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Below is Perspective on Economic survey 2021-22 by Ms. Madhavi Arora, Lead Economist, Emkay Global Financial Services

“The Eco survey laid out the background for the budget to be released tomorrow. It reckons that  the upcoming budget faces acute policy trade-offs between nurturing a nascent growth recovery and diminishing fiscal space with challenging debt dynamics. Policymakers should ensure the fiscal impulse is maximized to improve potential growth, while signaling adherence to medium-term fiscal sustainability. This entails continued financial sector reforms, better resource allocation, and funding by aggressive asset sales via functional infrastructure monetization, divestment/strategic sales.

The eco survey sees India’s GDP to grow 8-8.5% in FY23 after 9.25 in FY22, led by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. However, the baseline assumption is stable global financial markets with orderly G-4 policy normalisation and well behaved oil market (US$70-$75/bbl), and easing global supply chain disruptions.”

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