Economic Survey Explained By Yuvraj IAS Academy
The Economic Survey brings out the economic trends in the country and facilitates a better appreciation of the mobilisation of resources and their allocation in the Union Budget. The Survey analyses the trends in agricultural and industrial production, infrastructure, employment, money supply, prices, imports, exports, foreign exchange reserves and other relevant economic factors that have a bearing on the Budget. It is presented in Parliament ahead of the Budget for the ensuing year.
The Budget of the central government is not merely a statement of receipts and expenditure. Since Independence, with the launch of Five-Year Plans, it became a significant statement of government policy. The Budget reflects and shapes, and is, in turn, shaped by the country’s economy. For a better appreciation of the impact of government receipts and expenditure on the other sectors of the economy, it is necessary to group them in terms of economic magnitudes — for example, how much is set aside for capital formation, how much is spent directly by the government and how much is transferred by the government to other sectors of the economy by way of grants, loans, etc. This analysis is contained in the Economic and Functional Classification of the Central Government Budget, which is brought out by the Ministry of Finance separately.
The Chief Economic Advisor is the principal author of the Economic Survey. The Economy Survey continues to be a two-volume report since five years ago, since Arvind Subramanian was the chief economic advisor (CEA).
This time, incumbent CEA Krishnamurthy Subramanian will lead the writing of the first volume, which will continue to be idea-centric and forward-looking. First volume will also likely include a chapter focusing on the regulatory framework for credit rating agencies (CRAs), which are jointly regulated by the Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) at present.
A brief history of the Economy Survey
- The first Economic Survey was presented in the year 1950-51.
- Until 1964, it was presented along with the Union Budget, but later it was disjointed from the Union Budget to give a better understanding of the budget proposals.
- As the Economic Survey contains a detailed analysis of the economic development of the country and a lot of data related to various sectors of the economy, it works as a useful tool providing background knowledge.