Economic Survey 2021 HIGHLIGHTS: India's COVID response saved over 1 lakh lives, CEA

The Economic Survey, which is presented on the opening day of the budget session, provides a summary of the annual economic development across the country during the financial year.

The countdown to the budget, which the Finance Minister Nirmala Sitharaman has said will be pathbreaking and transformational, has well and truly begun.

The Prime Minister set the ball rolling by terming the budget that is to come as a historic one on account of what he termed a notable happening. "For the first time in India's history, in a way, the Finance Minister had to present 4-5 mini budgets in 2020 in the form of different packages. So this Budget will be seen as a part of those 4-5 mini budgets, I believe this," the PM told the Parliament at the beginning of the budget session.

And now the Economic Survey has been tabled by the Finance Minister in the House.

In an unprecedented year that saw the economy walloped like never before by the virus, and which saw the stock markets soar despite this hit on the back of money - Rs 60000-odd crore from foreign investors - gushing in, the vision document expectedly shed light on the impact Covid-19 had on the economy. The verdict: India reaped the "lockdown dividend".

It also shared the Chief Economic Advisor Krishnamurthy Subramanian's ideas for recovery.

And what of healthcare, in a year which has brought it thoroughly into focus. He did have thoughts to share.

The highlights from the survey:

Highways construction to regain high pace of pre-COVID level: Survey

Highways construction will regain fast-pace of the pre-COVID level on the back of multiple initiatives and unlocking of the economy, the Economic Survey 2020-21 said on Friday. The COVID-19 shock resulted in the decline of road construction to 22 km a day in the current fiscal from 30 km a day in FY19.

IBC redefines debtor-creditor relationship, says Economic Survey

Ushering in significant behavioural changes, the insolvency law has redefined the debtor-creditor relationship with more than 80 per cent of the corporate debtors getting resolved before official announcement of resolution process till September 2020, according to the Economic Survey.

The Insolvency and Bankruptcy Code (IBC) has rescued 308 corporate debtors as on December 2020 through resolution plans and they had Rs 4.99 lakh crore to creditors.

Taxpayer grievance redressal system needs more teeth, independence: Survey

The government should reinvigorate the taxpayer grievance redressal system by giving it more teeth and making it independent of the tax department to help build trust in tax administration, the Economic Survey said on Friday.

India's COVID response saved over 1 lakh lives: CEA

India's pandemic response, focused on saving lives and livelihoods, restricted the COVID-19 spread by 37 lakh cases and saved more than 1 lakh lives, as per the Economic Survey 2020-21.

A health worker checks a syringe during a vaccination drive at KC General Hospital in Bengaluru. (Photo | Meghana Sastry, EPS)

NPPA undertook measures to ensure availability of essential drugs during pandemic: Survey

Drug pricing regulator NPPA undertook necessary steps to ensure availability of life saving essential medicines across the country during the COVID-19 pandemic, the Economic Survey said on Friday. Drug prices in India are regulated to ensure continued availability and affordability of essential medicines with improved access to consumers, it added.

Economic Survey flags high T&D losses in power sector

India's transmission and distribution (T&D) losses in the power sector are "substantial" and are very high compared to peer nations, said the Economic Survey. The T&D losses represent electricity that is generated but does not reach intended customers. India's T&D losses have been over 20 per cent of generation, which is more than twice the world average. The ideal level of T&D losses ranges between six to eight per cent.

Need to promote non-discriminatory practices at workplace for women: Eco Survey

There is a need to promote non-discriminatory practices at the workplace like pay and career progression, improving work incentives and social security benefits for women to increase the level of female labour force participation rate in India, said the Economic Survey tabled in Parliament on Friday.

As per the Economic Survey for 2020-21, the labour force participation rate of females in the productive age (15-59 years) was 26.5 per cent in 2018-19, as compared to 80.3 per cent for males (rural+urban).

Rapid internet, broadband uptake; reduced data cost could enable affordable access: Survey

Internet and broadband penetration across both urban and rural areas progressed rapidly, and the reduced cost of data could enable the affordable access at a fast pace, the Pre-Budget Economic Survey said on Friday.

For representational purpose.

Need to see agriculture as modern biz enterprise; urgent reforms required: Survey

Lauding the farm sector for demonstrating resilience during the pandemic, the Economic Survey on Friday suggested the government to see farm sector as a "modern business enterprise" for which "urgent reforms" are required to enable sustainable and consistent growth.

