The Evening Wrap: Economic Survey projects 8%-8.5% growth in 2022-23

The Economic Survey for 2021-22, tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha, expects the GDP to grow by 9.2% this year and 8% to 8.5% in 2022-23, even as it expressed concerns about the implications of hardening inflation and energy prices. “Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment, with the financial system in a good position to provide support to the revival of the economy,” the Survey projected. The Survey’s GDP growth estimate for the coming year is based on the assumption that “there will be no further debilitating pandemic-related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year”. The Survey acknowledged the risks that have emerged at the time it was being written, such as the new COVID-19 variant, Omicron, sweeping across the world, inflation jumping up in most countries, and the cycle of liquidity withdrawal being initiated by major central banks. It highlighted that the country’s macro-economic stability indicators on the external front, fiscal front as well as the financial sector health and inflation, were well-placed to take on the challenges of 2022-23. “One of the reasons” for this comfortable position, the Survey argued, was the government’s unique response strategy that didn’t “pre-commit to a rigid response” but “opted to use safety nets for vulnerable sections” based on information. While the 9.2% growth estimate for 2021-22 suggested a recovery above the pre-pandemic level of 2019-20, the Survey conceded that private consumption and segments such as travel, trade and hotels were yet to fully recover. “The stop-start nature of repeated pandemic waves makes it especially difficult for these sub-sectors to gather momentum,” it said. “Latest advance estimates suggest full recovery of all components on the demand side in 2021-22 except for private consumption. When compared to pre-pandemic levels, recovery is most significant in exports followed by government consumption and gross fixed capital formation,” it noted. The country’s investment to GDP ratio had hit 29.6% in 2021-22, the highest level in seven years, the Survey explained, attributing this capital formation to the government’s policy thrust on quickening the “virtuous cycle of growth via capex and infrastructure spending”. “While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment,” it observed, citing record corporate profits in recent quarters and high mobilisation of risk capital by firms. “Inflation has reappeared as a global issue in both advanced and emerging economies.... India does need to be wary of imported inflation, especially from elevated global energy prices,” it stated, even as it suggested that the double-digit wholesale price inflation in recent months would “even out”. However, an equally strong recovery was seen in imports, rendering India’s net exports negative for the first half of the year, from a surplus in 2020-21. India has thus recorded a modest current account deficit of 0.2% in the first half, but robust capital flows in the form of continued inflow of foreign investment were sufficient to finance it, it pointed out. “Elevated global commodity prices, revival in real economic activity driving higher domestic demand and growing uncertainty surrounding capital inflows may widen current account deficit further during the second half of the year. However, it is expected to be within manageable limits,” it said. Taking on criticism that the ‘Atmanirbhar Bharat approach’ marks “a return to old school protectionism”, the Survey concluded that “... the focus on economic resilience is a pragmatic recognition of the vagaries of international supply chains”. Assembly polls: ECI allows public meetings of up to 1,000 people The Election Commission of India (ECI) on Monday allowed public meetings of political parties and candidates of all phases of the Assembly elections with up to 1,000 people, after reviewing the COVID-19 situation in the poll-bound states. The ECI had allowed public meetings for candidates of the first two phases only, with up to 500 people. The three-member commission reviewed the COVID-19 situation in the election-going Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh on Monday with officials of the Health Ministry and the States. “All the State Chief Secretaries informed the commission about reports of COVID-19 infection either plateauing out or tapering as on date. They also said that the positivity rate is showing a decline, with the number of hospitalisation cases also registering a declining trend. The State officers, however, said that COVID protocol precautions need to be continued to be observed so that no undue spurt takes place due to intense public contact because of heightened political activity,” the ECI said in a statement. The ECI extended the ban on road shows, vehicle rallies and processions till February 11. “Commission has now decided to allow physical public meetings of political parties or