Budget 2022: Key highlights from the Economic Survey

The Economic Survey 2021-22 has been presented by Finance Minister Nirmala Sitharaman before she will introduce the Union Budget tomorrow on February 1, 2022. The survey has revealed the performance of different sectors of the economy and also projected the rate of growth of the Indian economy for the fiscal year 2022-23. Here are the top key highlights from the Economic Survey 2021-22.

Economic Survey 2022: Macro highlights

Economic growth to be around 8-8.5%

The Economic Survey 2021-22 has forecasted India’s economic growth to be around 8-8.5% for the upcoming fiscal year. This is below the growth estimate of 9.2% in the current year as projected by the National Statistical Office (NSO). The survey further added that thanks to the vaccination program going throughout the country, the economy is getting back on track and there are long-term benefits in the pipeline owing to reforms made in the supply-side. All these make the Indian economy in a healthy position to grow at a rate of around 8-8.5% in the fiscal year 2022-23.

Revenues rise: More room for fiscal stimulus

Revenue receipts of the government during April-November 2021 have jumped 67.2% YoY.  This strong revival in revenues implies that the Finance Minister now has room for providing more fiscal stimulus. 

Fiscal deficit: Govt on track to meet target

The government is expected to “comfortably" meet its fiscal deficit target of 6.8% of GDP in the current fiscal. It also has the space to ramp up capital spending on the back of strong revenue growth.

Measures taken to meet government finances

The Indian economy contracted by 7.3% in 2021-22, which is fairly higher than the projection of 6-6.5% in the survey presented a few months ago before the advent of the COVID pandemic. The survey also shows that the government also took several conventional and unconventional measures in order to maintain and stabilize the market conditions and the finances needed by the government are met without any difficulties. 

Finance consolidation and GFCF growth rate

The government’s finances are going to see consolidation in 2021-22, after an uptick in debt and deficit metrics in FY 2021. The Gross Fixed Capital Formation (GFCF) is likely to witness a robust growth of around 15% in 2021-22 and recover back to the pre-pandemic levels.

Budget economic Survey: Impacted sectors

Least and Worst Affected Sectors

The least affected sector due to the COVID pandemic has been the agriculture and allied sectors, reveals the Economic Survey. The sector is likely to grow at a pace of 3.9% in 2021-22 as per the survey. On the other hand, the worst-hit sectors have been the ones that involve human contact, particularly the service sector. As per the survey, the sector contracted 8.4% in the last year and is expected to grow at a rate of 8.2% in this financial year.

Economic Survey 2022 Budget: Other highlights

India a startup hub

India has become the third-largest startup ecosystem in the world after the US and China. The Survey noted that the government recognized over 14,000 new startups in 2021-22 against 733 in 2016-17. 

Air India sale to boost privatization

This progress on privatisation of Air India is particularly important, not only in terms of garnering disinvestment proceeds but also for boosting the privatisation drive, said the Economic Survey.