The Economic Survey of 2021-22 was released at the beginning of the budget session. The growth rate of gross domestic product has been estimated to be 9.2 per cent for 2021-22. Impressive as it might appear, it ought to be kept in mind that last year, in 2020-21, the GDP fell by 7.3 per cent. Encouraged by the trend of recovery, the Central government has projected GDP to grow by 8 to 8.5 per cent in the fiscal, 2022-23. In terms of sector-wise growth, the agricultural sector has done exceedingly well, growing at 3.9 per cent compared to 3.6 per cent the previous year; services grew by 8.2 per cent against a decline of 8.4 per cent last year; and industry recovered this year by growing at the rate of 11.8 per cent against a decline of 7.0 per cent last year. Government spending has increased by 7.6 per cent and private consumption by 6.9 per cent. The gross fixed capital formation grew at 15 per cent after a decline of 10.8 per cent last year.

Going beyond statistics, the Indian economy, at the moment, is riddled with three principal problems that need immediate attention. The first is unemployment, especially among youth and low-skilled workers. The next is the high rate of inflation, measured by both consumer price index and wholesale price index, fuelled by global forces and domestic supply disruptions. Finally, there is the problem of an alarming rise in the extent of inequality in wealth and income. There is not much of analysis in the Economic Survey that could indicate possible solutions. Inflation is sought to be brought under control by focussed expenditures on transportation and storage infrastructure for perishable products. Unemployment is being addressed by a plethora of training and skilling programmes initiated by the government. Inequality has not been addressed this year. Last year, it warranted a separate chapter where it was claimed that growth and rising inequality actually converged to raise human development indicators. It appears that this year too, the government will have to continue with its stimulus package if an 8 per cent growth rate is to be achieved. Deficits and debt of the Union government had increased in the fiscal year, 2020-21. In 2021-22, while spending of the government has grown, rising tax revenues have brought comfort to the finance ministry in managing the deficits. However, this year, with uncertainty still hanging large over the world economy, fiscal consolidation may remain elusive, especially if the government’s assumption about a lower international crude oil price for 2022-23 does not hold.