New Delhi: The Economic Survey 2021 projects the Indian economy to rebound and grow at a record 11 per cent in 2021-22, after a sharp contraction in the ongoing fiscal, according to government sources.
The National Statistical Office (NSO) had forecast that the economy would contract by 7.7 per cent in 2020-21 while the Reserve Bank of India had forecast a 7.5 per cent contraction.
This is the third economic survey authored by Chief Economic Advisor Krishnamurthy Subramanian. It will be released at a time when there is a growing expectation that the Indian economy will see a V-shaped recovery.
Finance Minister Nirmala Sitharaman will table the survey for the year 2021-22 in Parliament later Friday.
Government sources said the survey cites the mega vaccination drive and how it supports economic recovery.
The survey also talks about the robust recovery in the services sector as well as the expected rebound in consumption and investment to support the growth estimates, according to sources. They added that the survey dwells on how different high frequency indicators like rail freight, e-way bills and power demand indicate economic recovery.
The survey also dwells on the inherent dilemma faced by nations including India in the Covid-19 battle of lives versus livelihoods. It also points out how India was brave to take short term pain for long term gain and how this helped in saving lives even as India is seeing a V-shaped recovery.
The 11 per cent growth in 2021-22 can be attributed to a large extent to the base effect due to the sharp contraction seen in 2020-21.
Rebound in economy
After contracting by 23.9 per cent in the April-June quarter on account of the complete halt in economic activity due to the two-month lockdown to combat the pandemic, the economy recovered marginally to contract at 7.5 per cent in July-September quarter.
Riding on festival demand, economists expect that the Indian economy will register a positive growth in the October to December quarter.
The gradual rollout of the vaccine across the country has also helped in improving sentiments which the government hopes will translate into consumption demand in the coming months.
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