Exports may dip 5.8 per cent, imports by 11.3 per cent in second half of 2020-21

The country's exports are expected to contract by 5.8 per cent and imports by 11.3 per cent during the second half of the current financial year, though implementation of several measures by the government would help support exports going forward, according to the Economic Survey 2021.

For representational purpose. (File photo)

Health outcomes of states that adopted PM-JAY improved: Economic Survey

The health outcomes of the states that adopted PM-JAY improved when compared to the states that did not adopt the scheme, according to the Economic Survey 2020-21. States that adopted the PM-JAY experienced greater penetration of health insurance and a reduction in infant and child mortality rates, as well as realised improved access and utilisation of family planning services, and greater awareness about HIV/AIDS, it added.

Enhanced govt spending on healthcare to cut out-of-pocket spending: Survey

An increase in government spending on the healthcare sector - from the current 1 per cent to 2.5-3 per cent of GDP - as envisaged in the National Health Policy 2017 could reduce out-of-pocket expenditures, as per the Economic Survey 2020-21. The rise in public spending can lead to a reduction in expenditures from 65 per cent to 30 per cent of overall healthcare spend, it noted.

Greater Thrust on Innovation required: Survey

India needs greater thrust on innovation to catapult itself to a higher growth trajectory and become the third largest economy in GHDP current US$ in the near future, says the Economic Survey 2020-21. This requires boosting gross expenditure on R&D from 0.7 per cent of GDP currently, to at least the average level of Gross Domestic Expenditure in other top ten economies (GDP current US$) of over two per cent. It also involves significantly calling up R&D personnel and researchers in the country, especially in the private sector.

Repo rate cut by 115 bps since March 2020: Economic Survey

The Economic Survey observes that the repo rate has been cut by 115 bps since March 2020, with 75 bps cut in first Monetary Policy Committee meeting in March 2020 and 40 bps cut in second meeting in May 2020. This year saw improvement in transmission of policy repo rates to deposit and lending rates, as reflected in the decline of 94 bps and 67 bps in Weighted Average Lending Rate on fresh rupee loans and outstanding rupee loans respectively from March 2020 to November 2020. Similarly, the Weighted Average Domestic Term Deposit Rate declined by 81 bps during the same period.

#EconomicSurvey: Bare Necessities Index (BNI) puts #Odisha along with WB, Jharkhand and Tripura for lowest access to water, sanitation, housing, micro-environment, and other facilities between 2012 & 2018. Kerala, Punjab, Haryana and Gujarat among best @NewIndianXpress #Odisha pic.twitter.com/k7bBNTneph

— Siba Mohanty (@Siba_TNIE) January 29, 2021

India expected to have a Current Account Surplus of 2 per cent of GDP this fiscal, a historic high after 17 years

Image used for representational purpose. (Photo | PTI)

LIVE: Press Conference by Chief Economic Advisor @SubramanianKri on #EconomicSurvey 2020-21

Watch on #PIB's
YouTube: https://t.co/eW5vyEV6gT
Facebook: https://t.co/p9g0J6q6qvhttps://t.co/T3PPrCXIk4

— PIB India (@PIB_India) January 29, 2021

Sales of affordable homes improving; signalling recovery in real estate sector: Survey

The COVID-19 pandemic affected the residential property market during the April-June period last year but sales have improved in affordable homes segment since July onwards, reflecting economic recovery in the real estate sector, according to the Economic Survey.

The National Housing Bank's (NHB) Housing Price Indices (HPIs) are a broad measure of movement of residential property prices observed within a geographic boundary.

New farm laws herald new era of market freedom: Economic Survey

The government's annual Economic Survey on Friday strongly defended new farm laws, saying they herald a new era of market freedom which can go a long way in improving lives of small and marginal farmers in India.

These legislations were designed "primarily" for the benefit of "small and marginal farmers", which constitute around 85 per cent of the total number of farmers and are the biggest sufferer of the "regressive" APMC-regulated market regime, the survey said. (READ MORE)

Economic survey recommends increase in public health spending

#EconomicSurvey strongly recommends increase in public health spending from 1% to 2.5-3% of GDP

“Increased healthcare spending can reduce out-of-pocket expenditure from 65% to 35% of overall healthcare spend”

Read here: https://t.co/icgdaQF697 pic.twitter.com/FsllWY3fkk

— PIB India (@PIB_India) January 29, 2021

India has a track record of having adopted expansionary fiscal policy focussed on infrastructure spending. We need to replicate the same, notes Economic Survey

India’s sovereign credit rating does not reflect its fundamentals: Economic survey

The survey called for an overhaul of sovereign rating methodology, saying that the fifth-largest economy can't be BBB- rated.

