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Introduction
What is Economic Survey? - The Economic Survey is the flagship annual document of
the finance ministry. It reviews the economic development in India over the past financial year by giving
detailed statistical data of all the sectors-industrial, agricultural, manufacturing among others. Besides,
it analyses the whole macroeconomics of the country in the past year and provides an outline for the
next financial year.

Who Presents It? - The Economic Survey is presented every year in the Parliament during
the Budget Session. The Economic Survey is presented normally a day before the presentation of the
Union Budget in the Parliament by the finance minister.

Who Penned Economic Survey 2021-22? - The Economic Survey 2021-22 was
drafted by a team led by Principal Economic Advisor Sanjeev Sanyal. The report is usually penned by
India’s chief economic advisor (CEA). But this time the new CEA, V Anantha Nageswaran, had been
appointed to the post only days before the Budget. The Economy Survey this time has been reverted to
a one-volume report format after eight years. The earlier two-volume format was way too “unwieldy”,
Sanyal said in his introductory remark.

Why is the Economic Survey presented before the Budget? -

Since the Economic Survey analyses the overall performance of the economy during the year, so
therefore it helps in providing a better understanding of the Union Budget. It essentially helps to
understand the priority of the country for the next financial year and what sectors would need more
focus in the Union Budget. The survey was de-linked from the Budget in the year 1964 and circulated in
advance so that a context of the Budget can be provided.

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.

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KEY HIGHLIGHTS OF THE ECONOMIC SURVEY 2021-22

 Prepared by Economic Division, Department of Economic Affairs, Ministry of

Finance, Government of India.
 The Survey was first published in 1950-51 and was initially part of the Budget
documents.
 The Survey of 1962-63 was divided into two parts where the first part focused on
broader economic x developments while the second part gave a basic analysis of
different sectors. The following year, the Economic Survey was separated from the
budget and was presented a day earlier as a stand-alone document
 This Economic Survey 2021-22 has shifted from the two-volume format of recent
years to a single volume plus a separate volume for statistical tables.
 A new chapter Tracking Development through Satellite Images and
Cartography has been added that demonstrates the use of satellite and geo-
spatial images to gauge various economic phenomenon – urbanization,
infrastructure, environmental impact, farming practices and so on.

State of The Economy

State of the Economy:

 Indian economy estimated to grow by 9.2 percent in real terms in 2021-22 (as
per first advanced estimates) subsequent to a contraction of 7.3 percent in 2020-
21.
 GDP projected to grow by 8- 8.5 percent in real terms in 2022-23.
 The year ahead poised for a pickup in private sector investment with the financial
system in good position to provide support for economy’s revival.
 Projection comparable with World Bank and Asian Development Bank’s latest
forecasts of real GDP growth of 8.7 percent and 7.5 percent respectively for
2022-23.
 As per IMF’s latest World Economic Outlook projections, India’s real GDP
projected to grow at 9 percent in 2021-22 and 2022-23 and at 7.1 percent in
2023-2024, which would make India the fastest growing major economy in the
world for all 3years.
 Agriculture and allied sectors expected to grow by 3.9 percent; industry by 11.8
percent and services sector by 8.2 percent in 2021-22.
 On demand side, consumption estimated to grow by 7.0 percent, Gross Fixed
Capital Formation (GFCF) by 15 percent, exports by 16.5 percent and imports
by 29.4 percent in 2021-22.
 Macroeconomic stability indicators suggest that the Indian Economy is well placed
to take on the challenges of 2022-23.
 Combination of high foreign exchange reserves, sustained foreign direct
investment, and rising export earnings will provide adequate buffer against
possible global liquidity tapering in 2022-23.
 Economic impact of “second wave” was much smaller than that during the full
lockdown phase in 2020-21, though health impact was more severe.
 Government of India’s unique response comprised of safety-nets to cushion the
impact on vulnerable sections of society and the business sector, significant
increase in capital expenditure to spur growth and supply side reforms for a
sustained long-term expansion.

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 Government’s flexible and multi-layered response is partly based on an “Agile”
framework that uses feedback-loops, and the use of eighty High Frequency
Indicators (HFIs) in an environment of extreme uncertainty.

