Why the Economic Survey is important before presenting budget?
An economic survey is one of the flagship annual documents of the ministry of finance. It reviews the developments in the economic structure of India over the past 12 months. It encapsulates the performance of major development programs and also highlights the policy initiatives of the Indian government along with the growth of the economy in the short to medium-term perspective.
The first Economic Survey of India was presented in the year 1950-51. It was presented along with the union budget till 1964 after which it was segregated from the union budget.
Components of Economic Survey
It gives a detailed account of the state of the economy, prospects, and policy challenges. It carries sectoral overviews and comments on reform measures that are required. The survey’s outlook serves as an indicator of future policy moves.
Preparation and Presentation of Economic Survey
It is prepared by the Economic Division of the Department of Economic Affairs under the guidance of the Chief Economic Adviser of India.
The annual Economic Survey is generally presented a few days before the annual budget’s presentation by the Finance Minister of India. Anyone from the common people has a right to access the economic survey.
Significance of Economic Survey
The Economic survey gives precise economic growth forecasts by explaining briefly why it believes the economy will expand faster or slow down.
The economic survey finds it important for the policymakers, economists, policy analysts, business practitioners, government agencies, students, researchers, media, and all the citizens interested in the development of the Indian economy.
The economic survey also depicts the outcomes of money inflow in the market and plays an important role in macro indicators such as inflation, economic activity, and government revenue.
The economic survey also gives an insight into increasing divergence across the states. The increasing inequality may not only disturbs the economic outcomes in the long run but may also be important for the political stability of the country.
The economic survey highlights the nature of urbanisation. Although the survey highlights this in the perspective of the impending property tax, this spatial concentration in metropolitan areas is now turning into a major challenge. The use of survey data may help in sorting out the complications of the problems and challenges that these trends point to.