Economic Survey 2021: Know The Significance Of FinMin’s Flagship Document On Economy's Performance

Economic Survey Union Budget 2021: A day before the historic paperless budget is presented, the Economy Survey will be released indicating the the country's economic performance during the past one year.

Budget 2021 will be presented on February 1 by the Union Finance & Corporate Affairs Minister Nirmala Sitharaman.  A day before the historic paperless budget is presented, the Economic Survey prepared under the guidance of the Chief Economic Advisor is released. Last year, Finance Minister Nirmala Sitharaman presented the Economic Survey 2019–20 during the Budget session in the Parliament on January 31.

 What is the Economic Survey?

The Economic Survey comprises a detailed report on the state of the economy in the past one year listing the key challenges expected and the way out. The document is prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA.  After the document is prepared, the Survey gets approved by the Finance Minister.

It’s interesting to note that the first Economic Survey was presented in 1950-51. Until 1964, the document was released at the time of the Budget.

However, the past few years, the Economic Survey has been presented in two volumes. For instance, in 2018-19, the Volume 1 was focussed on research and analysis of the challenges facing the Indian economy, while the Volume 2 offered an expansive review of the financial year, covering all the major sectors of the economy.

What is the importance of Economic Survey?

Economic Survey, the flagship document of the finance ministry, is a critical document from the government giving an insight into the country’s economic condition. The Economic Survey analyses trends in money supply, infrastructure, agricultural and industrial production, employment, prices, exports, imports, foreign exchange reserves as well as other relevant economic factors that have a major focus on the Budget. The document also focuses on key concerns of the economy.  It also reflects an allocation of resources in the Budget. 

Besides this, in 2018 the survey presented by the then CEA Arvind Subramanian was printed in pink to highlight the cause of gender equality. It was aimed on supporting women who suffer violence and to push for more gender equality. Apart from the change in document colour, Subramanian reshaped the whole document by making it more interesting with quotes and additional information. The data and analysis of the Economic Survey usually provides a policy perspective for the Union Budget.

Is it mandatory to present the Economic Survey?

No, the government is not constitutionally bound to present the Economic Survey or to follow the recommendations of the survey. It depends entirely on the government if wants to choose or reject the suggestions listed in the document. Even as the Centre is not obliged to present the Survey, it is tabled because of the significance it holds.

What are key expectations from Economic Survey 2021?

The pandemic has wreacked havoc across the world and impacting India as well, the Economic Survey for 2020-21 is expected to come up with a detailed assessment of how much the Indian economy has lost on account of Covid-19-induced lockdown.

The Survey will be chalked out at a time when the economy is likely to contract by 7.7 per cent as projected by the First Advance estimates put out by the government. The Survey is expected to consider the current economic conditions and offer solutions that will help the country to achieve the $5 trillion goal.

As per the report in the New Indian Express, it is expected that the government will offer a close scrutiny of the economic impact of the pandemic on the economy. Despite implementing one of the strictest lockdowns and then rolling out a series of measures to boost the economy, there are no official estimates or projection on the quantum of damage to the economy so far, as per the report.