The illustration on the front cover of Economic Survey 2020-21 is suggestive of the tone of its contents. It has on one side of the weigh scale balance the risks India had to undergo during the COVID-19 hit year: Economic shocks, health crisis and loss of lives and livelihood. On the other, it lists out the opportunities the COVID-19 crisis created during the year: Reforms, infrastructure, Atmanirbhar Bharat and vaccine. The balance shows the opportunities the outweigh risks. Here are the 10 takeaways from the inside pages of Economic Survey which explains why it is so.
Here are 10 key takeaways from Economic Survey 2021:
- India managed COVID-19 well. It has managed to avoid the second wave despite continual unlocking. It has ably managed to flatten the epidemiological curve, with the caseload peaking in mid-September followed by a steady drop in daily cases and fatalities.
- Starting July, a resilient V-shaped recovery is well underway, as demonstrated by the recovery in GDP growth and the sustained resurgence in high frequency indicators such as power demand, E-way bills, GST collection, steel consumption, etc.
- Long-pending structural reforms undertaken in agriculture, mining, labour, etc. will help economy to return to the potential growth path.
- After an estimated 7.7 per cent pandemic-driven contraction in 2020-21, India's real GDP is projected to record a growth of 11.0 percent in 2021-22 and nominal GDP by 15.4 per cent.
- A growth in real GDP by 2.4 per cent over the absolute level of 2019-20 implies that the economy would take two years to reach and go past the pre-pandemic level.
- Going forward, as food inflation eases further, overall inflation is expected to moderate further. On the other hand, improving demand conditions are likely to keep WPI inflation in the positive territory with improving pricing power for manufacturers.
- There will be fiscal slippage. In the wake of the global pandemic outbreak, the general government (Centre plus States) is expected to register a fiscal slippage in FY 2020-21, on account of the shortfall in revenue and higher expenditure requirements. However, longer term sustainability depends crucially on reviving growth relative to the interest cost of government debt. The government may have to continue with an expansionary fiscal stance.
- The disruption of global manufacturing value chains due to the COVID-19 pandemic presents a tremendous opportunity for India to become one of the key nodes in the chain.
- The revival of the industrial and infrastructure sector will be key to overall economic growth and macroeconomic stability.
- India has been doing its bit in climate change mitigation efforts now development nations should provide enhanced new and additional financial resources, technological support and support in capacity building to strengthen the on-going climate actions in developing nations like India.