Economic Survey 2022 India HIGHLIGHTS: Chief Economic Advisor V Anantha Nageswaran began his press conference on Economic Survey 2021-22. This year’s Economic Survey was tabled by Union Finance Minister Nirmala Sitharaman in Parliament earlier in the day today. This is CEA Nageswaran’s first Economic Survey, who took charge last Friday. Principal Economic Advisor Sanjeev Sanyal said that overall Economic Survey 2022 theme was centered around four pillars. Sanyal also added that government has focused on short-term support for the economy, especially to vulnerable sections; while keeping a firm eye on fiscal stability in medium term. PEA Sanyal said that Indian agriculture sector GVA now 7.7 % above pre-pandemic levels. Sanyal said that Government consumption has been reasonably strong, but private consumption still lags pre-pandemic level (mainly due to hit faced by contact intensive sectors). “Exports have been major growth driver, and imports too strong. GDP is 1.3% above pre-pandemic level,” PEA added.
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“Schemes like Credit Guarantee with 100 per cent guarantee for additional funding of Rs 4.5 lakh crore to MSMEs have provided a critical relief to the sectors, severely hit by the pandemic. More such measures are expected in the Budget. The Survey has re-emphasised the government's asset monetisation and disinvestment agenda which spells out bare minimum presence of the government ownership even in the strategic sectors. Successful completion of Air India disinvestment should infuse confidence for the roadmap,” said ASSOCHAM Secretary General Deepak Sood said.
“Economic Survey is right in its assessment about the investment scenario. The private investment recovery is still at a nascent stage, though there are increased activities in the brownfield projects. The heavy lifting would still be needed by the government capital expenditure. “We expect it in the Budget”. Good thing is, as the Survey has pointed out, that the Government has the fiscal capacity to maintain the support, and ramp up capital expenditure when required”, ASSOCHAM Secretary General Deepak Sood said
“Advance estimates suggest manufacturing to be growing by 12.5 per cent in the current fiscal while services would expand by 8.5 per cent. ''Traditionally, services grow at a faster face. Clearly the Covid impact on contact intensive industries is reflecting even as the manufacturing has been aided by supply side reforms. Once the impact of PLI scheme kicks in, we expect the manufacturing to be leading the growth for the foreseeable future”. Robust performance in exports has also helped the manufacturing,” said ASSOCHAM Secretary General Deepak Sood.
As a precursor to the tabling of the Budget tomorrow, we believe that the economic survey is an indication that the government will continue to focus on shoring up business sentiments through crucial reforms in taxation, infrastructure and social segments. We hope that these reforms will percolate to the real estate sector as well, considering that it is a crucial part of the country’s economy, with forward and backward linkages with nearly 200 industries. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa
“While the 8-8.5 GDP projections for FY' 23 are on the back of a high base of 9.2 per cent in the current financial year, ASSOCHAM is of the view that the Indian economic growth can surprise us on the higher side. Even as the pandemic is still raging in most parts of the world, its latest variant is less damaging; Besides with 75 per cent of eligible Indians fully vaccinated and the booster doses being rolled out, India would be far better prepared to take on the challenges,'' ASSOCHAM Secretary General Deepak Sood said.
The fact that the industrial sector is expected to grow by 11.8% in 2021-22 is likely to bolster investor sentiments in the market; as would the fact that the country climbed 35 notches on the Global Innovation Index, from 81st in 2015-16 to 46th in 2021. The survey stated that the government is focusing on supply-side reforms, rather than completely relying on demand management. These supply-side reforms include deregulation of numerous sectors, simplification of processes, removal of legacy issues such as ‘retrospective tax’, push to infrastructural investments, boost to manufacturing sector through the schemes such as PLI, etc. However, it did sound a note of caution on the increased inflation levels due to rising oil prices globally. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE
The Economic Survey 2022 tabled by Finance Minister is proof of the overall resilience that India has shown during the pandemic. In line with recent official estimates, India's GDP is estimated to grow at 9.2% this year, and 8-8.5% in 2022-23, which proves our belief that the country will be the world’s growth engine going forward, thereby booting business morale. This growth will be supported by widespread vaccine coverage, gains from supply-side reforms, easing of regulations, robust export growth and availability of fiscal space to ramp up capital spending. The Economic Survey also predicted that government consumption as well as total exports would surpass pre-pandemic levels, which is an indication of India’s strong recovery. Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE
“The economic growth projections for FY23 look very robust. A reasonably strong nominal GDP growth means we are looking at a healthy next fiscal year. This will also mean that tax collections will continue to remain robust and economic revival will gain further traction. Based on these projections, we remain very constructive on the future prospects.”
