Publication of the Annual Economic Survey, a day before the Union Budget, is a much-awaited event. Offering rare insights into the Government’s economic thinking and giving a snapshot of the Indian Economy, together with a SWOT analysis, every word of the Economic Survey is precious to serious students of economics. The spirit and thinking behind the Budget can be perfectly understood by perusing the Economic Survey, because both documents are drafted by the same set of economists. Painstaking research, unbiased statistics and unmatched scholarship ensure that the Economic Survey remains of interest long after the corresponding year’s Budget is forgotten.
The Economic Survey of 2016-17 summarised these desiderata in the following words: “It (Economic Survey) must possess a rare combination of gifts …. No part of man’s nature or his institutions must be entirely outside its regard. It must be purposeful and disinterested in a simultaneous mood, its authors as aloof and incorruptible as artists, yet sometimes as near to earth as politicians.” Economic Survey 2016-17 went on to note that such was the previous year’s Survey’s popularity, that it had been pirated and was being sold on Amazon.
The current Economic Survey, however, has no such pretensions, confining itself to a justification of the policies followed by the Government. We get a hint of the direction that the Survey would take, at the very beginning in the Preface itself, where it states: “Policies pursued carefully and consciously have ensured that the recovery is robust and sustainable,” which is debatable given that inflation and unemployment are at worrying levels, manufacturing is plateauing, exports are declining, and twothirds of our population is surviving on highly subsidised rations.
The arrangement of contents of the current Economic Survey is almost identical to that of its predecessors; the first chapter examines the state of the Indian economy, chapter two analyses India’s medium-term economic outlook, chapter three focuses on India’s fiscal policy trajectory and so on. However, treatment of all topics is somewhat pedestrian; short on original thinking and long on verbiage. While earlier Surveys will be long-remembered for their insights like the Twin Balance Sheet Problem in Economic Survey 2015-16 or the highly original Eight Interesting Facts About India in Economic Survey 2016-17 or Tracking Development through Satellite Images and Cartography in the last Economic Survey, the current Economic Survey displays no such acuity.
The tone of Economic Survey 2022- 23 is so highly optimistic that it becomes jarring at times. Facts not conforming to the authors’ narrative are sometimes not mentioned at all or deliberately obfuscated, an example being the chapter on India’s social sector (Chapter 6), that does not bifurcate social sector expenditure between the Centre and States, which would have revealed that the Centre’s spending on Health and Education was declining in percentage terms.
On page 93 of the Survey the authors state that 69 per cent of the distressed assets were rescued in the Corporate Insolvency Resolution Process, omitting to mention, that in simple words this means that lenders took a 69 per cent haircut.
The Survey also commends and reproduces the Finance Minister’s highly controversial statement “it is not that the Indian Rupee has weakened, but it is the US dollar that has strengthened” (page 333), without much justification.
Chapter 7, Agriculture & Food Management: From Food Security to Nutritional Security, faithfully recounts the contribution of agriculture to the Indian economy.
But the authors are silent about the fact that agricultural growth has been resilient despite almost zero additional budgetary support from the Centre. The chapter also does not mention anything about the short-lived Farming Acts, that caused such furore amongst farmers.
The Survey is at its unconvincing best while discussing the employment scenario in Chapter 6. Since the Labour Bureau of the Government of India had discontinued Annual and Quarterly Employment Surveys from 2016, relying exclusively on Government data, read in conjunction with somewhat less elegant indicators like the Periodic Labour Force Survey, the Economic Survey concludes: “The broad-based improvement in employment indicators is observed in data covering both the supply side and demand side of the labour market.”
Significantly, the Government had issued a Press Note on 4 January 2023, denying the high rate of unemployment projected by ‘private parties’ (probably Centre for Monitoring Indian Economy (CMIE)) and ‘cautioned’ the public against private employment surveys. Faithfully parroting the Government line, the Economic Survey does not even mention CMIE or any other data, which paints a totally different picture of the employment situation.
Perhaps, before outrightly rejecting non-government data, a publication of the eminence of the Economic Survey could at least have pointed out how nongovernment data was not reliable. Even otherwise, taking a holistic view, total employment in January 2020, just before the pandemic was 410.5 million, which has decreased to 409.3 million in January 2023.
Factoring in new entrants to the labour market in the last three years, it could be surmised that unemployment is touching stratospheric levels. This supposition is borne out by anecdotal evidence; thousands of overqualified youth apply for some few Government jobs ~ every time such vacancies are advertised.
At various places, the Economic Survey seems to have deliberately ignored adverse facts; in Chapter 10 and Chapter 11, while talking about robustness of the IT sector, no mention is made of the unprecedented global slowdown that has seen revenue losses and record layoffs in global market leaders like Netflix, Meta, Amazon, Microsoft, Alphabet, and Apple ~ which are directly affecting the Indian IT Sector, bringing the NIFTY IT down 11.4 per cent y-o-y, and leading to approximately 25,000 lay-offs.
Similarly, while talking about successful start-ups, and listing measures taken by the Government to support the start-up sector (Chapter 9), the Survey fails to mention the stress faced by the start-up sector in 2022, that had led to 22,000 lay-offs and Mr Anand Mahindra’s observation that 90 per cent of Indian start-ups fail within the first five years.
Chapter 5, Prices and Inflation: Successful Tightrope Walking, redeems the Economic Survey to some extent. The causes and effect of the present phase of high inflation are discussed threadbare, though the Survey is silent on an obvious reason for inflation viz. high GST rates. Similarly, Chapter 3, Fiscal Developments: Revenue Relish, has an enlightening discussion on tax revenues and government debt.
To sum up: Economic Survey 2022-23 disappoints in more ways than one. Most chapters of the Survey read like Government hand-outs, with a one-sided narration of the Government’s achievements.
At other places, a bucket list of Government schemes is given without discussing their actual effect, beneficial or otherwise, on the purpose they were intended to achieve. Sometimes, the Survey tries to divide the progress of the Indian Economy in two parts ~ pre-2014 and post-2014 ~ a political division rather than an economic one.
Again, the Survey makes herculean efforts to draw a parallel between the periods 1998-2002 and 2014-2022. Such obvious biases serve no purpose other than detracting from the intrinsic merit of the Economic Survey.
The iconic American business magnate, investor, and philanthropist Warren Buffet once said: “Forecasts usually tell us more of the forecaster than the future.” What Warren Buffet said about forecasts in general, holds true about the Economic Survey 2022-23.
(The writer is a retired Principal Chief Commissioner of Income-Tax)