Tatsat Chronicle Magazine

Budget 2022: Economic Survey Forecasts 8-8.5% Economic Growth in FY2022-23

Tabled in Parliament by finance minister Nirmala Sitharaman today, the economic survey suggests the GDP growth rate next fiscal to be lower than the rate, 9.2 per cent, projected for current fiscal
January 31, 2022
Budget 2022
Finance Minister of India, Nirmala Sitharaman in Lok Sabha. Photo Credit- Sansad TV

The Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman on January 31, 2022, tabled the Economic Survey 2021-22 prepared by Principal Economic Adviser Sanjeev Sanyal, which predicted a GDP growth of 8-8.5% for the upcoming financial year. The Indian economy is set to grow at 9.2% in the current fiscal, the survey said. India’s GDP grew by 8.4% in the July-September quarter. The GDP growth rate for the ongoing financial year 2021-22 is estimated at 9.2 per cent.

On the first day of the Budget session of Parliament, President Ram Nath Kovind addressed the joint sitting of both the Houses and union finance minister Nirmala Sitharaman tabled the economic survey. The minister will present the union budget tomorrow, February 1, and the first half of the budget session will continue will February 11. After nearly a month-long recess, the second part of the session will begin on March 14 and conclude on April 8.

The President praised the government’s steps in ensuing free foods to the needy during the pandemic.

According to the economic survey, all macro indicators indicated that the economy was well-positioned to face challenges, aided by pick-ups in farm and industrial output growth. The survey focuses on supply-side issues to improve the resilience of the Indian economy.

India, which is set to become the world’s fastest-growing major economy and maintain it for at least two years, has the fiscal space to do more to boost the economy, says the survey. Its projections are based on the conditions that there will be no further debilitating pandemic-related economic disruption, the monsoon will be normal, and the withdrawal of global liquidity by major central banks will be orderly. It also depends on oil prices remaining at the $70-$75 per barrel level, as well as global supply chain issues subsiding. By increasing spending, the budget is expected to prioritise growth over fiscal consolidation.

An annual document prepared by the Ministry of Finance under the guidance of the Chief Economic Advisor (CEA), the Economic Survey provides a summary of annual economic development across the country during the current financial year. On January 28, the government-appointed Dr V Anantha Nageswaran as the new CEA. replacing KV Subramanian whose three-year term ended in December.

Highlights: Economic Survey 2021-22

  • Under Barbell Strategy used to cushion Covid-19, “a combination of safety nets for vulnerable sections and real-time information-based policy adjustment was used to tackle the challenges posed by the pandemic.”
  • Pandemic: government’s supply side reforms preparing economy for sustained long-term expansion
  • Capex grows by 13.5 percent (yoy) during April-November 2021
  • Foreign exchange reserves touch US$ 633.6 billion on 31 December 2021
  • Macroeconomic stability indicators suggest economy well placed to take on challenges of 2022-23
  • Massive growth in revenue receipts
  • Social sector: expenditure on social services as proportion of GDP increases to 8.6 percent in 2021-22 (be) as compared to 6.2% in 2014-15
  • With revival of economy, employment indicators bounced back to pre-pandemic levels during last quarter of 2020-21
  • Merchandise exports and imports rebound strongly and surpass pre-covid levels
  • Bank credit accelerates to 9.2% as on 31 December 2021
  • Rs 89,066 crore raised via 75 IPOs; significantly higher than in any year in last decade
  • CPI-C inflation moderates to 5.2% in 2021-22 (April-December)
  • Food inflation averages at a low of 2.9% in 2021-22 (April-December)
  • Effective supply side management keeps prices of most essential commodities under control
  • Agriculture: GVA registers buoyant growth of 3.9% in 2021-22
  • SDGs: Overall scrore on NITI Aayog dashboard improves to 66 in 2020-21
  • Climate finance will remain critical to successful climate action by developing countries, including India, says the survey