Economic Survey projects a 11 per cent growth for 2021-22 and a 6.8 per cent growth for the year 2022-23. A big step-up in expenditure for health and infrastructure and a bold thrust on privatisation are among the other highlights.
THE GDP GROWTH is set to increase by 11 per cent (15 per cent in nominal terms) in 2021-22. Chief Economic Adviser K Subramanian, author of the Survey, said deficit control exercise should be reserved for better times. Even IMF has urged support for growth in expenditure in critical situations as at present.
This 11 per cent growth assumption is again dependent on other imperatives enjoined in the Survey. India, among the large countries affected by the pandemic, has been able to avoid a second surge of the Covid-19 virus. It is also resorting to an efficient and effective use of vaccines making these available across the country.
STEP-UP OUTLAY ON HEALTH, INFRASTRUCTURE…
The Survey has urged public health expenditure raised from the present 1.5 per cent of GDP to
2.5 – 3 per cent of GDP. The Survey also suggests a big step-up in expenditure on infrastructure.
A public investment programme centred around the National Infrastructure Pipeline along with the vaccination drive, are likely to push demand for goods and services and accelerate recovery. It could also create room for private investment.
The economy is expected to pick up growth to pre-Covid-19 level within two years. On this premise, the Survey has projected a 6.8 per cent growth in GDP (in real terms) in 2022-23. As demand picks up, corporate investments could get attracted.
LIVES AND LIVELIHOODS OVER GROWTH…
CEA Subramanian has presented a credible case on how India had managed to save “lives and livelihoods” with the most stringent lockdowns to tackle the pandemic.
Subramanian asserted that the tough lockdown prevented the Covid-19 spread to additional 37 lakh persons and saved more than a lakh lives. But the loss of millions of jobs, the spread of poverty and rise in inequality are not easily measurable.
The Survey emphasises the importance of raising public health expenditure and securing the health of population against future pandemics.
The Survey suggests several reform measures: privatisation of public sector banks, withdrawal of regulatory rigours for banks and companies, a significant rise in the corporate sector’s share in R&D expenditure and a reduction in the bulging subsidies over a period by rationalising the issue price of rice and wheat through PDS. –
By Sethuraman Srinivasan
[pdf-embedder url=”https://industrialeconomist.com/wp-content/uploads/2021/02/22-Pre-Budget-Survey-Sethuraman-Feb2021.pdf” title=”Pre-Budget Survey-Sethuraman-Feb2021″]Optimism over economic growth…
