Delhi, being an urban place with high load density, has seen the electricity consumption increasing from "25,668 MUs in 2010-11 to 33,082 MUs in 2019-20". Delhi, where electricity prices have not been increased since 2015, also saw about 42 lakh households (more than 83 per cent of the total domestic electricity consumers) getting electricity subsidy.
The annual average concentrations of PM2.5, fine particulate matter that is about three per cent the diameter of a human hair and can lead to premature deaths from heart and lung diseases, decreased from 149 microgram per cubic meter (g/m3) in 2014 to 101 g/m3 in 2020.
It observed that India has one of the highest levels of OOPE in the world, contributing directly to the high incidence of catastrophic expenditures and poverty.
The economy had been slowing even before the pandemic: growth was 6.5% in 2018-19 and 4% in 2019-20. The pandemic shrank the economy by 7.7% in 2020-21.
“Given India’s stage of development, India must continue to focus on economic growth to lift the poor out of poverty by expanding the overall pie,” the Survey said. This, it said, will enable redistribution since economic growth and inequality converge in terms of their effects on socio-economic indicators in India.
India's economy is likely to grow by 11 per cent in the fiscal year beginning April 1 as a vaccine drive and rebound in consumer demand help it emerge from the carnage inflicted by a strict coronavirus lockdown, the Economic Survey said. The rebound will follow an estimated 7.7 per cent contraction in the GDP in the current financial year ending March 31, the annual document said. Tune in as ET Now consulting editor Mythili Bhusnurmath decodes key points and recommendations made in the Economic Survey of India 2020-21, tabled in Parliament by FM Nirmala Sitharaman on Friday. (Text: PTI)Economic Survey 2020-21 decoded for you
The Economic Survey 2020-21 presented in Parliament on Friday said that in order to solve the problems, authorities often make attempts to reduce discretion by having evermore complex regulations, which is counterproductive.
Earlier in the day, Chief Economic Adviser K V Subramanian projected an 11 per cent growth for 2021-22, aided by V-shaped recovery and a 7.7 per cent contraction for the current year. It also projects a lower 6.8 per cent growth in 2022-23.
"With the Indian context of potential high growth, the interest rate on debt paid by the Indian government has been less than India's growth rate by norm, not by exception," it said.
India is witnessing a V-shaped economic recovery. History will judge India's COVID19 policy response as mature. Reason for optimism on health & economic fronts. Be cautious till vaccination: CEA summarizes Economic Survey 2020-'21Watch: CEA Subramanian decodes Economic Survey
Agri-exports touched Rs 2.52 lakh crores and imports at Rs 1.47 lakh crores in financial year 2019-20, the survey said. India occupies a leading position in global trade of agricultural products. However, its total agricultural export basket accounts for a little over 2.5 percent of world agricultural trade. The major export destinations were USA, Saudi Arabia, Iran, Nepal, and Bangladesh.
The Economic Survey calls for restructuring the current regulatory mechanism, upgrading and building capacities at various National Institute of Pharmaceutical Education and Research (NIPERs).
Infrastructure and economic growth share a lot of backward as well as forward linkages, which makes investment in infra an imperative for an economy like India's, the Economic Survey 2020-21 observed.
Like every year, the survey will make an analysis of the trends in infrastructure, agricultural and industrial production, employment, prices, exports, imports, money supply and forex reserves, apart from all other factors that influence the economy and the budget.
The country's exports are expected to contract by 5.8 per cent and imports by 11.3 per cent during the second half of the current financial year, though implementation of several measures by the government would help support exports going forward, according to the Economic Survey 2021.
These legislations were designed "primarily" for the benefit of "small and marginal farmers", which constitute around 85 per cent of the total number of farmers and are the biggest sufferer of the "regressive" APMC-regulated market regime, the survey said.
Govt sees FY22 GDP growth at 11 per cent, and nominal GDP (which accounts for inflation) at 15.4 per cent. This would mark the strongest growth since India liberalised its economy in 1991, and the highest nominal growth since India's independence in 1947.
The Survey seems to indicate that the government can stay with higher fiscal deficit to push growth. It suggests that growth leads to debt sustainability in the Indian context.
