What to look out for in the Economic Survey

What is the Economic Survey?

The Economic Survey is a flagship annual document which reviews the state of the Indian economy. It highlights the government’s policy initiatives, reviews the performance of development programmes and discusses the prospects of the economy in the short- and medium-term scenarios. Importantly, the survey projects the gross domestic product (GDP) growth, and provides an insight into the economic outlook for the country. It pinpoints the quality of policy responses needed under the prevailing economic situation. The survey is tabled in Parliament a day before the budget.

What are the key points to watch for?

In light of the pandemic, the trend analysis of various sectors of the economy such as agriculture, industrial production, services, construction, trade, and hotels needs to be closely watched. Also, analysis of employment levels, trade with the rest of the world, money supply, prices, infrastructure development and other relevant economic factors should be studied. The survey provides key inputs which influence the budget-making process. Considering the fact that it provides a detailed analysis of economic developments of the past financial year, it sets the context for the budget.

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What are some of the issues likely to be covered?

Keeping in mind that private final consumption expenditure, which constitutes 54.5% of the GDP, is still nowhere near pre-covid levels, the rationale behind low consumption demand may be analysed. Also, the performance of micro, small, and medium enterprises and contact -intensive sectors may be closely looked at.

What about GDP growth projections?

Based on data analysis relating to various sectors of the economy, the Economic Survey forecasts growth numbers for the Indian economy and gives the rationale for the same. It facilitates a healthy democratic debate by highlighting gaps if any, between the required policy measures and what is politically feasible. The first advance estimates by the government which serves as essential inputs for the Union budget have projected real GDP growth of 9.2% for 2021-22.

What  major  policy  gaps could be pointed out?

The survey might highlight the government’s compulsion to repeal the long-awaited farm reform measures. It may look at the need for speedier resolution of business disputes through judicial reforms and hint at the future course of action in this respect. The need for administrative reforms might also be discussed. A blueprint to improve the overall business environment to make India a $5 trillion economy may be provided.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH.