Economy is now functioning above pre-pandemic levels: Sanjeev Sanyal

Principal Economic Advisor Sanjeev Sanyal has stated that the Indian economy is now functioning above pre-pandemic levels. Sanyal and his team of advisors have complied the Economic Survey 2021-2022 which was tabled in the Parliament by Finance Minister Nirmala Sitharaman today. 

The survey has indicated a recovery of the economy to the pre-pandemic levels as it projected the GDP to grow at 9.2 per cent during the financial year. 

The Economic Survey 2021-2022 has projected the GDP forecast for FY23 at 8-8.5 per cent. "The economy is now functioning above pre-pandemic levels and you can see that whether you calculate it by GVA or you calculate it by GDP," said Sanjeev Sanyal in an interview on Business Today TV. 

The Economic Survey has stated that the service sector contributed over 50 per cent to India's GDP. It also explained that it was the worst hit by the pandemic, adding that its share in India's Gross Value Added (GVA) declined from 55 per cent in 2019-20 to 53 per cent in 2021-22.

Responding to a question on whether service sector would had fared better if the government had supported it more, Sanyal noted that it isn't the case that service was one of the better-performing sectors in the past two years, the agriculture sector wasn't terribly affected. 

Sanyal explained that the agriculture sector is also well above pre-pandemic levels as it was not impacted much by lockdowns and the pandemic. "The industrial sector has also seen a smart recovery. In Fact, it is now well above pre-pandemic levels," he added. 

Sanyal noted that even within the service sector there are segments like finance, public administration, among others that are also above pre-pandemic levels.

"The issue really relates to contact intensive services, which includes entertainment, tourism, travel," said Sanyal on the impact of the COVID-19 pandemic on the service sector.

"Those segments have a problem because all the impact of the various kinds of regulations, lockdowns etc., happens directly to them. Although so far, they did recover quite whenever we opened things up, again you have this episode with Omicron. Though the numbers on that are not clear," noted Sanyal. 

Also read: Economic Survey forecasts 8-8.5% GDP growth for FY23; here's what experts say

Also read: Eco Survey: Services sector hardest hit by COVID, expected to grow 8.2% in FY22