Fiscal Developments:

 The revenue receipts from the Central Government (April to November, 2021)
have gone up by 67.2 percent (YoY) as against an expected growth of 9.6
percent in the 2021-22 Budget Estimates (over 2020-21 Provisional Actuals).
 Gross Tax Revenue registers a growth of over 50 percent during April to
November, 2021 in YoY terms. This performance is strong compared to pre-
pandemic levels of 2019-2020 also.
 During April-November 2021, Capex has grown by 13.5 percent (YoY) with focus
on infrastructure-intensive sectors.
 Sustained revenue collection and a targeted expenditure policy has contained the
fiscal deficit for April to November, 2021 at 46.2 percent of BE.
 With the enhanced borrowings on account of COVID-19, the Central Government
debt has gone up from 49.1 percent of GDP in 2019-20 to 59.3 percent of
GDP in 2020-21, but is expected to follow a declining trajectory with the recovery
of the economy.

External Sectors:

 India’s merchandise exports and imports rebounded strongly and surpassed pre-
COVID levels during the current financial year.
 There was significant pickup in net services with both receipts and payments
crossing the pre-pandemic levels, despite weak tourism revenues.
 Net capital flows were higher at US$ 65.6 billion in the first half of 2021-22,
on account of continued inflow of foreign investment, revival in net external
commercial borrowings, higher banking capital and additional special drawing
rights (SDR) allocation.
 India’s external debt rose to US $ 593.1 billion at end-September 2021, from
US $ 556.8 billion a year earlier, reflecting additional SDR allocation by IMF,
coupled with higher commercial borrowings.
 Foreign Exchange Reserves crossed US$ 600 billion in the first half of 2021-
22 and touched US $ 633.6 billion as of December 31, 2021.
 As of end-November 2021, India was the fourth largest forex reserves holder in
the world after China, Japan and Switzerland.

Monetary Management and Financial Intermediation:

 The liquidity in the system remained in surplus.

o Repo rate was maintained at 4 per cent in 2021-22.
o RBI undertook various measures such as G-Sec Acquisition Programme
and Special Long-Term Repo Operations to provide further liquidity.
 The economic shock of the pandemic has been weathered well by the commercial
banking system:
o YoY Bank credit growth accelerated gradually in 2021-22 from 5.3 per cent
in April 2021 to 9.2 per cent as on 31st December 2021.
o The Gross Non-Performing Advances ratio of Scheduled Commercial
Banks (SCBs) declined from 11.2 per cent at the end of 2017-18 to 6.9
per cent at the end of September, 2021.
o Net Non-Performing Advances ratio declined from 6 percent to 2.2 per
cent during the same period.
o Capital to risk-weighted asset ratio of SCBs continued to increase from 13
per cent in 2013-14 to 16.54 per cent at the end of September 2021.

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o The Return on Assets and Return on Equity for Public Sector Banks
continued to be positive for the period ending September 2021.
 Exceptional year for the capital markets:
o Rs. 89,066 crore was raised via 75 Initial Public Offering (IPO) issues
in April-November 2021, which is much higher than in any year in the last
decade.
o Sensex and Nifty scaled up to touch peak at 61,766 and 18,477 on
October 18, 2021.
o Among major emerging market economies, Indian markets outperformed
peers in April-December 2021.

Prices and Inflation:

 The average headline CPI-Combined inflation moderated to 5.2 per cent in

2021-22 (April-December) from 6.6 per cent in the corresponding period of 2020-
21.
o The decline in retail inflation was led by easing of food inflation.
o Food inflation averaged at a low of 2.9 per cent in 2021-22 (April to
December) as against 9.1 per cent in the corresponding period last year.
o Effective supply-side management kept prices of most essential
commodities under control during the year.
o Proactive measures were taken to contain the price rise in pulses and edible
oils.
o Reduction in central excise and subsequent cuts in Value Added Tax by
most States helped ease petrol and diesel prices.
 Wholesale inflation based on Wholesale Price Index (WPI) rose to 12.5 per cent
during 2021-22 (April to December).
o This has been attributed to:
 Low base in the previous year,
 Pick-up in economic activity,
 Sharp increase in international prices of crude oil and other
imported inputs, and
 High freight costs.
 Divergence between CPI-C and WPI Inflation:
o The divergence peaked to 9.6 percentage points in May 2020.
o However, this year there was a reversal in divergence with retail inflation
falling below wholesale inflation by 8.0 percentage points in December
2021.
o This divergence can be explained by factors such as:
 Variations due to base effect,
 Difference in scope and coverage of the two indices,
 Price collections,
 Items covered,
 Difference in commodity weights, and
 WPI being more sensitive to cost-push inflation led by imported
inputs.
o With the gradual waning of base effect in WPI, the divergence in CPI-C and
WPI is also expected to narrow down.