contesting candidates in designated open spaces with a maximum of 1,000 persons (instead of existing 500 persons) or 50% of the capacity of the ground or the prescribed limit set by State Disaster Management Authority, whichever number is lesser, from February 1, 2022 for all phases,” the statement said. The ECI increased the limit for door-to-door campaigning from 10 to 20 people, excluding security personnel. For indoor meetings, it increased the limit from 300 to 500 people. Gurugram namaz case: SC agrees to immediately list contempt plea against Haryana officials Chief Justice of India N.V. Ramana on Monday agreed to immediately list for hearing a petition to initiate contempt action against Haryana authorities for not reining in “hooligans” who have created an “atmosphere of communal hatred and terror” for worshippers offering Friday prayers in Gurugram. The petition, filed by former Rajya Sabha MP Mohammad Adeeb, was mentioned by senior advocate Indira Jaising for urgent hearing. “I will look into it and put it up before an appropriate Bench immediately,” the CJI, who was heading a three-judge Bench, addressed Jaising. The petition condemned the inaction of the Haryana officials in violation of a Supreme Court judgment of 2018, which mandated that authorities should not be either silent spectators or tolerate communal violence and should use the law against hate crimes. The petition said the malicious attacks and false narratives on the Friday prayers were made through social media platforms. It said the prayers were held in the open “due to compulsion”. However, its conduct was portrayed as illegal and “some sort of encroachment”. The petition said the objections to the prayers had grown louder and more frequent. The police had not intervened despite complaints made. It has sought action against the Chief Secretary and the Director-General of Police of Haryana. The petition drew attention to December 3 and claimed how a large group of people were chanting communally divisive slogans at sites of namaz. “While a considerable number of police forces were present, despite the same, videos emerged clearly showing such persons as having no fear of law. The police reportedly detained some persons from the mob, but the same were subsequently let off the same day,” the plea has stated. Punjab Assembly election: Amarinder terms Rahul’s claims of deciding CM face with inputs from ground ‘farce’ Punjab Lok Congress (PLC) chief Captain Amarinder Singh (retd.) on Monday dubbed former Congress president Rahul Gandhi’s claims of deciding the chief ministerial face with inputs from the ground as farce and just theatrics. After filing his nomination papers from Patiala Urban, Capt. Amarinder said that as per procedure, people elected their MLAs and then the CLP elected the chief minister “and so all this talk is just drama.” Asked to comment on farmers’ decision to contest the polls, he stated that it was their right to do so. He personally had always supported them, he stressed. He pointed out that his government had announced jobs and ₹5 lakhs to the kin of each of the farmers who died during the agitation against the Central farm laws. Capt. Amarinder exuded confidence that the PLC-BJP-SAD (Sanyukt) alliance would form the next government in Punjab. He observed that the decision to allow some of the PLC candidates to contest on the BJP symbol was taken keeping in mind the voter demographics. “While four PLC candidates will contest on the BJP symbol in urban segments, two of their candidates will fight on the PLC symbol in the rural constituencies.” Hitting out at Punjab Congress president Navjot Singh Sidhu, Capt. Amarinder predicted an abysmal defeat for the former from Amritsar East. “With 38% of the voters in Amritsar East being Hindus and 32% SCs, his defeat is certain. The BJP has fielded a strong candidate from the constituency, he added. Covid Watch: Numbers and Developments The number of reported coronavirus cases from India stood at 4,13,22,228 at the time of publishing this newsletter, with the death toll at 4,95,107. In Brief: Indian economy contracted by 6.6% in 2020-21 on account of outbreak of COVID-19 and subsequent nationwide lockdown to contain the pandemic. As per the provisional estimates released in May 2021, the GDP had contracted by 7.3% in 2020-21. “Real GDP or GDP at constant (2011-12) prices for the years 2020-21 and 2019-20 stands at ₹135.58 lakh crore and ₹145.16 lakh crore, respectively, showing a contraction of 6.6% during 2020-21 as compared to growth of 3.7% during 2019-20,” National Statistical Office said in the revised national account data released on Monday. Evening Wrap will return tomorrow. [logo] The Evening Wrap 31 JANUARY 2022 [The Hindu logo] Welcome to the Evening Wrap newsletter, your guide to the day’s biggest stories with concise analysis from The Hindu. [[Arrow]Open in browser]( [[Mail icon]More newsletters]( Economic Survey projects 8%-8.5% growth in 2022-23 The [Economic Survey for 2021-22, tabled