Finance minister Nirmala Sitharaman will present the Economic Survey for 2021-22 in Parliament on January 31, Monday, one day before she tables Union Budget 2022. The Economic Survey is expected to be a single volume report this year, projecting a growth of around 9 per cent for the next financial year.
Here’s a lowdown on the significance of the document and what can be expected this year
What is the Economic Survey
The document contains a detailed account of the state of the economy, its prospects and policy changes. The Economic Survey carries sectoral overviews and comments on reform measures needed. The Survey’s outlook serves as a marker for future policy moves as well.
It puts out economic growth forecasts and gives detailed account of why the economy will accelerate or decelerate. At times, it also argues for specific reform measures.
The Economic Survey was first presented in 1950-51, and until 1964, was tabled in the Lok Sabha along with the Union Budget. Since 1964, the Economic Survey has been released every year on the eve of Budget presentation. The only aberration was 2021 when the Survey was presented two days before the Union Budget.
Who Prepares the Economic Survey
The Economic Survey is traditionally authored by the Chief Economic Adviser. But this year, the document is being prepared by Principal Economic Advisor and other officials since the position of CEA was filled, by V Anantha Nageswaran, just a couple of days before the presentation of the Economic Survey and Union Budget. The CEA is a Secretary-rank official attached to the Finance Ministry.
Even the first Economic Survey of the Narendra Modi government, presented by then finance minister Arun Jaitley in July 2014, was prepared by senior economic advisor Ila Patnaik.
At that time, the post of the CEA was vacant following the appointment of Raghuram Rajan as RBI Governor. Later, Arvind Subramanian moved in as CEA in October 2014. Anantha Nageswaran’s immediate predecessor KV Subramanian completed his three-year term as CEA on December 6 last year.
What to Expect in Economic Survey This Year
Economic Survey 2021-22 is likely to project a growth of around 9 per cent for the next financial year. The Indian economy, as per the advance estimates of the National Statistical Office (NSO), is expected to record a growth of 9.2 per cent during the current fiscal, lower than 9.5 per cent projected by the RBI.
The economy had contracted by 7.3 per cent during 2020-21 following the Covid-19 pandemic and the subsequent nationwide lockdown to check the spread of the virus. The impact of Covid-19 on the economy was comparatively less during the current financial year as lockdowns were local in nature and did not cause large-scale disruption in economic activity.
The Economic Survey 2020-21, released in January last year, had projected GDP growth of 11 per cent during the current financial year ending March 2022.
Are the Recommendations Binding?
The government is not bound to follow the recommendations made in the Economic Survey as the document serves more as a policy guide. The Economic Surveys in the past have favoured policy moves seen as contradicting the political ideology of the party in power.
These do not necessarily serve as pointers on what to expect from the Budget document. On many occasions, policy changes recommended in the Economic Survey find no place in Budget proposals.