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Press Conference by Chief Economic Advisor @SubramanianKri on #EconomicSurvey 2020-21

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LIVE now: Press Conference on #EconomicSurvey 2020-21, by Chief Economic Advisor @SubramanianKri

Watch on #PIB's
YouTube:
Facebook: facebook.com/pibindia

#SavingLivesAndLivelihoods

LIVE: CEA @SubramanianKri and his team launch the #EconomicSurvey which has been tabled in Parliament today

#SavingLivesAndLivelihoods

Chief Economic Advisor @SubramanianKri begins his press conference on #EconomicSurvey 2020-'21

This year's survey is dedicated to all COVID Warriors who upheld India, informs CEA

The cover also captures the resilience of the Indian economy

It's on #SavingLivesAndLivelihoods

Keeping with the times, this year's #EconomicSurvey is being delivered in e-book format, with an official app for the Survey

- CEA @SubramanianKri

Chapter 1 of #EconomicSurvey is about India's policy response to #COVID19, #SavingLivesAndLivelihoods, amidst a once-in-a-lifetime crisis - CEA @SubramanianKri

During high uncertainty, policy should minimize large losses

India's policy response to #COVID19 was guided by the realization that GDP growth will come back, but not lost human lives

Early intense lockdown saved lives, helped faster recovery: CEA

#SavingLivesAndLivelihoods

#EconomicSurvey2021 team has done an analysis of what could have been vs. what happened

Both on #COVID cases and deaths, India has done really well, informs CEA @SubramanianKri

#SavingLivesAndLivelihoods

CEA @SubramanianKri presents an analysis of performance of states in averting #COVID cases and deaths

Maharashtra is under performer on both counts

UP, Gujarat and Bihar over performers in terms of cases

Kerala, Telangana and AP in terms of deaths

#SavingLivesAndLivelihoods

Intensity and stringency of initial lockdown correlates well with both cases and deaths, both across countries and across states within India

- finds #EconomicSurvey

#SavingLivesAndLivelihoods

Stringency of #COVID19 lockdown correlates with negative economic growth in same period but with positive growth in future time period, observes #EconomicSurvey

#SavingLivesAndLivelihoods

Strong correlation of lockdown with decline in cases and deaths is found across states, not just within a few states

Hence #EconomicSurvey infers that lockdown had a causal effect on #SavingLivesAndLivelihoods

- CEA @SubramanianKri

Even without lockdown, #COVID19 pandemic would have created a significant economic impact

But what the lockdown did ensure is help a coordinated response, enabling #SavingLivesAndLivelihoods

- CEA @SubramanianKri

India's policy response to #COVID19 considered nuanced impact of the pandemic on demand

PMJDY balances increased at the bottom of the pyramid during lockdown, showing precautionary motive to save

Given this uncertainty, India focused on ensuring necessities in 1st phase

India realized very well that pushing down on the accelerator of a car while the brakes are already clamped only wastes fuel

Hence, India announced discretionary measures in unlock phase as part of #AatmaNirbharBharat Package

- CEA @SubramanianKri

A slew of structural reforms were announced, to enhance supply in the medium and long run, to strengthen primary and secondary sectors, create jobs and boost aggregate demand

- notes #EconomicSurvey

#SavingLivesAndLivelihoods

Mature and Far-sighted

Focused on #SavingLivesAndLivelihoods

Took short term pain for long term gain

Recognized that GDP growth will recover, lost human lives cannot be brought back

Only country to announce structural reforms

- CEA, on India's #COVID19 Policy Response

Growth leads to debt-sustainability, but not vice versa, observes #EconomicSurvey

#SavingLivesAndLivelihoods

Watch CEA's press conference LIVE:

If the interest rate is less than growth rate, debt as a percentage of GDP declines

Change in growth rate is key to influencing this, hence growth is instrumental to attaining sustainability of debt, notes CEA @SubramanianKri

#SavingLivesAndLivelihoods

#EconomicSurvey calls for counter-cyclical fiscal policy to be an important point of emphasis, where the govt. steps in when the private sector does badly and steps back when the private sector does well

#SavingLivesAndLivelihoods

Even if India were to have the real GDP growth rate as low as 3.8% each year from FY 23 to FY 29, the debts will still come down

- CEA @SubramanianKri, illustrating that India's debt is sustainable

#SavingLivesAndLivelihoods

India has a track record of having adopted expansionary fiscal policy focussed on infrastructure spending

We need to replicate the same - notes #EconomicSurvey

#SavingLivesAndLivelihoods

#EconomicSurvey highlights potential of public investment, especially in a slowdown

Calls for fiscal policy to support growth

Need for rethink in fiscal rules

#SavingLivesAndLivelihoods

Fifth largest economy has typically been rated AAA

Exceptions - China (A-) and India (BBB+)

Emerging giants are not getting the credit ratings their economic fundamentals demand, observes #EconomicSurvey

