Economic Survey 2022 - Definition, Importance & Highlights

The Economic Survey of India is an annual document released by the Finance Ministry, Government of India. It is a very important document from the IAS Exam perspective.

This article will discuss in detail the Economic Survey, highlights of Economic Survey 2022, and its importance in the UPSC and other government exams.

Highlights of previous years’ Economic Survey 2019-2021 are also provided in this article.

Economic Survey 2022:- Download PDF Here

Table of Contents:

Economic Survey Introduction

The Department of Economic Affairs, Ministry of Finance presents the Economic Survey of India in Parliament every year, just before the Union Budget. This document is submitted to both houses of Parliament during the Budget Session.

The Economic Survey reviews the developments in the Indian economy over the previous 12 months. It highlights the policy initiatives of the government, summarizes the performance on major development programs, and shows the growth prospects of the economy.

It is generally presented by the Chief Economic Advisor (CEA). However, this year (2022), it has been prepared by the Principal Economic Advisor Sanjeev Sanyal.

Importance of Economic Survey

The Economic Survey is a vital source for the UPSC exam, especially for the subjects Indian economy, polity, as well as, government schemes.

  • The Economic Survey discusses all the major government initiatives with explanations. All the dynamic and theoretical questions can be traced to this.
  • As per the new trend, the economy and the environment are going hand in hand. So questions can come from that perspective also.
  • Students can imbibe actual phrases used in the Economic Survey to frame answers for UPSC Mains Examination.
  • The Survey analyses and gives reasons for many issues happening around. Deep knowledge of the current policies and programs of the government also helps an aspirant to write meaningful essays.
  • Furthermore, the issues appraised in the Economic Survey and reforms suggested are often implemented by the government in future initiatives. A good example of this would be the Direct Benefit Transfer (DBT), which was suggested in previous Economic Surveys and has been implemented by the government.
  • Good phrases from the Survey and the use of appropriate language can be used in the exam to fetch a high score. For example – “Good economics is good politics”, “twin balance sheet problem”, “translating potential into actuality” “ Chakravuyh challenge”, etc.
  • Adding important and relevant facts and figures significantly boost marks in General Studies Paper-III.
  • Students should not miss reading the Economic Survey if they wish to clear the UPSC Prelims, as many questions are seen to be directly taken from this document.

How to read the Economic Survey for UPSC?

The pattern of Economic Survey

The Economic Survey usually consists of two volumes:

  1. Economic Survey, Volume I: Deals with conceptual and analytical issues.
  2. Economic Survey, Volume II: Deals with the state of economy and sectors of the economy in some detail with more focus on immediate issues and statistics.

Please note in 2022, there is only 1 volume of the Survey.

Tips to read the Economic Survey:

  • Read after a basic study: Students should have a basic understanding of economics, especially the basic terms like GDP, inflation, fiscal drag, etc. before moving on to studying the Economic Survey.
  • Read the Preface thoroughly: The Preface of the Economic Survey is like a summary of the document. Reading it will help you get an essence of what is inside and help you understand it better.
  • Boxes and Arguments: The document contains many boxes that are particularly important for the UPSC exam. From here, questions have been asked directly. Also, the data can be used to augment and support your answers. The Survey also gives arguments such as why a scheme or initiative is important, how it can be bettered, and also recommendations, which can be used in the mains answers.
  • Break into small topics: If you think reading the Economic Survey is overwhelming, it can be covered easily by breaking into smaller topics. You can categorize the content in the Survey into topics such as welfare schemes, macroeconomic tangibles, and demographics, agriculture, urbanization, social empowerment, figures (like unemployment data, GDP, inflation, food inflation, fiscal deficit, current account deficit, the balance of payments, foreign reserves, trade balance, etc.)

Economic Survey 2022 Highlights

The Economic Survey 2022 was presented by Finance Minister Smt. Nirmala Sitharaman. Presenting the highlights of the survey for the year 2022. One of the themes of this year’s Economic Survey is ‘Agile policy’.

