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Explained: What is Economic Survey, and why is it important?

While the government is not constitutionally bound to present the Survey or follow its recommendations, it is an important document that summarises the government's own take on the economy.

By: Explained Desk | New Delhi |
Updated: January 31, 2020 10:16:39 am
Explained: What is Economic Survey, and why is it important? Finance Minister Nirmala Sitharaman with Chief Economic Advisor Krishnamurthy Subramanian. (Express File Photo: Anil Sharma)

One day before the Union budget, the Chief Economic Adviser (CEA) of the country releases the Economic Survey. The Economic Survey for 2019-2020 will be tabled in Parliament on Friday (January 31).

With the Indian economy in the doldrums, this year’s Economic Survey will be keenly watched.

What is the Economic Survey?

The Economic Survey is a report the government presents on the state of the economy in the past one year, the key challenges it anticipates, and their possible solutions.

The document is prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA, currently Dr Krishnamurthy Subramanian.

Once prepared, the Survey is approved by the Finance Minister.

The first Economic Survey was presented in 1950-51. Until 1964, the document would be presented along with the Budget.

For the past few years, the Economic Survey has been presented in two volumes. For example, in 2018-19, while Volume 1 focussed on research and analysis of the challenges facing the Indian economy, Volume 2 gave a more detailed review of the financial year, covering all the major sectors of the economy.

Why is the Economic Survey significant?

The Economic Survey is a crucial document as it provides a detailed, official version of the government’s take on the country’s economic condition.

It can also be used to highlight some key concerns or areas of focus — for example, in 2018, the survey presented by the then CEA Arvind Subramanian was pink in colour, to stress on gender equality.

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Is it binding on the government?

The government is not constitutionally bound to present the Economic Survey or to follow the recommendations that are made in it.

If the government so chooses, it can reject all suggestions laid out in the document.

But while the Centre is not obliged to present the Survey at all, it is tabled because of the significance it holds.

What are the expectations from Economic Survey 2020?

At a time when India’s growth has plummeted to a six-year low, the Economic Survey ahead of the Union Budget is expected to offer key insights into the path ahead for the government to revive growth.

The conundrum of remaining fixated on deficit targets or making a concerted push towards more expenditure to kickstart growth is one of the key challenges the government is facing.

The Survey is expected to shed light on the crucial gaps that the Budget will aim to fill in terms of unemployment, private investment, and a slump in consumption.

According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), India’s gross domestic product (GDP) will grow by just 5 per cent in the current financial year (2019-20). Last financial year, 2018-19, the Indian economy grew at 6.8 per cent.

The gross value added (GVA), which maps the economic activity from the income side as against the GDP that maps it from the expenditure side, is expected to grow by 4.9 per cent in 2019-20 as against 6.6 per cent in 2018-19.

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