ECONOMIC SURVEY

How many of our so-called knowledge fraternity really care about the Economic Survey (there may be a few questioning what is it?). It calls for serious introspection particularly when you project yourself as the ones who are interested (partners) in the economic development and growth of the nation. The budget which hardly has an impact in the most immediate short term hogs our attention, whereas a document which looks far behind to identify the path for growth in the long term is horrendously ignored. This is an attempt to throw light on the economic survey which is presented each year. The salient feature of Economic Survey 2009-10 will post in a separate one.

The economic survey is a report on the performance of the economy over the past year, its comparison with the past and providing its outlook for the future. This document is an honest analysis of the performance of the economy. The economic survey is usually presented to the nation, a day before the budget each year, prepared by eminent economist part of the finance ministry and the planning commission. The finance minister tables it before both the houses of the Parliament. If analysed in detail, it is a document containing the history and also near-perfect prediction of the economy in the future (bet you, there can be no astrologer who can tell your future, these guys tell the future of the nation). The economic survey is a narrative with key statistical data supporting the analysis and conclusions.

The economic survey 2009-10 contains the following chapters:

· State of the economy and prospects: Commentary on overall growth of the economy over the year, overall GDP growth, sector-wise growth, reasons for shortfall/excess of growth over projections, quarterly trend of the growth, per capita income growth, demand and consumption, sector-wise production and supply, savings pattern in the country, Inflation during the year, details of balance of payments, foreign exchange reserves, impact of monetary and fiscal policy, short and medium term prospects are given in this chapter. This section gives an idea of the pattern of growth over years, sectors which are at various stages of its life-cycle and the demand-supply pattern and expectations. These also provide an insight into the potential growth of existing business and viability for new businesses based on the needs of the economy.

· Micro-foundations of inclusive growth: Contains details of how the distribution of growth has taken place in the economy, the challenges face by the economy for inclusive growth, measures taken by government to overcome the challenges of poverty, the measures taken in the form of subsidies, the bureaucratic costs and delays affecting the economy, impact of inflation and availability of food are discussed in this section. This gives an insight into the shortcomings of the economy to stand up to the global needs and growth, particularly with reference to China.

· Fiscal developments and Public finance: The receipts and expenditure statistics of the exchequer, revenue from various taxes, interest liabilities on internal and external funding for the government, plan outlay, outstanding liabilities of the government, performance of government enterprises like railways and post, revenue and fiscal deficits of the states are discussed. This gives a picture of the financial position of the Government. These are like financial statement analysis and can make out where the government is keen to tap revenues and cut down expenditures.

· Prices and monetary management: Analysis of wholesale price index which is taken as base for calculation of inflation, food inflation, main drivers of inflation, city-wise inflation trends, monetary developments like reserve money, liquidity management, repo and reverse repo rates, money market operations and rates, treasury bills, yields of government bonds and outlook are outlined in this chapter. Impact of inflation on each product, for each city and the trend vis-à-vis global trend are elaborated.

· Financial intermediation and markets: Bank operations with respect to credits, deposits and those of financial institutions role as financial market intermediaries, sectoral development of credit, agricultural credit, performance of commercial banks, Commodity markets, currency markets primary and secondary market performance of the economy, debt market and derivatives market performances are analysed in this section. This is one stop source for all those information flowing in the business news channels on stock markets and banking system of the country.

· Balance of Payments: Country’s BOP position in the midst of the challenges of the economic slowdown, current account balances, transaction on capital accounts and foreign exchange reserves, foreign exchange rates over the year and significant developments are discussed in this section. The strength of the economy on the basis of reserves and BOP can be determined from this section.

· International trade: Export trends globally, India’s export trend across various countries and various products, also import trends, direction of trade, India’s position globally, service sector international trade, suggestions for policies for service sector are discussed in this section. India’s present position in the global market and the measures for future is often discussed here.

· Agriculture and food management: Analysis of the entire agriculture sector highlighting contribution of private sector, public sector, foodgrains production, impact of rainfall and monsoons, policy for the sector are discussed in this section.

· Industry: Growth in outputs, performance of each of the sector, flow of finances for the sector, credit availability, policy measure taken for each of the sector and needed for those sectors, project appraisal status and challenges and outlook are discussed in this section. A smart businessperson has enough information to strategise the growth of the business in this section.

· Energy, Infrastructure and Communications: A special emphasis on the much needed resources for the economy is discussed for the present status, prospects and challenges to be addressed, ways of addressing and the outlook. One of the factors in the fundamental analysis of an economy is detailed out.

· Human development, poverty and public programme: Human development index, social sector expenses pattern, poverty status, measuring of the population below poverty line, determination of below poverty line category, employment status and various populist schemes of the government are discussed here in this section.

Economics is such an interesting subject that provides insight into every detail of the country, in the process better understanding often results in successful ventures for those who understand and utilize the reports of the government. Now that we know what exactly is in the economic survey document, we shall try to be literate of the status of the nation and indirectly take any other advantages attached with that, which is reward for being aware of your own economy.