On Tuesday, the Chief Economic Adviser (CEA) will release the Economic Survey for the current financial year (2022-23). The survey is always presented a day before – typically January 31 since Union Budgets are scheduled for February 1 – the Finance Minister unveils the Union Budget for the next financial year (2023-24 in the present case).
What is the Economic Survey?
As the name suggests, the Economic Survey is a detailed report of the state of the national economy in the financial year that is coming to a close.
It is prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA. Once prepared, the Survey is approved by the Finance Minister.
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The first Economic Survey was presented for 1950-51 and until 1964, it was presented along with the Budget.
Similarly, for the longest time, the survey was presented in just one volume, with specific chapters dedicated to different key sectors of the economy – such as services, agriculture, and manufacturing – as well as key policy areas – such as fiscal developments, state of employment and inflation etc. This volume carries a detailed statistical abstract as well.
However, between 2010-11 and 2020-21, the survey was presented in two volumes. The additional volume carried the intellectual imprint of the CEA and often dealt with some of the major issues and debates facing the economy.
Last year’s survey reverted back to a single volume format, possibly because it was prepared and presented while there was a change in guard in the CEA’s office and the current CEA – V Anantha Nageswaran – took charge when the survey was released.
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What is the Economic Survey’s significance?
Even though it comes just a day before the Budget, the assessment and recommendations carried in the survey are not binding on the Budget.
Still, the survey remains the most authoritative and comprehensive analysis of the economy that is conducted from within the Union government.
As such, its observations and details provide an official framework for analysing the Indian economy.
What should one look for in this year’s survey?
The Indian economy has been struggling to grow at a fast pace since the start of 2017-18. The years immediately after Covid may have registered fast growth rates but that was just a statistical illusion. Many outside economists have argued that India’s potential growth itself has fallen from 8% to 6%.
Along with a deceleration in growth, the economy has also witnessed historically high unemployment and a sharp rise in poverty and inequality during the Covid pandemic.
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The survey is expected to diagnose the true extent of economic recovery in the Indian economy and whether India’s growth potential has lost a step or not.
The survey can be expected to paint future scenarios and also suggest policy solutions. For instance, what can be done to boost manufacturing growth in the country? How can India continue to grow fast at a time when both global growth and world trade is likely to remain muted.
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Lastly, this survey is likely to bear the imprint of CEA Nageswaran. As such, it could carry chapters that analyse the key issues and challenges facing the economy and the likely solutions.