Sustainable Development and Climate Change:

 India’s overall score on the NITI Aayog SDG India Index and Dashboard
improved to 66 in 2020-21 from 60 in 2019-20 and 57 in 2018-19.

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 Number of Front Runners (scoring 65-99) increased to 22 States and UTs in
2020-21 from 10 in 2019-20.
 In North East India, 64 districts were Front Runners and 39 districts were
Performers in the NITI Aayog North-Eastern Region District SDG Index 2021-22.

 India has the tenth largest forest area in the world.

 In 2020, India ranked third globally in increasing its forest area during 2010
to 2020.
 In 2020, the forests covered 24% of India’s total geographical, accounting for
2% of the world’s total forest area.

 In August 2021, the Plastic Waste Management Amendment Rules, 2021, was
notified which is aimed at phasing out single use plastic by 2022.

 Draft regulation on Extended Producer Responsibility for plastic packaging was

notified.

 The Compliance status of Grossly Polluting Industries (GPIs) located in the

Ganga main stem and its tributaries improved from 39% in 2017 to 81% in
2020.
 The consequent reduction in effluent discharge has been from 349.13 millions of
litres per day (MLD) in 2017 to 280.20 MLD in 2020.

 The Prime Minister, as a part of the national statement delivered at the

26th Conference of Parties (COP 26) in Glasgow in November 2021, announced
ambitious targets to be achieved by 2030 to enable further reduction in
emissions.
 The need to start the one-word movement ‘LIFE’ (Lifestyle for Environment)
urging mindful and deliberate utilization instead of mindless and destructive
consumption was underlined.

Agriculture and Food Management:

 The Agriculture sector experienced buoyant growth in past two years, accounting
for a sizeable 18.8% (2021-22) in Gross Value Added (GVA) of the country
registering a growth of 3.6% in 2020-21 and 3.9% in 2021-22.
 Minimum Support Price (MSP) policy is being used to promote crop diversification.
 Net receipts from crop production have increased by 22.6% in the latest
Situation Assessment Survey (SAS) compared to SAS Report of 2014.

 Allied sectors including animal husbandry, dairying and fisheries are steadily
emerging to be high growth sectors and major drivers of overall growth in
agriculture sector.
 The Livestock sector has grown at a CAGR of 8.15% over the last five years
ending 2019-20. It has been a stable source of income across groups of
agricultural households accounting for about 15% of their average monthly
income.

 Government facilitates food processing through various measures of

infrastructure development, subsidized transportation and support for
formalization of micro food enterprises.
 India runs one of the largest food management programmes in the world.

 Government has further extended the coverage of food security network through
schemes like PM Gareeb Kalyan Yojana (PMGKY).

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Industry and Infrastructure:

 Index of Industrial Production (IIP) grew at 17.4 percent (YoY) during April-
November 2021 as compared to (-)15.3 percent in April-November 2020.
 Capital expenditure for the Indian railways has increased to Rs. 155,181
crores in 2020-21 from an average annual of Rs. 45,980 crores during 2009-14
and it has been budgeted to further increase to Rs. 215,058 crores in 2021-22 –
a five times increase in comparison to the 2014 level.
 Extent of road construction per day increased substantially in 2020-21 to 36.5
Kms per day from 28 Kms per day in 2019-20 – a rise of 30.4 percent.
 Net profit to sales ratio of large corporates reached an all-time high of 10.6
percent in in July-September quarter of 2021-22 despite the pandemic (RBI
Study).
 Introduction of Production Linked Incentive (PLI) scheme, major boost provided to
infrastructure-both physical as well as digital, along with measures to reduce
transaction costs and improve ease of doing business, would support the pace of
recovery.

