The Economic Survey that was’t
Context:
- Recent decades have seen a shift away from the “Washington Consensus” toward economic nationalism in many developed economies, including those in the United States, Great Britain, and Germany. This shift has strengthened the influence of government on these economies through industrial policy. This change is purportedly a reaction to China’s economic power and the militarization of commerce.
It’s demotivating:
- In this case, what should India’s economic strategy be? Should India return to a more active industrial policy and a tighter grip on its economy? In that circumstance, should India exercise greater control over the value of the rupee? and establish trade restrictions?
- Due to the sharply bipolar world order that has been restored between a China/Russian bloc and a western bloc of nations, the conflict between Russia and Ukraine has had enormous geoeconomic effects. In light of the fact that we appear to have returned to using bilateral currency agreements in place of the dollar for trade with Russia, how will this affect India’s economy? These are all topics that call for thoughtful discussion among policy experts and decision-makers.
- Such significant strategic economic concerns have historically been raised and considered in the Economic Survey, which the Chief Economic Adviser gives the day before the Union Budget. Many concepts and concerns, such as universal basic income, economic inequality between States, measures to increase property tax revenues using satellite technology, new techniques to calculate inflation using the Indian thali, estimating internal migration of people, and others, had been raised in surveys from previous years. They at least made a positive impact on the public’s intellectual health by sparking a debate and forcing decision-makers to take these issues into account.
- Unfortunately, no such discussion or thought was sparked by the Economic Survey for 2022-2023. The figures cited to back up the economic performance of the Narendra Modi administration are a bit sterile.
These are the key themes from the Economic Survey 2022–2023:
- The latest coronavirus outbreak has helped the Indian economy recover, but it still depends on global geopolitical events. The Economic Survey has been upfront in its projections of future growth and inflation because of this.
- It has painted a favourable picture of the Goods and Services Tax (GST), which has allegedly improved tax buoyancy, as well as the corporate tax cuts of 2019. (because it seemingly helped clean up bloated corporate balance sheets).
- Compared to previous surveys, the social sector chapter has gone into greater detail about employment, rural salaries, demand under the Mahatma Gandhi National Rural Employment Guarantee Act, and other important human capital themes. The analytical analysis of the employment intensity of contemporary economic growth models and recommendations to boost job creation, however, is lacking.
In keeping with the official line:
- The increase in capital spending by the government from 12% of total spending in 2014 to 19% currently is celebrated by the Survey, and rightfully so. Given the high level of global uncertainty, the trend of low corporate investment, and the hazardous asset markets, the emphasis on public capital spending as a means of boosting the economy is sensible and prudent.
- It waxes poetic about manufacturing and Production Linked Incentive (PLI) programmes when it comes to private sector investment, predicting that over the course of the next five years, they will attract $3 lakh crore in capital investment and generate $6 million in new jobs.
- Even before the pandemic, manufacturing gross value added (GVA) only expanded by 4% (actual) despite the hype around “Make in India.” This is because of business “indigestion” driven on by massive debt accumulated during the previous administration.
- When it comes to some of the significant economic issues that the entire world is currently debating, such as trade, industrial policy, the capital account, and unfairness, it is neither unreasonable nor unfair to have expected a little more intellectual sophistication.
Conclusion:
- The Economic Survey is really the sole venue in the country for a detailed, careful, and nuanced discussion of fresh economic concepts. Perhaps the decision to concentrate on data and facts rather than a doctoral thesis on the economic roadmap was deliberate and premeditated in order to stir up public discussion, as in the case of earlier surveys, and provide a report card on the government’s economic performance. The Economic Survey 2022–23, however, might have addressed issues in-depth and provided a strategy for India’s economic recovery and advancement instead of coming across as a political platform.
