Ahead of Budget 2022, 5 things to watch out for in Economic Survey

The Economic Survey is meant to elucidate the government's take on the ongoing Financial year while also offering glances into the Indian economy's present state. ICRA, in its recent report, made a forecast of a 9.0% GDP growth in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy and the large gaining at the cost of the small.

The Economic Survey annotates the economic trends in the country and enables a better comprehension of the mobilisation of resources and their allocation in the Union Budget. Pic: Reuters

Ahead of tabling of the union budget every year Ministry of Finance tables the flagship document called Economic Survey for the people of the country. The Economic Survey is meant to elucidate the government's take on the ongoing Financial year while also offering glances into the Indian economy's present state.

ICRA, in its recent report, made a forecast of a 9.0% GDP growth in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy and the large gaining at the cost of the small.

The Economic Survey annotates the economic trends in the country and enables a better comprehension of the mobilisation of resources and their allocation in the Union Budget.

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The survey analyses the trends in agricultural and industrial production, infrastructure, employment, money supply, prices, imports, exports, foreign exchange reserves and other relevant economic factors that have a bearing on the Budget. It is presented in Parliament ahead of the Budget for the ensuing year.

Here are the top 5 things that you should be watching out for in the upcoming economic survey:

1. GDP Growth

In last year's economic survey, the government had forecast a GDP growth of 11 per cent in 2021-22. However, the country saw major disruptions in the second and third waves of the COVID-19 pandemic.

Therefore, this year all eyes will be on the government forecast for the next year. It will also be interesting to see the government's remark on policies like Aatmnirbhar Bharat National Infrastructure Pipeline (NIP).

2. Healthcare

Healthcare was the focus of the government in the Budget 2021. However, the government allocated only 1.8 per cent of the GDP to health in last year's Budget. Players in the healthcare sector seek an increase in allocation.

Given the challenges country witnessed in the second wave of COVID-19. It remains to be seen how much importance does the government gives to the health sector, which has been at the forefront of fighting the COVID-19 pandemic—the numbers which the Economic Survey present should be appropriately matched with the budgetary allocation on February 1.

Alok Sharma, Founder & CEO, Shycocan Corporation, said, "While vaccines and medication are necessary, they are insufficient to tackle the current situation. Hence, the answer lies in health and safety technology getting equal focus as vaccine and medication."

Sharma further added, "Funding for proof of concept, roll-out in government facilities to prove the efficacy and safety for various technologies shall provide impetus to the industry. A lower rate of GST for health and safety products shall further help spur demand. Credit facilities for approved start-ups need to be handled differently by the banking segment without collateral needs."

3. Education

In 2020, the government of India introduced the National Education Policy (NEP) to increase the gross enrolment ratio in higher education to 50 per cent by 2035.

However, the schools and colleges in the country have largely remained shut due to the COVID-19 pandemic and nationwide lockdown.

Moreover, with the increasing focus on digital education and the shifting of students from physical to virtual classrooms, it remains to be seen what the government says about the education sector.

Swati Ganguly, Co-Founder of Edufiq, said, "Recognising the potential of technologies like Artificial Intelligence, Data Science and Machine Learning to engage young learners to pursue careers is a long-term dividend on "Skill Development for young learners".

4. Disinvestment

In last year's budget government gave a target of Rs 1.75 lakh crores for disinvestment in the FY 2021-22. This included the privatisation of 2 public sector banks and one public sector insurance company.

But according to the media report, this target has not been reached yet. It would be interesting to know what the government has to say about it.

Along with this, the government's comment on LIC IPO, which is a major part of the disinvestment plan, will be noteworthy.

5. Fintech

Fintech companies emerged as the messiah during the COVID-19 pandemic situation by facilitating no-contact transactions, which has made this sector one of the crucial sectors for the country.

Nishant Arora, Co-Founder of Sixth Element Finserv's Set Up Services, said, "Well-known firms are forming worldwide alliances that will transform India's digital payments sector, focusing on hyperlocal digital commerce that will reach smaller cities and rural areas. All of these variables point to a promising trend toward FinTech, which has huge development potential as India moves toward widespread use. Thus, arose the need to enhance the efficiency of Public Sectors Banks (PSBs) through Fintech as suggested by The Economic Survey 2019-20. The focus on PSBs is crucial as they have about 70 per cent of the market share. The Fintech sector will need immediate attention and a well laid out plan to help in the faster economic growth of the nation."

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Budget 2022 Economic Survey