#SavingLivesAndLivelihoods

India's Sovereign Credit Ratings do not reflect its fundamentals

- a variety of indicators bear testimony to this, notes CEA @SubramanianKri in #EconomicSurvey

#SavingLivesAndLivelihoods

Willingness to repay has been gold standard for India

Ability to repay is also very very high for India

So India should have highest credit rating

- observes #EconomicSurvey, reflecting an anomaly in India's sovereign credit rating

#SavingLivesAndLivelihoods

The Sovereign Credit Rating Methodology needs correction, current ratings do not reflect fundamentals, they also affect foreign investment flow in a mechanical manner

- CEA @SubramanianKri

#SavingLivesAndLivelihoods

In advanced economies, there is a conflict between outcomes delivered by inequality and growth

While in India, there is a convergence - both inequality and per capita income have similar impact on socioeconomic indicators

- #EconomicSurvey

#SavingLivesAndLivelihoods

India must continue to focus on growth, so that we expand the pie, enabling redistributive policies that lift people out of poverty

- CEA @SubramanianKri

#EconomicSurvey #SavingLivesAndLivelihoods

https://twitter.com/PIB_India/status/1355107517471186946

Small levels of increase in public spending on healthcare can have a non-linear impact and result in a very large decrease in out-of-pocket expenditure by typical families on healthcare - CEA @SubramanianKri

#SavingLivesAndLivelihoods #EconomicSurvey

#EconomicSurvey points to endemic information asymmetry problems which lead to market failures in healthcare

Private hospitals in India charge much higher for same treatment, as compared to govt. hospitals

#SavingLivesAndLivelihoods

Higher charges levied by pvt. hospitals do not necessarily ensure higher quality of care, as readmission rates show

Need better regulation of health care, notes #EconomicSurvey, citing market failure due to information asymmetry
#SavingLivesAndLivelihoods

https://twitter.com/PIB_India/status/1355109544301457412

Crucial life saving procedures were not impacted due to #COVID19, #AyushmanBharat @AyushmanNHA has helped ensure this, observes #EconomicSurvey

#SavingLivesAndLivelihoods

#AyushmanBharat is resulting in various direct and spillover effects, finds #EconomicSurvey

#SavingLivesAndLivelihoods

Contracts in real world cannot take care of all contingencies

Once we acknowledge this reality, incomplete regulations become inevitable

- points out #EconomicSurvey

#SavingLivesAndLivelihoods

Excessive regulation leads to excessive and opaque supervision and exercise of discretion, sounds CEA @SubramanianKri, making a call for simple regulation and transparent supervision

#SavingLivesAndLivelihoods

https://twitter.com/PIB_India/status/1355111850220810244

Simple Regulation

Transparent Decision Making Process

Transparent Supervision

Stronger Accountability Mechanisms

Resolution Mechanisms

- #EconomicSurvey calls for key process reforms

#SavingLivesAndLivelihoods

Regulatory restraint should not become a staple diet, remember that it is an emergency medicine

- cautions #EconomicSurvey, drawing lessons from the 2008 global financial crisis where regulatory forbearance continued for much longer than required

#SavingLivesAndLivelihoods

We need to avoid a recurrence of the issues that arose due to an extended provision of regulatory forbearance following the 2008 global recession

- CEA @SubramanianKri

#SavingLivesAndLivelihoods #EconomicSurvey

India has been an outlier in its global innovation performance, India must aspire to increase its Gross Expenditure on R&D from around 1.5% to 3% of GDP

- #EconomicSurvey

#SavingLivesAndLivelihoods

Private sector needs to contribute more to innovation and R&D

Business sector contribution to gross R&D expenditure in India much less as compared to govt., when compared with scenario in top 10 economies

- #EconomicSurvey #SavingLivesAndLivelihoods

#EconomicSurvey creates an Index of Bare Necessities that a typical household in India gets

#SavingLivesAndLivelihoods

There has been a pan India improvement in access to bare necessities, in 2018 vs situation in 2012

For both rural and urban India

- #EconomicSurvey finds, based on data on 26 bare necessities

#SavingLivesAndLivelihoods

Rich can access private options for public goods, poor rarely have such access

Against this backdrop, along with improvement in overall access to bare necessities, there has been an improvement in equity of access as well

- #EconomicSurvey

#SavingLivesAndLivelihoods

India is witnessing a V-shaped economic recovery

History will judge India's #COVID19 policy response as mature

Reason for optimism on health & economic fronts

Be cautious till vaccination

- CEA @SubramanianKri summarizes #EconomicSurvey 2020-'21

#SavingLivesAndLivelihoods

So, those were the highlights of the #EconomicSurvey 2020-'21

For those who are interested in the details, here goes:

Volume I 📖indiabudget.gov.in/economicsurvey…

Volume II📖indiabudget.gov.in/economicsurvey…

Mobile App: play.google.com/store/apps/det…

#SavingLivesAndLivelihoods