Watch Economic Survey 2022 Highlights: Complete Analysis
Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2021-22 in Parliament. Economic Survey is the official report card of the union government, giving a roadmap for the country's economy and spells the way forward.
This year, it holds major significance because of the economic upheavals owing to Covid-19 pandemic. It will also project India's gross domestic product growth for 2022-23.
Generally, the Economic Survey is presented a day before the Union Budget (on 1st February).
In this article, we are sharing with you all Key highlights of Economic Survey 2021-22.
Before, coming to the highlights, let us quickly take a note on some important information related to economic survey of India.
Who composes Economic Survey?
- Economic Survey is compiled by Chief Economic Advisor (Current- Dr V Anantha Nageswara) under the Ministry of Finance.
Who publishes it?
- It is published by the Department of Economic Affairs under the Ministry of Finance.
- Generally, It is available from one day before from the announce of the budget on the official website of the Ministry of Finance.
History of Economic Survey in India
- First economic Survey of India was published by the Government of India for the financial year 1950-51.
What does it include?
- It includes whole year's statistics of various sectors of Indian Economy.
- The Survey shows the highlights of various initiatives, programmes, and policies of the Indian governments.
What is the Significance of Economic Survey?
- Helps in future policy-making based on current statistics of the Indian Economy
- Helps in taking of right steps to achieve the various targets which include growth rate, fiscal deficit, Forex reserves etc.
- Helps in the Budget-making process for the upcoming financial Year.
Structure of Economic Survey
- Economic Survey 2021-22 consists of only one volume with 11 chapters.
- It covers all the sectors of the economy.
- It has a separate volume for the Statistical Appendix.
Highlights of Economic Survey 2021-22
We have come up with chapter-wise highlights of the Economic Survey 2021-22
1. State of the Economy
- Government's flexible and multi-layered approach is partly based on “Agile” framework that uses feedback-loops for monitoring of real-time data.
- For this, govt use eighty High Frequency Indicators (HFIs) in an environment of extreme uncertainty.
- As per first advance estimate, Indian economy is estimated to grow by 9.2% in real terms in 2021-22, subsequent to a contraction of 7.3% in 2020-21.
- GDP projection: Growth of 8% to 8.5% in real terms in 2022-23.
- As per IMF’s latest World Economic Outlook ,India’s real GDP is projected to grow at 9% in 2021-22 and 2022-23 and at 7.1% in 2023-2024, making India the fastest growing major economy in the world.
- Sectoral Trends:
- Agriculture and allied sectors: It is expected to grow by 3.9% in 2021-22
- Industry: It will grow by 11.8% in 2021-22
- Services sector: It will grow by 8.2% in 2021-22.
- Consumption is estimated to grow by 7.0% on demand side.
- Gross Fixed Capital Formation (GFCF): to grow by 15%.
- Exports will grow by 16.5% and imports by 29.4% in 2021-22.
- India’s Consumer Price Index inflation: 5.6% YoY in December 2021.
- Economic impact of “Covid's second wave” was much smaller than that during the full lockdown phase in 2020-21, though health impact was more severe.
- Government opted to use safety-nets for vulnerable sections on one hand while responding iteratively based on Bayesian-updating of information.
- Fiscal Developments
- Revenue receipts during April to November, 2021 have increased by 67.2% (YoY) as against an expected growth of 9.6% in the 2021-22 Budget Estimates.
- Gross Tax Revenue: It shows growth of over 50% during April to November, 2021 in YoY terms.
- Tax performance is strong as compared to pre-pandemic levels of 2019-2020.
- Gross monthly collections of GST have crossed 1 lakh crore mark consistently since July 2021.
- During April-November 2021, capital expenditure has grown by 13.5% (YoY), with focus in infrastructure-intensive sectors.
- Fiscal deficit for April-November 2021 has been contained at 46.2% of BE.
- Central Government debt is increased from 49.1% of GDP in 2019-20 to 59.3% of GDP in 2020-21.
- External Sectors:
- India’s merchandise exports and imports has rebounded strongly and surpassed pre-COVID levels during current financial year.
- Current account balance of India turned into deficit of 0.2% of GDP in the first half (H1) of 2021-22.