“Never in the history of sovereign credit ratings has the 5th largest economy been rated as the lowest rung of investment-grade (BBB -). India’s fiscal policy must not remain beholden to a noisy, biased measure of India’s fundamentals. India’s forex reserves can cover an additional 2.8 standard deviation negative event. It is imperative that sovereign credit rating methodology be made more transparent, less subjective,” it said.

Sensex tanks 588.59 points to close at 46,285.77; Nifty dives 182.95 points to 13,634.60

S&P BSE SENSEX

Economic survey dedicated to COVID 19 warriors

Launching the #EconomicSurvey2021, Chief Economic Advisor #KVSubramanian said this year's #EconomicSurvey is dedicated to the #COVID19 warriors. @TNIEBiz @gsvasu_TNIE

For LIVE Updates: https://t.co/FnGw8jQnrQ pic.twitter.com/WUBXMswcfz

— The New Indian Express (@NewIndianXpress) January 29, 2021

Early intense lockdown saved lives, helped the faster recovery, says Chief Economic Advisor

"During high uncertainty, policy should minimize large losses. India's policy response to COVID-19 was guided by the realization that GDP growth will come back, but not lost human lives. Early intense lockdown saved lives, helped the faster recovery," said Chief Economic Advisor (CEA) KV Subramanian.

Economic Survey finds that stringency of the lockdown played a role: CEA Dr K V Subramanian

Intensity and stringency of initial lockdown correlates well with both cases and deaths, both across countries and across states within India

- finds #EconomicSurvey #SavingLivesAndLivelihoods pic.twitter.com/QX0HpMvrWn

— PIB India (@PIB_India) January 29, 2021

India’s response to the once-in-a-century crisis based on humane principle “Saving a life that is in jeopardy is the origin of dharma,” says Chief Economic Adviser K V Subramanian.

#EconomicSurvey2021: India-the only country to announce structural reforms to expand supply in the medium to long term & avoid long-term damage to productive capacities #SavingLivesAndLivelihoods #VShapedRecovery (7/7) @FinMinIndia @PIB_India @nsitharamanoffc

— K V Subramanian (@SubramanianKri) January 29, 2021

Hospitalisation rates in India are among the lowest in the world

Despite improvements in healthcare access and quality (healthcare access and quality scored at 41.2 in 2016, up from 24.7 in 1990), India continues to underperform in comparison to other Low and Lower Middle Income (LMIC) countries. At 3-4 per cent, the hospitalisation rates in India are among the lowest in the world; the average for middle income countries is 8-9 per cent and 13-17 per cent for OECD countries.

The percentage of the poorest utilising prenatal care through public facilities has increased

The National Health mission has played a critical role in mitigating inequity in healthcare access. The percentage of the poorest utilising prenatal care through public facilities has increased from 19.9 per cent to 24.7 per cent from 2004 to 2018.

Similarly, the percentage of the poorest accessing institutional delivery increased from 18.6 per cent to 23.1 per cent and from 24.7 per cent to 25.4 per cent for post-natal care. The poorest utilising inpatient care and outpatient care has increased from 12.7 per cent to 18.5 per cent and from 15.6 per cent to 18.3 per cent. Therefore in conjunction with Ayushman Bharat, the emphasis on NHM should continue.

Farm sector reforms overdue, will help create ‘One India, One Market’: Survey

The reforms in the agricultural sector were more overdue than even the labour reforms as the existing laws kept the Indian farmer enslaved to the local Mandi and their rent-seeking intermediaries. The local monopolists created by this legal infrastructure enabled the intermediaries to prosper at the cost of the farmer, especially the poor ones without the wherewithal to store their produce.

The agricultural reforms enable the farmer to sell where he gets the best deal and thereby enable competition that is sine qua non to create welfare for the small farmer. The reforms in agriculture markets will enable creation of ‘One India one market’ for agri-products.

