IPA Newspack
  • Home
  • now
  • politics
  • business
  • markets

IPA /

IPA Special

IPA Special

Economic Survey 2021-22 — Economic Hardship Ahead In The Next Financial Year

By Dr. Gyan Pathak

The financial year 2022-23 will be bringing hardship to the people of India, as it has been revealed in the data released by the Economic Survey 2021-22 tabled in the Parliament of India on January 31. Indian economy is expected to witness a 9.2 per cent of growth in the GDP for the current fiscal which has been projected to grow at the rate of 8-8.5 per cent in the fiscal 2022-23.

Though there will be risks and uncertainties due to COVID-19, if the expected real GDP growth of 9.2 per cent is achieved this year, India will have a fiscal space to ramp up Capex. The agricultural growth of the current fiscal is expected to be 3.9 per cent, higher than 3.6 per cent in the previous year, while Industry is likely to grow at 11.8 per cent. Overall economic activity has recovered past the pre-pandemic levels, the survey indicated. However, for the next fiscal, supply side reforms, Capex, and exports are likely to be chief driver of growth.

The Survey said that the Services sector had been the hardest hit by the pandemic, especially those segments that involve human contact. This sector is estimated to grow by 8.2 per cent in the current financial year after a 8.4 per cent contraction in the previous year.

Total consumption is estimated to grow 7 per cent in the current financial year which are mainly due to significant contribution from government spending. Government consumption is estimated to grow by 7.6 per cent surpassing the pre pandemic level. Private consumption is also estimated to have improved significantly to recover 97 percent of corresponding pre-pandemic output level. It means private consumption is yet to reach the pre-pandemic level. They must not have money in their hand or their sources of incomes have been dried up. It is therefore clear that crisis of demand is to continue on the one hand and the crisis of supply is also to continue due to disruption in the supply chain. Production is to suffer, which in turn will adversely affect the job market.

It also must be noted that the estimated growth of 9.2 per cent in real terms for the current fiscal is on the lower base of growth that was after a contraction of 7.3 per cent in 2020-21. It means that the present higher growth in real terms is too low for well-being of the people, compared to the pre-pandemic era.

The Survey portraits a rosy picture of the growth of startups in India during the last six years on the basis of merely numbers. The number of new recognised startups have increased to over 14,000 in 2021-22 from only 733 in 2016-17. As a result, India has become the third largest startup ecosystem in the world after the US and China. Further, a record 44 Indian startups have achieved unicorn status in 2021 taking the overall tally of unicorns in India to 83, most of these are in the services sector. However, barring a few, most of the startups are in very bad shape, and they are not getting required government support. Another example is MSMEs. It is very sad to know that only about 13 lakh of them got government support out of about 65 lakhs MSMEs in the country.

WPI inflation in ‘fuel and power’ will be another matter of concern which was above 20 per cent. Government will therefore need to work hard to bring down inflation and rising prices in the market to make life easier, especially at a time of joblessness.

 

Revenue receipts were up over 67 per cent year on year basis during April-November 2021, which should enable the government to support and ramp up capital expenditure (Capex). The increase in revenue is chiefly due to increased tax compliance, rather than improvement in the market conditions. In the next fiscal when growth in GDP will be even one per cent less than this year, revenue receipt may fall.

Management of government debt remained a major challenge during the current financial year. Market borrowings have witnessed 141.2 per cent jump. However, the Economic Survey sees India’s public debt as “stable and also sustainable.”

Strong investment growth of 15 per cent is likely in 2021-22 in Gross Fixed Capital Formation (GFCF), according to the Survey. It says that government’s policy thrust on quickening virtuous cycle of growth via Capex and infrastructure spending has increased capital formation in the economy lifting the investment to GDP ratio to 29.9 per cent.

Economic Survey 2021-22 makes a history in a sense that it was prepared during a period when the post of Chief Economic Advisor (CEA) to the government of India was lying vacant since December 17, 2021, when K V Subramanian demitted the office. The new CEA Dr V Anantha Nageswaran was appointed on January 28, 2022, only a few days ahead of the Economic Survey was presented in the Parliament on January 31, 2022. He was a member of the Prime Minister’s Economic Advisory Council, and hence Economic Survey of this year acquires a special significance, because he has now become the CEA of the Ministry of Finance. Traditionally, Economic Surveys of the country are prepared under the leadership of CEA and his team, which is not the case this time, and hence, this document must be treated as the PM Narendra Modi’s voice.

