The Economic Survey is back to its true and tested format

The Economic Survey is supposed to be a comprehensive report that gives an overview of the current economic situation of a country. However, while it has traditionally been focused in India on recapping economic performance, over the years, it has evolved into a platform for chief economic advisers (CEAs) to opine and propose future reforms and set the tone for the Union budget that follows. Despite being appreciably forward-looking in its vision, historically, the survey’s proposals have rarely been reflected in actual budget decisions, with the result that these surveys ended up becoming a collection of longish opinion pieces on the Indian economy and economic matters.

But such things change. The latest Economic Survey, like last year’s, is a refreshing return to its tried and true format. This classic template focuses more on hard facts and less on opinions, offering a comprehensive overview of the economy’s performance over the last year. It, however, also highlights the reforms undertaken by the incumbent government in the previous eight years, which will shape India’s growth trajectory in the medium term.

There are 12 chapters in the survey, including two new ones: ‘Social Infrastructure and Employment: Big Tent’ and ‘Climate Change and Environment’. Overall, Economic Survey 2022-23 is a reflection of the government’s commitment to India’s growth and development. There are three important things about the survey which we would like to highlight.

One, amid two years of covid chaos and the Russia-Ukraine conflict in the third year, what kind of economic revival is the survey projecting for 2022-23 and 2023-24? These figures are sure to be the most talked about from the survey. It predicts a 7% real growth for 2022-23. For 2023-24, the survey predicts growth in a range of 6% to 6.8%. This prediction is likely to be widely accepted. It aligns with the International Monetary Fund’s latest World Economic Outlook forecast (also released yesterday) of 6.8% growth for 2022-23 and 6.1% for 2023-24. But, the good news is farther on the horizon, as India is projected to return to a growth rate of 6.8% in 2024-25. Despite the widening of its current account deficit and increased inflationary pressures worldwide, India continues to reign as the world’s fastest-growing major economy, outpacing growth in emerging and developing Asia. It even outpaces projections for China’s economy, which is set to grow at 5.2% in 2023-24 and 4.5% in 2024-25.

Two, the survey has also highlighted that India’s progress in creating social infrastructure is a shining example of the government’s commitment to improving the lives of its citizens. Economic Survey 2020-21 had developed a Bare Necessities Index (BNI). Based on five dimensions, i.e., water, sanitation, housing, micro-environment and other services, it was a compilation of 26 indicators. As indicated by our BNI at that time, in comparison with 2012, access to basic needs improved in all states of the country in 2018. Had the same exercise been carried out in this survey, there would have been drastic improvements despite covid. As pointed out by this year’s survey, the government’s spending on the social sector has seen a massive uptick. The social-sector expenditure outlay of the Centre and state governments was ₹12.8 trillion in 2018-19. It has increased steadily to stand at ₹21.3 trillion in 2022-23 (budget estimate).

The covid pandemic essentially took away two years of progress on our sustainable development goals (SDGs) and other developmental indicators. However, the ground lost in terms of social sector improvements due to the pandemic has largely been recovered. The findings of the Economic Advisory Council to the Prime Minister (EAC-PM) are also in line with this assertion. For instance, as per the EAC-PM, the all-India poverty ratio in 2020-21 stood at 17.9%, compared to 21.9% in 2011-12, with lower poverty in urban India than rural. Poverty ratios have declined, although the pandemic has limited their quantum.

As the survey points out, India is entering a new era of growth, where its citizens can look forward to a better quality of life with better-equipped schools, affordable healthcare, and increased formal employment opportunities. Women’s collectives have also been empowered, which can help ensure that the country’s growth is inclusive and sustainable.

Three, the survey highlights the continuity of reforms in India. It compares the reform story of the last eight years to the 1998-2002 period. In the past eight years, the Indian government has taken bold steps in revamping its approach to economic reforms. Instead of just focusing on product and capital market spaces, the reforms now aim to make everyday life easier and improve the economy’s overall efficiency. As the survey suggests, the strategy is centred around “creating public goods, fostering trust-based governance, working hand in hand with the private sector, and enhancing agricultural productivity". The recent introduction of the Jan Vishwas Bill in the Lok Sabha is one of many examples of how the government is promoting both the ease of doing business and ease of living.

Ever since Nirmala Sitharaman became finance minister, all surveys have more or less been in tune with the government’s broad intentions. Even though they may not divulge what the budget will contain, they are on the same page. And even more so with this Economic Survey.

Bibek Debroy & Aditya Sinha are, respectively, chairman and additional private secretary (research) of the Economic Advisory Council to the Prime Minister