The Economic Survey for 2021-2022 was tabled in the Lok Sabha in the Parliament Budget Session 2022 by Finance Minister Nirmala Sitharaman. The Economic Survey has forecasted the Gross Domestic Product (GDP) to grow at 8-8.5% for the year 2022-2023. The Survey is tabled a day before the Annual Budget and holds great importance for understanding the economic development in the country and showing the future outlook for the economy.
This year the Economic Survey focused on the post-pandemic recovery and was the first survey presented by the newly-appointed CEA V Anantha Nageswaran. However, this year’s Economic Survey was prepared by the Principal Economic Adviser as the last CEA’s term had ended in December 2021.
What is the Economic Survey about?
- The Economic Survey brings out the economic trends in the country and is presented on the first day of the Budget Session. It is presented in both Houses of Parliament.
- Prepared by the Chief Economic Advisor of India, the Economic Survey is an annual document presented by the Department of Economic Affairs, Ministry of Finance, Government of India.
- The Economic Survey was first presented in 1950-51 and de-linked from the Union Budget in 1964.
- The Annual Economic Survey shows the state of the Indian economy, according to the Central Government’s perspective.
- The Survey reviews the growth and development of the Indian economy over the past financial year.
- It also evaluates and summarizes the performance of various governmental programs in the country.
- Most importantly, the Survey forecasts the prospects of the Economy in the forthcoming financial year. A projection of GDP growth is also forecasted in the survey.
- The condition of different sectors of the economy is highlighted in the Survey and reforms are recommended to be undertaken for enhancing economic growth.
- The Economic Survey consists of 2 volumes. The 1st volume contains policy advisories and the 2nd volume contains a sectoral analysis of the economy.
Key Highlights of the Economic Survey 2022
The Economic Survey of 2022 provided some crucial insights into the economic condition of India. According to the Survey, “the macroeconomic stability indicators in the government’s Economic Survey suggest that the country's economy is well-placed to take on the challenges of the financial year 2022-23”.
Let’s take a look at some of the key highlights of the Economic Survey in the following points:
- The Economic Survey has predicted a robust growth of 9.2% of the GDP in the ongoing financial year 2022.
- As per estimates of the NSO (National Statistical Office), the growth is expected to be 9.2 percent whereas the RBI forecasted a GDP growth of 9.5 percent.
- A growth of 8 - 8.5% is projected by the Economic Survey from April 2022 to March 2023.
- The growth in consumption has grown by 7% in 2021-2022 and includes a majority of government expenditure.
- Agriculture and allied sectors grew by 3.9% in 2021-2022 as compared to 3.6% in the previous year. A normal monsoon is expected by the Survey which is a silver lining in the pandemic hit economy.
- However, the services sector witnessed a decline as compared to last year and grew by 8.2%.
- The industry sector grew 11.2 percent in FY 2021-2022 and there has been a resumption of global supply chains.
- Oil prices will be in the range of US$70 - $75 per barrel. Exports also picked up in the previous financial year, and are expected to grow by 16.5%
- Gains from supply-side reforms have given a boost to the economy. In other good news, widespread vaccination has stimulated growth and pushed GDP to 1.3% above the pre-pandemic level.
- The government expects to meet its fiscal targets despite rising government debt. Further, the government is confident to have the fiscal space for additional expenditure if necessary, due to an increase in government revenues in 2021-2022.
In other good news, India’s balance of payments remained in surplus for the last two years. Consequently, the Foreign Exchange Reserves stood at US$ 634 billion making India the 4th largest forex reserve holder in the world at the end of 2021.
- Inflation was cited as a major concern in the Economic Survey as WPI has been running in double-digits (13% -14%)
- Food inflation reduced to 2.9% in April-Dec 2021 which was nearly 9% last year.
- CPI inflation stood at 5.6% YoY in December 2021. Rising global energy prices may drive imported inflation as well.
Interestingly, Delhi became the start-up capital with 5,000 new startups as compared to 4,514 in Bengaluru between April 2019 and December 2021. A total of 44 unicorns were witnessed in India and Rs 89,066 crore was raised via 75 IPO issues in April-Nov 2021.
UPI witnessed unprecedented growth in terms of increases in transactions. There were nearly 4.6 billion transactions worth Rs 8.26 lakh crore in December 2021 alone. In April-November 2021, UPI processed more than 24.26 million One-Time Mandate transactions worth Rs 44,381 crore.