The former Union finance minister took to Twitter to say that the "best decision" taken by the government is the decision not to print the economic survey.
The need for a change in definition, that's aimed at offering small firms the incentives to grow and thereby reap economies of scale was argued for in the Economic Survey 2018-19 too.
Uttar Pradesh, Gujarat and Bihar restricted the case spread the best; Kerala, Telangana and Andhra Pradesh saved the most lives; Maharashtra under-performed the most in restricting the spread of cases and in saving lives.
Breaking with years of tradition, Part 1 is devoted to key conceptual and policy issues – how India fought covid, the debt/GDP debate, the “unfairness” of Western credit rating agencies, inequality, loan forbearance, innovation, Ayushman Bharat and constructing a Bare Necessities Index.
It also added that use of improved storage structures as well as use of good storer varieties, judicious use of fertilizers, timely irrigation and post-harvest technology are essential to reduce the losses in stored onions.
The Survey said that unlike in advanced economies, in India, economic growth and inequality converge in terms of their effects on socio-economic indicators.
"The inevitable consequence of a resolution process(the control and management of the firm move away from existing promoters and managers, most probably, forever) deters the management and promoter of the firm from operating below the optimum level of efficiency. Further, it encourages the debtors to settle default expeditiously with the creditor at the earliest, preferably outside the code," the survey said.
The government has recognised 41,061 startups so far, more than 39,000 of which have reported 4,70,000 jobs, according to the Economic Survey 2020-21.
India's T&D losses have been over 20 per cent of generation, which is more than twice the world average. The ideal level of T&D losses ranges between six to eight per cent.
Infrastructure quintessential to boost growth; sectors to grow with unlocking of economy: Economic Survey
"The strong backward-forward linkages of the infrastructure sector are well established. Therefore, investment in infrastructure is quintessential for more rapid and inclusive economic growth," the Economic Survey tabled in Parliament said.
Further, the Survey has recognised the emerging potential of gig workers in India and said the labour reforms have brought in the labour laws in tune with the changing labour market trends.
The survey said most of the non-performing loans were lent and restructured during the forbearance phase and RBI’s audit missed some of the severe cases of ever-greening that the two lenders did.
It said that since the bulk of healthcare in India (74 percent of outpatient care and 65 percent of hospitalisation) is provided through the private sector in urban India, it is critical for policymakers to mitigate information asymmetry in healthcare which creates market failures.
The survey says that the fleet strength of airlines was 669 by the end of 2020 fiscal, which will increase to 713 by the end of the current fiscal. The increase in fleet strength is coming primarily with IndiGo continuing with its expansion plans.
"Mere reliance on 'Jugaad innovation' risks missing the crucial opportunity to innovate our way into the future," the Survey notes.
“Healthcare policy must not become beholden to “saliency bias”, where policy overweights a recent phenomenon,” believes the Chief Economic Adviser.
The government is currently in the midst of planning a disinvestment plan for public sector undertakings, under which it will look at privatising central public sector enterprises in non-strategic sectors.
The strategy hedges for a worst outcome initially and then calibrates the response step by step through a feedback mechanism.
Severe under-capitalisation of Indian banks was the inevitable outcome of prolonged forbearance. This triggered a distortion in bank's potential incentives, eventually emboldening them to indulge in risky lending. Such twisted incentives made banks go wrong on calculations, and as an end result, the quality of investment in the economy suffered badly.
The Indian economy, which the International Monetary Fund singled out as a global bright spot only a few years ago, is set to contract 7.7% in the current fiscal year to March 31, the deepest contraction in four decades, the economic survey is expected to say.
This year's economic survey assumes a much higher significance in view of the unprecedented manner in which 2020 played out. From hitting a multi-decade GDP trough in Q1 to making a noticeable recovery in the quarter that followed, the Indian economy has been in an extremely fluid state in all through 2020-21.
The growth rate in Bihar in 2019-20 fiscal has been recorded at 10.5 per cent while it was 4.2 at the national level during the period, the Economic Survey 2020-21 introduced in the state legislative assembly during the day said.
