Economic Survey of India 2021: Chief Economic Advisor KV Subramanian presented the economic surveyEconomic Survey 2021: Union Finance Minister Nirmala Sitharaman on Friday, January 29, tabled the Economic Survey that comprises details of the state of the economy ahead of the government's Budget for the fiscal year beginning April 1, 2021.
The economic survey projects a 'V shaped' economic recovery for the country.
The Economic Survey 2020-21 is authored by a team led by Chief Economic Adviser Krishnamurthy Venkata Subramanian and details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth. The government forecast an economic recovery of 11 per cent for fiscal 2021-22 in the annual economic statement, on the back of the roll out of the COVID-19 vaccination drive.
(Also Read: Economic Survey 2021 Projects 11% Growth Next Fiscal Year )Nominal GDP to grow by 15.4% - the highest since independenceAccording to the advance estimates by National Statistics Office (NSO), the country's real GDP to record a 11.0 per cent growth in financial year 2021-22 and the nominal GDP is likely to grow by 15.4 per cent - the highest since independenceGovernment needs to see agriculture as modern business enterpriseThe Economic Survey noted that the government to see farm sector as a modern business enterprise for which urgent reforms are required to enable sustainable and consistent growth.
The agricultural sector has shown its resilience amid the adversities of COVID-19 induced lockdowns.Private sector needs to contribute more to innovation and R-D Business sector contribution to gross R-D expenditure in India is much less as compared to government, when compared with scenario in top 10 economies, according to economic surveyEconomic survey calls for greater focus on core inflationEconomic Survey 2021 pitched for shifting the focus from consumer price-based inflation  to core inflation.
The focus on CPI-combined inflation may not be appropriate as food inflation, which contributes significantly to CPI-C, is driven primarily by supply-side factors.India's exports may go down: Economic SurveyThe country's exports are expected to contract by 5.8 per cent and imports by 11.3 per cent during the second half of the current financial year, though the implementation of various measures by the government would help support exports going forward, according to Economic Survey 2021.Economic Survey calls for asset quality reviewAn asset quality review (AQR) exercise must be conducted immediately after the forbearance is withdrawn, said the Economic Survey 2021.
Forbearance represents emergency medicine that should be discontinued at the first opportunity when the economy exhibits recovery, not a staple diet that gets continued for years.
Economic Survey creates an Index of Bare NecessitiesThe government launched a composite index called the bare necessities index to measure the quality of housing, toilet, drinking water as well as clean cooking fuel as part of the economy survey presented.
The Bare Necessities Index will measure the progress in delivery of the bare necessities.COVID-19 crisis impact on healthcareEconomic Survey 2021 notes that endemic information asymmetry problems lead to market failures in healthcare.
Private hospitals in the country charge much higher for the same treatment, as compared to government hospitals, said Chief Economic Advisor.
Higher charges levied by private hospitals do not necessarily ensure higher quality of care, according to economic surveyHealthcare spending must increase to 2.5-3% of GDPAn increase in public healthcare spending from one per cent to 2.5-3 per cent of gross domestic product can decrease the out-of-pocket expenditure on health, noted economic survey 2021.India may witness current account surplus after 17 yearsThe country is expected to witness a current account surplus after a gap of 17 years.
The foreign exchange reserves rose to all-time high of  $ 586.1 billion as of January 8, 2021.
External debt decreases by $ 2.0 billion, says Chief Economic Advisor.Economic Survey calls for counter-cyclical fiscal policyEconomic Survey calls for counter-cyclical fiscal policy to be an important point of emphasis, where the government steps in when the private sector does badly and steps back when the private sector does well.India's sovereign credit ratings do not reflect the economy's fundamentals: Economic SurveyThe survey said that sovereign credit ratings methodology must be amended to reflect economies' ability and willingness to pay their debt obligations, and suggested that developing economies must come together to address this bias and subjectivity inherent in sovereign credit ratings methodology.Growth leads to debt-sustainability, but not vice versa: Economic SurveyGrowth leads to debt-sustainability, but not vice versa, according to Economic Survey.
If the interest rate is less than growth rate, debt as a percentage of GDP declines.
The change in growth rate is key to influencing this, hence growth is instrumental to attaining sustainability of debt, informed CEA KV Subramanian.Reason behind India's V-shaped economic recoveryThe V-shaped economic recovery is due to mega vaccination drive and robust recovery in the services sector as well as growth in consumption and investment, according to economic surveyStringency of COVID-19 lockdown correlates with negative economic growthEconomic Survey 2021 has observed that the stringency of the COVID-19 lockdown correlates with negative economic growth in the same period but with positive growth in the future time period.Early intense lockdown saved lives, helped faster recovery: CEA SubramanianDuring high uncertainty, policy should minimize large losses.
India's policy response to COVID19 was guided by the realization that GDP growth will come back, but not lost human lives, informed Chief Economic Advisor Krishnamurthy SubramanianChief Economic Advisor Krishnamurthy Subramanian begins press conferenceChief Economic Advisor Krishnamurthy Subramanian began his press conference on Economic Survey 2020-21.
'This year's survey is dedicated to all COVID Warriors who upheld India' said CEA Krishnamurthy Subramanian. Fiscal Deficit May Overshoot Budget Estimates In 2020-21The government's fiscal deficit is projected to overshoot the initial estimates, 3.5 per cent of gross domestic product (GDP) in the financial year ending in March, according to the economic surveyEconomic Survey 2021 Projects 11% Growth Next Fiscal YearThe survey forecasts an economic growth of 11 per cent for the fiscal year beginning on April 1, 2021, on the back of the beginning of a nationwide COVID-19 vaccination drive and a rebound in consumer demand.Economy Set To Contract 7.7% In Current Financial yearThe economy is projected to contract 7.7 per cent in the current financial year ending March 31, after economic activity was hit by the pandemic, leading to job losses for millions of workers, particularly employed by small businesses.Finance Minister Nirmala Sitharaman tabled Economic Survey in Lok Sabha Union Finance Minister Nirmala Sitharaman tabled the economic survey 2021 in the Lok Sabha on Friday, January 29. The Economic Survey 2020-21, is authored by a team led by Chief Economic Adviser Krishnamurthy Venkata Subramanian.
It details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.