What can we expect from the Economic Study?

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New Delhi: Anticipating the Union budget on February 1, the government today presents the Economic Study for 2022-23. mint examines its importance to the economy and what we can expect from the vital document.

What is the need for the Economic Survey?

The budget proposals for the next fiscal year are supposed to be a fiscal policy strategy in response to the current state of the economy and the challenges associated with it. The Economic Study is an emblematic annual document that reviews the prevailing economic scenario and offers a panoramic view of the economic evolution of the country in the last year. It analyzes the state of the economy and the challenges that both the national and global economies have faced. It also points out the appropriate policy measures that should be initiated to resolve any prevailing economic crisis, should it exist.

What could be your highlights this time?

Apart from presenting an outlook on the state of the economy, this year’s Economic Survey could skilfully analyze the direction of the economy compared to the rest of the world in terms of economic growth (India being the fastest growing major economy ); price stability and foreign exchange reserves. In addition to the monetary measures of the Reserve Bank of India, one could also cite the efficient management of the supply chain by the government, which resulted in successful management of inflation. Similarly, the management of the fiscal deficit is likely to be discussed. Reasons could also be offered for slow progress on divestment goals.

Are geopolitical issues likely to come up in the survey?

The survey may highlight supply chain disruption due to the Ukraine war and raw material prices. One could mention the possibility of a global recession and its impact on India. Impact of high inflation in developed economies leading to rate increases; and its effect on the currency exchange rate, which generates additional pressure on the current account deficit.

How does the survey influence policy steps?

The steps suggested in the survey help generate public debate. In the past, they have helped crystallize reforms such as the rationalization of subsidies and user charges; divestment and privatization; tax and banking reforms; agricultural reforms and asset monetization. The privatization of two public sector banks, an insurance company, the strategic sale of the government’s stake and LIC in IDBI Bank, the monetization of assets for infrastructure financing are some of the reforms that emerged after the discussions.

What is the ideal time for the survey?

In reality, the Economic Survey is a mid-term review of the economy, as the data required is mostly for less than nine months of the year. However, since its aim is to provide a true picture of the economy and to seek public support for the required policy responses, it should ideally be presented in the winter session of Parliament rather than one day before the Union’s budget. This would also help the government to get meaningful input from different stakeholders.

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