Economic Survey

What is Economic Survey?

THE Economic Survey is an annual commentary on the state of the economy which is
put together by the Union finance ministry. The survey is thus the finance ministry's
version of economic developments during the course of the year. It is presented in
Parliament each year shortly before the general budget and just after the railway budget.
This year, the Economic Survey for the fiscal year 1999-00 is being presented today, the
day before the Budget. The first chapter, which is called "General Review”, contains a
detailed account of macroeconomic performance during the course of the year. It contains
data on macroeconomic indicators like the fiscal deficit, trends in growth of national
income and industrial and agricultural production, among others. This chapter, and
indeed the whole survey, is an important source of data for economists and other
observers.
The survey also provides an opportunity for the finance ministry to spell out its reforms
agenda. It can thus be used to urge reform on ministries which are lagging behind in
implementation. This is usually done in the last section of the first chapter, called "Issues
and Priorities", in which the survey lists reforms needed in various sectors of the
economy.

How is the survey prepared?

Much of the legwork and research for the survey as well as the initial draft is done by the
department of economic affairs, which is a part of the finance ministry. The draft is then
cleared by the chief economic advisor and the secretary, economic affairs. The final
version of the survey is vetted by the finance secretary and the finance minister.

Why is the Economic Survey presented just before the Budget?

The timing is actually because of convention. However, logically it also makes sense to
do so. The survey is a description of economic developments during the year while the
Budget is a balance sheet for the current year and the government's projections for next
year.
The survey provides an authoritative commentary on the state of the economy just before
the Budget. This helps, because in its absence, it might seem that the Budget is being
presented in a vacuum. The survey is therefore a part of the build up to the budget and
gives an indication of the government's thinking on different issues. It could even give an
indication of what is to come in the budget. If something has gone wrong during the
course of the year - such as a burgeoning fiscal deficit - then the survey can be used to
sound a warning and suggest politically unpalatable steps.

What is the structure of the Economic Survey?

The structure of the survey has remained constant for a number of years. It usually
contains 10 chapters on the same set of topics. The first chapter gives an overview of the
entire economy. This is followed by chapters on various sectors including industry,
agriculture, the external sector, infrastructure, money and banking, capital markets,
infrastructure and the social sector. It also has over 100 tables and an appendix at the end
which contains macroeconomic data.
The last Economic Survey, the one for 1998-99, saw a departure from the usual pattern
with the inclusion of an extra chapter on the environment. It remains to be seen if this
Economic Survey has a special chapter, but if it does, an obvious candidate could be
information technology. These chapters contain a detailed account of developments
during the year in the particular sector or area which is being covered. It also suggests the
future reform agenda for these sectors.

ET IN THE CLASSROOM dated 28/02/2000