Finance Minister Nirmala Sitharaman on January 29 tabled the Economic Survey Report 2021 in the Parliament. The Economic Survey 2020-21, authored by a team led by Chief Economic Adviser Krishnamurthy Venkata Subramanian, details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth. Here are all the key highlights of the report.
The economy, which was battered by the coronavirus lockdown, is expected to see a strong recovery in the 2021-22 fiscal year. For the full fiscal, the survey projected a contraction of 7.7 percent and V-shaped recovery in the next. GDP growth is seen expanding by 11 percent in 2021-22 fiscal (April 2021 to March 2022). The gross domestic product (GDP) contracted by a record 23.9 percent in April-June and by 7.5 percent in the second quarter.
The report said that the government is likely to miss its fiscal deficit target of 3.5 percent of gross domestic product this year. “There’s a need for more sustained and calibrated measures to facilitate the process of economic recovery in the new fiscal year,” it said.
Healthcare has taken the centre stage in the report. This path would entail a growth in real GDP by 2.4 percent over the absolute level of 2019-20 – implying that the economy would take two years to reach and go past the pre-pandemic level. “Key role of the government is to actively shape the structure of the healthcare market,” the survey said.
The survey said that initial COVID-related disruptions drove rising prices. CPI inflation from April-October 2020 was mostly driven by a substantial increase in price momentum, possibly due to the initial disruptions caused by the lockdown. CPI inflation averaged 6.6% in 2020-21 (April-Dec) and stood at 4.6% in Dec 2020, mainly driven by a rise in food inflation, which has increased from 6.7% in 2019-20 to 9.1% in 2020–21, owing to build up in vegetable prices,” it said.
The Economic Survey has slammed the Credit Rating Agencies’ methodology for allegedly undermining India’s sovereign credit ratings. It states that India’s sovereign credit rating does not reflect its fundamentals. The survey called for an overhaul of the sovereign rating methodology. “Never in the history of sovereign credit ratings has the 5th largest economy been rated as the lowest rung of investment-grade (BBB-Baa3),” the survey said, adding that India’s fiscal policy must not remain beholden to a noisy, biased measure of India’s fundamentals.
India is reaping the “lockdown dividend” from the preventive measures it adopted at the onset of the COVID-19 pandemic indicating its willingness to take short-term pain for long-term gain, said the Economic Survey tabled in Parliament on Friday. By estimating the natural number of cases and deaths expected across countries based on their population, population density, demographics, tests conducted, and the health infrastructure, the survey compares these estimates with actual numbers to show that India restricted the COVID-19 spread by 37 lakh cases and saved more than 1 lakh lives.
Backing government on the farm laws, Economic Survey 2021 said that the legislation will empower farmers in their engagement with processors, wholesalers, aggregators, large retailers and provide a level-playing field. “It will transfer the risk of market unpredictability from the farmer to the sponsor and enable access to modern technology. Due to the new law, 10,000 farmer producer organizations will be formed throughout the country which will bring together small farmers. The new farm laws are designed and intended primarily to benefit small and marginal farmers who constitute 85% of total farmers,” the survey said, adding that the new laws will herald a new era of market freedom which can go a long way in improvement of farmer welfare. (Image: AP)
The COVID-19 pandemic affected the residential property market during the April-June period last year but sales have improved in affordable homes segment since July onwards, reflecting the economic recovery in the real estate sector, according to the Economic Survey. The Economic Survey highlighted that the access to housing has improved in all states, with some exception, helped by schemes like the PMAY. “The access to housing has improved in all states, except urban areas in a few states. The inter-state disparities have also declined as the states having a low level in 2012 have gained more. However, the gaps in the levels across states have been large, especially in rural areas,” the document said.