Economic Survey 2022: Growth forecasts and other key takeaways

The Narendra Modi government on Monday said that the country’s economy is set to grow by 9.2% during the current financial year and by 8-8.5% in the next fiscal year. 

India’s annual Economic Survey said that the country was well poised to support a recovery, as it emerges from the impact of the Covid-19 pandemic that forced it into multiple crippling lockdowns over the last two years. 

The Economic Survey, unveiled ahead of Tuesday’s annual budget, said that India is well placed to wrest the position of the fastest-growing major economy from China, and remain on top, at least for the next two years. 

Growth will be supported by “widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending,” the survey said. “The projection is based on the assumption that there will be no further debilitating pandemic related economic disruption.”

Having said that, the document does flag risks like inflation, which it says will be ‘imported’ owing to high energy prices globally. 

“The inflation in ‘fuel and power’ group of WPI was above 20 per cent reflecting higher international petroleum prices. Although the high WPI inflation is partly due to base effects that will even out, India does need to be wary of imported inflation, especially from elevated global energy prices," the survey said.

"The Consumer Price Index inflation remained range bound as food prices eased considerably due to the supply management response by the Government. Food inflation remained benign during the year at 2.9 per cent (April-December) as against 9.1 per cent in the corresponding period last year," the survey said. 

Highlights of the Economic Survey 2022

1) India’s Gross Domestic Product expected to grow by 9.2% in the current financial year.

2) Agriculture and allied sectors to grow by 3.9% in 2021-22 as against 3.6% last year.

3) Total consumption likely to grow by 7% in 2021-22.

4) Gross fixed capital formation exceeds pre-pandemic levels, on account of increased government spending on infrastructure.

5) India’s balance of payments remained in the surplus over the last two years.

6) Foreign exchange reserves as of Dec. 31 at $634 billion, higher than India’s external debt and enough for 13.2 months of merchandise imports.

7) Rise in government revenue to help it meet fiscal targets.

8) Revenue receipts between April and November 2021 up 67% on a year-on-year basis.

9) India has third-largest startup ecosystem in the world after the US and China.

10) India's banks are well capitalized and the overhang of NPAs seems to have structurally declined even allowing for some lagged impact of the pandemic.

11) India’s capital markets allowed record mobilization of risk capital for Indian companies.

12) In April-November 2021, IPOs of 75 companies garnered Rs 89,066 crore, compared with 29 companies raising Rs 14,733 crore during April-November 2020, indicating a rise of 505% in fund mobilization.