Economic Survey 2020-21: Highlights

Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman has presented the Economic Survey 2020-21 in Parliament on January 29.

Key Points

• The real GDP of the country to record a growth of 11% in the financial year 2021-22 and nominal GDP by 15.4%.
• V-shaped economic recovery will be seen due to COVID-19 Vaccination Drive, recovery in the services sector, and growth in consumption and investment.
• According to the Economic Survey 2020-21, the GDP of the country is projected to decrease by 7.7% in the fiscal year 2020-21. It will include a sharp 15.7% decline in the first half and a 0.1% decreases in the second half.
• The agriculture sector has remained the silver lining while manufacturing, contact-based services, construction were the hardest hit sectors.
• In quarter 1, the GDP contraction was by 23.9% due to lockdown and Q2 saw a V-shaped recovery with a 7.5% decline.
• Food prices were high driving inflation. However, the inflation reached under the RBI’s target range of 4+/-2% in December 2020 to reach 4.6%.
• Credit growth to agriculture and allied activities increased to 7.4% in October 2020 in comparison to 7.1% in October 2019.
• Credit growth to the services sector increased to 9.5% in October 2020 in comparison to 6.5% in October 2019.
• Exports are projected to decrease by 5.8% and imports by 11.3% in the second half of the year. India is expected to have a Current Account Surplus of 2% of GDP in FY21, a historic high after 17 years.
• The fiscal deficit of the country is expected to overshoot the initial estimates, 3.5% of GDP, in the financial year 2020-21.

The Economic Survey 202-21 highlighted that the year 2020 was dominated by the impact of the COVID-19 pandemic and resulted in the global economic slowdown.