Economic Survey says all is well. So where’s the need for a fiscal stimulus?

This year’s economic survey doesn’t say a lot about economic prospects for 2022-23. But it’s pretty confident the Indian economy will do well, with a growth rate of 8-8.5 percent.

Several economists have expressed concerns over consumption, arguing that the incomes of the poor have been badly affected by the pandemic. The Economic Survey has no such qualms. It says, ‘Private consumption is poised to see stronger recovery with rapid coverage in vaccination and faster normalisation of economic activity.’

What about investment demand, sorely needed for sustainable growth? Here too the Survey is upbeat. It says, ‘While private investment recovery is still at a nascent stage, there are many signals which indicate that India is poised for stronger investment. The number of private investment projects under implementation in manufacturing sector has been rising over the years. Companies hitting record profits in recent quarters and mobilization of risk capital bode well for acceleration in private investment. A sturdy and cleaned-up banking sector stands ready to support private investment adequately. Expected increase in private consumption levels will propel capacity utilisation, thereby fuelling private investment activity. RBI’s latest Industrial Outlook Survey results indicate rising optimism of investors and expansion in production in the upcoming quarters.’ No worries there.