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Budget 2021 Updates: India witnessing V-shaped economic recovery, says CEA K Subramanian

Budget 2021: India's economic growth is likely to rebound with a 11% growth in the next financial year as it makes a 'V-shaped' recovery after witnessing a pandemic-led carnage, the Pre-Budget Economic Survey said on Friday

FP Staff January 29, 2021 17:52:12 IST
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Budget 2021 Updates: India witnessing V-shaped economic recovery, says CEA K Subramanian

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Jan 29, 2021 - 18:54 (IST)

Exports may dip 5.8%, imports by 11.3% in second half of 2020-21

The country's exports are expected to contract by 5.8 percent and imports by 11.3 percent during the second half of the current financial year, though implementationof several measures by the government would help support exports going forward,according to the Economic Survey 2021

Jan 29, 2021 - 17:37 (IST)

11% growth in FY 22 achievable target, says Ranen Banerjee, Leader - Economic Advisory Services, PwC India

“The Economic Survey has projected a strong V shaped recovery with an 11% growth in FY22. It is an achievable target given the lower base owing to the consensus that 7% plus contraction will be experienced in FY21. The Economic Survey has laid out 10 ideas towards achieving and sustaining a higher growth rate basing it on the theme of wealth creation. Trust and market forces doing a handshake has been the basis of the 10  ideas. Jobs is what India needs to put us on the virtuous cycle of enhanced consumption, resource generation for the government to invest in infrastructure, and investments by the private sector and wealth creators should continue to sustain job creation,” Banerjee said. 

Jan 29, 2021 - 17:33 (IST)

Govt data says India's eight core sectors contract for third month in a row

India's eight core sectors recorded a contraction for the third month in a row in December 2020, with output declining 1.3 percent year-on-year. Electricity and coal were the only two sectors to record positive growth, of 4.2 precent and 2.2 percent, respectively

Jan 29, 2021 - 17:15 (IST)

Eco survey suggests change in weighage of food items to gauge true picture of inflation

The economic survey for 2020-21 has suggested revision in the weightage of food items to gauge the true picture of inflation in the country, and said new sources of price data also need to be incorporated in the wake of increasing retail e-commerce transactions. As per the survey, the current spike in consumer price-based retail inflation of food prices is mainly a supply-side phenomenon.

 
The survey noted that the weights of all items in retail inflation are based on the NSO household consumption expenditure survey of 2011-12, adding the weight of food items in the index might have significantly decreased over the decade since then.

Jan 29, 2021 - 16:55 (IST)

India will be hailed for its mature and bold response, says CEA

When the history judges India for its response to this once-in-a-century health crisis, it will be hailed for its mature and bold response, said Chief Economic Advisor Dr KV Subramanian.

Jan 29, 2021 - 16:49 (IST)

People relied on PMJAY during lockdown: Economic Survey

Key finding of Economic Survey 2021 revealed a strong positive impact of Pradhan Mantri Jan Arogya Yojana (PMJAY) on health outcomes. People relied on PMJAY even during lockdown. 

The survey also observed that:

  • The proportion of households with any usual member covered under health insurance or financing scheme increased by 54 per cent from NFHS 4 to NFHS 5 in the states that adopted PMJAY, it decreased by 10 per cent in the states that did not adopt PMJAY, reflecting the success of PMJAY in enhancing health insurance coverage.
  • The reduction in Infant Mortality Rate (IMR) was 20 per cent vis-à-vis 12 per cent in PMJAY and non-PMJAY states respectively, an increment of 8 per cent for states that adopted PMJAY versus those that did not.
  • The proportion of people ensuring family planning rose across all the states between the two surveys, the increase is much more significant in the states that adopted PM-JAY indicating its effectiveness.
  • The proportion of women with total unmet family planning needs decreased by 31 per cent in the PMJAY states, the decline in the non-PMJAY states was merely 10 per cent.

Jan 29, 2021 - 16:37 (IST)

Health insurance coverage in states with PM-JAY scheme is 10 percentage points higher

A comparison of states that have implemented PM-JAY and those that haven't shows that health insurance coverage in states that have implemented is 10 percentage points higher," CEA KV Subramanian said.

Jan 29, 2021 - 16:35 (IST)

CEA says credit ratig mechanisms need upgrade, claims India's debt sustainable

Even if India were to have the real GDP growth rate as low as 3.8% from FY 23 to FY 29, debts will still come down. The Economic Survey highlights potential of public investment, especially in a slowdown; calls for fiscal policy to support growth. Willingness to repay has been gold standard for India. Ability to repay is also very very high for India. So India should have highest credit rating, said Subramanian.

Jan 29, 2021 - 16:14 (IST)

Sensex falls 589 points, Nifty settles below 13,650

The domestic equity market continued its downward journey for the sixth session in row on Friday, with the BSE Sensex plummeting over 588 points and the NSE Nifty tumbling nearly 183 points due to across-the-board selling. Both benchmark indices fluctuated between gains and losses in a highly volatile session.

