Budget Expectations and Economic Survey 2021 Highlights | Budget on Feb 1, general discussion on Budget 2021 scheduled on February 8
Budget 2021 Highlights: Economic Survey 2021 has forecast India's economy to contract 7.7 percent in 2020-21
Budget 2021 - Economic Survey Highlights: The Union Budget 2021-2022 will be presented on February 1. According to PTI, the CCPA has said the Budget will be presented on February 1. President Ram Nath Kovind will address a joint sitting of both the Houses of Parliament on January 29. The Cabinet Committee
on Parliamentary Affairs (CCPA) also recommended that the budget session be held from January 29 to February 15. The second part of the budget session will be held from March 8 to April 8. According to Union Minister of Parliamentary Affairs Pralhad Joshi, the Budget Session will commence from January 29 and the first part of it will conclude on February 15. "In the first part, Budget and President’s address will be there, necessary bills will be taken and there will be question hour as well as zero hour," he told ANI.
Economic Survey 2021
The flagship, annual document of the Finance Ministry (presented by the Ministry's Department of Economic Affairs led by the CEA), reviews the developments that took place in the Indian economy over the past financial year. It is usually tabled a day ahead of the Budget (on January 31), but this may be adjusted this year, as per reports, because February 1 (the day the Budget is to be announced) is a Monday.
The Economic Survey 2021 will be of particular significance as the country comes out of the pandemic-hit year. The First Advance estimates put out by the government suggests the economy may contract by 7.7 percent.
Despite implementing one of the strictest lockdowns followed by a plethora of measures to boost the economy, there are no official estimates or projection on the quantum of damage to the economy so far. The Economic Survey may also outline plans to put the economy back on track to achieve the $5 trillion goals the government had set in 2019.
Budget 2021 - Expectations
COVID-19 and its spread have left a devastating trail of destruction across the economic landscape, blowing into smithereens the very framework of orthodox fiscal policy planning. The lockdowns and the prolonged restrictions have forced many a company to shut or curtail operations, lowering the government's tax collections. Gross domestic product (GDP)—the total value of goods and services produced in the country—fell 23.9 percent in April-June 2020, and then again by 7.5 per cent in July-September.
India has now slipped into a technical recession, which takes place when real or inflation-adjusted GDP contracts in two successive quarters. From being toasted as an engine for global growth with the status of the world’s fastest-growing major economy, India’s GDP has fallen for two successive quarters. The bigger question now is: how long will the impact last? Will it last for months or for years, if social distancing measures need to be kept in place for protracted periods?
Economic Survey LIVE | WATCH: Press Conference by Chief Economic Advisor Krishnamurthy V Subramanian on the Economic Survey 2021
January 29, 2021 / 11:05 PM IST
This live blog has been concluded. Please check back MoneyControlwebsite for all updates on Budget expectations and Economic Survey 2021.
January 29, 2021 / 10:58 PM IST
Budget & Economic Survey 2021: Budget on Feb 1, general discussion on Budget 2021 scheduled on February 8
Budget 2021 to be read out by FM Niramla Sitharaman on February 1, 2021. General Discussion on Budget 2021 scheduled on February 8. Consideration and passage of Finance Bill to be taken up on March 19 & 22.
January 29, 2021 / 10:47 PM IST
Economic Survey 2021: Survey highlights the government’s priority to revive GDP growth in FY22: Acuité Ratings' CAO Suman Chowdhury
Acuité Ratings & Research's Chief Analytical Officer Suman Chowdhury: "The Economic Survey highlights the government’s priority to revive GDP growth in FY22 and further to sustain a growth of 6.5%-7.0% over the medium term. It has indicated that an expansionary fiscal policy may continue beyond the current year to boost domestic demand and investments. This may imply that the government may not be in a hurry to tighten up on the fiscal front in the near term and may be comfortable maintaining the fiscal deficit at a level significantly over the previous band of 3.0%-4.0%.
Better quality of expenditure i.e. a higher share of capital expenditure along with some progress on reforms may augur well for fiscal stability over the medium term. While the survey report is optimistic about India’s medium term growth prospects, it has also warned about potential systemic risks in the banking sector accruing from excessive forbearance beyond the pandemic period and has also recommended an Asset Quality Review after the economy reaches normalization.”
PM Narendra Modi: "The Economic Survey captures India’s fight against Covid-19 and our nation's strong economy fundamentals. It emphasises on the huge potential for economic growth, the importance of further scaling up innovation and the way ahead in key areas like health."
The Economic Survey captures India’s fight against Covid-19 and our nation's strong economy fundamentals. It emphasises on the huge potential for economic growth, the importance of further scaling up innovation and the way ahead in key areas like health. https://t.co/CZHNOcO7GV
Economic Survey 2021: India only country taken measures on the supply-side: Principal Economic Adviser Sanjeev Sanyal
Principal Economic Adviser Sanjeev Sanyal:"India is the only country which has taken measures on the supply-side. It is important to keep opening up sectors. The private sector is an important part of supporting recovery. There was a cyclical slowdown in the pre-COVID phase. Currently, experiencing a fairly strong recovery," CNBC-TV18 quoted.