by Finance Minister Nirmala Sitharaman in the Lok Sabha]( expects the GDP to grow by 9.2% this year and 8% to 8.5% in 2022-23, even as it expressed concerns about the implications of hardening inflation and energy prices. “Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment, with the financial system in a good position to provide support to the revival of the economy,” the Survey projected. The Survey’s GDP growth estimate for the coming year is based on the assumption that “there will be no further debilitating pandemic-related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global supply chain disruptions will steadily ease over the course of the year”. [Chief Economic Advisor V. Ananth Nageshwaran with Sanjeev Sanyal and Rajiv Mishra release the Economic Survey 2021-22, in New Delhi on January 31, 2022.]  The Survey acknowledged the risks that have emerged at the time it was being written, such as the new COVID-19 variant, Omicron, sweeping across the world, inflation jumping up in most countries, and the cycle of liquidity withdrawal being initiated by major central banks. It highlighted that the country’s macro-economic stability indicators on the external front, fiscal front as well as the financial sector health and inflation, were well-placed to take on the challenges of 2022-23. “One of the reasons” for this comfortable position, the Survey argued, was the government’s unique response strategy that didn’t “pre-commit to a rigid response” but “opted to use safety nets for vulnerable sections” based on information. While the 9.2% growth estimate for 2021-22 suggested a recovery above the pre-pandemic level of 2019-20, the Survey conceded that private consumption and segments such as travel, trade and hotels were yet to fully recover. “The stop-start nature of repeated pandemic waves makes it especially difficult for these sub-sectors to gather momentum,” it said. “Latest advance estimates suggest full recovery of all components on the demand side in 2021-22 except for private consumption. When compared to pre-pandemic levels, recovery is most significant in exports followed by government consumption and gross fixed capital formation,” it noted. The country’s investment to GDP ratio had hit 29.6% in 2021-22, the highest level in seven years, the Survey explained, attributing this capital formation to the government’s policy thrust on quickening the “virtuous cycle of growth via capex and infrastructure spending”. “While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment,” it observed, citing record corporate profits in recent quarters and high mobilisation of risk capital by firms. “Inflation has reappeared as a global issue in both advanced and emerging economies.... India does need to be wary of imported inflation, especially from elevated global energy prices,” it stated, even as it suggested that the double-digit wholesale price inflation in recent months would “even out”. However, an equally strong recovery was seen in imports, rendering India’s net exports negative for the first half of the year, from a surplus in 2020-21. India has thus recorded a modest current account deficit of 0.2% in the first half, but robust capital flows in the form of continued inflow of foreign investment were sufficient to finance it, it pointed out. “Elevated global commodity prices, revival in real economic activity driving higher domestic demand and growing uncertainty surrounding capital inflows may widen current account deficit further during the second half of the year. However, it is expected to be within manageable limits,” it said. Taking on criticism that the ‘Atmanirbhar Bharat approach’ marks “a return to old school protectionism”, the Survey concluded that “... the focus on economic resilience is a pragmatic recognition of the vagaries of international supply chains”. [underlineimg] Assembly polls: ECI allows public meetings of up to 1,000 people The [Election Commission of India (ECI) on Monday allowed public meetings of political parties and candidates of all phases]( of the Assembly elections with up to 1,000 people, after reviewing the COVID-19 situation in the poll-bound states. The ECI had allowed public meetings for candidates of the first two phases only, with up to 500 people. The three-member commission reviewed the COVID-19 situation in the election-going Goa, Manipur, Punjab, Uttarakhand and Uttar Pradesh on Monday with officials of the Health Ministry and the States. “All the State Chief Secretaries informed the commission about reports of COVID-19 infection either plateauing out or tapering as on date. They also said that the positivity rate is showing a decline, with the number of hospitalisation cases also registering a declining trend. The State officers, however, said that COVID protocol precautions need to be continued to be observed so that no undue spurt takes place due to intense public contact because of heightened political activity,” the ECI said in a statement. The ECI extended the ban on road