Two days ahead of Budget, the Economic Survey Friday pitched for an “expansionary fiscal policy” in 2021-22 to boost growth. It also advised the government to continue with structural reforms and significant privatisation of state-owned companies. Tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha, the survey for 2020-21 emphasised that a stringent lockdown from March 25 to May 31 helped in breaking the chain of the pandemic’s spread and preventing loss of lives. The subsequent policy response helped in ensuring a V-shaped economic recovery, it said. Calling for an expenditure push despite a fiscal slippage this year, the survey, authored by Chief Economic Advisor Krishnamurthy V Subramanian-led Economic Division, said, “… to sustain the recovery in aggregate demand, it is expected that the Government may have to continue with an expansionary fiscal stance…The calibrated approach adopted by India allows space for maintaining a fiscal impulse the coming year. The growth recovery would facilitate buoyant revenue collections in the medium term, and thereby enable a sustainable fiscal path.”. After an estimated 7.7 per cent contraction in 2020-21, the Survey projects real GDP to record a 11 per cent growth in 2021-22. The nominal GDP growth has been estimated at 15.4 per cent, implying a 4.4 per cent inflation during the year. The Ministry’s projections are in line with IMF estimates of real GDP growth of 11.5 per cent in 2021-22 for India and 6.8 per cent in 2022-23. India is expected to emerge as the fastest growing economy in the next two years as per IMF (International Monetary Fund), the Survey said. 👉🏽 READ | Covid Budget: A to Z of what to expect today 👉🏽 READ | ExplainSpeaking: Will the Union Budget 2021-22 slay India’s ‘five giants’? 👉🏽 READ | P Chidambaram writes: Since I have no expectations with Budget 2021, I am prepared to be disappointed 👉🏽 READ | Explained: Budget, monetary policy decisions may put markets through another volatile week
