qualifying criteria and achieving basic minimum benchmarks. RDSS has an outlay of around ₹3.04 lakh crore from FY22 to FY2613 which includes an estimated Government budgetary support of around ₹0.98 lakh crore. RDSS aims to reduce aggregate technical & commercial losses to 12-15 per cent by FY2514, reduce the Average Cost of Supply and the Average Revenue Realized gap to zero by FY25 and improve quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector. Under RDSS, 19.79 crore prepaid smart meters, 52 lakh distribution transformer meters and 1.88 lakh feeder meters have been sanctioned.
SAMARTH Mission: Launched in 2021, the Sustainable Agrarian Mission on Use of Agri-Residue in Thermal Power Plant (SAMARTH) has a full-time mission directorate to coordinate and monitor implementation. Biomass co-firing in NCR thermal power plants has reached 1.68 per cent; efforts are underway to take it up to 5 percent.
One Sun, One World, One Grid Initiative: A task force is studying the feasibility of interconnection of regional grids viz. Southeast Asia, South Asia, Middle East, Africa and Europe for exchange of renewable power. Presently, discussions are going on with Saudi Arabia, UAE, Sri Lanka, Myanmar, Singapore, etc.
UJALA Scheme: Unnat Jyoti by Affordable LEDs for ALL (UJALA), launched in 2015, LED bulbs, LED tube lights and energy-efficient fans are sold to replace conventional and inefficient variants. According to the Ministry of Power, this has resulted in an estimated energy savings of 48.42 billion kWh per year with avoided peak demand of 9,789 MW and GHG emission reduction of 39.30 million tonne CO2 per year, and annual monetary savings of ₹19,335 crore in consumer electricity bills.
Street Lighting National Programme: This programme was launched in 2015 to replace conventional streetlights with smart and energy-efficient LED streetlights. Over 1.31 crore LED streetlights have been installed so far. According to the Ministry of Power, this is estimated to have resulted in estimated energy savings of 8.80 billion kWh per year with avoided peak demand of 1,467 MW and GHG emission reduction of 6.06 million tonnes CO2 per year and estimated annual monetary savings of ₹6,162 crore in electricity bills of municipalities.
Challenges in Renewable Energy Sector:
Mobilisation of the necessary finance and investment on competitive terms: Gearing up the banking sector for arranging finances for larger deployment goals, exploring low-interest rate, and long-term international funding, and developing a suitable mechanism for risk mitigation or sharing by addressing both technical and financial bottlenecks.
Land acquisition: Identification of land with RE potential, its conversion (if needed), clearance from Land Ceiling Act, decision on land lease rent, clearance from revenue department, and other such clearances take time. State Governments must play a major role in acquisition of land for RE projects.
For E-mobility
PLI Scheme for automobile and auto components has a budgetary outlay of ₹ 25,938 Crore from FY23 to FY27. Sub-divided into champion OEM incentive scheme and component champion incentive scheme. 85 applicants have been approved. Attracted a proposed investment of ₹67,690 Crore, against which ₹14,043 Crore has been invested till end-March 2024.
Battery Storage, National Programme on Advanced Chemistry Cell (ACC) Battery Storage was approved in May 2021 with a budgetary outlay of ₹ 18,100 Crore. Envisages to enhance manufacturing capabilities of ACCs by setting up of Giga scale ACC and battery manufacturing facilities. Aims to set up a cumulative ACC manufacturing capacity of 50 GWh for ACCs and a cumulative capacity of 5 GWh for Niche ACC Technologies. The first round of the ACC PLI bidding concluded in March 2022, whereby a capacity of 30 GWh was allocated.
Phase II of the FAME Scheme, approved with an outlay of Rs 11500 Crore for 5 years during FY20 to FY24. Aims to generate demand for electric vehicles by supporting 7000 e-buses, 5 Lakh e-3 wheelers, 5 to FY5000 e4 wheeler passenger cars and 10 Lakh e-2 wheelers. The Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) was approved in March 2024.