Services:

 GVA of services crossed pre-pandemic level in July-September quarter of 2021-

22; however, GVA of contact intensive sectors like trade, transport, etc. still
remain below pre-pandemic level.
 Overall service Sector GVA is expected to grow by 8.2 percent in 2021-22.
 During April-December 2021, rail freight crossed its pre-pandemic level while air
freight and port traffic almost reached their pre-pandemic levels, domestic air
and rail passenger traffic are increasing gradually – shows impact of second wave
was much more muted as compared to during first wave.
 During the first half of 2021-22, service sector received over US$ 16.7 billion FDI
– accounting for almost 54 percent of total FDI inflows into India.
 IT-BPM services revenue reached US$ 194 billion in 2020-21, adding 1.38 lakh
employees during the same period.
 Major government reforms include, removing telecom regulations in IT-BPO
sector and opening up of space sector to private players.
 Services exports surpassed pre-pandemic level in January-March quarter of
2020-21 and grew by 21.6 percent in the first half of 2021-22 - strengthened
by global demand for software and IT services exports.
 India has become 3rd largest start-up ecosystem in the world after US and China.
Number of new recognized start-ups increased to over 14000 in 2021-22 from
733 in 2016-17.
 44 Indian start-ups have achieved unicorn status in 2021 taking overall tally
of unicorns to 83, most of which are in services sector.

Social Infrastructure and Employment:

 157.94 crore doses of COVID-19 vaccines administered as on 16th January 2022;

91.39 crore first dose and 66.05 crore second dose.
 With revival of economy, employment indicators bounced back to pre-pandemic
levels during last quarter of 2020-21.
 As per the quarterly Periodic Labour Force Survey (PFLS) data up to March
2021, employment in urban sector affected by pandemic has recovered almost to
the pre-pandemic level.
 According to Employees Provident Fund Organisation (EPFO) data,
formalization of jobs continued during second COVID wave; adverse impact of
COVID on formalization of jobs much lower than during the first COVID wave.

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 Expenditure on social services (health, education and others) by Centre and States
as a proportion of GDP increased from 6.2 % in 2014-15 to 8.6% in 2021-22 (BE)
 As per the National Family Health Survey-5:

o Total Fertility Rate (TFR) came down to 2 in 2019-21 from 2.2 in 2015-
16
o Infant Mortality Rate (IMR), under-five mortality rate and institutional
births have improved in 2019-21 over year 2015-16.

 Under Jal Jeevan Mission (JJM), 83 districts have become ‘Har Ghar Jal’
districts.
 Increased allotment of funds to Mahatma Gandhi National Rural Employment
Guarantee Scheme (MNREGS) to provide buffer for unorganized labour in rural
areas during the pandemic.

Barbell Strategy, Safety Nets & Agile Response.

What is Barbell Strategy?
 The last two years have been particularly challenging for policy-making around the world with
repeated waves from a mutating virus, travel restrictions, supply-chain disruptions and, more
recently, global inflation.
 Faced with all this uncertainty, the Government of India opted for a “Barbell Strategy” that
combined a bouquet of safety-nets to cushion the impact on vulnerable sections of
society/business, with a flexible policy response based on a Bayesian updating of information.
 As explained in last year’s Economic Survey, this is a common strategy used in financial markets
to deal with extreme uncertainty by combining two seemingly disparate legs.

Feedback Real Time Agile

Loops Adjustments Approach

 As some readers will have guessed, the iterative leg of this strategy is the same as the “Agile”
approach that uses feedback-loops, and real-time adjustment.

What is Agile Approach?

 The Agile approach is a well-established intellectual framework that is increasingly used in fields
like project management and technology development.
 In an uncertain environment, the Agile framework responds by assessing outcomes in short
iterations and constantly adjusting incrementally.
 High Frequency Indicators (HFIs) both from government departments/agencies as well as
private institutions that enabled constant monitoring and iterative adaptations.
 Such information includes GST collections, power consumption, mobility indicators, digital
payments, satellite photographs, cargo movements, highway toll collections, and so on.
 These HFIs helped policy makers tailor their responses to an evolving situation rather than rely
on pre-defined responses of a Waterfall framework.

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 Notice that the flexibility of Agile improves responsiveness and aids evolution, but it does not
attempt to predict future outcomes.
 This is why the other leg of the Barbell strategy is also needed. It cushions for unpredictable
negative outcomes by providing safety nets.

