The Economic Survey 2020-21

The Economic Survey 2020-21

Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment.

Synopsis – The Economic Survey 2020-21 outlines the status of various sectors of the economy.

 Introduction-

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• The government presented Economic survey 2020-21 of India in the Parliament.
• The Economic survey provides a summary of the annual economic development across the country during the previous financial year.
• The focus of this year’s economic survey is on the following basic tenets:
• Atmanirbhar Bharat in COVID times.
• Shifting from entitlement-based approaches to an entrepreneurship-based policy framework.
• Going beyond “nudging”.

Nudging is a method of changing people’s behavior by incentives and encouragement. It does not favour the use of force or penal actions for inducing behaviour change among people. It was used to discourage open defecation by communicating its advantages and financial incentives for toilet construction.

Key highlights of Economic Survey 2020-21

The Economic Survey 2020-21 examined the correlation of inequality and per-capita income with a range of socio-economic indicators, including health, education, etc.

1. Economic recovery: The emphasis is mostly on the economic recovery routes after the damage due to COVID-19 pandemic. It is expected that the recovery will follow a V-shaped path. Now, the target of making India a $5-trillion economy by 2024 is also clear.
2. Health expenditure: The survey recommends raising government spending on the healthcare sector [from the current 1 per cent to 2.5-3 per cent of GDP]. It will reduce out-of-pocket expenditures.
• Health outcomes- The health results of the states that have adopted Pradhan Mantri Jan Arogya Yojana (PM-JAY) have improved compared to those that have not adopted the scheme.
3. Bare necessities- Access to the bare necessities such as water and sanitation, accommodation, micro-environment, and other facilities has improved across all States. The survey looks at how the bare necessities have changed.
4. National Infrastructure Pipeline (NIP) will boost inclusive economic growth and employment opportunities during 2020-25. The NIP [introduced in 2020] has estimated cumulative investment of 111 lakh crore over five years in infrastructure projects.
5. Government consumption and net exports cushioned the growth from diving further down.
• Strong services exports and weak demand leading to a sharper contraction in imports than exports.
• India remained a preferred investment destination in FY 2020-21 with FDI pouring.
• India’s forex reserves at an all-time high as to cover 18 months’ worth of imports in December 2020.

However, the survey should have focused more on the external trade aspect. India should try to establish value chains with South and Southeast Asia.

India should also reconsider the high cost of tariffs when 38% of our exports rely on imports.