January 29, 2021 / 08:12 PM IST
Economic Survey 2021 |Economic Survey calls for counter-cyclical fiscal policy, a strategy Indian kings followed
With the country going through a pandemic-driven slowdown, the Economic Survey 2020-21 has pushed for the adoption of counter-cyclical fiscal policy to enable growth.
The survey said the call for a more active countercyclical fiscal policy is not one for fiscal irresponsibility. The term came to limelight when the Chief Economic Advisor, KV Subramanian, indicated last year that the government has adopted “Counter-Cyclical Fiscal Policy” to decrease the economic slowdown in the country. What does counter-cyclical fiscal policy mean?
It can be termed as an action by the government to counter growth or downturn through fiscal measures. It refers to a step that will go against the ongoing trend to bring the economy back on track. (READ MORE HERE)
January 29, 2021 / 07:35 PM IST
Economic Survey 2021 | India's services sector posted robust 34% growth in FDI inflows in H1 FY21
Despite the disruptions globally, foreign direct investment (FDI) inflows into India’s services sector grew a robust 34 percent year-on-year (YoY) during April-September 2020 to $23.6 billion, the Economic Survey 2020-21 pointed out.
This accounted for almost four-fifths of the total gross FDI equity inflows into India during this period. "The jump in FDI equity inflows was driven by strong inflows into the ‘Computer Software & Hardware’ sub-sector, wherein FDI inflows increased to $17.55 billion which is over 336 percent higher over the corresponding period last year," the survey said in the chapter titled Services.
"High growth in FDI inflows was also present in subsectors such as retail trading, agriculture services, and education," the survey said. (READ MORE HERE)
January 29, 2021 / 07:09 PM IST
Economic Survey 2021 | ICRA expects Union Budget to incorporate a growth in gross tax revenues of 15-16%: Aditi Nayar
ICRA ltd's Principal Economist Aditi Nayar: “The Economic Survey’s forecasts of real and nominal GDP growth for FY2022 of 11.0% and 15.4%, respectively, will require a substantial push from central and state government spending. Private sector capacity expansion announcements are anticipated to be intermittent, and sector-specific in the next couple of quarters. Moreover, private consumption is likely to chart a differentiated recovery across income and age groups, in our view.
Based on the comments made in the Economic Survey, we expect the Union Budget to incorporate a growth in gross tax revenues of 15-16%, which in conjunction with a stiff target for disinvestment proceeds, would allow the Government to project a considerable expansion in spending, especially on capex. The ensuing higher GDP growth, would help Union Government finances to revert to a sustainable fiscal trajectory over the medium term.
In line with our estimate that the Government of India will target a fiscal deficit of 5.0% of GDP for FY2022, we peg its gross dated borrowings at Rs. 11.7 trillion for the coming fiscal."
January 29, 2021 / 06:45 PM IST
Economic Survey 2021 | ES-2021 presents optimistic picture of the economy which recovered from economic distress caused by COVID-19: Emkay's Dr Joseph Thomas
Emkay Wealth Management's Head of Research Dr. Joseph Thomas: “The equity market remained highly volatile throughout the trading session, and closed in the red, continuing the trend on the last three days. The frontline indexes lost close to 1.26 - 1.35 % whereas the midcap and the small caps lost much less, in the range of 0.25 % to 0.60 %. Negative indications from the overseas markets abound, mainly against the background of the spread of the pandemic, and stricter lockdowns in larger parts of Europe has not gone well with the market's perceptions about the future of the economic rebound.
The domestic market is awaiting the Union Budget on Monday, and it is quite likely that some positions have been pared ahead of the event. Speculations about likely public sector bank recapitalization based on the observations in the Economic Survey, helped PSU banks to hold well while the broader market was gradually declining during the day. The Economic Survey presents an optimistic picture of the economy, which has recovered from the economic distress caused by the pandemic and is poised to register positive growth numbers as we move into the new financial year. The fiscal, as well as monetary measures, are likely to be normalized over a period of over the next couple years as the sustenance growth is the key objective that needs to be pursued.”
January 29, 2021 / 06:38 PM IST
Economic Survey 2021 | Expected recovery will result in buoyant tax collections, ensure sustainable fiscal path: HDFC Securities' Deepak Jasani
HDFC Securities' Head of Retail Research Deepak Jasani:"According to the Economic survey 2020-21, India’s economy will rebound by 11% in FY22 (nominal GDP by 15.4%), after a 7.7% contraction in the current fiscal, helped by continued normalisation of economic activities, covid-19 vaccination and a host of policy steps taken by the government. It has also hinted at continuation of fiscal expansionary stance. The expected recovery will result in buoyant tax collections and ensure a sustainable fiscal path over the medium term. The comfortable foreign exchange reserves give the much-needed space for enhanced domestic investments. It has also hinted at change in the base year for CPI and including new sources of price data in its calculation.
A larger fiscal deficit in FY22 (though smaller than FY21) is on the cards in the Budget due on Feb 01. This could spur economic growth, but create pressure on interest rates and inflation later. Reaction of the Sovereign rating agencies to the Budget proposals would be interesting to watch. Given the fact that countries all over the globe are following similar policies, it would be difficult for them to single out India for harsh comments/evaluation."
January 29, 2021 / 06:34 PM IST
Economic Survey LIVE Updates | Report sees strong recovery from pandemic knocks, hints at huge spending, tax cuts in budget