Waterfall Framework

It is important here to distinguish Agile from the

“Waterfall” framework which has been the

conventional method for framing policy in India and

most of the world. The Waterfall approach entails a

detailed, initial assessment of the problem followed

by a rigid upfront plan for implementation. This

methodology works on the premise that all

requirements can be understood at the beginning

and therefore pre-commits to a certain path of

action. This is the thinking reflected in five-year

economic plans, and rigid urban master-plans.

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So, what are those Safety Nets?

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Supply Side Reforms

 There are two common themes in India’s supply-side strategy:
o (i) Reforms that improve flexibility and innovation in order to deal with the long-term
unpredictability of the post-Covid world.
 This includes factor market reforms;
1. deregulation of sectors like space, drones, geospatial mapping,
2. trade finance factoring; process reforms like those in government
procurement and in telecommunications sector;
3. removal of legacy issues like retrospective tax; privatization and
monetization,
4. creation of physical infrastructure, and so on.
o (ii) Reforms aimed at improving the resilience of the Indian economy.

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 These range from climate/environment related policies; social infrastructure
such as public provision of tap water, toilets, basic housing, insurance for the
poor, and so on; support for key industries under Atmanirbhar Bharat; a strong
emphasis on reciprocity in foreign trade agreements, and so on.

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Growth Outlook
 The Indian economy is estimated to grow by 9.2 per cent in real terms in 2021-22 (as per the
First Advance Estimates), after a contraction of 7.3 per cent in 2020-21.
 India’s GDP is projected to grow in real terms by 8.0-8.5 per cent in 2022-23.
 This projection is based on the assumption that there will be no further debilitating pandemic
related economic disruption, monsoon will be normal, withdrawal of global liquidity by major
central banks will be broadly orderly, oil prices will be in the range of US$70-$75/bbl, and global
supply chain disruptions will steadily ease over the course of the year.

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Fiscal Developments

 The agile fiscal policy response adopted by Government of India encompassed a change in mix
of the stimulus measures amidst an uncertain evolution of the pandemic situation.
 In the initial phase of the pandemic, the fiscal policy focused on building safety-nets for the
poor and vulnerable sections of society to hedge against the worst-case outcomes.
 Stimulus measures such as direct benefit transfers to the vulnerable sections, emergency credit
to the small businesses, and the world’s largest food subsidy programme targeting 80.96 crore
beneficiaries enabled the creation of safety-nets, by ensuring that the essentials are taken care
of.
 This was followed by a series of stimulus packages spread throughout the year 2020-21, driven
by a Bayesian updating of information as the situation evolved.

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Fiscal Deficit
 Sustained revenue collection and a targeted expenditure policy has contained the fiscal deficit
for April to November, 2021 at 46.2 percent of BE.
 With the enhanced borrowings on account of COVID-19, the Central Government debt has gone
up from 49.1 percent of GDP in 2019-20 to 59.3 percent of GDP in 2020-21, but is expected to
follow a declining trajectory with the recovery of the economy.

Transfer to States
 The Union Government has accepted the recommendations made by the Fifteenth Finance
Commission (XV-FC) in its Report for the award period 2021-22 to 2025-26 relating to the grants
in- aid amounting to Rs.2,33,233 crore to the States during 2021-22 for Post Devolution
Revenue Deficit grant, grants to Local Bodies, Health sector grant and Disaster Management
grants.

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Public Debt
 Public debt is largely owned by institutional segments like banks, insurance companies, provident
funds etc.
o The share of commercial banks stood at 37.77 per cent at end-March 2021, lower than
40.4 per cent at end-March 2020.
o Share of insurance companies and provident funds at end-March 2021 stood at 25.3 per
cent and 4.44 per cent, respectively.
o Share of mutual funds increased from 1.4 per cent at end-March 2020 to 2.94 per cent at
end-March 2021.
o Share of RBI went up to 16.2 per cent at end March-2021 from 15.1 per cent at end-
March 2020.
 Under the scheme RDI of RBI, retail investors will be able to open a Retail Direct Gilt (RDG) account
using an online portal through which it can directly invest minimum of `10,000 and maximum of
`2 crore per security.

State Finance
 The Gross Fiscal Deficit of States is estimated to cross the Fiscal Responsibility Legislation (FRL)
threshold of 3 per cent of GDP during 2020-21 RE and 2021-22 BE.
 The Revenue Deficit of the States also increased from 0.1 per cent of GDP in 2018-19 to 2 per
cent of GDP in 2020-21 (RE).
 This relaxation in borrowing limits was allowed on account of the additional expenditure needs
and constrained revenues of the States due to COVID-19. The net borrowing ceilings of the
States were enhanced to 5 per cent of GSDP of the States for the year 2020-21 and 4 per cent of
GSDP of the States for 2021-22.