- Net capital flows: 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 increased from US $ 556.8 billion in 2020 to US $ 593.1 billion at end-September 2021.
- Foreign Exchange Reserves touched US $ 633.6 billion as of December 31, 2021.
- On November 2021, India was the fourth largest forex reserves holder in the world, after China, Japan and Switzerland.
- Top export destinations in April-November 2021: USA followed by UAE and China.
- Largest import sources for India in April-November, 2021: China, UAE and USA.
- Major Schemes & Initiatives to boost exports:
- Remission of Duties and Taxes on Exported Products (RoDTEP)
- Developing District as Export Hub
- Production-Linked Incentive (PLI) scheme for 14 sectors.
- Electronic Platform for Preferential Certificate of Origin (CoO)
- Infusion of capital in EXIM Bank
- Export Credit Guarantee Corporation of India (ECGC)
- Export Promotion Capital Goods (EPCG) Scheme
- Trade Infrastructure for Export Scheme (TIES)
- Market Access Initiatives (MAI)
- Special Economic Zone (SEZ) scheme
- Monetary Management and Financial Intermediation:
- Repo rate was maintained at 4% in 2021-22.
- RBI took various measures like G-Sec Acquisition Programme and Special Long-Term Repo Operations to provide liquidity in the market.
- Bank credit growth accelerated gradually from 5.3% in April 2021 to 9.2% as on 31st December 2021.
- Gross Non-Performing Advances ratio of Scheduled Commercial Banks (SCBs) declined from 11.2% at the end of 2017-18 to 6.9% in September, 2021.
- Net Non-Performing Advances ratio declined from 6% to 2.2%.
- Capital to risk-weighted asset ratio of SCBs increased from 13% in 2013-14 to 16.54% in September 2021.
- Return on Assets and Return on Equity for Public Sector Banks remain positive for the period ending September 2021.
- During April-November 2021, Rs. 89,066 crore was raised via 75 Initial Public Offering (IPO) issues.
- Sensex and Nifty touched peak at 61,766 and 18,477 respectively in October, 2021.
- Prices and Inflation:
- Average headline CPI-Combined inflation decreased to 5.2% in 2021-22 (April-December) from 6.6% in 2020-21.
- Decline in retail inflation was due to ease of food inflation.
- Food inflation averaged at a low of 2.9% in 2021-22 as against 9.1% in 2020-21.
- Measures were taken to control price rise in pulses and edible oils.
- Reduction in central excise and subsequent cuts in Value Added Tax by most States eased petrol and diesel prices.
- Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5% during April to December 2021-22.
- Divergence between CPI-C and WPI Inflation has been observed, that can be explained by factors like:
- Variations due to base effect
- Difference in scope and coverage of the two indices
- Price collections
- Items covered and difference in commodity weights.
- Sustainable Development and Climate Change:
- India’s score on the NITI Aayog SDG India Index and Dashboard: 66 in 2020-21. The rank was 60th in 2019-20
- Number of Front Runners (scoring 65-99): 22 States and UTs in 2020-21
- Across North East India, 64 districts were Front Runners and 39 districts were Performers in the NITI Aayog North-Eastern Region District SDG Index 2021-22.
- India has tenth largest forest area across the world.
- India ranked 3rd globally in increasing its forest area during 2010 to 2020.
- Forest covers 24% of India’s total geographical, that accounts for 2% of the world’s total forest area.
- Compliance status of Grossly Polluting Industries (GPIs) in the Ganga and its tributaries improved from 39% in 2017 to 81% in 2020.
- New Measures:
- Plastic Waste Management Amendment Rules, 2021, was notified to phase out single use plastic by 2022
- Draft regulation on Extended Producer Responsibility for plastic packaging was notified.
- PM Modi announced ambitious targets to be achieved by 2030 to enable further reduction in emissions at COP26 in Glasgow in November 2021
- ‘LIFE’ (Lifestyle for Environment) movement was underlined.
- India continued significant climate leadership at International Solar Alliance (ISA), Coalition for Disaster Resilient Infrastructure (CDRI) and Leadership Group for Industry Transition (LeadIT Group).