The 30-share Sensex closed 588.59 points or 1.26 per cent lower at 46,285.77 -- taking the six-session aggregate loss to 3,506.35 points or 7.04 per cent. Intra-day, the index swung 1,263.20 points. Likewise, the NSE Nifty furthered its loss by 182.95 points or 1.32 per cent to settle at 13,634.60. Over the last six days, the NSE barometer has shed 1,010.10 points or 6.89 percent. On the Sensex chart, 26 shares closed in the red.

Jan 29, 2021 - 16:08 (IST)

India is the fifth-biggest economy, says CEA

Are sovereign credit rating based on fundamentals in India's case? India is the fifth-biggest economy. Fifth-biggest economy is normally rated AAA. There are only two anomalies -- India and China. When China was fifth-largest, it was rated AA-, India is rated BBB-He said that credit ratings do not reflect its fundamentals.

Budget 2021 LATEST Updates: India's economic growth is likely to rebound with a 11% growth in the next financial year as it makes a 'V-shaped' recovery after witnessing a pandemic-led carnage, the Pre-Budget Economic Survey said on Friday

Presenting the Economic Survey of India, CEA KV Subramanian said that the imposition of a stringent lockdown early on helped India avoid 37.1 lakh cases and over 1 lakh deaths. He said the analysis was done taking into account the population density, healthcare infrastructure etc

Finance Minister tabled the Economic Survey 2021 in the Rajya Sabha. After an estimated 7.7 percent pandemic-driven contraction in 2020-21, India’s real GDP is projected to record a growth of 11 percent in 2021-22 and the nominal GDP by 15.4 percent, the Survey reads.

Meanwhile, the Rajya Sabha will reconvene at 3 pm.

Aatmanirbhar Bharat isn't just confined to manufacturing in India but also aimed at elevating standard of living of every Indian and boosting self-confidence of country, said Vice-President M Venkaiah Naidu.

The government would like to clarify that the rights and facilities that were available before the formation of the three farm laws have not been cut short, in fact with these new agricultural reforms the govt has provided new facilities and rights to farmers, said President Ram Nath Kovind on Friday.

To help small and marginal farmers, the government has transferred about Rs 1.13 lakh crore directly to their accounts. Apart from that, farmers have also greatly benefited from the Fasal Bima Yojna, said President Ram Nath Kovind.

The national flag and a holy day like Republic Day were insulted in the past few days. The Constitution that provides us Freedom of Expression, is the same Constitution that teaches us that law & rules have to be followed seriously, said President Ram Nath Kovind during for the joint Parliamentary session.

The crucial Budget session of Parliament is set for a stormy start with as many as 18 opposition parties announcing their decision to boycott the President's address to a joint sitting of both houses on Friday, in solidarity with the farmers agitating against the three contentious farm laws.

The session is also likely to witness acrimonious scenes, with the opposition all set to corner the government on issues like recession, job losses, handling of COVID crisis, LAC stand-off with China and the WhatsApp chat leaks of Arnab Goswami.

Alleging that the farm laws have been pushed by the BJP government without a national consensus, the opposition parties announced their decision on Thursday to boycott the President's address, a move termed as "most unfortunate" by Parliamentary Affairs Minister Prahlad Joshi.

To seek the cooperation of various parties for the smooth functioning of the Budget session, Lok Sabha Speaker Om Birla has convened a meeting of all political parties on Friday which is expected to be attended by Prime Minister Narendra Modi.

The session will begin with the President's address followed by the presentation of the Economic Survey.

The Union Budget will be presented by Finance Minister Nirmala Sitharaman on 1 February. Both the houses will also debate on the Motion of thanks to the President's address after the budget presentation.

The Economic Survey 2021 will be tabled on 29 January, a couple of days prior to the Union Budget, which will be tabled on 1 February.

President Ram Nath Kovind will address the joint sitting of both Houses on the same day.

Prepared by the Economic Division of the Department of Economic Affairs (DEA) under the guidance of the CEA, the Economic Survey is a detailed report on the state of the economy in the past one year. It lists key challenges expected and the way out from them.

The Economic Survey gets approved by the finance minister after the document is prepared. The first Economic Survey was presented in 1960-51 and until 1964, it was released at the time of the Budget.

While the Economic Survey is a crucial document that provides an extensive official version of the government's take on the economic condition of the country, in reality, the government is not constitutionally bound to present the Economic Survey or to follow the recommendations made in it.

The document also analyses trends in money supply, infrastructure, agricultural and industrial production along with employment, prices, exports, imports, foreign exchange reserves and other important factors that may impact the Budget.

Apart from this, economic magnitudes are grouped, such as how much is set aside for capital formation etc. This helps in better appreciation of the impact of government receipts and expenditure on the other sectors of the economy.

The Economic Survey 2021 is of particular significance as it during the COVID-19 pandemic. As per the First Advance estimates of the government, the economy may contract by 7.7 percent. The survey is likely to outline plans to put the economy back on track to achieve the $5 trillion goal that was set in 2019.

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