As is customary at the beginning of the budget session of Parliament, Union Finance Minister Nirmala Sitharaman presented the Economic Survey, authored by a team of economists headed by the Chief Economic Adviser Krishnamurthy V Subramanian. The Survey offers an inkling of the shape the Indian economy is in, ahead of the Government’s budget for the fiscal year beginning April 1, 2021, as also actions that are needed to be taken. It does not conceal the reality that the Indian economy, as economies of many nations across the world, has taken a hit because of the novel coronavirus pandemic, when economic activities came to an almost complete standstill for months altogether. This is mirrored by the figures given in the Survey; the gross tax revenue, for instance, earned by the Government during the period April to November 2020 fell by 12.6% to Rs.10.26 lakh crore, a telling indicator of the extent to which the economy had contracted. Similarly, disinvestment which was targeted at Rs. 2.1 lakh crore had been only Rs. 15,220 crore, or barely 7.2 per cent of the targeted amount, a drastic shortfall which the Survey attributed to the Covid-19 pandemic. The fiscal deficit had also gone up, with the Union Government borrowing 65% more than the corresponding period in the previous financial year.
However, as the Government began to get a grip on the pandemic and the Indian economy began to open up, there were hopeful signs that it was bouncing back and, with the ongoing vaccination campaign, if bolstered by bold and imaginative stimulation packages, would be able to make substantial recovery during 2021-22. The Survey expects the Indian economy to grow by 11 per cent, and the Indian GDP to be at Rs.149.2 lakh crore, during 2021-22, which would be close to the growth forecast of 11.5 per cent made by the International Monetary Fund. This means a reversal to the contracting economy as indicated by growth figures for the second half of 2020. The Goods and Services Tax (GST) collections, for example, had increased in the second half of the year as the monthly GST collections in December 2020 stood at Rs 1.15 lakh crore. Inflation between April and December 2020 stood at 6.6% in comparison to the previous year, a reasonable attainment given the havoc wrought by the pandemic to the production and supply chain. It is expected that the assessment of the health of the Indian economy will yield pointers to the Finance Minister to implement bold measures to assist the rebound and drive it onto the high growth path, while ensuring that the ground lost during the pandemic is recovered through focus on agriculture, health care, banking and industrial growth.