What is an Economic Survey and why is it important?

Parliament

What is the Economic Survey?

The annual Economic Survey is usually tabled a few days before the annual budget's presentation.

A flagship annual document of the finance ministry, the Survey reviews the developments in the Indian economy over the previous 12 months, summarises the performance on major development programmes, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term. This document is presented to both houses of Parliament during the Budget Session.

How different is this year’s survey from previous ones?

Earlier, the survey came as a single volume divided in two parts. The first part contained commentary; the second part carried statistics.

Since last year the survey has been presented in two volumes—tabled seven months apart. The move to advance the budget’s presentation by a month to February 1 from February 28 has prompted a modification to a two volume system. In the modified construct, the first part is tabled in the last week of January, with commentary and outlook, while the second volume, presented in July-August contains updated macroeconomic data and analyses.

This year, Finance Minister Arun Jaitley will table the Survey on January 29, Monday—three days before he presents the Union Budget for 2018-19 on February 1.

What does it contain?

It gives a detailed account of the state of the economy, prospects and the policy challenges. It carries sectoral overviews and comments on reform measures that are required. The survey’s outlook serves as a marker about future policy moves.

Who drafts the Economic Survey?

The Economic Survey is authored by Chief Economic Adviser Arvind Subramanian and his team.

What about projections?

The survey puts out economic growth forecasts, giving out detailed reasons why it believes the economy will expand faster or decelerate.

Does the survey suggest policy changes?

Successive CEAs have used the Economic Survey to recommended policy changes, sometimes even sweeping measures. Last year, for instance, the survey recommended the rollout of Universal Basic Income (UBI), a poverty alleviation plan involving direct money transfer to people’s bank accounts.

Are such recommendations binding?

The government isn’t bound to follow these recommendations and only serve as a policy guide. The Economic Survey, in the past, has favoured policy moves that come into conflict with the official line of thinking of the government in power. These do not necessarily serve as pointers to what to expect in the annual budget. On many occasions, policy changes recommended in the Economic Survey have not been reflected in budget proposals.

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