Economic Survey 2021: Lockdown Helped Save 1 Lakh Lives, 37 Lakh Covid-19 Infections: Top 9 Highlights
Ahead of the release of the first ever electronic union budget on 1 February, Krishnamurthy Subramanian, the chief economic advisor revealed the economic survey for the year 2020-21 on Friday. The Finance minister, Nirmala Sitaraman has also reported the survey to both the houses of parliament.
Last year was a roller coaster in terms of finances, with the major part of the ride having down slides. However, the survey showed a V shaped recovery in the graph of the economy. Subramaniam referred to India’s comeback in the recent test series against Australia while describing the improvement seen in the economy.
Besides, he dedicated this retrieval to all the Covid 19 warriors who helped the country survive in this severe economic crisis.
Here are the top 9 highlights of the economic survey 2020-2021:
- After the pandemic started affecting the finances, the economy was expected to fall 7.7% in the current fiscal year which will end on March 31.
- The survey speculated that even without lockdown, pandemic would have affected the economy significantly. However, implementation of lockdown only helped India recover faster. CEA also highlighted that India correctly realised the importance of human lives while imposing severe lockdown since it cant be recovered unlike GDP.
- The economy will require two years to achieve the pre-pandemic conditions. This supports IMF estimates suggesting that the real GDP will grow by 11.5% and 6.8% in 2021-22 and 2022-23 respectively. Whereas, the nominal GDP growth for FY22 is predicted at 15.4%.
- The major reason behind the rapid recovery in the economy in 2020-21 is the surge in power demand, rail freight, e-way bills, GST collection, and steel consumption. Besides, massive vaccination drives are expected to contribute 11 per cent in the economic recovery for the FY 2021-22.
- Though the government will undertake several actions to push the exchange activities, the exports and imports in India may shrink by 5.8% and 11.3% during the later half of the current financial year.
- The survey sheds light on the prospective investment in the public sector, especially in times of a slowdown. Hence CEA has encouraged the government to reconstruct the fiscal policy to support growth.
- The government will focus more on the healthcare sector by increasing its expenditure from the current 1% to somewhere between 2.5 and 3% of GDP as projected by the National Health Policy back in 2017.
- According to the survey, the agriculture sector has prospered even during the pandemic. Agriculture is anticipated to showcase a growth of 3.4% in this year. Whereas a decline of 9.6% in the industrial sector and 8.8% in services based sector is expected.
- India is likely to cover 7% of its financial deficiency in year 2020-21 as the government is aiming to sell its assets for funding the expenditure of next year.