Rediff.com  » Business » Highlights of Economic Survey 2020-21

Highlights of Economic Survey 2020-21

Source: PTI
January 29, 2021 17:01 IST
Get Rediff News in your Inbox:

Following are the highlights of Economic Survey 2020-21, tabled in Parliament by Finance Minister Nirmala Sitharaman on Friday.

  • Economic contraction projected at 7.7% in FY21
  • 11% GDP growth projected in FY22, farm sector remains silver lining
  • V-shaped recovery supported by COVID vaccination drive
  • Rebound to be led by low base and continued normalisation in economic activities as vaccine rollout gathers traction
  • Govt consumption, net exports have cushioned growth from further diving down
  • Exports to decline by 5.8%, imports by 11.3% in 2nd half of FY21
  • India expected to have a Current Account Surplus of 2% of GDP this fiscal, a historic high after 17 years
  • India's sovereign credit ratings do not reflect its fundamentals, India's willingness to pay is unquestionably demonstrated through its zero sovereign default history
  • India's fiscal policy should reflect Gurudev Rabindranath Tagore's sentiment of ‘a mind without fear'
 

Healthcare:

  • India's lockdown strategy prevented 37 lakh COVID-19 cases, 1 lakh deaths
  • Survey recommends increase in public healthcare spending from 1% to 2.5-3% of GDP
  • India's health infrastructure must be agile to respond to pandemics - healthcare policy must not become beholden to 'saliency bias'
  • Telemedicine needs to be harnessed to the fullest by investing in internet connectivity and health infrastructure

Process reforms:

  • India over-regulates the economy resulting in regulations being ineffective even with relatively good compliance with process
  • The solution is to simplify regulations and invest in greater supervision which, by definition, implies greater discretion
  • India's business sector needs to significantly ramp up investments in R&D
  • Survey suggests asset quality review exercise immediately after the forbearance is withdrawn
  • Forbearance represents 'emergency medicine' that should be discontinued at the first opportunity when the economy exhibits recovery, not a 'staple diet' that gets continued for years
  • Legal infrastructure for the recovery of loans needs to be strengthened de facto

Fiscal developments

  • India adopted a calibrated approach best suited for a resilient recovery of its economy from COVID-19 pandemic impact, in contrast with a front-loaded large stimulus package adopted by many countries
  • India remained a preferred investment destination with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies
  • Net FPI inflows recorded an all-time monthly high of USD 9.8 billion in November 2020, as investors' risk appetite returned
  • India only country among emerging markets to receive equity FII inflows in 2020
  • India the fastest country to roll out 10 lakh vaccines in 6 days and also emerged as a leading supplier of the vaccine to neighbouring countries and Brazil
  • India's mature policy response provides important lessons for democracies to avoid myopic policy-making.

Photograph: Adnan Abidi/Reuters

Get Rediff News in your Inbox:
Source: PTI© Copyright 2021 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
SHARE THIS STORY 

Moneywiz Live!