Image used for representaional purpose. (File photo | Jithendra M, EPS)

Survey calls for adequate capitalisation of public sector banks

The survey says adequate capitalisation of public sector banks is required. If capital is not provided, lenders may resort to risk-shifting, it said. In turn, impacting the real economic recovery. “Under-capitalised banks may again resort to risk-shifting and zombie lending, thereby severely exacerbating the problem. The adverse impact could then spill over to the real economy through good borrowers and projects being denied credit. The resultant drop in the investment rate of the economy could then lead to the slowdown of economic growth,” it said.

Counter-cyclical policy a must: Survey

Is more government spending likely? The Survey seems to suggest so.

For India, in the current scenario, when private consumption, which contributes to 54 per cent of GDP is contracting, and investment, which contributes to around 29 per cent is uncertain, the relevance of counter-cyclical fiscal policies is paramount, it recommends.

This after observing how Indian Kings used to build palaces during famines and droughts to provide employment and improve the economic fortunes of the private sector. Economic theory, in effect, makes the same recommendation: in a recessionary year, Government must spend more than during expansionary
times. Such counter-cyclical fiscal policy stabilizes the business cycle by being contractionary (reduce spending/increase taxes) in good times and expansionary (increase spending/reduce taxes) in bad times.

India has been unique in experiencing declining daily cases: Survey

India's strategy flattened the curve, pushed the peak to September, 2020, and helped transform the short-term trade-off between lives and livelihoods into a win-win in the medium to long-term that saves both lives and livelihoods. After the September peak, India has been unique in experiencing declining daily cases despite increasing mobility, says the Survey.

India focused on saving lives and livelihoods :Survey

The Covid-19 pandemic engendered a once-in-a-century global crisis in 2020. Faced with unprecedented uncertainty at the onset of the pandemic, India focused on saving lives and livelihoods by its willingness to take short-term pain for long-term gain.

Image used for representational purpose. (Photo | AFP)

India's Covid containment strategy motivated by Nobel-Prize winning research: Survey

The (lockdown) strategy was also motivated by the Nobel-Prize winning research in Hansen & Sargent (2001) that recommends a policy focused on minimizing losses in a worst case scenario when uncertainty is very high. Faced with an unprecedented pandemic and the resultant uncertainty, loss of scores of human lives captured thus the worst case scenario.

India reaping the lockdown dividend: Survey

The Survey notes that India is reaping the "lockdown dividend" from the brave, preventive measures adopted at the onset of the pandemic, which were based on the humane principle advocated eloquently in the Mahabharata that "Saving a life that is in jeopardy is the origin of dharma."

A V-shaped bounce back like Team India's in Australia: Economic survey

A Survey that is optimistic of India bouncing back with a 11% GDP growth in FY22 begins with a reference to Team India's famous Australia win. The survey said that the V-shaped economic recovery is due to timely stringent lockdown.

India is witnessing a V-shaped recovery: Economic survey

Despite the hardhitting economic shock created by the global pandemic, India is witnessing a V-shaped recovery with a stable macroeconomic situation aided by a stable currency, comfortable current account, burgeoning forex reserves, and encouraging signs in the manufacturing sector output.

India's GDP is projected to contract by 7.7 per cent

#Breaking India's GDP is projected to contract by 7.7 per cent says Economic Survey @NewIndianXpress @TNIEBiz

— Anuradha Shukla (@anu1122) January 29, 2021

Budget likely to focus on growth, structural reforms: Report

The budget, to be presented on February 1, is likely to be less worried about fiscal deficit and will be focused more on nursing the fragile growth, according to a Wall Street brokerage report.

There have been 4-5 mini budgets in 2020, upcoming budget will be seen as part of that series: PM

GDP growth seen rebounding at 11 per cent in FY22

In the economic survey, Narendra Modi government has estimated 2021-22 GDP growth at 11 per cent. Growth recovery to be driven by consumption, it has said.

India to have suffered a staggering  Rs 20 lakh crore loss in April-Sept quarter

A report by SBI Ecowrap had in May predicted the coronavirus outbreak to have caused losses to the tune of Rs 30.3 lakh crore to the national economy, while analysts at UBS Securities have estimated India to have suffered a staggering Rs 20 lakh crore loss or 10.5% of GDP between April and September quarter. (READ MORE)

Economic survey tabled

Union Finance Minister Nirmala Sitharaman tabled Economic Survey 2021-22 in Lok Sabha on Friday.