On 29.1.2021, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2020-21 which is authored by Chief Economic Adviser Krishnamurthy Subramanian. MBAUniverse.com presents important highlights of this important GD Topic - Economic Survey 2021.
Setting the context, preface of the survey says, “Economic Survey 2020-21 is an ardent tribute to the immortal human spirit of grit and compassion encapsulated by the tireless battle against the pandemic by our frontline COVID-19 warriors. In the midst of the most unfathomable global health emergency experienced in modern history, the resolve of each Indian helped find its way from the darkness of ‘lives vs livelihoods’to the glow of ‘#SavingLives&Livelihoods’. The foresight of our collective vision to battle this pandemic became evident when policy insights and implementation at the Centre, State and local level converged to initiate a V-shaped economic recovery.” Survey adds, “….after experiencing a sharp contraction of 23.9% in first quarter of 2020-21, India is expected to be the fastest growing economy in the next two years. Projections by various national and international agencies including the IMF project this resilience of the Indian economy.”
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Key Highlights of the Survey
- V-shaped economic recovery due to mega vaccination drive, robust recovery in the services sector and robust growth in consumption and investment
- V-shaped recovery is due to resurgence in high frequency indicators such as power demand, rail freight, E-Way bills, GST collection, steel consumption, Etc
- India to become the fastest growing economy in next two years as per IMF
- India’s GDP is estimated to contract by 7.7% in FY2020-21
- Agriculture to clock 3.4% Growth, while industry and services to contract by 9.6% and 8.8% respectively this year
- India to have a Current Account Surplus of 2% of GDP in FY21, A historic high after 17 years
- Net FPI Inflows recorded an all-time monthly high of 9.8 Billion Dollars in November 2020
- Scores of lives saved and V-Shaped Economic Recovery bear testimony to India’s boldness in taking short-term pain for long-term gain.
Other highlights ofEconomic Survey 2021:
1. Economy To Go Past Pre-Covid Levels In Two Years
A rebound in economic activity and the government’s reforms can help the Indian economy go past its pre-Covid level in two years, the survey said. Further upside is also possible if economic activities normalise sooner due to the vaccine rollout.
2. GovernmentSpending should continue
The Economic Survey has batted for a continued expansionary fiscal stance by the government to ensure that growth returns to pre-Covid levels. A recovery in growth will boost revenue collections and help India get back on a sustainable fiscal path, it said.
3. Higher Growth Will Keep Debt In Check
The survey tried to cast away doubts about India’s debt levels saying that as long as GDP keeps growing, the country won’t have to worry about debt. The survey argues that over the last two-and-a-half decades, higher GDP growth causes the ratio of debt-to-GDP to decline in the case of India. The reverse, however, is not true, it said.
4. Banking sector needs Asset Quality Review 2.0
There is need for a fresh asset quality review of Indian banks as soon as the Covid-19 relief measures are lifted, the survey suggested. The chief economic adviser called for a clean-up of bank books to ensure mistakes of the past aren’t repeated.
5. An Eye On Core Inflation For Policy Making
The survey has suggested that a greater focus on core inflation is warranted to drive policy-making. It said that the sole focus on CPI inflation to set monetary policy may not be appropriate for four reasons.
6. Farm Lawsare good
The Economic Survey has said that the new farm laws, which are being widely opposed by farmer groups, will be beneficial for small and marginal farmers and herald Indian agriculture in a new free-market era.
7. Overregulation, a big issue.
More than lack of compliance or regulatory standards, India’s administrative process is suffering from overregulation, the survey noted. The root case is the government’s approach is one that attempts to account for every possible outcome, it said.
8. Say no to ‘Jugaad’
The Economic Survey made a case for higher research and development spending by the private sector to boost India's innovations. Relying on “jugaad innovation” risks missing the crucial opportunity to innovate our way into the future, the survey said.
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Hope this GD topic with important details and factual information on Economic Survey has helped you to prepare well on the topic for your final selection round. Since Economic Survey document is released by the Government just before the budget, it gives a holistic picture of the economy and prepares the base for the Budget for the forthcoming financial year. Please note that while presenting your views in Group Discussion, the fact based information helps to give an edge to get through.
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