Economic Survey 2021 updates: Agriculture set to cushion Covid blow on economy, says CEA

History will judge India's Covid policy response as mature. Reason for optimism on health and economic fronts. Be cautious till vaccination: CEA summarizes Economic Survey

As economists, we believe that the new farm laws will be beneficial: CEA Subramanian on farmers protest

India has been an outlier in its global innovation performance, India must aspire to increase its gross expenditure on research and development from around 1.5% to 3% of GDP: Economic Survey

Bank credit remained subdued in FY 2020-21 amid risk aversion and muted credit appetite. However, credit growth to agriculture and allied activities accelerated to 7.4% in October 2020 from 7.1% in October 2019. October 2020 saw resilient credit flows to sectors such as construction, trade and hospitality, while bank credit remained muted to the manufacturing sector. Credit growth to the services sector accelerated to 9.5% in October 2020 from 6.5% in October 2019: Economic Survey

Global Innovation Index

India has for the first time entered the top 50 Innovative economies in 2020-21, says CEA

Agriculture is set to cushion the shock of the Covid-19 pandemic on the Indian economy in 2020-21 with a growth of 3.4% in both Q1 and Q2. A series of progressive reforms undertaken by the government have contributed to nourishing a vibrant agricultural sector, which remains a silver lining to India’s growth story of FY 2020-21: Economic Survey

Starting July 2020, a resilient V-shaped recovery is underway, as demonstrated by the recovery in GDP growth in Q2 after the sharp decline in Q1. As India’s mobility and pandemic trends aligned and improved concomitantly, indicators like E-way bills, rail freight, GST collections and power consumption not only reached pre-pandemic levels but also surpassed previous year levels: Economic Survey

Economic Survey highlights potential of public investment, especially in a slowdown. Further, it calls for fiscal policy to support growth and need for rethink in fiscal rules.

"High food prices remained a major driver of inflation in 2020. However, inflation in December, 2020 fell back into the RBI’s target range of 4+/-2% to reach 4.6% to reach 4.6% year-on-year as compared to 6.9% in November. This was driven by a step fall in food prices, particularly of vegetables, cereals, and protein products and favorable base effects," the survey noted.

Exports are expected to decline by 5.8% and imports by 11.3% in the second half of the year. India is expected to have a current account surplus of 2% of GDP in FY21, a historic high after 17 years: Economic Survey

Economic Survey on markets

"Buoyant sensex and Nifty resulted in India’s market-capitalisation to GDP ratio crossing 100% for the first time since October 2010. This, however, raises concerns on the disconnect between the financial markets and real sector."

Economy would take two years to reach and go past the pre-pandemic level: Economic Survey

The survey projections are in line with IMF estimate of real GDP growth of 11.5% in 2021-22 for India and 6.8% in 2022-23. India is expected to emerge as the fastest growing economy in the next two years as per IMF.

'Preferred investment destination'

India remained a preferred investment destination in FY 2020-21 with FDI pouring in amidst global asset shifts towards equities and prospects of quicker recovery in emerging economies. Net FPI inflows recorded an all-time monthly high of $ 9.8 billion in November 2020, as investors’ risk appetite returned, with a renewed search for yield, and US dollar weakened amid global monetary easing and fiscal stimulus packages. India was the only country among emerging markets to receive equity FII inflows in 2020: Economic Survey

Stringency of Covid-19 lockdown correlates with negative economic growth in same period but with positive growth in future time period: Economic Survey

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 faster recovery: CEA

Economic Survey: Resilience of economy similar to cricket team, CEA says

Keeping with the times, this year's Economic Survey is being delivered in e-book format, with an official app for the survey: CEA

Economic Survey: Chief economic adviser Krishnamurthy Subramanian addresses a press conference

"India was the only country to announce a slew of structural reforms to expand supply in the medium to long term and avoid long-term damage to productive capacities," the Economic Survey cited.

'Fiscal deficit may overshoot budget estimates in 2020-21'

India's fiscal deficit is projected to overshoot the initial estimates, 3.5% of GDP, in the financial year ending in March, the government said in an Economic Survey presented to Parliament on Friday. (Read full story)