Factors Analysis
Growth Estimates
  • The Indian economy is estimated to grow by 9.2 percent in real terms in 2021-22.
GDP Estimates
  • GDP is projected to grow by 8-8.5 percent in real terms in 2022-23. 
  • It also noted that the GDP growth rate contracted by 7.3 per cent in 2020-21.
Strong revenue
  • The survey pointed out that revenues have witnessed a strong revival in FY22. 
  • This means that the government has fiscal room to provide support if necessary. 
Imports-Exports
  • Exports are estimated to grow by 16.5 percent in 2021-22.
  • Imports are expected to grow by 29.4 per cent in 2021-22.
Monetary Management 
  • Repo rate was maintained at 4 per cent in 2021-22.
  • The Gross Non-Performing Advances ratio of Scheduled Commercial Banks (SCBs) declined from 11.2 per cent at the end of 2017-18 to 6.9 per cent at the end of September, 2021.
  • Capital to risk-weighted asset ratio of SCBs continued to increase from 13 per cent in 2013-14 to 16.54 per cent at the end of September 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.
  • The decline in retail inflation was led by the easing of food inflation.
  • Food inflation averaged at a low of 2.9 percent in 2021-22 (April to December) as against 9.1 per cent in the corresponding period last year.
Capital Spending
  • According to the Economic Survey, there can be a sharp increase in capital spending by the government as a demand and supply-enhancing measure.
Consumption
  • Total consumption is estimated to have grown by 7.0 per cent in 2021-22 with significant contributions in the form of government spending.
Agriculture
  • Agriculture and allied sectors remained the silver lining during the Covid-19 pandemic and are expected to grow by 3.9 per cent in 2021-22 after growing 3.6 per cent in the previous year.
Service Sector
  • The Covid-19 pandemic has hit the services sector the hardest. This sector is projected to grow by 8.2 per cent this financial year following the previous fiscal’s 8.4 per cent contraction.
Industrial Sector
  • The growth of the industrial sector has been estimated at 11.2 per cent in FY22.
Infrastructure
  • The top five sectors which capture around 83 percent of the aggregate pipeline value include: Roads (27 percent) followed by Railways (25 percent), Power (15 percent), oil & gas pipelines (8 percent) and Telecom (6 percent).
Air India Privatization 
  • The Economic Survey has highlighted that the privatization of Air India was a significant step in terms of boosting the privatization drive and gathering disinvestment proceeds.
Agile Policy framework
  • The government’s flexible and multi-layered response is partly based on an “Agile” framework that uses feedback-loops, and the use of eighty High Frequency Indicators (HFIs) in an environment of extreme uncertainty.
Startups
  • Startups in India have grown remarkably over the last six years. India has now become the third-largest startup ecosystem in the world after the US and China.
Global liquidity tapering 
  • A 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.
Forest Area
  • India has the tenth largest forest area in the world.
  • In 2020, India ranked third globally in increasing its forest area from 2010 to 2020.
  • In 2020, the forests covered 24% of India’s total geographical area, accounting for 2% of the world’s total forest area.
Sustainable Development
  • 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.
Climate Finance
  • As per the Economic Survey 2022, climate finance will remain critical to successful climate action for India to achieve its Net Zero Carbon Emission target by 2070.

Other important highlights from the Economic Survey 2022

Government’s Spending On Social Services Increases Significantly During The Pandemic

Social Services Spending: 

  • An increase of 9.8% has been made in the expenditure allocation to the Social Services sector in 2021-22 over 2020-21.
  • During the last five years, Social Services accounted for about 25% of the total Government expenditure. 

Economic Survey Observation on Education for 2019-20

  • Decline to 1.45% from 4.45% in drop-out rates at primary, upper primary and secondary levels.
  • Improvement in Gross Enrolment Ratio (GER) at all levels and improvement in gender parity. In 2019-20, 26.45 crore children were enrolled in schools. This has helped to reverse the declining trend of GER between 2016-17 and 2018-19. 

Government initiatives at revolutionizing the higher education ecosystem: 

  • Amendment to National Apprenticeship Training Scheme
  • Academic Bank of Credit
  • e PGPathshala
  • Unnat Bharat Abhiyan 
  • Scholarship for weaker sections

Pandemic Impact on Education:

  • The Economic Survey refers to the Annual Status of Education Report (ASER) 2021 which has assessed the impact during the pandemic for the education sector in rural areas. 
  • ASER found that 
    • Enrolment in the age group of 15 to 16 years continues to improve as the number of ‘not enrolled’ children in this age group declined from 12.1 % in 2018 to 6.6 % in 2021. 
    • Children (age 6-14 years) ‘not currently enrolled in schools’ increased from 2.5 % in 2018 to 4.6 % in 2021. 
    • Children in rural areas have moved out of Private to Government schools in all age groups.
    • Students in lower grades found it difficult to do online activities compared to higher grade students.