shows, vehicle rallies and processions till February 11. “Commission has now decided to allow physical public meetings of political parties or contesting candidates in designated open spaces with a maximum of 1,000 persons (instead of existing 500 persons) or 50% of the capacity of the ground or the prescribed limit set by State Disaster Management Authority, whichever number is lesser, from February 1, 2022 for all phases,” the statement said. The ECI increased the limit for door-to-door campaigning from 10 to 20 people, excluding security personnel. For indoor meetings, it increased the limit from 300 to 500 people. [underlineimg] Gurugram namaz case: SC agrees to immediately list contempt plea against Haryana officials [Chief Justice of India N.V. Ramana on Monday agreed to immediately list for hearing a petition to initiate contempt action]( against Haryana authorities for not reining in “hooligans” who have created an “atmosphere of communal hatred and terror” for worshippers offering Friday prayers in Gurugram. The petition, filed by former Rajya Sabha MP Mohammad Adeeb, was mentioned by senior advocate Indira Jaising for urgent hearing. “I will look into it and put it up before an appropriate Bench immediately,” the CJI, who was heading a three-judge Bench, addressed Jaising. [Muslims offer Friday prayers at an open site, in Gurugram, on December 17, 2021. File image.]  The petition condemned the inaction of the Haryana officials in violation of a Supreme Court judgment of 2018, which mandated that authorities should not be either silent spectators or tolerate communal violence and should use the law against hate crimes. The petition said the malicious attacks and false narratives on the Friday prayers were made through social media platforms. It said the prayers were held in the open “due to compulsion”. However, its conduct was portrayed as illegal and “some sort of encroachment”. The petition said the objections to the prayers had grown louder and more frequent. The police had not intervened despite complaints made. It has sought action against the Chief Secretary and the Director-General of Police of Haryana. The petition drew attention to December 3 and claimed how a large group of people were chanting communally divisive slogans at sites of namaz. “While a considerable number of police forces were present, despite the same, videos emerged clearly showing such persons as having no fear of law. The police reportedly detained some persons from the mob, but the same were subsequently let off the same day,” the plea has stated. [underlineimg] Punjab Assembly election: Amarinder terms Rahul’s claims of deciding CM face with inputs from ground ‘farce’ [Punjab Lok Congress (PLC) chief Captain Amarinder Singh (retd.) on Monday]( dubbed former Congress president Rahul Gandhi’s claims of deciding the chief ministerial face with inputs from the ground as farce and just theatrics. After filing his nomination papers from Patiala Urban, Capt. Amarinder said that as per procedure, people elected their MLAs and then the CLP elected the chief minister “and so all this talk is just drama.” Asked to comment on farmers’ decision to contest the polls, he stated that it was their right to do so. He personally had always supported them, he stressed. He pointed out that his government had announced jobs and ₹5 lakhs to the kin of each of the farmers who died during the agitation against the Central farm laws. Capt. Amarinder exuded confidence that the PLC-BJP-SAD (Sanyukt) alliance would form the next government in Punjab. He observed that the decision to allow some of the PLC candidates to contest on the BJP symbol was taken keeping in mind the voter demographics. “While four PLC candidates will contest on the BJP symbol in urban segments, two of their candidates will fight on the PLC symbol in the rural constituencies.” Hitting out at Punjab Congress president Navjot Singh Sidhu, Capt. Amarinder predicted an abysmal defeat for the former from Amritsar East. “With 38% of the voters in Amritsar East being Hindus and 32% SCs, his defeat is certain. The BJP has fielded a strong candidate from the constituency, he added. [underlineimg] Covid Watch: Numbers and Developments The [number of reported coronavirus cases from India]( stood at 4,13,22,228 at the time of publishing this newsletter, with the death toll at 4,95,107. [underlineimg] In Brief: Indian economy contracted by 6.6% in 2020-21 on account of outbreak of COVID-19 and subsequent nationwide lockdown to contain the pandemic. As per the provisional estimates released in May 2021, the GDP had contracted by 7.3% in 2020-21. “Real GDP or GDP at constant (2011-12) prices for the years 2020-21 and 2019-20 stands at ₹135.58 lakh crore and ₹145.16 lakh crore, respectively, showing a contraction of 6.6% during 2020-21 as compared to growth of 3.7% during 2019-20,” National Statistical Office said in the revised national account data released on Monday. 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