- Agriculture and Food Management:
- Agriculture sector registered growth of 3.6% in 2020-21 and 3.9% in 2021-22.
- Minimum Support Price (MSP) policy to promote crop diversification is used extensively.
- Net receipts from crop production have increased by 22.6% in the recent Situation Assessment Survey (SAS) compared to SAS Report of 2014.
- Livestock sector has grown at CAGR of 8.15% over the last five years. It has been a stable source of income across groups of agricultural households accounting for about 15% of average monthly income.
- Government also facilitated food processing measures like subsidized transportation and support for formalization of micro food enterprises.
- India runs one of the largest food management programmes in the world.
- Government has extended coverage of food security network through schemes like PM Gareeb Kalyan Yojana (PMGKY).
- Industry and Infrastructure:
- Index of Industrial Production (IIP): It grew at 17.4% (YoY) during April-November 2021.
- Capital expenditure for Indian railways increased to Rs. 155,181 crores in 2020-21 and it has been budgeted to further increase to Rs. 215,058 crores in 2021-22, which is five times increase in comparison to 2014 level.
- Extent of road construction per day increased 30.4% to 36.5 Kms per day in 2020-21 from 28 Kms per day in 2019-20.
- Net profit to sales ratio of large corporates reached an all-time high of 10.6% in July-September 2021-22.
- Production Linked Incentive (PLI) scheme gave major boost to physical as well as digital infrastructure, along with measures to reduce transaction costs and improve ease of doing business, would support the pace of recovery.
- Overall service Sector GVA is expected to grow by 8.2% in 2021-22.
- GVA of services crossed pre-pandemic level in July-September 2021-22 but GVA of contact intensive sectors like trade, transport, etc. still remain low.
- During first half of 2021-22, service sector received over US$ 16.7 billion FDI, that accounts for almost 54% of total FDI inflows into India.
- IT-BPM services revenue reached US$ 194 billion in 2020-21, adding 1.38 lakh employees.
- Major government reforms in this:
- removing telecom regulations in IT-BPO sector
- opening up of space sector to private players.
- 100% FDI flow in telecom sector.
- India has become 3rd largest start-up ecosystem of the world after US and China.
- New recognized start-ups increased from 733 in 2016-17 to over 14000 in 2021-22.
- A total of 44 Indian start-ups bagged unicorn status in 2021 taking overall tally of unicorns to 83.
- Social Infrastructure and Employment:
- Covid vaccination:
- Union Budget 2021-22 has allocated 35,000 crore for procurement of vaccines under COVID-19 Vaccination Program.
- 156.76 crore doses of COVID-19 vaccines has been registered as on 16th January 2022
- With this, 93% of 18 year and above aged persons have been vaccinated with first dose and about 70% with second dose.
- As per quarterly Periodic Labour Force Survey (PFLS) data, employment in urban sector affected by pandemic has recovered almost to the pre-pandemic level.
- Gross enrolment ratio in higher education reached 27.1% in 2019-20.
- Expenditure on social services (health, education and others) by Centre and States as a proportion of GDP increased to 8.6% in 2021-22 (BE)
- As per 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) improved.
- 83 districts have become ‘Har Ghar Jal’ districts under Jal Jeevan Mission.
- Increased allotment of funds to Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) to provide buffer for unorganized labor in rural areas during Covid.
- Tracking Development through Satellite Images & Cartography
- The Economic Survey 2021-22 saw plethora of information from satellites, drones, mobile phones and other sources.
- The chapter saw India’s night-time luminosity comparison between 2012 and 2021 using satellite images.
- Maps have been created by combining satellite data over the course of 12 month period in each year.
- Components included under this:
- Physical as well as financial infrastructure development in India.
- Expansion of national highways, airports, commercial bank branches, metros, etc.
- Change in net sown area of India over the last 15 years.
- Comparison of Kharif crop cycle in Moga district, Punjab during 2005 and 2021.
- Shift of Kharif sowing cycle by around two-to-three weeks causing the Kharif harvest to almost coincide with Rabi sowing in November.
- Population density of select Indian cities
- Wasteland redeployment in Andhra Pradesh and Gujarat.
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