Government measures to minimize the adverse impact of the pandemic on education 

  • Distribution of textbooks at home, 
  • Telephonic guidance by teachers, 
  • Online and digital content through TV and Radio, 
  • TARA interactive chatbot, 
  • Activity-based learning through the Alternative Academic Calendar released by the National Council of Education Research and Training, etc. 
  • Other major initiatives: PM e-Vidya, National Digital Education Architecture, NIPUN Bharat Mission, etc.
Agile And Multi-Pronged Approach Adopted By India To Combat Covid-19

Context:

The Economic Survey highlights that India’s response during the pandemic was based on the agile framework Multi-Pronged Approach. 

What is India’s response to the Pandemic?

  • The response of the Union Government to the global COVID19 pandemic has been agile, strategic and pre-emptive. 
  • In an uncertain environment, the agile framework responds by assessing outcomes in short alternations and constantly adjusting itself incrementally.
  • The flexibility of the agile framework improves responsiveness and aids evolution, but it does not attempt to predict future outcomes. 

India’s Health Response to COVID-19:

The Economic Survey states that India adopted a multipronged approach to COVID19 response and management. These included:

  1. Restrictions/partial lockdowns
  2. Building capacity in health infrastructure
  3. COVID-19 appropriate behaviour, testing, tracing, treatment, and
  4. Vaccination drive

Health Sector Expenditure:

  • Expenditure on the health sector increased from Rs. 2.73 lakh crore in 2019-20 (pre-COVID -19) to Rs, 4.72 lakh crore in 2021-22 (BE), an increase of nearly 73%. 
  • The National Health Policy, 2017 envisaged an increase in the Government’s health expenditure to 2.5% of GDP by 2025. 
  • The Central and State Government’s budgeted expenditure on the health sector reached 2.1% of GDP in 2021-22, against 1.3% in 2019-20.

National Family Health Survey-5 (NFHS-5):

  • Child nutrition indicators have improved at the all India level. 
  • Under-Five Mortality Rate (U5MR) has declined from 49.7 in 2015-16 to 41.9 in 2019-21.  
  • Infant Mortality Rate (IMR) has declined from 40.7 per 1000 live births in 2015-16 to 35.2 per 1000 live births in 2019-21.  
  • Stunting has declined from 38% in 2015-16 to 36% in 2019-21. 
  • Wasting has also declined from 21% in 2015-16 to 19% in 2019-21.  
  • Underweight declined from 36% in 2015-16 to 32% in 2019-21. 
  • The sex ratio and birth of female children per 1000 male children born in the last five years, has grown from 919 in 2015-16 to 929 in 2019-21. 
India’s External Trade Recovers Strongly In 2021-22

Context:

The Economic Survey 2021-22 says that the resilience of India’s external sector during the current year augurs well for growth revival in the economy. 

External trade performance:

  • Exports: The USA followed by the UAE and China remained the top export destinations in April-November, 2021.
  • Imports: China, the UAE and the USA were the largest import sources for India. 
  • India’s merchandise exports: During April – December 2021 the merchandise exports grew by 49.7%, compared to the corresponding period of last year and 26.5% over 2019-20. 
  • India’s agriculture exports: Exports of agriculture and allied products grew by 23.2% during April- November 2021 over the corresponding period of last year. 

Trade in Services:

  • Services exports grew by 18.4% to US$ 177.7 billion during April-December 2021 for the corresponding period of last year. 
  • Services imports rose by 21.5% to US$ 103.3 billion in April-December 2021.

Current Account Balance:

  • India’s current account balance turned into a deficit of 0.2 percent of GDP in the first half of 2021-22. 

Capital Account:

  • The Survey states that the net foreign investment inflows moderated to US$ 25.4 billion in the first half of the current financial year, compared to the corresponding year of FY 2021. 
  • The Survey states that Foreign Portfolio Investment remains volatile due to global uncertainties.

BoP Balance and Foreign Exchange Reserves:

  • The Economic Survey mentions that the robust capital flows were sufficient to finance the modest current account deficit, resulting in an overall balance of payments (BoP) surplus.
  • This led to augmented foreign exchange reserves crossing the milestone of US$ 600 billion and touched US$ 633.6 billion as of December 31, 2021. 
  • As of the end of November 2021, India was the fourth-largest forex reserves holder in the world after China, Japan, and Switzerland.
Forex reserves trend

Image source: PIB

 External Debt:

  • India’s external debt as of end-September 2021 was 3.9% more than the end-June 2021 levels. 
  • The Survey says that from a medium-term perspective, India’s external debt continues to be below what is estimated to be optimal for an emerging market economy.

Economic Survey 2021 Highlights

The Economic Survey 2021 was presented by Finance Minister Smt. Nirmala Sitharaman. The theme for Economic Survey 2021 is “Saving Lives and Livelihoods”. Presenting the highlights of the survey for the year 2021.

