Highlights of "Economic Survey 2021-22"

Economic Survey 2021-22 was tabled in Parliament by the Finance Minister soon after the President's address to both Houses of Parliament.

The central theme of this year's Economic Survey is the "Agile approach".

The Economic Survey of India the most authoritative and updated source of data on India's economy, it is released by the Ministry of Finance.

It is a report that the government presents on the state of the economy in the past one year, the key challenges it anticipates, and their possible solutions.

It is prepared by the Economics Division of the Department of Economic Affairs (DEA) under the guidance of the Chief Economic Advisor.

It is usually presented a day before the Union Budget is presented in the Parliament.

The first Economic Survey in India was presented in the year 1950-51.

Up to 1964, it was presented along with the Union Budget, from 1964 onwards, it has been delinked from the Budget.

Key Points of the Economic Survey 2021-22

State of the Economy

The Indian economy is estimated to grow by 9.2% in real terms in 2021-22 (advance estimates) subsequent to a contraction of 7.3% in 2020-21.

The Gross Domestic Product (GDP) projected to grow by 8-8.5% in real terms in 2022-23.

Projection comparable with World Bank and Asian Development Bank's latest forecasts of real GDP growth of 8.7 percent and 7.5 percent respectively for 2022-23.

As per IMF's January, 2022 World Economic Outlook projections, India's real GDP projected to grow at 9 percent in 2021-22 and 2022-23 and at 7.1 percent in 2023-2024, which would make India the fastest growing major economy in the world for all 3years.

The latest edition (April, 2022) of the World Economic Outlook cut its forecast for India's Gross GDP growth in FY 2022-23 to 8.2%. In 2021, India registered a growth rate of 8.9 %. In 2023-24, India is estimated to grow at 6.9 %.

Macroeconomic stability indicators suggest that the Indian Economy is well placed to take on the challenges of 2022-23.

Combination of high foreign exchange reserves, sustained foreign direct investment, and rising export earnings will provide adequate buffer against possible global liquidity tapering in 2022-23.

Economic impact of "second wave" was much smaller than that during the full lockdown phase in 2020-21.

Fiscal Developments

The revenue receipts from the Central Government (April to November, 2021) have gone up by 67.2 percent (YoY) as against an expected growth of 9.6 percent in the 2021-22 Budget Estimates.

Gross Tax Revenue registers a growth of over 50 percent during April to November, 2021 in YoY terms. This performance is strong compared to pre-pandemic levels of 2019-2020 also.

During April-November 2021, Capex (Capital Expenditure) has grown by 13.5% (YoY) with focus on infrastructure-intensive sectors.

The Central Government debt has gone up from 49.1% of GDP in 2019-20 to 59.3% of GDP in 2020-21, but is expected to follow a declining trajectory with the recovery of the economy.

The government is on course to achieve the fiscal deficit target of 6.8% of GDP for the current year (2021-22).

External Sectors

India's merchandise exports and imports rebounded strongly and surpassed pre-COVID levels during the current financial year.

There was significant pickup in net services with both receipts and payments crossing the pre-pandemic levels, despite weak tourism revenues.

Net capital flows were higher at USD 65.6 billion in the first half of 2021-22, on account of continued inflow of foreign investment, revival in net external commercial borrowings, higher banking capital and additional Special Drawing Rights (SDR) allocation.

As of end-November 2021, India was the fourth largest forex reserves holder in the world after China, Japan and Switzerland. (US $ 633.6 billion as of December 31, 2021).

Monetary Management and Financial Intermediation

The liquidity in the system remained in surplus

Repo rate was maintained at 4 per cent in 2021-22.

RBI undertook various measures such as G-Sec Acquisition Programme and Special Long-Term Repo Operations to provide further liquidity.

The economic shock of the pandemic has been weathered well by the commercial banking system

YoY Bank credit growth accelerated gradually in 2021-22 from 5.3 per cent in April 2021 to 9.2 per cent as on 31st December 2021.

