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Home / Budget / News /  Unfolding this week: Budget, Economic Survey, GDP estimates

Every Monday, Mint’s Plain Facts section features key data releases and events to track in the coming week. This week promises to be eventful, with the Union budget to be presented on Tuesday. A day before this, the economic survey will be tabled in Parliament. Updated gross domestic product (GDP) data for 2020-21 is also due. The Winter Olympics is set to begin in Beijing amid controversies. Here’s more:

Union Budget

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Union finance minister Nirmala Sitharaman is set to present her fourth budget in Parliament at 11am on Tuesday. All eyes will be on key announcements such as spending plans, medium-term fiscal framework, tax changes, and relief for covid-hit industries. But there will be interest in other aspects of the speech as well.

At 160 minutes, Sitharaman’s 2020 budget speech was the longest in independent India’s history, breaking her own record of the previous year by 20 minutes. However, her 2021 speech was only 100 minutes long. Sitharaman has become famous for long budget speeches, but lags Arun Jaitley in terms of word count. His 18,604-word speech in 2018 was shorter only than the historic 1991 budget speech delivered by Manmohan Singh.

Budget speeches usually last 90-120 minutes. Will the tough economic backdrop, with Sitharaman expected to walk the fine line between spending and fiscal consolidation, lead to another long speech?

Economic Survey

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The finance minister will present this year’s Economic Survey in Parliament on Monday. This document sets the context for the budget while highlighting the government’s initiatives undertaken this fiscal year. Since former chief economic adviser (CEA) Arvind Subramanian took office, the survey became a two-volume report, which was continued by his successor Krishnamurthy Subramanian. The second volume provided a glimpse of the state of the economy and sectoral performances, while the first was forward-looking. It delved into problems plaguing the economy and allowed the CEA to sneak in bold suggestions.

As the CEA’s office was vacant until Friday, this year’s survey has been prepared by the principal economic adviser, Sanjeev Sanyal. Reports suggest the survey will go back to being a single-volume report.

GDP Estimates

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Provisional estimates released by the government last May showed India’s GDP had contracted by a historic 7.3% in FY21 which was impacted by one of the strictest covid-19 lockdowns in the world. But the provisional estimates are based on fewer data sets. Some economists have argued the initial set of numbers relies heavily on corporate performance and, as the impact of the lockdown was more severe among the non-listed companies and in the informal sector, the contraction may have been much more.

The government is set to release the first revised estimates for FY21 on Monday. These will take into account detailed estimates of various sectors and public finance, giving a clearer picture of the economy. In the last two years, the first revised estimates have downgraded GDP growth numbers from provisional estimates and this cannot be ruled out for 2020-21.

FMCG Earnings

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Revenue growth of most fast-moving consumer goods (FMCG) companies is likely to remain somewhat flat in the December quarter owing to a high base and the adverse impact of commodity inflation in key categories despite companies increasingly deciding not to bite the bullet and hike prices.

Leading FMCG firm Dabur, whose results are due on Wednesday, is likely to witness revenue growth, not just due to higher volumes but also because of the price hikes of approximately 5% in the last six months. Analysts at ICICI Securities expect a 210 basis point dip in gross margin on the back of high crude-based commodities. The bottomline numbers are likely to decline by 3%. ITC will announce its third-quarter results on Thursday. The company is likely to see revenue growth of 6.7% on the back of recovery in hotels, and paperboard business, said the ICICI Securities report. It is also expected to gain market share within the cigarette space.

Winter Olympics

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The Winter Olympics begins on Friday in Beijing, making the Chinese capital the first city to host both summer and winter editions. This is the third Olympics in a row to be hosted in East Asia, after the 2018 Winter Olympics and 2020 Summer Olympics.

Beijing’s bid had drawn criticism around the proposed venue not having reliable snowfall and the great cost and environmental consequences of transporting snow to the venue. Later, China faced backlash because of human rights abuses. The US is leading a diplomatic boycott, along with Australia and several European countries. This only means government officials will not be present and it does not affect the participation of athletes. India has not joined the boycott, but won’t send any high-level political delegation either.

Jammu and Kashmir’s Arif Khan is India’s only entrant to the games. India has never won any medal at the Winter Olympics.

 

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