Before Covid, average daily metro journey figures stood at 57 lakh; dropped to 10 lakh: Delhi Eco Survey
As per directions of the government to check the spread of coronavirus infection, Delhi Metro train services were suspended from March 22 onwards in 2020. From September 7, services were resumed in a graded manner, in compliance with all the COVID-19 safety norms.
From Economic Survey 2021’s take on India’s startup ecosystem and gig economy to the government notifying India Seed Fund Scheme, here’s a look at the top tech news today.
The increasing role of the gig economy was evidenced in the significant e-commerce growth seen during the pandemic-induced lockdown, Economic Survey 2020-21 said.
Deputy Chief Minister and Finance Minister Ajit Pawar tabled the survey in the state Assembly, while Minister of State for Finance Shambhuraj Desai presented it in the Council.
The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.
India's insurance penetration "extremely low" compared to Asian rivals such as China, Malaysia and Thailand: Economic Survey
Even as India’s insurance penetration grew from 2.71% in 2001 to 3.76% in 2019, when compared with the penetration recorded in comparable Asian economies such as Malaysia, Thailand and China at 4.72, 4.99 and 4.30 % respectively, was found to be much lower, the survey stated.
The per capita income of the state at the current prices is estimated to drop by 3.7 per cent to Rs 1,83,286 for fiscal year 2020-21, the survey showed.
India’s real GDP is expected to have contracted 7.7 per cent in the current fiscal year given the impact of the COVID-19 pandemic on the economy.
The cover shows a V-shaped recovery curve that's driven by vaccine optimism and a greater push to the government's flagship Atmanirbhar Bharat campaign.
The Survey, therefore, explains India’s ‘barbell’ strategy that combined hedging against worst-case outcomes, on the one hand, with step-by-step responses driven by a Bayesian updating of information on the other. It shows how policies were targeted and sequenced in ways that would maximise bang for the buck.
However, reversing this trend, current account balance turned into surplus (0.1 per cent of GDP) in fourth quarter 2019-20 on the back of, among others, a lower trade deficit and a sharp rise in net invisible receipts.
V-shaped recovery in manufacturing sector led by iron & steel, cement, pharma and auto cos: Economic Survey 2020-2021
“V-shaped recovery is well underway, as demonstrated by the recovery in GDP growth and the sustained resurgence in high frequency indicators such as power demand, E-way bills, GST collection, steel consumption,” the survey said.
The RBI had discontinued all forms of forbearance given to banks in the latter half of 2015 and launched a asset quality review to know the exact amount of bad loans present in the banking system.
Computer software and hardware as a sector accounted for over 74% of total FDI inflows in the broader services sector in 2019-20, the survey said.
The Survey noted that the IT-BPM sector (excluding Hardware and e-commerce) had seen growth rates of 8.2% in 2017-18, 8.1% (2016-17) and 9.1% (2015-16).
In order to facilitate a resilient recovery of the economy from the impact of COVID-19 pandemic and the following lockdown, Government of India and RBI together announced a total stimulus worth Rs 29.87 lakh crore, which is 15 per cent of national GDP. Out of this, stimulus worth 9 per cent of GDP has been provided by the government under Aatma Nirbhar Bharat Package.
Health outcomes of states that adopted PM-JAY improved compared to those who didn't: Economic Survey
States that adopted the PM-JAY experienced greater penetration of health insurance and a reduction in infant and child mortality rates, as well as realised improved access and utilisation of family planning services, and greater awareness about HIV/AIDS, it added.
Economic Survey 2020-21: V-shaped recovery due to timely and stringent lockdown, says CEA KV Subramanian
India's timely and stringent lockdown to curb the spread of Covid-19 pandemic led to the 'V'-shaped economic recovery, said the Economic Survey 2020-21. The Economic Survey 2021 has forecast India's economy to contract 7.7% in 2020-21, before witnessing a sharp recovery of 10-12% in 2021-22. It is expected that the economy grows at its trend growth rate of 6.5% in 2022-23 and 7% in 2023-24 aided by structural reforms. CEA Krishnamurthy Subramanian highlighted the key highlights of Economic Survey. Watch.Economic Survey 2020-21: V-shaped recovery due to timely and stringent lockdown, says CEA KV Subramanian
“Milk production in the country has increased from 146.3 million tonnes in 2014-15 to 198.4 million tonnes in 2019-20,” the survey said. Compared to 2018-19, it has increased by 5.70 percent according to the government data.
