Survey calls for healthcare regulator and asset review for banks; sustainable growth still a way away, say economists
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India’s finance ministry on Friday tabled the Economic Survey which highlighted the point that the country is expected to clock a contraction of 7.7 percent in its GDP for the year to March 2021, hurt by the ‘once-in-a-century crisis’ in the form of the Covid-19 pandemic.
The country has since seen a V-shaped recovery in several high-frequency economic indicators since the unlocking of the economy in June last year. The economic survey now projects the country to grow by 11.5 percent in FY22 with nominal GDP forecast at 15.4 percent.
The survey brought out the need for a healthcare regulator, an asset quality review check for banks and an aggressive disinvestment programme from the government.
Needed: Increased healthcare spend, a regulator
The economic survey had its first chapter focussed on how the government dealt with the pandemic. India imposed one of the most stringent lockdowns amongst the large economies of the world. The government then started the unlocking of the economy in five different phases, which has led to an improvement in people mobility and an improvement in the services sector and logistics activity.
“This [strategy] enabled flattening of the pandemic curve and thereby provided the necessary time to ramp up the health and testing infrastructure. Faced with enormous uncertainty, India adopted a strategy of Bayesian updating to continually calibrate its response while gradually unlocking and easing economic activity,” Krishnamurthy V Subramanian, India’s chief economic advisor to the government of India, said in the report.