The Indian economy is likely to grow by 11% in 2021-22, the V-shaped recovery having been made possible by its strategy of Covid management that focused on protection of life at the expense of a short-term impact on livelihoods, the Economic Survey for 2020-21 has argued. The annual birds’ eye view of the economy strongly emphasized the need for the government to loosen its purse strings to aid the recovery without getting overly concerned about the fiscal deficit.
It estimated that the stringent lockdown had flattened the curve and shielded over 37 lakh from contracting coronavirus, apart from saving over one lakh lives.
Attacking credit rating agencies, it said India’s sovereign ratings had consistently been much lower than what the fundamentals and its debt situation would merit. “India’s fiscal policy, therefore, must not remain beholden to a noisy/biased measure and should instead reflect Gurudev Rabindranath Thakur’s sentiment of a mind without fear,” it said.
It argued that the primary focus at India’s stage of development must be on promoting economic growth rather than reducing inequality.
Not unexpectedly, the survey set out a passionate defence of the new farm laws, asserting that they seek to give farmers a freedom of choice that they have been denied thus far. It also set out a timeline of “consultations/recommendations” dating back to 2001 in an attempt to counter the charge that they had been passed in haste.
The survey called for regulation of healthcare to address the “market failure” in the sector. Urging governments, in particular states, to step up public spending on health to 2.5% of GDP to reduce out-of-pocket expenditure by patients’ families, it also called for a quality assessment framework, citing the UK’s Quality and Assessment Framework as a possible model. In a separate chapter specifically on the PMJAY (Ayushman Bharat) scheme, the survey, whose lead author is the finance ministry’s chief economic adviser, Krishnamurthy V Subramanian, said comparisons between states that had adopted the scheme and those that hadn’t showed clearly the scheme had led to improved health outcomes across a range of parameters.
While calling for regulation of the health sector, the survey maintained that overall the Indian economy had been adversely affected by too much regulation. Complex regulation that aimed to anticipate every possible situation rather than light supervision was the bane of India, it said.
The survey cautioned about the elevated stock prices. “While stock markets value the potential future growth, these elevated levels still raise concerns on the disconnect between the financial markets and real sector,” it said.
The two volumes of the nearly 900-page survey had a smattering of references from cricket (India’s 36 all out and the subsequent V shape recovery in Australia), Bollywood (Amitabh Bachhan starrer Main Azad Hoon), and ancient wisdom scattered over a wealth of charts and graphs that sought to drive home each point with data.