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Remission of Duties and Taxes on Exported Products (RoDTEP).
Major Developing District as Export Hub.
Initiative Production-Linked Incentive (PLI) scheme.

to Boost Electronic Platform for Preferential Certificate of Origin.

Export Infusion of capital in EXIM Bank.

Export Credit Guarantee Corporation of India Ltd for Insurance cover
Export Promotion Capital Goods (EPCG) Scheme

 Top 5 Export Commodities:

o Petroleum Products
o Pearl, Precious, Semiprecious Stones
o Iron and Steel
o Drug Formulations, Biologicals
o Gold and other precious metal jewellery
 Top 5 Import Commodities:
o Petroleum: Crude
o Gold
o Petroleum Products
o Pearl, Precious, Semiprecious Stones
o Coal, Coke and Briquittes, etc

United States of America (USA) remained the top export destination followed by United Arab Emirates
(UAE) and China while China, UAE and USA were the largest import sources for India.

BOP Balance & Foreign Exchange Reserves

 The current account deficit (CAD) was adequately cushioned by robust capital flows, resulting
into an overall balance of payments (BoP) surplus of US$ 63.1 billion in H1: FY 22.
 There was a massive increase in India’s foreign exchange reserves during 2021-22. The forex
reserves stood higher at US$ 633.6 billion as at end-December 2021, than US$ 577.0 billion as at
end-March 2021.
o As at end-November 2021, India was the fourth largest foreign exchange reserves
holder in the world after China, Japan and Switzerland.
 From a historical perspective, India can sustain a current account deficit of 2.5-3.0 per cent of
GDP without getting into an external sector crisis

Liquidity Conditions & its Management

 Liquidity has remained in surplus in the system since mid-2019 in sync with the easing of
monetary conditions.
 The liquidity conditions were further eased during the year 2020-21 after the covid pandemic,
and RBI has since then maintained ample surplus liquidity in the banking system to support
growth.

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 The measures taken by RBI to provide targeted liquidity support to the system in 2021-22
included:
a) Special refinance facilities of `66,000 crore to all-India financial institutions, comprising
`25,000 crore to the National Bank for Agriculture and Rural Development (NABARD);
`10,000 crore to the National Housing Bank (NHB); and `31,000 crore to the Small
Industries Development Bank of India (SIDBI).
b) Term liquidity facility of `50,000 crore to ramp up COVID-related healthcare
infrastructure and services in the country;
c) Special Long-Term Repo Operations (SLTRO) for small finance banks of `10,000 crore to
support small business units, micro and small industries, and other unorganised sector
entities adversely affected during the second wave of the pandemic. SLTRO scheme was
subsequently made on-tap and was extended till December 31, 2021.
d) On-tap liquidity window of `15,000 crore for contact-intensive sectors. e. Extension of On
tap Targeted Long-Term Repo Operations (On tap-TLTRO) till 31st December 2021. The
yields on 10-year G sec which had reached 8.2 per cent on 26th September 2018 reduced
substantially to reach 5.75 per cent in June 2020. It has since then increased to stand at
6.45 per cent as on 31st December 2021.

Sustainable Development & Climate Change

India’s Progress on Sustainable Development Goals

 In September 2015, 193 countries including India committed to the Sustainable Development
Goals (SDGs) as detailed in the UN resolution, “Transforming our world: the 2030 Agenda for
Sustainable Development”.
 The SDGs comprehensively cover social, economic and environmental dimensions and build on
the Millennium Development Goals (MDGs), which covered the earlier fifteen-year period from
2000 to 2015.
 India’s overall score on the NITI Aayog SDG India Index & Dashboard improved to 66 in 2020-21
from 60 in 2019-20 and 57 in 2018-19, showing progress in India’s journey towards achieving
the SDGs.
 Despite 2020-21 being a pandemic year, India performed well on eight of the 15 SDGs measured
by the NITI Aayog SDG India Index.
o These included – goal 3 (good health and well-being), goal 6 (clean water and
sanitation), goal 7 (affordable and clean energy), goal 10 (reduced inequalities), goal 11
(sustainable cities and communities), goal 12 (responsible consumption and
production), goal 15 (life on land) and goal 16 (peace, justice, and strong institutions).
o Front Runners (scoring 65-99) increased to 22 states and UTs in 2020-21 from 10 in
2019-20.
o All remaining states and UTs were Performers (scoring 50- 64). Amongst states,
additions to the Front Runner category in 2020-21 included Uttarakhand, Gujarat,
Maharashtra, Mizoram, Punjab, Haryana and Tripura. Amongst UTs, additions to the
Front Runner category included Andaman and Nicobar Islands, Delhi, Jammu and
Kashmir, Ladakh and Lakshadweep.

