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Economic Survey Key highlights2021-22

Economic survey is prepared by a team headed by Chief Economic Advisor under Finance ministry. As this year Dr. V. Anantha Nageswaran was appointed as the CEA few days back, ES was prepared under a team headed by the Principle economic Advisor Mr. Sanjeev Sanyal .

Journey of economic Survey 

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4 prong Approach Adopted by indian Government:

  1. Short term approach

  2. Medium term fiscal stability

  3. Structural and supply side reforms

  4. Process reforms

 

Journey of Economic survey Structural changes in the Economic survey:

  • 1956: ES presentation started with budget paper which was simple, small, and factual document

  • 1970: It became more substantial

  • 1980: it started publishing separately from budget

  • 1991-92: first time represented in two volume followed by one volume again

  • 2008: Changes in representation from sectoral to thematic.

  • 2014: its presentation in two volumes started: thematic and traditional/ sectoral chapter.

  • 2022: main volume: text; second: now statistical appendix.

Basic Growth Indicators

Key highlights:

  1. Revival of economy to pre pandemic years, shallower slow down in second wave of pandemic

  2. Estimated GDP: 9.2%, after a contraction to 7.3% in 2020-21

  3. Agriculture sector saw growth, despite slowing down.

  4. Industries and other sector saw contraction and then revival

  5. Services sector took a hard hit due to lockdown

 

Supply side indicators:

  1. Government consumption: Nearly reaching pre pandemic level.

  2. Private consumption: still lags behind.

  3. Gross FCR: recovered but due to government spending

 

Global economy challenges:

  1. Likely withdrawal of liquidity in major central banks

  2. Oil prices went up.

 

Macro indicators:

  1. Fiscal performance: 

    1. April-november 2021: very sharp increase in tax and non tax revenue collection, significantly above pre pandemic levels.

    2. Fiscal deficit is less than pre pandemic in nominal, also Primary deficit

    3. Fiscal deficit: 46%

  2. Financial sector:

    1. GNPA, NNPA: declining

    2. CAR: is increasing for banks, thus indicating more stability

    3. Growth:though declining bu just in recent times started ticking up

    4. Capital market: Resource mobilization through IPO: april-december reached all time records.

    5. Increasing risk taking appetite: registered companies/ startup: 2016-17 from very concentrations in delhi, mumbai and bengaluru and by 2021 end: it is scattered across the country with at least 550 districts with one startup at least even in the north east.

  3. External sector:

    1. BOP: 

    2. FOrex: 13.2 months of imports @$634bn

  4. Inflation:

    1. 2021: supply chain disruptions kicked up CPI but as of now CPI backa t 5.6 %

    2. Whereas WPI is at 13%.

    3. Retail prices of tomato and onion: face massive spikes due to:

      1. Seasonality, cyclical due to harvesting seasons

      2. Irregularity: weather shocks.

  5. Vaccination status**: new indicator amid pandemic

    1. 93% adult population : first dose

    2. 75% adult population: second dose

 

Economic outlook 2022-23:

  1. Robust growth, @8-8.5% REal GDP based on:

    1. No lockdowns

    2. Normal monsoon

    3. Global supply chain disruption will remains but easing over time

    4. Liquidity withdrawal

    5. Oil prices: 70-75

  2. Forecast:

    1. IMF: India, one of the few country whose forecast ws increased

    2. Indian will be the world fastest economy

India's Strategy

India strategy:

  1. Barbell strategy: in unpredictable environment, combine two different strategy (leg) to try and hedge in both direction

    1. Can be used in short as well as longer strategy

    2. How we used:

      1. In short term;

        1. Safety net: giving bufferto poor, vulnerable sectors, raping up of liquidity support,to msme, largest food program and other social services.

          1. Other social program who might not be a part f covid strategy but aided in fighting the pandemic: PM awas yojana has transformed some of the cities like tripura

          2. Jan Jeevan mission: telangana, bihar, north east, ladakh have done tremendously well. Ladakh less than 15% recently to 60-70% tap water connection have done well.

        2. Agile framework: Tracking dtaa and response quickly

          1. High frequency indicator: approximately 80 such indicators, Sharp Dip and revival were seen.

          2. In passenger intensive area recovery has not yet achieved

      2. Supply side barbell:

        1. Flexibility and innovation:

          1. Deregulation of sectors: space, drone, telcom rule liberalization, 

          2. Privatization 

          3. Factor market reforms

          4. Process reform in government procurement

        2. Improving resilience:

          1. Atma Nirbhar bharat

          2. Support for domestic manufacturing 

          3. Climate change: investment to renewable energy

Process reforms:

  1. GEM portal: it was used to comparison with amazon and flipkart and thus saving for the government 

  2. Patent application process: increasing in the application and granting of approval: increase in Indian resident Patents, however India is far far behind its Global peers.

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Geo Spatial Data

Geospatial data have been used to highlight:

  1. Tremendous increase in night time luminosity

  2. National highway almost doubles

  3. Airport infrastructure dramatic increase

  4. 2021: commercial bank spread have been enormous though went slight down due to mergers

  5. Spread of metro inftasrtcutre

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Agriculture and crop cycle:

  • Kharif cycle have moved 2-3 weeks thus decrease time in kharif and rabi crop thus forcing farmers to burn the land and in turn aiding to pollution

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