Green Rural Value Chain
The Indian agriculture sector provides livelihood support to about 42.3 per cent of the population and has a share of 18.2 per cent in the country’s GDP3 at current prices. The sector has been buoyant, which is evident from the fact that it has registered an average annual growth rate of 4.184 percent at constant prices over the last five years.
As per provisional estimates for 2023-24, the growth rate of the agriculture sector stood at 1.4 percent,5 which is below 4.7 per cent in 2022-23, mainly because of a drop in the foodgrain production due to delayed and poor monsoons caused by El Nino.
Promotion of greater efficiency in the use of inputs and sustainable production methods through Per Drop More Crop (PDMC), a micro irrigation scheme and the actions under the National Mission on Sustainable Agriculture (NMSA), including the use of alternative and organic fertilisers are a few examples on other initiatives being undertaken to improve productivity and sustainability. In addition, digital initiatives such as the Digital Agriculture Mission and e-National Agriculture Market (e-NAM) have also been taken up to facilitate the adoption of smart agriculture technologies, with the latter allowing better price discovery.
The fisheries sector has been supported through programmes for improving productivity, access to institutional credit, and infrastructure development through the Fisheries Infrastructure Development Fund (FIDF) with a total fund size of ₹7.52 Thousand Crore. Similarly, Pradhan Mantri Matsya Sampada Yojana (PMMSY) introduced in May 2020 aimed at strengthening fisheries infrastructure, enable technology infusion and promote optimal water management. These interventions in fisheries sector have resulted in increasing fish production by an average annual growth of 7.4 per cent in 2022-23 from 2020-2111.
In 2022-23, foodgrain production hit an all-time high of 329.7 million tonnes, and oilseeds production reached 41.4 million tonnes. In 2023-24, food grain production is slightly lower at 328.8 million tonnes
The Gross capital formation (GCF) of the agriculture sector grew at the rate of 19.04 per cent in 2022-23, and the GCF as a percentage of GVA rose from 17.7 per cent in 2021-22 to 19.9 per cent in 2022-23, suggesting an increase in investment in agriculture. The average annual growth in GCF from 2016-17 to 2022-23 was 9.70 percent. t to double farmers’ income over the period of 2016-17 to 2022-23, income would need to grow at an annual rate of 10.4 per cent in the farm sector, which in turn would require an annual growth rate in agriculture investment of 12.5 per cent.
Agriculture Infrastructure Fund (AIF) was launched with a financing facility of ₹1 lakh Crore to be disbursed between FY 2020-21 to FY 2025-26 with support extending till FY 2032-33.
Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) introduced credit-linked financial assistance through grants-in-aid to build efficient supply chain management from farm to retail to reduce the wastage of perishable produce and extend food shelf life, 1044 out of 1685 projects with cost ₹ 32.78 Thousand Crore and approved subsidy of ₹ 9.3 Thousand Crore have been approved till end March 2024.
About 89.4 percent of farm households own less than 2 hectares of land.
Agriculture Marketing-Reaping prosperity:
The average area served by mandis in the country is 434.48 sq. km against the recommendation of the National Commission on Farmers (2006) of the market within a radius of 5 Km (corresponding market area of about 80 sq. km.).
As of 29 February 2024, 8,195 FPOs have registered under the new FPO scheme, and equity grants of ₹157.4 Crore were released to 3,325 FPOs. Credit guarantee cover worth ₹278.2 Crore was issued to 1,185 FPOs.
Futures market for agriculture commodities
The establishment of a forward market in commodities was driven by the recognition that while the production of agricultural products was largely seasonal and subject to various risks, consumption was not. The forward market serves as a mechanism that brings the prospects of future production and consumption to influence today’s price in a logical manner.
The Sub Mission on Agricultural Mechanization (SMAM) provides assistance to the State Government for training and demonstration of agricultural machinery, setting up of Custom Hiring Centres (CHC) and assists farmers in procuring various farm machinery and equipment. The total funds allocated under SMAM from 2014-15 to 2023- 24 was ₹7.26 Thousand Crore. In 2023-24, the allocation was ₹859.45 Crore.