While the government and much of the formal sector maintain that the domestic economy is seeing a V-shaped recovery post the national lockdown to contain the Covid-19 cases in April-May, the true shape of the recovery has been rather ‘K-shaped’.
The first lesson for policymakers is to treat emergency measures as such and not to extend them even after recovery: when an emergency medicine becomes a staple diet, it can be counterproductive,” the survey stated.
During the period between February 2019 and November 2020, public sector banks have passed on 0.94% as compared to 0.54% passed on by the private sector banks on outstanding loans. During the same period, in case of fresh loans, public sector banks reduced the rates by 1.51% and private sector banks reduced the interest rates by 1.76%.
“The first lesson for policymakers is to treat emergency measures as such and not to extend them even after recovery: when an emergency medicine becomes a staple diet, it can be counterproductive,” the survey said.
CLOSING BELL: Sensex tanks 589 points as Economic Survey fails to cheer investors; Nifty ends below 13,650; DRL, Maruti plunge 5% eachSensex tanks 589 points as Economic Survey fails to cheer investors; Nifty ends below 13,650
The survey prepared by Chief Economic Adviser Dr KV Subramanian said the current sovereign rating of India does not truly reflect its fundamentals.
Stressing the significance of a resilient logistics sector especially in the backdrop of the Covid-19 pandemic, the Survey noted how such resilience could go a long way in responding to emergencies and supply chain disruptions.
Strengthening production and post production measures needed to double farmers income: Economic survey
The survey said that adequate storage and remunerative markets for agricultural products should be the main focus of post-production management.
The survey mentioned that the tax incentive structure introduced earlier to boost R&D did not generate the expected level of private participation in GERD in India.
Economic Survey slams Credit Rating Agencies, says they do not reflect India's economic fundamentals
The Survey questioned the sovereign credit ratings and stated that these do not capture correctly the strong economic fundamentals of India.
"Together, prospects for robust growth in consumption and investment have been rekindled, with estimated real GDP growth for FY2021-22 pegged at 11 per cent,” the survey noted.
Economic Survey 2020-21: Drastic reduction in compliances with 41 central labour laws reduced to four
Last year was a particularly tough time for the MSME sector which faced an acute financial crunch and shuttered businesses amid the virus outbreak.
Finance Minister Nirmala Sitharaman tabled the Economic Survey 2020-21 in the Lok Sabha following which the house was adjourned. Today's Survey holds significance as the economy begins to recover from the pandemic-hit year. According to the survey, GDP growth for the next financial year (FY2021-22) is seen to be 11%.FM Sitharaman tables Economic Survey 2020-21 in Lok Sabha, FY22 GDP growth projected at 11%
The Economic Survey said that as the food subsidy bill is “becoming unmanageably large” and while it is difficult to reduce the economic cost of food management in view of rising commitment towards food security, there is a need to consider the revision of central issue price (CIP) to reduce the bulging food subsidy bill.
Asked whether India will be able to achieve a USD 5-trillion economy target by 2024-25, he said, "We are in 2021. So, four years are there and as of now, it does not seem that we will be able to reach that target."
It’s quite likely that fiscal deficit will be lower than what’s mentioned. When you under-promise and over-deliver, it generates enormous credibility, says Krishnamurthy Subramanian.
Responding to a question on whether an asset quality review (AQR) was imperative at this juncture, Das said the regulator’s supervisory process was already conducting an AQR-like assessment.
The Economic Survey had last week called for another round of asset quality review when the Covid related forbearance is lifted. The survey stated that it was important for the Reserve Bank of India to do a complete clean-up exercise of bank balance sheets after granting every regulatory forbearance.
Saving lives came first: Economic Survey establishes how India’s lockdown controlled Covid and will help in a V-shaped recovery
The response drew on epidemiological and economic research, especially those pertaining to the Spanish Flu, which highlighted that an early, intense lockdown provided a win-win strategy to save lives, and preserve livelihoods via economic recovery in the medium to long term.
