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The Economic Survey 2021-22

The Union Minister for Finance & Corporate Affairs, Smt Nirmala Sitharaman presented the Economic Survey 2021-22 in Parliament on 31 January 2022.

Important Highlights of Economic Survey 2021-22:

State of the Economy:
  • Indian economy estimated to grow by 9.2 percent in real terms in 2021-22 (as per first advanced estimates) subsequent to a contraction of 7.3 percent in 2020-21.
  • India’s GDP will grow at the rate of 8.0-8.5 percent in the year 2022-23.
  • As per the Survey, the above projection is comparable with the World Bank’s and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively for 2022-23.
  • As per the IMF’s latest World Economic Outlook (WEO) growth projections released on 25th January, 2022, India’s real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24.
  • Agriculture and allied sectors expected to grow by 3.9 percent; industry by 11.8 percent and services sector by 8.2 percent in 2021-22.
  • On demand side, consumption estimated to grow by 7.0 percent, Gross Fixed Capital Formation (GFCF) by 15 percent, exports by 16.5 percent and imports by 29.4 percent in 2021-22.
Fiscal Developments:
  • The revenue receipts from the Central Government (April to November, 2021) have gone up by 67.2 percent (YoY) as against an expected growth of 9.6 percent in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals).
  • Gross Tax Revenue registers a growth of over 50 percent during April to November, 2021 in YoY terms.
  • During April-November 2021, Capex has grown by 13.5 percent (YoY).
External Sectors:
  • India’s merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.
  • Net capital flows were higher at US$ 65.6 billion in the first half of 2021-22.
  • India’s external debt rose to US $ 593.1 billion at end-September 2021, from US $ 556.8 billion a year earlier.
  • Foreign Exchange Reserves crossed US$ 600 billion in the first half of 2021-22 and touched US $ 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.
Monetary Management and Financial Intermediation:
  • The liquidity in the system remained in surplus.
  • Repo rate was maintained at 4 per cent in 2021-22.
  • YoY Bank credit growth accelerated gradually in 2021-22 from 5.3 per cent in April 2021 to 9.2 per cent as on 31st December 2021.
  • Sensex and Nifty scaled up to touch peak at 61,766 and 18,477 on October 18, 2021.
Prices and Inflation:
  • The average headline CPI-Combined inflation moderated to 5.2 per cent in 2021-22 (April-December) from 6.6 per cent in the corresponding period of 2020-21.
  • Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5 per cent during 2021-22 (April to December).
Sustainable Development and Climate Change:
  • India’s overall score on the NITI Aayog SDG India Index and Dashboard improved to 66 in 2020-21 from 60 in 2019-20 and 57 in 2018-19.
  • India has the tenth largest forest area in the world.
  • In 2020, India ranked third globally in increasing its forest area during 2010 to 2020.
  • In 2020, the forests covered 24% of India’s total geographical, accounting for 2% of the world’s total forest area.
Agriculture and Food Management:
  • The Agriculture sector experienced buoyant growth in past two years, accounting for a sizeable 18.8% (2021-22) in Gross Value Added (GVA) of the country registering a growth of 3.6% in 2020-21 and 3.9% in 2021-22.
  • The Livestock sector has grown at a CAGR of 8.15% over the last five years ending 2019-20.
Industry and Infrastructure:
  • Index of Industrial Production (IIP) grew at 17.4 percent (YoY) during April-November 2021 as compared to (-)15.3 percent in April-November 2020.
Services:
  • Overall service Sector GVA is expected to grow by 8.2 percent in 2021-22.
  • India has become 3rd largest start-up ecosystem in the world after US and China. Number of new recognized start-ups increased to over 14000 in 2021-22 from 733 in 2016-17.
  • 44 Indian start-ups have achieved unicorn status in 2021 taking overall tally of unicorns to 83, most of which are in services sector.
Social Infrastructure and Employment:
  • 157.94 crore doses of COVID-19 vaccines administered as on 16th January 2022; 91.39 crore first dose and 66.05 crore second dose.
  • Expenditure on social services (health, education and others) by Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 8.6% in 2021-22 (BE).
  • As per the National Family Health Survey-5:
    » Total Fertility Rate (TFR) came down to 2 in 2019-21 from 2.2 in 2015-16

» Infant Mortality Rate (IMR), under-five mortality rate and institutional births have improved in 2019-21 over year 2015-16

In conclusion, the Economic Survey 2021-22 is quite optimistic that overall macro-economic stability indicators suggest that the Indian Economy is well placed to take on the challenges of 2022-23.

Source: PIB

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