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State of The Environment - Forest

 Forest Area refers to area recorded as forest in government records and is also called “recorded
forest area”.
o Russia, Brazil, Canada, USA and China were the top five largest countries by forest area
in 2020, while India was the tenth largest country by forest area.

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o Forests covered 24 per cent of India’s total geographical area accounting for two per
cent of the world’s total forest area in 2020. India has increased its forest area
significantly over the past decade.

 It ranks third globally in average annual net gain in forest area between 2010 to 2020, adding an
average 2,66,000 ha of additional forest area every year during the period, or adding
approximately 0.38 per cent of the 2010 forest area every year between 2010 to 2020.
 Forest cover comprises all lands, more than one hectare in area, with a tree canopy density of
more than 10 per cent, irrespective of ownership and legal status. Such lands may not
necessarily be a recorded forest area, and also include orchards, bamboo and palm plantations.
o India’s total forest cover was 7,13,789 sq km in 2021 reflecting an increase of 3.14 per
cent in the forest cover over 2011, from 21.05 per cent of the country’s geographical
area in 2011 to 21.71 per cent in 2021.
o This Amongst states, Madhya Pradesh (11 per cent of India’s total forest cover) had the
largest forest cover in India in 2021, followed by Arunachal Pradesh (9 per cent),
Chhattisgarh (8 per cent), Odisha (7 per cent) and Maharashtra (7 per cent).
o Mizoram (85 per cent), Arunachal Pradesh (79 per cent), Meghalaya (76 per cent),
Manipur (74 per cent) and Nagaland (74 per cent) were the top five states in terms of
highest per cent of forest cover w.r.t. total geographical area of the state in 2021.
o Arunachal Pradesh accounted for 21 per cent of India’s very dense forest in 2021,
followed by Maharashtra (9 per cent), Odisha (7 per cent), Chhattisgarh (7 per cent) and
Madhya Pradesh (7 per cent) in top 5 for Very dense forest in 2021.
o Madhya Pradesh and Chhattisgarh accounted for 11 per cent of India’s moderately
dense forest in 2021, followed by Arunachal Pradesh (10 per cent), Odisha (7 per cent)
and Karnataka (7 per cent).
o Madhya Pradesh accounted for 12 per cent of India’s open forest cover in 2021,
followed by Odisha (8 per cent), Maharashtra (7 per cent), Chhattisgarh (5 per cent) and
Assam (5 per cent).
o Forest cover in seven major cities – Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad,
Kolkata and Mumbai, in 2021.
o The total forest cover in these seven major cities in 2021 was 509.72 sq km, which was
10.21 per cent of the total geographical area of these cities, and 0.07 per cent of India’s
forest area.

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State of The Environment – Water/River/Air
 Water - Ground water is a crucial resource for India’s agriculture, industry and drinking water
security. However, unsustainable extraction, i.e. extraction in excess of, or close to, annual
recharge, can severely compromise ground water resources.
 River - India has several perennial and seasonal rivers. The Ganga River Basin is the largest river
basin in India, covering more than a quarter of country’s land area, hosting about 43 per cent of
its population and contributing 28 per cent of India’s water resources.
 India declared River Ganga as the National River in 2008. Further, the Government of India
launched the Namami Gange Mission in 2014 as an integrated and multi-sectoral mission for
conservation of Ganga and its tributaries.
o The activities undertaken as part of the Namami Gange Mission rest upon four pillars –
Nirmal Ganga (Unpolluted Flow), Aviral Flow (Continuous Flow), Jan Ganga (People-
River Connect) and Gyan Ganga (Research and Knowledge Management). As of
December 2021, a total of 363 projects worth Rs.30,841.53 crores have been
sanctioned under the mission.
 Air - Air pollution is one of the biggest global environmental challenges. The Government of
India launched the National Clean Air Programme (NCAP) in 2019 to tackle the air pollution
problem in a comprehensive manner, with a target to achieve 20-30 per cent reduction in
particulate matter (PM) concentrations by 2024 across the country keeping 2017 as the base
year for the comparison of concentration.
o The NCAP is implemented in 132 cities, of which 124 cities have been identified based
on non-conformity with national ambient air quality standards for five consecutive
years.

