From UPSC perspective, the following things are important :
Prelims level : Terms used in Economic Survey
Mains level : Paper 3- Overview of the Economic Survey 2020-21
The pandemic has been leaving its imprint various aspects of our lives and Economic Survey is no different. This year’s Economic Survey focuses on the recovery path of the economy disrupted by the pandemic. The article takes an overview of the survey and also mentions the missing areas.
Focus on a recovery path
- The Economic Survey analyses the broad trends at the macro level and the profiling of the initiatives across various economic activities.
- This year, the Economic Survey focuses on the recovery path after initial derailment and the losses suffered by the Indian economy due to the pandemic.
- The recovery is expected to follow a V-shaped path.
- The Survey advocates countercyclical fiscal policies based on the premise that growth leads to debt sustainability.
- The Survey brings together various relevant factors that have both a short and long-term impact on the economy and the budget.
- This year’s Survey focuses on enhanced public healthcare spending and demonstrates how effective it has been in slashing out-of-pocket expenditures in the recent past.
- It also shows the brilliant performance under the Pradhan Mantri Jan Arogya Yojana (PM-JAY) and the improved outcomes in states that have implemented the programme.
- With focus on basic needs, the Survey has brought back national attention on the fundamental developmental paradigm.
- The idea of analysing inequalities in times of recovery is a reassuring premise to move on with.
Comparison with past Economic Surveys
- If we consider the last two Economic Surveys, the introduction of new concepts and approaches has been quite evident.
- In the Survey for 2018-19, the idea of “nudge” helped provide recognition of the importance of social behaviour change for any policy to succeed.
- This led to the adoption of transformative approach in the Swachh Bharat Mission and Beti Bachao Beti Padhao initiative that integrated behavioural insights.
- Another powerful idea has been using technology to run and monitor welfare schemes.
- The Economic Survey 2019-20 talked overwhelmingly about the importance of wealth creation, entrepreneurship, and financial markets in the economic development.
What the Survey misses
- The Survey should have focussed on a new narrative for trade.
- Apart from explaining the missing value chains and integration with South and Southeast Asia, the survey should have analysed the high cost of tariffs when 38 per cent of our exports are import-dependent.
Consider the question “In the wake of economic disruption caused by the pandemic, India needs a new narrative for trade. However, India faces the challenge of missing value chains and lack of integration with South and Southeast Asia. In light of this, suggest the policies India should adopt as new narrative for trade.“
Besides trade, FDI inflows and the accumulation of foreign exchange reserves has been remarkable this year. It is expected that India will emerge as an important link in the global value chain sector which has been visibly disrupted by the pandemic