Finance Minister Nirmala Sitharaman will present the Economic Survey for 2021-22 in Parliament on January 31, Monday, one day before she tables Union Budget 2022. The Economic Survey is expected to be a single volume report this year, projecting a growth of around 9 % for the next financial year.
Here’s a lowdown on the significance of the document and what can be expected this year.
What is the Economic Survey
The Economic Survey is the official report card of the country’s economy and is tabled in Parliament by the Union Finance Minister a day before the presentation of the Union Budget,
The document contains a detailed account of the state of the economy, its prospects and policy changes. The Economic Survey carries sectoral overviews and comments on reform measures needed. The Survey’s outlook serves as a marker for future policy moves as well.
ALSO READ | Budget 2022: Will Finance Minister Nirmala Sitharaman Announce Tax Benefits for Work from Home?
It puts out economic growth forecasts and gives a detailed account of why the economy will accelerate or decelerate. At times, it also argues for specific reform measures.
The Economic Survey was first presented in 1950–51, and until 1964, was tabled in the Lok Sabha along with the Union Budget. Since 1964, the Economic Survey has been released every year on the eve of Budget presentation. The only aberration was 2021 when the Survey was presented two days before the Union Budget.
Who Prepares the Economic Survey
The Economic Survey is traditionally authored by the Chief Economic Adviser. But this year, the document is being prepared by the Principal Economic Advisor and other officials since the position of CEA was filled, by V Anantha Nageswaran, just a couple of days before the presentation of the Economic Survey and Union Budget. The CEA is a Secretary-rank official attached to the Finance Ministry.
ALSO READ | Budget 2022: Will Homebuyers’ Get Additional Tax Benefits?
Even the first Economic Survey of the Narendra Modi government, presented by then finance minister Arun Jaitley in July 2014, was prepared by senior economic advisor Ila Patnaik.
At that time, the post of the CEA was vacant following the appointment of Raghuram Rajan as RBI Governor. Later, Arvind Subramanian moved in as CEA in October 2014. Anantha Nageswaran’s immediate predecessor KV Subramanian completed his three-year term as CEA on December 6 last year.
What to Expect in Economic Survey This Year
Economic Survey 2021-22 is likely to project a growth of around 9% for the next financial year. The Indian economy, as per the advance estimates of the National Statistical Office (NSO), is expected to record a growth of 9.2% during the current fiscal, lower than 9.5% projected by the RBI.
The economy had contracted by 7.3% during 2020-21 following the Covid-19 pandemic and the subsequent nationwide lockdown to check the spread of the virus. The impact of Covid-19 on the economy was comparatively less during the current financial year as lockdowns were local in nature and did not cause large-scale disruption in economic activity.
ALSO READ | Budget 2022: Will Govt Increase Standard Deduction to Rs 1 Lakh to Help the Salaried?
As per the recent report of the World Bank, India is projected to grow at 8.7%, while India Ratings and Research said it expects India’s gross domestic product (GDP) to grow 7.6% on-year in FY23. As per an ICRA report, the country’s real GDP is likely to maintain a 9% growth rate in fiscal 2022 and 2023 amid concerns over the Omicron variant.
The Economic Survey 2020-21, released in January last year, had projected GDP growth of 11% during the current financial year ending March 2022.
Are the Recommendations Binding?
The government is not bound to follow the recommendations made in the Economic Survey as the document serves more as a policy guide. The Economic Surveys in the past have favored policy moves seen as contradicting the political ideology of the party in power.
These do not necessarily serve as pointers on what to expect from the Budget document. On many occasions, policy changes recommended in the Economic Survey find no place in Budget proposals.
Read all the Latest News, Breaking News and Coronavirus News here.
,