As of the last week of December, there were 41,061 govt-recognised startups in India. Of this, over 39,000 startups account for 4,70,000 jobs, according to this year's Economic Survey.
FM Nirmala Sitharaman had in her budget for 2020-21 set a target of raising Rs 2.1 lakh crore from privatisation, sale of minority stakes in state-owned companies and share buyback by CPSEs. While Rs 1.20 lakh crore was to come from stake sale in CPSEs, Rs 90,000 crore was to be mopped up from share sale in financial institutions.
Earlier this month, RBI Governor Shaktikanta Das indicated that the central bank can consider the idea of a bad bank to tackle non-performing assets (NPAs). "If there's a proposal to set up a bad bank, the RBI will look at it. We have regulatory guidelines for asset reconstruction companies," Das had said.
Union Finance Minister Nirmala Sitharaman will present the budget for the financial year 2020-21 on Monday. Her speech is expected to begin at 11 AM IST in Lok Sabha.
Asked about the timing for pulling back the stimulus, he said the Economic Survey had clearly stated fiscal support should continue till the country returned to the pre-pandemic growth path.
The Economic Survey presented in Parliament on Friday expressed concern over lower sovereign rating assigned by agencies like Fitch, S&P and Moody's to India despite its strong economic fundamentals.
The Economic Survey 2020-21 presented in Parliament on Friday expects the growth rate to rebound sharply from an estimated record contraction of 7.7 per cent in the current financial year on account of the impact of the COVID-19 pandemic.
Covid-related relaxations gave a boost to NPS. Contribution under NPS grew over 30% with assets under management at Rs 4.94 lakh crore as on September 30, 2020, as compared to Rs 3.71 lakh crore a year ago.
Growth Gyaan: Tips on raising women’s participation in workforce, and how digitization may reduce inequalities in education
Besides, non-discriminatory practices at the workplace like pay and career progression are needed to help draw more females to join the labour force. Female labour force participation stood at 26.5% in 2018-19 compared to 80.3% for males.
Following a strong 10-12% rebound in FY22, survey looks ahead assuming a 6.5% rise in FY23 and 7% GDP growth in FY24
India’s V-shaped recovery was like the Indian cricket team’s performance in Australia which bounced from an all-time low score of 36 runs to clinch the four-match Test series 2-1.
Importantly, and perhaps more so after the pandemic, it calls for increasing investment in health infrastructure, by boosting public spending from 1% of GDP currently to 2.5-3.0% of GDP, along with the setting up of a sectoral regulator in light of the market failures due to information asymmetry.
The SOE describes the policy dilemma of lives versus livelihoods faced globally at the beginning of the pandemic forcing countries to choose between the two. Deploying the containment strategy India initially chose lives but soon enough livelihoods as well once the system to handle the pandemic was in place to hasten the unlocking of the economy.
The Insolvency and Bankruptcy Code has hence brought about significant behavioural changes among the creditors and debtors thereby redefining debtor-creditor relationship.
For all the hardships that year 2020 had, the Economic Survey 2020-21 is mostly on expected lines. The Part II of the Survey presents the economic assessment of the year 2020-21.
Fiscal deficits will bulge all over the world, with the IMF forecasting emerging market deficits more than doubling from below 5% of GDP pre-Covid to above 10% of GDP in 2020.
In the NDC, the country has also sought to achieve 40 per cent of cumulative electric power installed capacity from non-fossil fuel sources by 2030.
It emphasises on the huge potential for economic growth, the importance of further scaling up innovation and the way ahead in key areas like health, he said in a tweet.
"Social services include, education, sports, art and culture; medical and public health, family welfare, water supply and sanitation; housing, urban development, welfare of SCs, STs and OBCs, labour and labour welfare, social security and welfare, nutrition, relief on account of natural calamities etc," the Survey for the financial year ending March 31, 2021, said.
The solution is to simplify regulations and invest in greater supervision which, by definition, implies willingness to allow some discretion.
Under the initiative about 54,500 hectare land has been brought under green cover by planting 132 million trees, the Survey for 2020-21 laid in Parliament said.
Due to the pandemic, initiation of corporate insolvency resolution process (CIRP) was suspended for any default and the suspension along with continued clearance has allowed a small decline in accumulated cases.