Sustainable and Digital Evolution
With 11 of the 17 Sustainable Development Goals (SDGs) directly linked to agriculture, securing improvements in crop yields and ensuring income stability is vital for the country as it strives to achieve the Agenda 2030 goals.
The Digital Agriculture Mission 2021–2025 aims to modernise agriculture through advanced technologies like AI, remote sensing, drones, etc. Further, per the Budget Announcement for 2023-24, the government has taken various initiatives to build Digital Public Infrastructure (DPI) for agriculture as an open source, open standard and interoperable public good.
Agri Stack is one of the prominent DPIs with three foundational registries (databases) i.e. Farmers’ Registry/Database, Geo-referenced village maps and the Crop Sown Registry/ Database, along with several Support Registries/Databases.
Food processing sector
The food processing industry in India is one of the largest employers in organised manufacturing, with a 12.02 percent share in the total employment in the organised sector45. The value of agri-food exports, including processed food exports during 2022-23, was USD46.44 Billion, accounting for about 11.7 percent of India’s total exports. The share of processed food exports also increased from 14.9 per cent in 2017-18 to 23.4 per cent in 2022-23.
During the last eight years ending 2022-23, the food processing industries has been growing at an average annual growth rate (AAGR) of around 5.35 per cent at 2011-12 prices. Being labour-intensive, the pandemic adversely affected the sector and it is now recovering. GVA in the food processing sector has increased from ₹1.30 lakh Crore in 2013-14 to ₹1.92 lakh Crore in 2022-23. The sector constituted 7.66 per cent of GVA in Manufacturing in 2022-23 at 2011-12 prices.
The Production Linked Incentive Scheme for the Food Processing Industry (PLISFPI) supports the creation of global food manufacturing champions, branding and marketing abroad.
The PM Formalization of Micro Food Processing Enterprises (PMFME) scheme with a total outlay of ₹10 Thousand Crore provides credit-linked subsidy and capacity building, including marketing and branding support.
The scheme for developing the Tomato, Onion and Potato (TOP) value chain was launched in 2018-19. The coverage of Operation Green has been expanded from 3 crops (tomato, onion & potato) to 22 perishables crops, which include 10 fruits, 11 vegetables (including TOP) and one marine, i.e. shrimp.
MSME
Prime Minister’s Employment Generation Programme: During FY23, facilitated assistance to 85,167 micro-units with a margin money subsidy of ₹2,722.17 Crore, generating employment for around 6.81 Lakh people. In FY24, this support was extended to 89,118 micro-units with a margin money subsidy of ₹3,093.87 Crore, creating employment opportunities for around 7.13 Lakh.
The Credit Guarantee Scheme (CGS): Administered by the CGTMSE which aims to alleviate the credit constraints faced by MSMEs by offering collateral free loans of up to ₹5 Crore, with a guaranteed coverage of up to 85 percent. The scheme, since its inception, has approved 91.76 Lakh guarantees amounting to ₹6.78 Lakh Crore. In FY24 alone, 17.24 Lakh guarantees worth ₹2.03 Lakh Crore were approved.
Challenges and Opportunities: MSMEs face challenges, including issues with formalisation and inclusion, limited access to finance, markets, technology, and digitalisation, infrastructural bottlenecks, and skilling. To address these challenges, the Government has implemented initiatives and platforms aimed at supporting formalisation, ease of registration and grievance redressal, like the Samadhaan Portal, Sambandh Portal, and Champions Portal, which aid in delayed payment issues, procurement monitoring, and speedy resolution of grievances. The Global Value Chain Development Report (2019) highlights that although SMEs are underrepresented in global value chains, the digital economy offers them significant new opportunities. This is evident in India's MSME sector, where nearly 70 per cent of total e-commerce sales in 2020-21 were from MSMEs, reflecting a year-on-year growth rate of 60- 70 per cent21. Further, research shows that reimagining the level of regulations on the usage of factory space, like those relating to setbacks, will likely augment the manufacturing capacity, especially of the micro and small firms.
