Union Finance Minister Nirmala Sitharaman on Monday presented the Economic Survey 2021-22 documenting the Indian economy’s performance in the last 12 months and charting out the future course of action for different sectors. Prepared by Principal Economic Advisor Sanjeev Sanyal, the survey comprises 11 chapters focusing on several aspects such as fiscal developments, external sector, monetary management and financial intermediation, prices and inflation, sustainable development and climate change, agriculture and food management, industry and infrastructure, services and employment.
From a detailed review of the economic development in India, to requisite policy changes that should be undertaken to accelerate growth, here are the top 10 highlights of the Economic Survey 2022.
Economic Survey 2022 Highlights
1. State of Economy
Agriculture and allied sectors have been the least impacted by the pandemic. Sector expected to grow by 3.9% in 2021-22.
The Services sector has been the hardest hit by the pandemic, estimated to grow by 8.2% this financial year.
Total Consumption is estimated to have grown by 7.0% in 2021-22 with significant contributions from government spending.
Exports of both goods and services have been exceptionally strong so far in 2021-22.
Indian economy is in a good position to witness GDP growth of 8.0-8.5% in 2022-23.
India’s balance of payments remained in surplus throughout the last two years.
Reserve Bank of India to keep accumulating foreign exchange reserves (they stood at US$ 634 billion on 31st December 2021).
The Government will comfortably meet its targets for the year while maintaining the support, and ramping up capital expenditure.
India’s Consumer Price Index inflation stood at 5.6 per cent YoY in December 2021, within the targeted tolerance band. Wholesale price inflation, however, has been running in double-digits.
2. Aviation sector started to rebound, registers 14% growth
The Economic Survey highlighted that the Indian aviation sector had started to rebound after the 2-year-long COVID-19 pandemic, with an accelerated pace of COVID-19 vaccine roll-out that had eased travel restrictions globally. “The domestic traffic in India has more than doubled from around 61 million in 2013-14 to around 137 million in 2019-20, registering a growth of over 14 per cent per annum,” said the report.
3. FDI in pharma sees ‘sudden spurt’ in 2020-21
Foreign direct investment in India’s pharmaceutical sector saw a “sudden spurt” in 2020-21, according to the Economic Survey. The FDI inflows in April-September 2021 continued to be buoyant at Rs 4,413 crore, growing at the rate of 53 per cent over the same period in 2020-21, mainly on account of investments to meet COVID-19-related demands for therapeutics and vaccines.
4. India 3rd largest startup ecosystem in the world after US and China
Encouraging statistics in the report showed that startups in India had grown remarkably over the last six years. “The number of new recognised startups has increased to over 14,000 in 2021-22 from only 733 in 2016-17,” the survey said. As of January 14, 2022, India has 83 unicorns, with a total valuation of $277.77 billion.
5. Farm credit worth Rs 7.36 lakh crore disbursed in H1 of 2021-22
According to the Economic Survey, the Centre had distributed farm credit worth over Rs 7.36 lakh crore to farmers just during the first six months of the 2021-22 fiscal year. The government has fixed a farm credit target of Rs 16.50 lakh crore for the current fiscal.
6. Air India sale to boost privatisation drive
The annual report predicted that Air India’s privatisation had redefined the public sector role in business enterprises. It will encourage private participation in all sectors, the survey said. The government earlier this month handed over ownership rights in national carrier Air India to Tata Group for Rs 18,000 crore.
7. India needs diversified energy mix, focus on fossils fuels
In view of the recent energy crisis in Europe, India should focus on the right diversified energy mix laying focus on fossil fuels, the Economic Survey said. It also suggested that the focus should be laid on building storage for intermittent electricity generation from solar PV and wind farms to ensure an on-demand energy supply.
8. India needs FTA push to diversify export basket, destinations
The Economic Survey on Monday pitched for giving a push to the ongoing negotiations for the proposed free-trade agreements (FTAs) as these pacts will help in diversifying the country’s export basket and destinations.
9. Policy initiatives to catapult IT sector to next level of growth
Initiatives such as the relaxation of Other Service Provider (OSP) regulations and telecom sector reforms would significantly increase job creation and catapult the IT services sector to the next level of growth, according to the survey. This would significantly expand access to talent, increase job creation, and catapult the sector to the next level of growth.
10. COVID vaccination vital for opening up economy
COVID-19 vaccination should be treated as a macro-economic indicator since it is not merely a health response but, critical for opening up the economy, the Economic Survey 2022 mentioned. It added that the exercise had played a critical role in minimising loss of lives and boosting confidence in the economy towards the resumption of activity.