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Economic Survey: From economic growth to fiscal health, check out key highlights

Economic Survey: From economic growth to fiscal health, check out key highlights

Finance Minister Nirmala Sitharaman on Tuesday tabled the Economic Survey 2021-22 in the Parliament ahead of the Union Budget.

The Economic Survey has projected an 8-8.5 per cent growth rate for the Indian economy in fiscal year 2022-23. The Economic Survey has projected an 8-8.5 per cent growth rate for the Indian economy in fiscal year 2022-23.

Finance Minister Nirmala Sitharaman on Tuesday table the Economic Survey 2021-22 in the Parliament ahead of the Union Budget, which will be presented on Tuesday. The Survey reviews the economic development in the country over the past financial year and suggests policy prescriptions. Here are the major highlights from Economic Survey 2021-22:

State of Economy

  • Indian economy estimated to grow by 9.2 per cent in real terms in 2021-22 subsequent to a contraction of 7.3 per cent in 2020-21.  
  • GDP projected to grow by 8-8.5 per cent in real terms in 2022-23.
  • The year ahead poised for a pickup in private sector investment with the financial system in good position to provide support for economy's revival.  
  • Agriculture and allied sectors expected to grow by 3.9 per cent; industry by 11.8 per cent and services sector by 8.2 per cent in 2021-22.
  • On demand side, consumption estimated to grow by 7.0 per cent, Gross Fixed Capital Formation (GFCF) by 15 per cent, exports by 16.5 per cent and imports by 29.4 per cent in 2021-22.
  • Combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide adequate buffer against possible global liquidity tapering in 2022-23. 

Fiscal Health

  • Revenue receipts from the central government (April-November 2021) have gone up by 67.2 per cent (YoY) as against an expected growth of 9.6 per cent in the 2021-22 Budget Estimates     
  • Gross tax revenue registers a growth of over 50 per cent during April-November 2021 in YoY terms. This performance is strong compared to pre-pandemic levels of 2019-2020 also.  
  • During April-November 2021, capex has grown by 13.5 per cent with focus on infrastructure-intensive sectors.
  • With enhanced borrowings on account of COVID-19, the central government's debt has gone up from 49.1 per cent of GDP in 2019-20 to 59.3 per cent of GDP in 2020-21, but is expected to follow a declining trajectory with the recovery of the economy.  

External Sectors

  • Merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
  • India's external debt rose to $593.1 billion at end-September 2021 from $556.8 billion a year earlier, reflecting additional SDR allocation by IMF, coupled with higher commercial borrowings.
  • Foreign exchange reserves crossed $600 billion in the first half of 2021-22 and touched $633.6 billion as of December 31, 2021.
  • As of end-November 2021, India was the fourth largest forex reserves holder in the world after China, Japan and Switzerland.

Also Read: Economic Survey 2022 Live Updates: Indian economy well placed to take the challenges of 2022-23
 

Monetary Management

  • The liquidity in the system remained in surplus. Repo rate was maintained at 4 per cent in 2021-22, while RBI undertook various measures such as G-Sec Acquisition Programme and Special Long-Term Repo Operations to provide further liquidity.
  • The economic shock of the pandemic has been weathered well by the commercial banking system.
  • YoY Bank credit growth accelerated gradually in 2021-22 from 5.3 per cent in April 2021 to 9.2 per cent as on December 31, 2021.
  • Gross non-performing advances ratio of Scheduled Commercial Banks declined from 11.2 per cent at the end of 2017-18 to 6.9 per cent at the end of September 2021.
  • Net non-performing advances ratio declined from 6 per cent to 2.2 per cent during the same period.

Capital markets

  • Rs 89,066 crore raised via 75 Initial Public Offering (IPO) issues in April-November 2021, much higher than in any year in the last decade. 
  • Sensex and Nifty scaled up to touch peak at 61,766 and 18,477 on October 18, 2021.
  • Among major emerging market economies, Indian markets outperformed peers in April-December 2021.

Agriculture and food management

  • The agriculture sector experienced buoyant growth in past two years, accounting for a sizeable 18.8 per cent (2021-22) in Gross Value Added (GVA) of the country registering a growth of 3.6 per cent in 2020-21 and 3.9 per cent in 2021-22.
  • Allied sectors including animal husbandry, dairying and fisheries are steadily emerging to be high growth sectors and major drivers of overall growth in agriculture sector.
  • The livestock sector has grown at a CAGR of 8.15 per cent over the last five years ending 2019-20. It has been a stable source of income across groups of agricultural households accounting for about 15% of their average monthly income.

Industry and Infrastructure

  • Index of Industrial Production (IIP) grew at 17.4 per cent YoY during April-November 2021 as compared to (-)15.3 per cent in April-November 2020.
  • Capital expenditure for Indian Railways has increased to Rs 1,55,181 crore in 2020-21 from an average of Rs 45,980 crore during 2009-14 and it has been budgeted to further increase to Rs 2,15,058 crore in 2021-22, a five times increase in comparison to the 2014 level.
  • Extent of road construction per day increased substantially in 2020-21 to 36.5 kms per day from 28 kms per day in 2019-20, a rise of 30.4 per cent.
     

Services

  • GVA of services crossed pre-pandemic level in July-September quarter of 2021-22. However, GVA of contact intensive sectors like trade, transport, etc., still remains below pre-pandemic level.
  • Overall service Sector GVA expected to grow by 8.2 per cent in 2021-22.
  • Services exports surpassed pre-pandemic level in January-March quarter of 2020-21 and grew by 21.6 per cent in the first half of 2021-22, strengthened by global demand for software and IT services exports.
  • India has become third largest start-up ecosystem in the world after US and China. Number of new recognized start-ups increased to over 14,000 in 2021-22 from 733 in 2016-17.
  • 44 Indian start-ups achieved unicorn status in 2021, taking overall tally of unicorns to 83, most of which are in services sector.