The Union Minister for Finance & Corporate Affairs has presented the Economic Survey 2021-22 in Parliament.
What is the Economic Survey?
- The Economic Survey is a report on the state of the economy in the past one year, the key challenges it anticipates, and their possible solutions.
- One day before the Union budget, the Chief Economic Adviser (CEA) releases the Economic Survey.
- The document is prepared by the Economic Division of the Department of Economic Affairs (DEA) , Ministry of Finance.
- Once prepared, the Survey is approved by the Finance Minister.
- The first survey was presented in 1950-51. Until 1964, the document was presented along with the Budget.
Why is the Economic Survey significant?
- The Economic Survey is a crucial document as it provides a detailed, official version of the government’s take on the country’s economic condition.
- It can also be used to highlight some key areas of focus — for example, in 2018, the survey presented by the then CEA Arvind Subramanian was pink in colour, to stress on gender equality.
Is it binding on the government?
- The government is NOT constitutionally bound to present the Economic Survey or to follow the recommendations that are made in it.
- If the government so chooses, it can reject all suggestions laid out in the document.
- But while the Centre is not obliged to present the Survey at all, it is tabled because of the significance it holds.
Highlights of the Economic Survey 2021-22
 State of the Economy
- Economic growth: 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 growth: GDP projected to grow by 8- 8.5 percent in real terms in 2022-23.
- Agriculture and allied sectors: They are expected to grow by 3.9 percent; industry by 11.8 percent and services sector by 8.2 percent in 2021-22.
 Fiscal Developments
- Revenue receipts: These have gone up by 67.2 percent (YoY) as against an expected growth of 9.6 percent in the 2021-22 Budget Estimates.
- Gross Tax Revenue: It registered a growth of over 50 percent during April to November, 2021 in YoY terms.
- Borrowings: 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/
 External Sectors
- India’s merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
- Net capital flows: These were higher at US$ 65.6 billion in the first half of 2021-22, on account of continued inflow of foreign investment, revival in net external commercial borrowings, higher banking capital and additional special drawing rights (SDR) allocation.
- India’s external debt: It rose to US $ 593.1 billion at end-September 2021, from US $ 556.8 billion a year earlier, reflecting additional SDR allocation by IMF, coupled with higher commercial borrowings.
- Foreign Exchange Reserves: It touched US $ 633.6 billion in Dec 2021 making India the fourth largest forex reserves holder in the world after China, Japan and Switzerland.
 Monetary Management and Financial Intermediation
- Repo was maintained: The liquidity in the system remained in surplus. Repo rate was maintained at 4 per cent in 2021-22.
- GSAP: RBI undertook various measures such as G-Sec Acquisition Programme and Special Long-Term Repo Operations to provide further liquidity.
- NPAs declined: The Gross Non-Performing Advances ratio of Scheduled Commercial Banks (SCBs) declined from 11.2 per cent at the end of 2017-18 to 6.9 per cent at the end of September, 2021.
 Prices and Inflation
- Control over food inflation: The decline in retail inflation was led by easing of food inflation. Proactive measures were taken to contain the price rise in pulses and edible oils.
- Supply constraints eased: Effective supply-side management kept prices of most essential commodities under control during the year.
- Fuel price reduction: Reduction in central excise and subsequent cuts in Value Added Tax by most States helped ease petrol and diesel prices.
 Sustainable Development and Climate Change
- Sustainable development: India’s overall score on the NITI Aayog SDG India Index and Dashboard improved to 66 in 2020-21 from 60 in 2019-20 and 57 in 2018-19.
- Rise in forest cover: India has the tenth largest forest area in the world. In 2020, India ranked third globally in increasing its forest area during 2010 to 2020. In 2020, the forests covered 24% of India’s total geographical, accounting for 2% of the world’s total forest area.
- Plastic waste management (PWM): In August 2021, the PWM Amendment Rules, 2021, was notified which is aimed at phasing out single use plastic by 2022.
- Extended Producer Responsibility for plastic: Draft rules for plastic packaging was notified.
- Pledge on Net-Zero Emissions: The PM participated at COP-26 in Glasgow. He announced ambitious targets to achieve net-zero by 2070.
 Agriculture and Food Management
- Minimum Support Price (MSP) policy: It is being used to promote crop diversification.
- Allied sector growth: Allied sectors including animal husbandry, dairying and fisheries are steadily emerging to be high growth sectors and major drivers of overall growth in agriculture sector.
- Food security: Government has further extended the coverage of food security network through schemes like PM Gareeb Kalyan Yojana (PMGKY).
- Income Support: Timely release of PM-KISAN Funds.
 Industry and Infrastructure:
- Index of Industrial Production (IIP): It grew at 17.4 percent (YoY) during April-November 2021 as compared to -15.3 percent in April-November 2020.
- Extent of road construction per day: This has increased substantially in 2020-21 to 36.5 Kms per day from 28 Kms per day in 2019-20 – a rise of 30.4 percent.
- Production Linked Incentive (PLI) Scheme: It gave a major boost to infrastructure-both physical as well as digital.
 Services Sector
- Growth despite pandemic: Overall service Sector GVA is expected to grow by 8.2 percent in 2021-22.
- Opening up of space sector to private players: Major government reform.
- India becomes start-up hub: India has become 3rd largest start-up ecosystem in the world after US and China.
- Unicorns in India: 44 Indian start-ups have achieved unicorn status in 2021 taking overall tally of unicorns to 83, most of which are in services sector.
 Social Infrastructure and Employment
- Universal vaccination: 157.94 crore doses of COVID-19 vaccines administered (as on 16th January 2022).
- Employment recovery: As per the quarterly Periodic Labour Force Survey (PFLS) data up to March 2021, employment in urban sector affected by pandemic has recovered almost to the pre-pandemic level.
- Expenditure on social services (health, education and others): This expenditure by Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 8.6% in 2021-22.
- National Family Health Survey-5:
- Total Fertility Rate (TFR) came down to 2 in 2019-21 from 2.2 in 2015-16
- Infant Mortality Rate (IMR), under-five mortality rate and institutional births have improved in 2019-21 over year 2015-16
- Jal Jeevan Mission (JJM): Under this, 83 districts have become ‘Har Ghar Jal’ districts.
- Continuance of MGNREGS: Increased allotment of funds to Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) to provide buffer for unorganized labour in rural areas during the pandemic.