Union Finance Minister, Ms Nirmala Sitharaman tabled the Economic Survey 2022 in the Indian Parliament. According to Economic Survey, after contracting by 7.3 percent in 2020-21, the Indian economy is expected to grow by 9.2 percent in real terms in 2021-22. Widespread vaccine coverage, gains from supply-side reforms and regulatory ease, sustained export growth, and the availability of budgetary space to ramp up capital spending will all contribute to growth in 2022-23.

The coming year is expected to see a surge in private sector investment, with the financial system in a strong position to aid the economy’s recovery. As a result, India’s GDP is expected to rise by 8.0-8.5 percent in real terms in 2022-23. This forecast is based on the assumption that there will be no further debilitating pandemic-related economic disruption, that the monsoon will be normal, that global liquidity withdrawal by major central banks will be orderly, that oil prices will be in the US$70-$75/bbl range, and that global supply chain disruptions will gradually ease throughout the year.

The central government’s revenue receipts increased by 67.2 %(YoY) from April to November 2021, compared to a 9.6 % growth forecast in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals). The growth in the revenue pool is due to increased direct and indirect tax collections, as well as non-tax revenue enhanced by the RBI’s excess transfer to the government. In terms of YoY growth, gross tax income increased by more than 50% throughout this time period. Since July 2021, gross monthly GST receipts have continuously exceeded Rs. 1 lakh crore, following a brief decrease in June 2021 due to the second wave of COVID-19.

The privatisation of Air India was particularly significant, not only in terms of obtaining disinvestment funds, but also in terms of bolstering the privatisation campaign.

Over the first three quarters of 2021-22, capital expenditures are on the rise. Capital expenditure increased by 13.5 percent (YoY) from April to November 2021, with an emphasis on infrastructure-intensive sectors such as roads and highways, railways, and housing and urban affairs.

Key Highlights of Economic Survey 2021-22 Include:

• In real terms, growth of 9.2% is predicted in 2021-22.
• In 2022-23, GDP is expected to grow at a rate of 8-8.5 %.
• From April to November 2021, capex increases by 13.5 percent.
• On December 31, 2021, India’s foreign exchange reserves reaches $633.6 Billion.
• Spending on social services as a percentage of GDP increased to 8.6% in 2021-22, up from 6.2 % in 2014-15.
• By the end of 2021, bank credit has accelerated to 9.2%.
• Rs 89 thousand Crores Raised through 75 IPO
• From April to December 2021-22, CPI-C inflation has moderated to 5.2 percent and Food Inflation Averages at a low of 2.9% in 2021-22

The estimates are in line with the World Bank’s and Asian Development Bank’s recent forecasts of 8.7% and 7.5 percent real GDP growth for 2022-23, respectively. India’s real GDP is expected to rise at 9% in both 2021-22 and 2022-23, and at 7.1 percent in 2023-24, according to the IMF’s latest World Economic Outlook (WEO) growth predictions announced on January 25, 2022. In all three years, India is expected to be the world’s fastest expanding major economy.

(Source:  Economic Survey 2022)

Bureau Galactik Views