Economic Survey may ask govt to aggressively push growth, jobs through raised capital spends

The Economic Survey to be presented in Parliament on Monday may ask the government to significantly increase capital expenditure from the last year's budgeted nearly 5.6 lakh crore to help generate demand, employment and, attract more private investment for sustained growth in the economy bruised by three waves of Covid-19 pandemic.

Besides, the survey may also suggest the government to increase healthcare and education spending, substantially raising the Budget outlay on education from a little over Rs 93,000 crore last year, a major chunk of which should go to making digital infrastructure in the sector more robust.

To fund rising expenditure on Covid-19 vaccination, the survey may also drop a hint on generating more tax resources without putting the burden on the middle-income group and the salaried class, informed sources told DH.

With the tax revenues of the government doing better than projected in the Budget of last year, it may also ask for a few concessions to households to support their incomes and strengthen demand in the wake of rising inflation and inflationary expectations.

"Delaying a sharp fiscal correction to make room for boosting employment and infrastructure spending is probably the best bet at this juncture," Crisil Research has said in a report.

Since the services sector, especially contact services, have been severely impacted by the pandemic, it may recommend production-linked incentives (PLI) in more sectors of manufacturing that have the potential to create more jobs.

Also read: Eyes on GDP forecast by Economic Survey despite recent misses

It may project the economy to grow about 9 per cent in the financial year 2022-23, which is 2 percentage points lower than last year's Economic Survey's projection of 11 per cent for the current financial year, due to uncertainties posed by potential new Covid virus variants.

The International Monetary Fund (IMF) has projected a 9 per cent growth in the financial year 2022-23 and the World Bank at 8.7 per cent.

After contracting 7.3 per cent in 2020-21, the economy is expected to grow 9.2 per cent in 2021-22, ending March 31, according to the official forecast.

The Survey, which is authored by the Chief Economic Advisor, is drafted by the Principal Economic Advisor to the finance minister after CEA K V Subramanian stepped down in December post completion of his three-year term.

The government has, however, appointed V Ananth Nageswaran as the new CEA recently.

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