  • In FY 2021, the economic contraction is projected at 7.7%.
  • With the farm sector being the silver lining, the GDP growth is estimated at 11% in the financial year 2022.
  • The economy is showing a V-shaped recovery supported by the vaccination drive against COVID-19. (Read in detail about economic recovery post-pandemic in the linked article.)
  • As the vaccination drive gathers steam, the rebound would be led by the low base and the continuing normalisation in economic activities.
  • Growth has been kept from further diving down by government consumption and net exports.
  • The Survey has batted for a continued expansionary fiscal stance by the government to ensure that growth returns to pre-Covid levels.
  • It said that as long as GDP kept growing, the country need not worry about debt.
  • It projected exports to decline by 5.8% and imports by 11.3% in the second half of FY21.
  • The country is expected to have a Current Account Surplus of 2% of GDP this fiscal which is a historic high after 17 years.
  • According to the survey, India’s fiscal policy should reflect Gurudev Rabindranath Tagore’s sentiment of ‘a mind without fear’.
  • It also stated that India’s sovereign credit ratings do not reflect its fundamentals, evident from its zero sovereign default history.
  • Healthcare:
    • The nationwide preemptive lockdown imposed prevented 37 lakh COVID-19 cases and 1 lakh deaths.
    • It recommended increasing the spending on public healthcare from 1% of GDP to 2.5 – 3% of GDP.
    • The health infrastructure should be made agile in order to be able to respond to pandemics better.
    • Telemedicine needs to be harnessed to the fullest by investing in internet connectivity and health infrastructure.
    • It recommended setting up a sectoral regulator for the healthcare sector and a rating agency-like body to evaluate the quality of healthcare service providers.
  • Process reforms:
    • There is over-regulation in the economy which leads to regulations being ineffective even when there is good compliance with the processes.
    • The solution is to simplify regulations and invest in greater supervision which, by definition, implies greater discretion.
    • There should be more investments in research and development by the private sector.
    • The Economic Survey suggests asset quality review exercise to be done 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.
    • It called for a clean-up of the banks’ books to ensure that past mistakes are avoided in the future.
    • There is a need for boosting the legal infrastructure for the recovery of loans.
    • The survey supported the new farm laws which it said would benefit the small and marginal farmers, and usher in a free-market era in agriculture.
  • Fiscal developments:
    • India adopted a calibrated approach best suited for a resilient recovery of its economy from the pandemic impact, in contrast with a front-loaded large stimulus package adopted by many countries.
    • India remained the only country among emerging markets to receive equity FII inflows in 2020.
    • As per the survey, compared to 2012, access to “the bare necessities” has improved across all states in the country in 2018.
    • Access to bare necessities is the highest in Kerala, Punjab, Haryana and Gujarat while it is the lowest in Odisha, Jharkhand, West Bengal and Tripura.

Economic Survey 2020 Highlights

Finance Minister Ms. Nirmala Sitharaman presented the Economic Survey 2020 in the Parliament on 31 January. Presenting the highlights of the Survey:

