The last Economic Survey was presented in the midst of the COVID-19 pandemic.
The Pre-Budget Economic Survey, which is presented to Parliament before the Union Budget to present the state of the economy and suggest policy prescriptions, often misses out on GDP forecasts, sometimes by a significant margin.
This time, soon after the President’s address in both the houses of Parliament, Finance Minister Nirmala Sitharaman will present the Economic Survey for 2021-22 in the Lok Sabha on Monday. She will present the Union Budget on Tuesday for the next financial year beginning April 1, 2022.
One of the most viewed numbers in the pre-Budget Economic Survey, authored by a team led by the Chief Economic Adviser (CEA), is the projection of the Gross Domestic Product (GDP) for the next fiscal year.
The last Economic Survey was presented in the midst of the COVID-19 pandemic. A glimmer of optimism as the country recovers from the effects of the pandemic is likely to figure prominently in the current year’s Economic Survey. However, various high frequency indicators such as GST collections and corporate profitability are pointing towards significant growth.
Just days before the presentation of the Economic Survey, the government appointed economist V Ananth Nageswaran as the new CEA. Nageswaran, an academic and former executive with Credit Suisse Group AG and Julius Baer Group, will replace KV Subramaniam, who stepped down as CEA in December 2021 after completing his three-year term.
The Economic Survey for 2021-22 forecast a growth of around 9 per cent for the next financial year as Asia’s third-largest economy shows signs of recovery from the pandemic.
The previous survey, submitted in January 2021 amid the COVID pandemic, had projected economic growth for 2021-22 at 11%. However, India’s statistics ministry has projected the economic growth rate to be only 9.2% for the current fiscal.
The economy contracted by 7.3% during 2020-21 as against the projection of 6-6.5% in the Economic Survey tabled in Parliament before the outbreak of the COVID pandemic in 2020.
Economic activities were badly hit as India imposed a strict lockdown in late March 2020 to contain the spread of the virus. The government and the Reserve Bank of India took several measures to support the economy.
The Economic Survey 2018-19 had projected GDP growth at 7% for the financial year 2019-20. However, the economy expanded by only 4%, missing the target by a wide margin.
Similarly, the Economic Survey 2017-18 had projected a growth rate of 7-7.5 for 2018-19, but GDP grew by only 6.5%.
However, the real GDP growth during 2015-16 and 2017-18 was almost in the range estimated in the respective economic surveys. It should also be noted here that the GDP during 2016-17 expanded at a faster rate than what was estimated in the Economic Survey 2015-16.
India is poised to grow as the world’s fastest large economy during the current financial year, with the economy projected to grow at around 9 per cent despite the pandemic.
According to advance estimates by the National Statistical Office (NSO), the economy is expected to register a growth of 9.2 per cent during the current fiscal, which is slightly lower than the 9.5 per cent projected by the Reserve Bank.