Economic Survey 2022 live | Govt forecasts 8-8.5% GDP growth in FY23

Finance Minister Nirmala Sitharaman on January 31 presented the Economic Survey that details the state of the economy ahead of the Government’s Budget for the fiscal year beginning April 1, 2022.

CEA Dr. V. Anantha Nageswaran will address a press conference today at 3:45 p.m. in New Delhi.

Ahead of the Union Budget 2022-23, Indian industry has urged the government to offer incentives for creating jobs, including special sops under the Production Linked Incentive (PLI) schemes already announced.

Here are the latest updates:

Economic Survey projects 8%-8.5% growth in 2022-23

The Economic Survey for 2021-22, tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha, expects the GDP to grow by 9.2% this year and 8% to 8.5% in 2022-23, even as it expressed concerns about the implications of hardening inflation and energy prices.

“Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy,” the Survey projected.

Sensex, Nifty surge 1.5% in mid-session

Equity benchmarks Sensex and Nifty jumped over 1.50 per cent in mid-session deals on Monday, after the Economic Survey 2021-22 projected a 9.2% growth rate for 2021-22. -PTI

Highlights

Highlights of the Economic Survey

The Economic Survey for 2021-22 tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha expects India’s GDP to grow by 9.2% this year, in line with recent official estimates, and 8% to 8.5% in 2022-23.

Stressing that India’s overall macro-economic stability indicators show the economy is well placed to take on the challenges of 2022-23, the Survey argued that ‘one of the reasons’ for this is the government’s unique response strategy that didn’t ‘pre-commit to a rigid response’ but ‘opted to use safety-nets for vulnerable sections’ based on information.

“Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy,” the Survey projected.

• ‘Assumption that ‘there will be no further debilitating pandemic related economic disruption”

The Survey’s 8%-8.5% GDP growth estimate for the coming year is based on the assumption that ‘there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year’.

Inflation has reappeared as a global issue in both advanced and emerging economies…. India does need to be wary of imported inflation, especially from elevated global energy prices,” the Survey has noted, even as it suggests that the double-digit wholesale price inflation in recent months will ‘even out’.

The Survey acknowledges the risks that have emerged at the time it was being written, such as the new COVID-19 with the Omicron variant sweeping across the world, inflation jumping up in most countries, and the cycle of liquidity withdrawal being initiated by major central banks.

• India transformed to 4th largest forex reserve

It highlighted that India’s macro-economic stability indicators on the external front, fiscal front as well as financial sector health and inflation, are well-placed to take on the challenges of 2022-23.

Robust export growth and availability of fiscal space to ramp up capital spending to support growth next fiscal.

Govt. finances to witness consolidation in 2021-22, after an up tick in deficit and debt indicators during pandemic year FY21.

The survey says that India transformed from being among ‘Fragile Five’ nations to 4th largest forex reserve, giving policy room for manoeuvring.

• ‘India is poised for stronger investment’

India’s investment to GDP ratio has hit 29.6% in 2021-22, the highest level in seven years, the Survey said, attributing this capital formation to the Government’s policy thrust on quickening the ‘virtuous cycle of growth via capex and infrastructure spending’ has increased capital formation in the economy.

“While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment,” it added, citing record corporate profits in recent quarters and high mobilisation of risk capital by firms.

• Improve productivity of small, marginal farmers

Taking on criticism that the ‘Atmanirbhar Bharat approach’ marks ‘a return to old school protectionism’, the Survey stated that “…the focus on economic resilience is a pragmatic recognition of the vagaries of international supply-chains’. 

While the 9.2% growth estimate for 2021-22 suggests the economy will rise above pre-pandemic level of 2019-20, the Survey conceded that private consumption and segments such as Travel, Trade and Hotels are yet to fully recover. “The stop-start nature of repeated pandemic waves makes it especially difficult for these sub-sectors to gather momentum,” it said.

Survey calls for improving productivity of small, marginal farmers through small holding farm technologies. Crop diversification towards oilseeds, pulses and horticulture needs to be given priority, the survey says.

Parliament

Finance Minister tables the Economic Survey 2022

FM Nirmala Sitharaman tabled the Economic Survey in Lok Sabha after the President’s address.

The Economic Survey 2021-22, details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.

The gross domestic product (GDP) contracted by 7.3 per cent in 2020-21.

The Survey focuses on supply-side issues to improve the resilience of the Indian economy.

(With inputs from Agencies)