What does the Economic Survey 2021-22 say?
Overall economic activity has recovered to pre-pandemic levels & economy is well-poised for FY23, the survey says.
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New Delhi, Feb 1: Finance minister Nirmala Sitharaman tabled the Economic Survey 2021-22 in Parliament on Monday. It presents details of state of the economy ahead of the government's budget for the fiscal year beginning April 1, 2022.
Overall economic activity has recovered to pre-pandemic levels & economy is well-poised for FY23, the survey says.
Key highlights:
- Indian economy estimated to grow by 9.2 percent in real terms in 2021-22 (as per first advanced estimates) subsequent to a contraction of 7.3 percent in 2020-21.
- GDP projected to grow by 8- 8.5 percent in real terms in 2022-23.
- The year ahead poised for a pickup in private sector investment with the financial system in good position to provide support for economy’s revival.
- Economic impact of “second wave” was much smaller than that during the full lockdown phase in 2020-21, though health impact was more severe.
- Government of India’s unique response comprised of safety-nets to cushion the impact on vulnerable sections of society and the business sector, significant increase in capital expenditure to spur growth and supply side reforms for a sustained long-term expansion.
External Sectors:
- There was significant pickup in net services with both receipts and payments crossing the pre-pandemic levels, despite weak tourism revenues.
- India’s merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
- As of end-November 2021, India was the fourth largest forex reserves holder in the world after China, Japan and Switzerland.
Inflation:
- Consumer inflation within target; high wholesale inflation is partly due to base effect and should ease out.
- Imported inflation a concern, especially from high energy prices
Fiscal Developments:
- The revenue receipts from the Central Government (April to November, 2021) have gone up by 67.2 percent (YoY) as against an expected growth of 9.6 percent in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals).
- Gross Tax Revenue registers a growth of over 50 percent during April to November, 2021 in YoY terms. This performance is strong compared to pre-pandemic levels of 2019-2020 also.
- During April-November 2021, Capex has grown by 13.5 percent (YoY) with focus on infrastructure-intensive sectors.
- Sustained revenue collection and a targeted expenditure policy has contained the fiscal deficit for April to November, 2021 at 46.2 percent of BE.
- With the enhanced borrowings on account of COVID-19, the Central Government debt has gone up from 49.1 percent of GDP in 2019-20 to 59.3 percent of GDP in 2020-21, but is expected to follow a declining trajectory with the recovery of the economy.
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