FM Nirmala Sitharaman on Friday presented the Economic Survey 2021 that details the state of the economy ahead of the government’s Union Budget 2021 for the fiscal year.
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 UPSC IAS Exam perspective. This article will discuss in detail the Economic Survey, highlights of Economic Survey 2020, and its importance in the UPSC and other government exams.
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.
Economic Survey 2021 Highlights:
Economic Survey 2020-21 Highlights: The document was tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman. According to the document, the government sees FY22 GDP growth at over 11 per cent.
The Budget Session of the Parliament began today and Finance Minister Nirmala Sitharaman tabled the Economic Survey 2020-21 in the Lok Sabha. The annual document by the Ministry of Finance under the guidance of Chief Economic Advisor KV Subramanian provides a summary of annual economic development across the country during the financial year 2020-21.
According to the document, the government sees the Indian economy growing at 11.5 per cent in the financial year 2021-22 (FY22) based on IMF estimates. However, the GDP growth rate is estimated at minus 7.7 per cent for ongoing fiscal.
Here are the highlights of Economic Survey 2020-21:
– Real growth rate for FY21 is taken as -7.7 per cent (MoSPI) and the real growth rate for FY22 is assumed as 11.5 per cent based on IMF estimates.
– The survey projected a V-shaped recovery: While the lockdown resulted in a 23.9 per cent contraction in GDP in Q1, the recovery has been a V-shaped one as seen in the 7.5 per cent decline in Q2 and the recovery across all key economic indicators.
Finance Minister Nirmala Sitharaman on Friday presented the Economic Survey that details the state of the economy, ahead of the government’s Budget for the fiscal year beginning April 1, 2021. The Economic Survey 2020-21, authored by a team led by Chief Economic Adviser Krishnamurthy Venkata Subramanian, details the state of different sectors of the economy as well as reforms that should be undertaken to accelerate growth.
The economic survey tabled on Friday sees a robust growth of 11% for the fiscal year beginning on April 1 on the back of the nationwide vaccination and a rebound in consumer demand. India, which the International Monetary Fund singled out as a global bright spot only a few years ago, is set to contract 7.7% in this fiscal year, to March 31, the deepest contraction in four decades, the government said in the survey.
Economic Survey 2020-2021 accessed; Read here
Annual Economic Survey 2020-21 – Click here -Download
The Indian economy can contract by 7.7% in the current financial year ending on March 31 and the growth could be 11% in the next financial year, according to the Economic Survey. The contraction in FY21 is mainly due to Coronavirus (Covid-19) pandemic and the visible damage caused by the subsequent countrywide lockdown to contain it.
Annual Economic Survey 2020-21 Volume 2:
The survey unveiled two days before the Union Budget is broadly in line with forecasts by the Reserve Bank of India (RBI) which has said it expected the country’s GDP to contract by 7.5% in the year ending March 31. The International Monetary Fund (IMF) recently pegged the contraction in India’s economy at 8% in 2020-21. It expects a growth rate of 11.5% in 2021-22 before a decline to 6.8% in 2022-23 and that India will regain the tag of the fastest-growing large economy in the world in both years.
In the quarter ended June 2020, the GDP contracted by 23.9% followed by a milder contraction of 7.5% in the quarter ended September 2020. “India was the only country to announce a slew of structural reforms to expand supply in the medium to long term and avoid long-term damage to productive capacities,” said the survey. “The upturn in the economy while avoiding the second wave of infections makes India a sui generis case in strategic policymaking amidst a once-in-a-century pandemic,” it added.
Annual Economic Survey 2020-21 Volume 2 – Click here – Download
The Economic Survey pegged India’s economic contraction in 2020-21 at 7.7 per cent – the sharpest fall in four decades – mainly due to the nationwide lockdown to curb the Covid-19 pandemic. This matches CSO’s first advance estimates that project the economy to decelerate at 7.7 per cent in 2020-21 and RBI’s projection of 7.5 per cent contraction.
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 the 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 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 consists of two volumes:
- Economic Survey, Volume I: Deals with conceptual and analytical issues.
- 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.
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.)