The Gross NPA ratio of Scheduled Commercial Banks (SCBs) declined from 11.2 per cent at the end of 2017-18 to 6.9 per cent at the end of September, 2021.

Net Non-Performing Advances ratio declined from 6 percent to 2.2 per cent during the same period.

Capital to risk-weighted asset ratio of SCBs continued to increase from 13 per cent in 2013-14 to 16.54 per cent at the end of September 2021.

The Return on Assets and Return on Equity for Public Sector Banks continued to be positive for the period ending September 2021.

Exceptional year for the capital markets

Rs. 89,066 crore was raised via 75 Initial Public Offering (IPO) issues in April-November 2021, which is much higher than in any year in the last decade.

Sensex and Nifty scaled up to touch peak at 61,766 and 18,477 on October 18, 2021.

Among major emerging market economies, Indian markets outperformed peers in April-December 2021.

Prices and Inflation

The average headline CPI-Combined inflation moderated to 5.2 per cent in 2021-22 (April-December) from 6.6 per cent in the corresponding period of 2020-21. Effective supply-side management kept prices of most essential commodities under control during the year. Reduction in central excise and subsequent cuts in Value Added Tax (VAR) by most States helped ease petrol and diesel prices.

Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5 per cent during 2021-22 (April to December). This has been attributed to:

1) Low base in the previous year,
2) Pick-up in economic activity,
3) Sharp increase in international prices of crude oil and other imported inputs, and
4) High freight costs.

The divergence between CPI-C and WPI Inflation peaked to 9.6% points in May 2020. However in 2021 there was a reversal in divergence with retail inflation falling below wholesale inflation by 8.0% points in December 2021. This divergence can be explained by factors such as:

1) Variations due to base effect,
2) Difference in scope and coverage of the two indices,
3) Price collections,
4) Items covered,
5) Difference in commodity weights, and
6) WPI being more sensitive to cost-push inflation led by imported inputs.

With the gradual waning of base effect in WPI, the divergence in CPI-C and WPI is also expected to narrow down.

Sustainable Development and Climate Change

India's overall score on the NITI Aayog SDG India Index and Dashboard improved to 66 in 2020-21 from 60 in 2019-20 and 57 in 2018-19. Number of Front Runners (scoring 65-99) increased to 22 States and UTs in 2020-21 from 10 in 2019-20.

In the NITI Aayog North-Eastern Region District SDG Index 2021-22 - 64 districts were Front Runners and 39 districts were Performers.

India has the tenth largest forest area in the world. In 2020, India ranked third globally in increasing its forest area during 2010 to 2020. In 2020, the forests covered 24% of India's total geographical, accounting for 2% of the world's total forest area.

In August 2021, the Plastic Waste Management Amendment Rules, 2021, was notified which is aimed at phasing out single use plastic by 2022.

Draft regulation on Extended Producer Responsibility for plastic packaging was notified.

The Compliance status of Grossly Polluting Industries (GPIs) located in the Ganga main stem and its tributaries improved from 39% in 2017 to 81% in 2020.

The PM Modi, as a part of the national statement delivered at the 26th Conference of Parties (COP 26) in Glasgow in November 2021, announced ambitious targets to be achieved by 2030 to enable further reduction in emissions.

The need to start the one-word movement "LIFE" (Lifestyle for Environment) urging mindful and deliberate utilization instead of mindless and destructive consumption was underlined.

Agriculture and Food Management

The Agriculture sector experienced buoyant growth in the past two years, accounting for a sizable 18.8% (2021-22) in Gross Value Added (GVA) of the country registering a growth of 3.6% in 2020-21 and 3.9% in 2021-22.

Minimum Support Price (MSP) policy is being used to promote crop diversification.

Net receipts from crop production have increased by 22.6% in the latest Situation Assessment Survey (SAS) compared to the SAS Report of 2014.

