Economic Survey 2022 makes strong case for continuation of bold reforms

By Anish Kumar | First Published Jan 31, 2022, 4:50 PM IST

Economic Survey 2022 re-emphasises the critical importance of disinvestment and further opening up of the economy.

Union government’s bold reforms, including the corporatisation of the Ordnance Factory Boards (OFBs) stay on course with the Economic Survey 2022 re-emphasising the critical importance of disinvestment and further opening up of the economy.

The Economic Survey which was presented in Parliament on Monday makes a strong case for the continuation of the reforms process. The survey which is generally prepared by the Finance Ministry’s Economic Division and written by economists and bureaucrats does not reflect the ground reality.

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The government has restructured 41 OFBs into seven corporate entities, which was dedicated to the nation by Prime Minister Narendra Modi in October last year. The government had to face strong opposition from employees unions but eventually, they fizzled out.

Two years ago, in an effort to realise India’s quest for the ‘Aatmanirbhar Bharat’ campaign, the government had raised the foreign direct investment in the defence sector to 74 per cent from 49 per cent through automatic route and 100 per cent through the government route. The decision was appreciated by the private sector.

'Overall, macro-economic stability indicators suggest that the Indian economy is well placed to take on the challenges of 2022-23,' the Economic Survey stated.

'One of the reasons that the Indian economy is in a good position is its unique response strategy. Rather than pre-commit to a rigid response, the Government sought to use safety-nets for vulnerable sections on one hand while responding iteratively based on Bayesian-updating of information. This ‘barbell strategy’ was discussed in last year’s Economic Survey,' it added.

'A key enabler of this flexible, iterative “Agile” approach is the use of eighty High-Frequency Indicators (HFIs) in an environment of extreme uncertainty,' the survey said.

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