Economic Survey 2021-22

Key takeaways

The Economic Survey 2021-22 tabled in the Parliament points out that the Indian economy has reached the pre-pandemic levels. 

What is the Economic Survey of India?

Presented annually by the Ministry of Finance, the Economic Survey of India is a document prepared under the guidance of the Chief Economic Adviser. This document presented to both the houses of parliament during the budget session explains in detail the development and performance of the Indian Economy in the past year, while also charting out the opportunities and challenges of the coming fiscal year. The key difference between in Economic Survey of India and the Annual Budget presented by the government is that while the latter maps out the spending, collection and expenses of economic assets for the coming year, the former charts out in exact detail the present health of the economy given past performance and current status. To understand the difference between the budget and the Economic Survey it is essential to know that it is the Economic Survey which enables lawmakers to prepare a budget that will take the Indian Economy towards higher growth and improved performance.  


The latest economic survey was presented by the honourable Finance minister of India, Smt. Nirmala Sitharaman. The advance estimates suggest that the Indian economy will grow at 8-8.5 per cent in the financial year 2022-23 after the current year’s expected growth of 9.2 per cent.

These projections are based on the assumptions that there will be no further debilitating pandemic related economic disruption, monsoon will be normal and that withdrawal of global liquidity by major central banks will be orderly. It also depends on oil price being in the range of $70-$75 a barrel and global supply chain disruptions easing.

The  Economic Survey 2021-22 points out that overall economic activity have recovered past the pre-pandemic levels. Almost all indicators show that the economic impact of the “second wave” in Q1 was much smaller than that experienced during the full lockdown phase in 2020-21 even though the health impact was more severe. However, survey also noted the challenges arising out of the new COVID-19 variants and uncertainties in the global economy.

The government’s fiscal support to the economy as well as to the health response caused the fiscal deficit and government debt to rise in 2020-21. However, a strong rebound in government revenues in 2021-22 has meant that the Government will comfortably meet its targets for the year while maintaining the support, and ramping up capital expenditure. The strong revival in revenue receipts, up over 67 per cent year-on year in April-November 2021 means that the government has fiscal space to provide additional support if necessary. The latest economic survey points out that India needs spending of $ 1.4 trillion to reach the GDP target of a $5 trillion economy.


The Economic Survey 2021-22 further expands on the fact that the rapid export growth India is currently seeing and the comfortable fiscal space that the country has for ramping up capital expenditure can support economic growth in the coming financial year. The higher capital expenditure with a focus on infrastructure spending in 2021-22 budget estimates will have a multiplier effect on the ongoing economic recovery.

Global standing:

The Economic Survey 2021-22 further points out that, foreign exchange reserves stood at $ 634 billion on 31st December 2021. This is equivalent to 13.2 months of merchandise imports and is higher than the country’s external debt. The combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide an adequate buffer against possible global liquidity tapering in 2022-23. Increase in FPI limit to the sectoral cap has acted as a catalyst for increasing weightage of domestic securities in major global equity indices.

According to survey, India’s weightage in MSCI EM index from 8.3 per cent in 2020 to 12.45 per cent in December 2021. The country’s weightage also rose in other indices such as the MSCI Asia Pacific ExJapan, MSCI World index and those compiled by the FTSE.

On banking sector stress:

As per the Economic survey 2021-22 the banking system is well capitalised and the overhang of NPAs seems to have structurally declined even allowing for some lagged impact of the pandemic.

Can we expect Budget giving priority over fiscal discipline?

The answer will be out tomorrow…

Our take:

Growth projections are in line with broader market expectations. We need to see, whether the government ramps up fiscal space to further push up economic activity and Infrastructure spending.

Author:- Mangesh Kulkarni | Research Analyst

Tel: 91-22-67526636

Email: mangesh.kulkarni@almondzadmin


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