After a long time, we have an economic survey that lives up to its name – it surveys developments in the economy, either looking at what it sees or venturing into an integrated analysis or policy solution. Barring a few astonishing satellite photos compiled at the end, this is a survey that attempts to do nothing new – no JAM (Jan Dhan-Aadhaar-mobile combination to supercharge financial inclusion and leak from government payments to citizens). With no potential for redemption), no new insights into a country’s economic transformation (unpredictable degree of internal migration), no convincing explanation about the potential for additional public borrowing, as long as the economy’s growth rate is above the rate of interest. Lives, no thalinomics, is the kind that have made surveys enjoyable to read over the past decade.
True, it sets out a brave defense of the government’s policy response to the pandemic, citing IMF’s forecasts for India to claim the fastest growing major economy in 2022, which follows the logic of the three agricultural laws. Refrains from analyzing those that were enacted and relentlessly withdrawn due to relentless protests by farmers, making the case for crop diversification and still in MSP of rice and wheat as a major achievement. Presented as enormous growth, of which India produces surplus mountains that rot silently in government warehouses. There is a striking reluctance on the part of the Survey to adopt agro-processing as a means to combat food inflation and increase farmers’ income. Yes, the survey mentions farmer producer organizations and food processing, but without confidence or enthusiasm on their combined potential.
The biggest shortcoming of the survey is its lack of a detailed analysis of the global context in which India develops. Reviving already published economic data does not satisfy the thirst of economic actors for an authoritative assessment of trends in the global economy and how these may affect India. If the US Fed raises policy rates from 0-25 basis points to 150-175 basis points over the next 12-18 months, what will follow? Of the trillions of dollars in additional liquidity created by the US, EU, UK and Japan, how much is actually likely to be returned to the coffers of monetary authorities, and what will this mean for a country like India?
Some honest assessment of progress on asset monetization, the possibility of achieving a functional market for corporate debt in the near term, the challenge that micro, small and medium enterprises will face to repay loans and avoid bankruptcy, once asset classification is made. As the moratorium and debt restructuring grace period expires, the opportunity pandemic in synthetic biology and genomic drugs/vaccines has been highlighted, and other such matters may have provided some guidance to Indian economic actors. Instead, what the survey offers is a compilation of separate chapters produced by different teams of government economists working to summarize developments in different sectors of the economy. It does a fine job of this unmistakable task. If you expect the survey to keep alive your faith in the $5 trillion Indian economy in the near future, perhaps, the fault lies in your high expectations.
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