Finance Minister presented the Economic Survey for 2020-21 ahead of the government's Budget for fiscal year beginning April 1, 2021.
The Survey seems to privilege wealth creation over reduction of income disparity.
What are the claims on the pandemic response?
The Survey is seen to have opted for a self-congratulatory tone.
It highlights the policy achievements of the government in steering the economy through the COVID-19 pandemic time.
The Survey cites that an approach that used ‘graded public health measures’ was adopted.
This enabled transform the short-term trade-off between lives and livelihoods into a win-win to save both lives and livelihoods over the longer term.
The survey thus asserts that India established a globally unique model of strategic policymaking in containing the pandemic.
The measures also helped the economy recover quickly from its deleterious impact.
How real are these?
The country did flatten the curve as well as crucially, so far avoided a second wave of infections seen in much of Europe and the U.S.
But, it may be debatable as to how much of the turn in the pandemic’s progress could be attributed wholly to proactive policy measures.
The survey’s contention that India has turned the crisis into an opportunity to strengthen its long-term growth potential through ‘seminal reforms’ seems a tall claim.
This is especially given the ongoing farmers’ agitation against the new farm laws.
There is also the plight of the struggling small and medium-scale industries and informal sectors.
What are the conflicting aspects?
The survey goes on to forecast that the economy is currently experiencing a V-shaped recovery.
This is said to enable GDP to expand, even by a ‘conservative estimate’, by 11% in real terms in 2021-22.
But, to achieve that level of real growth, retail inflation must moderate substantially to average 4.4% or less over the 12-month period through March 2022.
This is given the fact that the survey had projected nominal growth at 15.4%.
The survey also talks of the growth predictions on various sectors and factors while suggesting fiscal push to support the reviving economy.
Among others, a rapid roll-out of the COVID-19 vaccines and a recovery in demand in the battered services sector is mentioned.
However, the document fails in providing an honest assessment of the on-ground economic situation.
It has overlooked some of the key aspects in this regard.
E.g. the survey hints at the level of rural joblessness, which followed the return of millions of urban casual workers in the wake of the hastily implemented lockdown
This it does by taking credit for a record 311.92 crore person-days of work generated over the last 10 months (roughly from April 2020) under MGNREGA.
However, it has not spelt the extent of unemployment.
What is the larger concern?
Already the pandemic has exacerbated the gap between the rich and the poor.
The Survey now contends that growth should be prioritized over inequality in tackling poverty.
The survey thus seems to privilege wealth creation over all else, causing concerns over the sustainability of a ‘growth with inequality’.