~Naveen Kulkarni, Chief Investment Officer, Axis Securities
Apart from discussing in detail the sectoral developments and policy implementations, the Survey very aptly talks in detail about the developments on social parameters of Health and Education. As per the need of the hour, there is also a detailed discussion on sustainable economic growth. The Economic survey has very aptly discussed in detail the current issues for the Indian economy, now the critical aspect would be how the Central and state Governments handle many of these issues going forward. Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India
“The Economic Survey’s GDP growth projection of 8-8.5% 2for FY23 is quite conservative and lower than that projected by IMF. The Economic Survey has explained in detail the Government’s approach to handling this once in a century pandemic induced crisis. The Survey talks in detail about the ‘Agile’ approach that the government has been adopting, which basically implies tracking closely the high frequency economic indicators and tweaking the government’s response on a real time basis as the crisis situation unfolds,” said Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India.
Growth in 2022-23 will be driven by widespread vaccinations, gains from supply-side reforms, easing of regulation, robust export growth & availability of fiscal space to ramp up capital spending: Principal Economic Advisor Sanjeev Sanyal
Significant improvement in patents in last 10 years – in no. of applications and patents granted. As opposed to MNCs, more Indian residents are registering patents. However, India is far behind some other countries and it need to further smoothen patents process: Economic Survey
Vaccination status is a macroeconomic stability indicator, considering macroeconomic risk posed by #covid19 waves, and in vaccination, India has done rather well, observes Economic Survey.
World Bank’s and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 percent and 7.5 percent respectively for 2022-23.
Indian Economy to grow by 9.2% in real terms in 2021-22 supported by widespread vaccine coverage, gains from supply-side reforms & easing of regulations, robust export growth & availability of fiscal space to ramp up capital spending.
Even during difficult times of lockdown, current account moved into surplus in Q1 of 2020-21. Capital flows have been strong, we have a very healthy balance of payments surplus, resulting in accumulation of foreign exchange reserves of $634 billion, said Principal Economic Advisor Sanjeev Sanyal.
Compared to 2016-17, the startup scenario has remarkably changed, with startup hubs all across the country. This shows a startup culture taking root in the country in a clear manner: Principal Economic Advisor
CPI inflation remains in tolerance band at 5.6%. WPI inflation is back up in double digits (partly due to low base last year). We need to be concerned especially about imported inflation due to Energy prices, said Sanyal.
India to witness GDP growth of 8.0-8.5 per cent in 2022-23. Investment is expected to see strong growth of 15% in 2021-22.
Financial sector has weathered the pandemic shocks rather well. Both Gross and Net NPA levels have continued to steadily decline in last two years, banks are getting better capitalized as well, said PEA Sanjeev Sanyal.
Deficit numbers show that fiscal deficit for Apr – Nov 2021 is not only below what it was for the same period last year, but also below what it was in pre-pandemic phase in nominal terms.
There has been a very sharp increase in both tax and non-tax revenues; this is great because it supports capital expenditure which too is above pre-pandemic level: Principal Economic Advisor
With revival of the economy, employment indicators bounced back to pre-pandemic levels during last quarter of 2020-21. Demand for MGNREGS work stabilized after second covid surge but remains higher than pre-pandemic level.
Government consumption has been reasonably strong, but private consumption still lags pre-#pandemic level (mainly due to hit faced by contact intensive sectors). Exports have been major growth driver, imports too strong. GDP is 1.3% above pre-pandemic level: Sanyal
There has been a revival of economic activity to pre-pandemic levels in 2021-22, as reflected in national accounts and high frequency data, said Principal Economic Advisor Sanjeev Sanyal.
Central theme of Economic Survey 2021-22 is the “Agile Approach”. Another theme highlighted in this Survey relates to the art and science of policy-making under conditions of extreme uncertainty
Economic Survey highlights the agile and multi-pronged approach adopted by India to combat COVID19. Vaccination is not merely a health response but is critical for opening up the economy. It should be treated for now as a macro-economic indicator.
Expenditure on health sector increased from Rs 2.73 lakh crore in 2019-20 to Rs 4.72 lakh crore in 2021-22 (BE), an increase of nearly 73%. For the education sector, increase during the same period was 20%.
Government's spending on Social Services increased significantly during the pandemic, states the Economic Survey 2021-22. An increase of 9.8% has been made in the expenditure allocation to the Social Services sector in 2021-22 over 2020-21.
Govt. has pursued 4 pronged approach to prepare economy for post-Pandemic world. These pillars are short-term support to economy (especially to vulnerable sections), Keeping a firm eye on fiscal stability in medium term, Structural & supply-side reforms and Process reforms, said CEA V Anantha Nageswaran.