New Delhi: Finance Minister Nirmala Sitharaman and Chief Economic Advisor Krishnamurthy Subramanian during the final touches of the Union Budget 2021-22, at the Ministry of Finance in New Delhi, Sunday, January 31, 2021 ( PTI photo).
Two days before the Budget, the Economic Study on Friday proposed an “expansionary fiscal policy” in 2021-22 to boost growth. He also recommended that the government continue with structural reforms and the significant privatization of state-owned companies.
Presented by Finance Minister Nirmala Sitharaman at the Lok Sabha, the survey for 2020-21 emphasized that a strict shutdown from March 25 to May 31 helped break the chain of spread of the pandemic and prevent loss of life. . The subsequent policy response helped ensure a V-shaped economic recovery, he said.
[also_read title = “Explained” article_title= “How Economic Survey projected a growth of 11% in FY 2021-22” id = “7166527” liveblog = “no” ]Calling for a spending boost despite a fiscal slide this year, the survey, written by Chief Economic Advisor Krishnamurthy V Economic Division led by Subramanian, said, “… to sustain the recovery in aggregate demand, it is expected that the government needs to continue with an expansionary fiscal stance… India’s calibrated approach leaves room for maintaining fiscal momentum next year. The recovery in growth would facilitate strong revenue collection in the medium term and thus allow a fiscal path sustainable “.
After an estimated 7.7% contraction in 2020-21, the Survey projects that real GDP will grow by 11% in 2021-22. Nominal GDP growth has been estimated at 15.4 percent, which implies inflation of 4.4 percent during the year. The Ministry’s projections are in line with IMF estimates of real GDP growth of 11.5% in 2021-22 for India and 6.8% in 2022-23. India is expected to emerge as the fastest growing economy in the next two years according to the IMF (International Monetary Fund), according to the Survey.
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