  • The theme of the Economic Survey is wealth creation, promotion of pro-business policies, and strengthening of trust in the economy.
  • Thalis(food platter) with respect to one day’s pay of a worker have improved over time, which indicates improved welfare of the common man. Note- This year economic survey unveiled Thalinomics.
    • The affordability of vegetarian Thalis improved 29 percent from 2006-07 to 2019-20 while that for non-vegetarian Thalis by 18 percent.
  • There have been many new firms created in the country since 2014.
    • In the formal sector, there has been a 12.2 % cumulative annual growth rate of new firms in 2014-18, compared to 3.8 % in 2006-2014.
    • About 1.24 lakh new firms were created in the year 2018, which is an increase of about 80 % from about 70,000 in 2014.
  • Under the Pradhan Mantri Awaas Yojana – Gramin (PMAY-G), the number of houses completed in a year quadrupled. (Read about Housing for All Scheme in the linked article.)
  • To achieve a Gross Domestic Product (GDP) of USD 5 trillion by 2024 – 25, India needs to spend about USD 1.4 trillion (Rs.100 lakh crore) over these years on infrastructure so that lack of infrastructure does not become an impediment to the growth of the economy.
  • Livestock has emerged as an important secondary source of income for rural families and has assumed an important role in securing the goal of doubling the income of farmers.
    • There is a need to bring in a distinction between hoarding and storage of food grains, this will play an important role in doubling farmers’ income.
    • There is also a need for addressing some basic challenges such as credit, insurance coverage as well as irrigation in agriculture and allied sectors. (Read about National Livestock Mission in the linked article.)
  • Rise in Tree and forest cover – They have reached 80.73 million hectares.
  • States/UTs showing an increase in forest cover are Karnataka, Jammu & Kashmir, and Andhra Pradesh. States showing a loss are Meghalaya, Manipur, Mizoram, and Arunachal Pradesh.
  • Ayushman Bharat has set up 28,005 Health & Wellness Centres as of 14th January 2020.
    • The OoPE (out of pocket expenditure) on health as a percentage of total health expenditure diminished from 64.2 percent in 2013-14 to 58.7 percent in 2016-17.
  • 2.6 crore jobs have been created in urban and rural areas between 2011-12 and 2017-18.
    • Apart from jobs, the focus has also been on enhancing the quality of jobs and formalization of the economy.
    • The share of regular wage/salaried employees has increased from 18 percent in 2011-12 to almost 23 percent in 2017 – 2018 (an increase of five percentage points). This reflects formalization in the Indian economy.
  • Currently, India has the second-largest emerging Green Bond Market after China.
    • The State Bank of India entered the green bond market with a US$650 million Certified Climate Bond.
    • In 2019, India joined the International Platform on Sustainable Finance (IPSF) to further boost the environmentally sustainable investments.
  • All the urban areas of 35 states/UTs have been declared ‘open defecation free’ (ODF).
    • The percentage of waste processing has increased to around 60% from 18%.
    • This comes under the Swachh Bharat Mission (Urban).
  • In the services sector, there has been a 33% hike in the gross FDI.
    • This sector accounted for about 55% of the economy and Gross Value Added (GVA) growth, 38% of the total exports, and 2/3rd of the total FDI inflows into India.
    • In 15 of the 33 states/UTs, the services sector’s share is now over 50 percent of the Gross State Value Added.
  • Regarding the space programme of the country, ISRO has launched around 5-7 satellites per year in recent years with almost no failures.
  • The survey notes that while there is a case for governmental intervention when markets don’t function properly, excessive intervention particularly when the market can do the job of improving citizens’ welfare perfectly well, suppresses economic freedom and generates ‘deadweight loss’.
    • Deadweight loss is the loss generated by the wasted opportunity of creating a consumer and producer surplus and diminishes wealth creation by not permitting efficient allocation of entrepreneurial resources and energy to productive activities thereby promoting economic dynamism.
  • The GDP growth is pegged at 6-6.5 percent in the fiscal year starting in April.
  • The fiscal deficit target may have to be relaxed to revive growth for the current fiscal.
  • Relying on ten factors like the build-up of demand pressure, higher FDI inflows, a positive growth of GST revenue, there is an expectation of an uptick in growth in the second half of the current fiscal.
  • The Survey demands that the government deliver diligently on reforms to revive growth.
  • Ethical wealth creation is key to India becoming a USD 5 trillion economy by the year 2025.
  • Regarding regular women employment, from 2011 – 12 to 2017 – 18, there was an increase of 8%.
    • But in rural employment of women, there has been a decline in female labour force participation.
  • Debt waivers disrupt the credit culture, reduces formal credit to the same farmers.
  • The survey recommends the government to analyze the areas where it intervenes and undermines markets unnecessarily.
  • There is a call for improving governance in public sector banks, and bring in more disclosures to enhance trust. The Survey also mentions dwarfism in the banking sector.
  • The Survey also suggests taking steps to make it easier to start new business ventures, pay taxes, register property, and enforce contracts.
  • The easing of crude prices reduces the current account deficit; imports contract more sharply than exports in the first half of the current fiscal.
  • Demand pressure in the economy is weakening as indicated by a declining inflation rate (from 3.2% in April 2019 to 2.6% in Dec 2019).
  • During April – November 2019, the GST collections increased by 4.1% for the Centre. 
  • The Chief Economic Advisor (CEA) commented in the press conference after the Survey release that the impact of the Wuhan Coronavirus on the Indian economy would be very marginal.
  • He noted that all groups of countries have slowed down and in a globalized economy, India has also felt the effect.
  • He said the economic slowdown since 2017 has been due to the lagged effect of reduced investment from 2013 which occurred due to credit boom-bust.
  • The Survey informs that for wealth to be distributed, it first has to be created and called for looking at wealth creators with respect.

Economic Survey 2019 Highlights

Download the highlights of the 2019 Economic Survey from the link below:

Economic Survey 2019:- Download PDF Here

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