Obviously, this year’s Economic Survey, highlights the importance of reforms in a number of sectors including deregulation of numerous sectors, simplification of processes, removal of legacy issues, privatisation, production linked incentives and so on. The document emanates the signal that the government is going to pursue all its policies regarding reforms and privatisation. (IPA Service)

IPA Special

Karnataka Election Results Have Given The Congress Some Useful Lessons

May 27, 2023
IPA Special

Forced Labour In India Highest In The World At Present

May 27, 2023
IPA Special

China All Set To Extend Its Solar Dominance To Global Wind Energy Sector

May 27, 2023
IPA Special

Greece Heads For Second National Elections As Coalition Talks Fail

May 27, 2023
IPA Special

Culture Wars Bubble Below The Surface Across Arab Region

May 27, 2023
IPA Special

Remembering Tina Turner, The Unapologetic Queen Of Rock And Roll

May 27, 2023
Politics

Six CMs staying away from PM’s NITI Aayog meeting

May 27, 2023
Politics

Cong poses 9 inconvenient questions to PM Modi

May 27, 2023
Politics

Cooperative federalism turned into joke, Kejriwal to Modi

May 27, 2023
Politics

BJP dares Karnataka govt to ban RSS, Bajrang Dal

May 27, 2023
Politics

Row over ‘The Diary of West Bengal’ film awaiting release

May 27, 2023
IPA Special

Opposition Politics In India Changing Fast In Next Few Months

May 26, 2023
IPA Special

Approval Of MiCA Regulation Leads To A New Dawn For Cryptocurrencies In EU

May 26, 2023
IPA Special

Under Nitish’s Leadership, Joint Opposition Slowly Takes Shape

May 26, 2023
IPA Special

Exchange Rate Depreciation Leads To Lowering Of The Real Wages Rate

May 26, 2023
IPA Special

Sourav Ganguly Has Given A Signal By Accepting Position Of BJP Govt Of Tripura

May 26, 2023
IPA Special

Tina Turner Was The Ultimate Live Performer Who Mesmerised People For Decades

May 26, 2023
IPA Special

Bernie Sanders And Chicago Mayor Johnson Have Come Out In Support Of Biden As Presidential Candidate

May 26, 2023
IPA Special

‘Succession’ Is US Television’s Most Devastating Critique Of The Ultrarich

May 26, 2023
Politics

Cong stand on Delhi ordinance depends on Punjab unit

May 26, 2023

An appeal

The legacy of IPA, founded by Nikhil Chakravartty, the doyen of journalism in India, to keep the flag of independent media flying high, is facing the threat of extinction due to the effect of the Covid pandemic. Only an emergency funding can avert such an eventuality. We appeal to all those who believe in the freedom of expression to contribute to this noble cause.
Click here to learn more

Share

Reply

  • 0
More on IPA

Karnataka Election Results Have Given The Congress Some Useful Lessons

May 27, 2023 3:58 pm | IPA Staff

By Harihar Swarup What are some of the implications of the Congress’s emphasis and creditable win in Karnataka for national politics? At one level it...

IPA Special

Forced Labour In India Highest In The World At Present

May 27, 2023 3:56 pm | IPA Staff

By Dr. Gyan Pathak Forced labour in India is the highest in the world. About 11 million are presently under forced labour in the country,...

IPA Special

China All Set To Extend Its Solar Dominance To Global Wind Energy Sector

May 27, 2023 1:15 pm | IPA Staff

By K Raveendran After establishing complete dominance in global solar supply chain, China is all set to maintain a firm grip of the global wind...

IPA Special

Greece Heads For Second National Elections As Coalition Talks Fail

May 27, 2023 1:09 pm | IPA Staff

By Satyaki Chakraborty Greece is heading for another general elections next month, possibly on June 25 as the ruling National Democracy Party refused to form...

IPA Special

Karnataka Election Results Have Given The Congress Some Useful Lessons

in IPA Special
May 27, 2023   ·  

Forced Labour In India Highest In The World At Present

in IPA Special
May 27, 2023   ·  

China All Set To Extend Its Solar Dominance To Global Wind Energy Sector

in IPA Special
May 27, 2023   ·  

Leave a Reply Cancel reply

You must be logged in to post a comment.

Follow us on
Up Next: Shooting Oil Prices Can Upset Budget Projections
©2020 -2021 India Press Agency, All Rights Reserved.
Newspack by India Press Agency | Statement of Ownership | Contact Us
logo
  • Home
  • now
  • politics
  • business
  • markets