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Economic Survey 2021 pegs GDP growth at 11% in FY22, backs fiscal expansion to beat slowdown

The Economic Survey 2020-21 batted for a counter-cyclical fiscal policy, recommended a massive increase in healthcare spending in light of the COVID-19 pandemic and regulator for the sector, and criticised credit rating agencies, saying their assessment does not match India's fundamentals.

January 30, 2021 / 11:48 AM IST
The survey also argued that India's sovereign credit ratings did not reflect its true fundamentals.

The survey also argued that India's sovereign credit ratings did not reflect its true fundamentals.

India's real gross domestic product (GDP) is expected to grow by 11 percent in FY22, making it one of the world's fastest growing economies in the aftermath of the COVID-19 pandemic, said the Economic Survey 2020-21 tabled in Parliament on January 29.

Ahead of the Union Budget 2021-22, the survey also batted for a counter-cyclical fiscal policy, recommended a massive increase in healthcare spending in light of the COVID-19 pandemic and regulator for the sector, and criticised credit rating agencies, saying their assessment of India does not match its fundamentals.

The survey, drafted by Chief Economic Advisor Krishnamurthy Subramanian and his team, reserved its strongest words for the financial sector. It slammed "asleep at the wheels" bank boards and auditors for the non-performing asset (NPA) crisis, suggested that the Reserve Bank of India (RBI) should penalise auditors wherever ever-greening of toxic loans happen, and recommended another round of bank recapitalisation.

"After an estimated 7.7 per cent pandemic-led contraction in FY21, India’s real GDP is projected to record a growth of 11 percent in FY22 and nominal GDP by 15.4 percent," the survey said.