Economic Survey 2021: CEA Takes Aspirations From '3 Idiots' To Reshape Indian economy, Projected To Be Fastest-Growing Globally

Justifying the early lockdowns that forced the economy to negative growth of 23.9% in the first quarter and negative 7.5% in the second quarter, the CEA said India took "short term pain" for "long term economic gain." 

Krishnamurthy Subramanian, Pic Courtesy: PTI

Taking a cue from the loss in the first test match against Australia to winning the series, India's chief economic advisor K V Subramanian has a similar take on the Indian economy, which is projected to grow at over 11% in 2021-22 before contracting 7.7% this fiscal. 

In Australia, India lost the first test and was all out by 36 runs, but the men in blue from there won two tests, thereby winning the series despite several players injured. 

Justifying the early lockdowns that forced the economy to negative growth of 23.9% in the first quarter and negative 7.5% in the second quarter, the CEA said India took "short term pain" for "long term economic gain." 

Drawing analogy from the Australian test series, CEA said that the Indian economy had shown resilience during the pandemic like Chetashewar Pujara, who got injured 11 times, held on one side, let no wickets fall, leading Pant to play freely. Now, Finance Minister Nirmala Sitharaman is likely to bat like Rishabh Pant to take the Indian economy to a V-shaped recovery. 

The Economic Survey emphasized the importance of the healthcare sector, emerging out of COVID-19 crisis. An increase in public spending from 1% to 2.5% of GDP – as envisaged in the National Health Policy 2017 – can decrease the Out-Of-Pocket Expenditures from 65% to 30% of overall healthcare spending, said Mr. Subramanian.

Drawing an analogy from the movie "3 Idiots," Subramanian said, When Frahan and Rancho go to have dinner at Raju's place, it was shown that a large part of the family income goes towards the medical expenditure, leaving less money for other household expenses. 

"Health care takes center stage this year. However, health is a state subject. An increase in health care allocation will reduce the out-of-pocket expenditure," Subramanian said.

Talking about the demand-side on how the deposits have increased during the COVID -19 pandemic, the CEA said that PM Jhan Dhan average balance increased by around Rs 500 for over 40 crore accounts. This is even though the marginal propensity to consume is very high for these households. Illustrative motive, deposits have increased. 

 The Survey projects the agriculture sector to cushion the shock of the COVID-19 pandemic on the Indian economy in FY21 with a growth of 3.4%. Industry and services estimated to contract by 9.6% and 8.8%, respectively, during FY21

Commenting on the Economic Survey, Arun. M. Kumar, Chairman and CEO, KPMG in India said: "The Economic Survey 2020-21 has focused on an assessment of how the COVID-19 pandemic is being managed, the trade-offs between the differing compulsions of community health protection and economic recovery, with the protection of lives being the paramount consideration; how to manage the dialectical tensions between ramping up growth and reducing inequality; the need for sensible regulations, as well as the centrality of innovation for fostering growth."

This year's Economic Survey was dedicated to all covid warriors, doctors, nurses, and sanitization workers, as shown on the document's cover. 

India's Growth

·  2017-18: 7% growth

·  2018-19: 6.1% growth

·  2019-20: 4.2% growth

·  2020-21: -7.7 percent (Projected)

·  2021-22: 11% growth (projected) – the highest since Independence.