Allied sectors including animal husbandry, dairying and fisheries are steadily emerging to be high growth sectors and major drivers of overall growth in the agriculture sector.

The Livestock sector has grown at a CAGR (Compound annual growth rate) of 8.15% over the last five years ending 2019-20. It has been a stable source of income across groups of agricultural households accounting for about 15% of their average monthly income.

India runs one of the largest food management programmes in the world.

Government has further extended the coverage of the food security network through schemes like PM Gareeb Kalyan Yojana (PMGKY).

Industry and Infrastructure

Index of Industrial Production (IIP) grew at 17.4 percent (YoY) during April-November 2021 as compared to (-)15.3 percent in April-November 2020.

Capital expenditure for the Indian railways has increased to Rs. 155,181 crores in 2020-21 from an average annual of Rs. 45,980 crores during 2009-14 and it has been budgeted to further increase to Rs. 215,058 crores in 2021-22 – a five times increase in comparison to the 2014 level.

Extent of road construction per day increased substantially in 2020-21 to 36.5 Kms per day from 28 Kms per day in 2019-20 - a rise of 30.4 percent.

Net profit to sales ratio of large corporations reached an all-time high of 10.6% in July-September quarter of 2021-22 despite the pandemic (RBI Study).

Introduction of Production Linked Incentive (PLI) scheme, major boost provided to infrastructure-both physical as well as digital, along with measures to reduce transaction costs and improve ease of doing business, would support the pace of recovery.


IT-BPM services revenue reached US$ 194 billion in 2020-21, adding 1.38 lakh employees during the same period.

Major government reforms include, removing telecom regulations in IT-BPO sector and opening up of space sector to private players.

Services exports surpassed pre-pandemic level in January-March quarter of 2020-21 and grew by 21.6 percent in the first half of 2021-22 - strengthened by global demand for software and IT services exports.

India has become 3rd largest start-up ecosystem in the world after US and China. Number of new recognized start-ups increased to over 14000 in 2021-22 from 733 in 2016-17.

44 Indian start-ups have achieved unicorn status in 2021 taking overall tally of unicorns to 83, most of which are in services sector.

Gross Value Added (GVA)

GVA of services crossed pre-pandemic level in July-September quarter of 2021-22; however, GVA of contact intensive sectors like trade, transport, etc. still remain below pre-pandemic level.

Overall service Sector GVA is expected to grow by 8.2 percent in 2021-22.

Foreign Direct Invest

During the first half of 2021-22, the service sector received over USD 16.7 billion Foreign Direct Invest - accounting for almost 54% of total FDI inflows into India.

Social Infrastructure and Employment

With revival of economy, employment indicators bounced back to pre-pandemic levels during last quarter of 2020-21.

As per the quarterly Periodic Labour Force Survey (PFLS) data up to March 2021, employment in urban sector affected by pandemic has recovered almost to the pre-pandemic level.

According to Employees Provident Fund Organisation (EPFO) data, formalization of jobs continued during second COVID wave; adverse impact of COVID on formalization of jobs much lower than during the first COVID wave.

Expenditure on social services (health, education and others) by Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 8.6% in 2021-22 (BE).

As per the National Family Health Survey-5:

1) Total Fertility Rate (TFR) came down to 2 in 2019-21 from 2.2 in 2015-16

2) Infant Mortality Rate (IMR), under-five mortality rate and institutional births have improved in 2019-21 over year 2015-16

Under Jal Jeevan Mission (JJM), 83 districts have become "Har Ghar Jal" districts.

Increased allotment of funds to Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) to provide buffer for unorganised labour in rural areas during the pandemic.
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India's first domestic Covid -19 vaccine, Whole Virion Inactivated Coronavirus Vaccine (COVAXIN), was developed and manufactured by Bharat Biotech International Limited in collaboration with National Institute of Virology of Indian Council of Medical Research (ICMR).