Ahead of the presentation of the Union Budget, Union Finance Minister Nirmala Sitaraman tabled the Economic Survey 2020-21. Chief Economic Advisor (CEA) Krishnamurthy Subramanian led the Survey which focuses on the impact of the Coronavirus pandemic, condition of different sectors of the economy and the reforms to be taken.
Subramanian said that during the Covid-19 pandemic, the country was willing to take short-term pain for long-term gain to save lives. “India is focused on saving lives and livelihoods by its willingness to take short-term pain for long-term gain, at the onset of the Covid-19 pandemic,” he said.
The country’s economy is currently undergoing a V-shaped recovery. The Survey projects that the Covid-19 vaccine will energize India's economic growth with 11% next year. This means the Indian GDP in 2021-22 is expected to be at Rs 149.2 lakh crore which 2.4% more than the GDP during 2019-20. The GDP in 2019-20 was Rs 145.7 lakh crore.
The Survey also indicates that amid crisis, the agriculture sector has the silver lining. It also projects that the agriculture sector is the only sector which is likely to grow by 3.4%.
The Survey also points out that the disinvestment has only been Rs 15,220 crore due to the Covid-19 pandemic. The estimated disinvestment was set at Rs 2.1 lakh crore. Meanwhile, India's fiscal deficit may overshoot the initial budget estimates. The fiscal deficit has already gone up. As of January 8, the Centre has borrowed a total of Rs 10.72 lakh crore. According to the Survey, this is 65% more than what the Centre borrowed during the same period last financial year.
The survey also showed high food price remained a major driver of inflation in 2020 at 9.1%. Inflation between April and December 2020 stood at 6.6% in comparison to the previous year. However, as the economy opens up, food inflation will likely be coming down.