Climate Change
 India launched the National Action Plan on Climate Change (NAPCC) in 2008, establishing eight
National Missions to advance action on the country’s climate priorities.
1. National Solar Mission (NSM)
2. National Mission for Enhanced Energy Efficiency (NMEEE)
3. National Mission for a Green India (GIM)
4. National Mission on Sustainable Habitat (NMSH)
5. National Water Mission (NWM)
6. National Mission for Sustainable Agriculture
7. National Mission for Sustaining Himalayan Ecosystems National Mission on Strategic
Knowledge for Climate Change (NMSKCC)

Finance for Sustainable Development.

 In May 2021, the Reserve Bank of India (RBI) set up a new unit–‘Sustainable Finance Group’
(SFG) within its Department of Regulation to effectively counter these risks, and for leading the
regulatory initiatives in the areas of sustainable finance and climate risk.
 In January 2021, a Task Force on Sustainable Finance has been set up by the Department of
Economic Affairs, Ministry of Finance, Government of India.
 India is actively contributing to the global efforts towards green finance. RBI joined the Central
Banks and Supervisors Network for Greening the Financial System (NGFS) as a member on April
23rd, 2021.

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 In May 2021, SEBI issued new sustainability reporting requirements as per the Business
Responsibility and Sustainability Report (BRSR) which shall replace the existing BRR to bring in
greater transparency through disclosure of ESG-related information and by enabling market
participants to identify and assess sustainability-related risks and opportunities.

Indian Lifestyle for Environment (LIFE)

Initiative at International Solar Alliance (ISA)

Global Coalition for Disaster Resilient Infrastructure
Stage Leadership Group for Industry Transition (LeadIT Group)

Industry & Infrastructure

Introduction
 COVID-19 pandemic led to disruptions in global economic activity impacting not only the lives
but also livelihoods.
 The Indian industry experienced interlude in business activity leading to slowdown in its
performance.

Credit In Industry & FDI

 Gross bank credit to the industrial sector, recorded a growth of 4.1 percent in October 2021 (Y-
o-Y basis) compared to a negative growth of 0.7 growth in October2020.
o The share of industry in non-food credit stood at 26 percent in October 2021.
o Certain industries such as mining, textiles, petroleum, coal products and nuclear fuels,
rubber, plastic and infrastructure have shown consistent improvement in credit growth.
 Measures taken by the Government to put in place an enabling investor friendly FDI Policy has
resulted in increased FDI inflows setting up new records. FDI inflows in India stood at US $ 45.14
billion in 2014-15 and have continuously increased since then.
o India registered its highest ever annual FDI inflow of US$ 81.97 billion (provisional) in
the2020-21 reflecting a growth of 10 percent as compared to the previous year.

Infrastructure – national Infrastructure Pipeline

 Public Private Partnership in India has grown and has become important source of investment in
the infrastructure sector.
o According to World Bank, India is ranked second amongst the developing countries both
by the number of PPP projects as well as investments.
o Factors responsible for this are- good institutional structure, financial support and
standardization of documents.
 Government of India’s Viability Gap Funding scheme provides funding of up to 20% of the cost
in projects that are not financially viable socially and economically desirable and taken up under
the PPP mode.
o This scheme will help channel private investment in social sectors such as health,
education etc. through PPP.

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o With objective of increasing infrastructure investment, the government of India
launched the National Infrastructure Pipeline.
o Its aim is to invest around Rs. 111 lakh crore and attract domestic and foreign
investment during FY 2020-2025 in infrastructure sector of India.
o Most infrastructure projects under NIP are in the energy sector followed by roads,
urban development and railways.

Infrastructure – national Monetization Pipeline

 NITI Aayog has developed the ‘National Monetisation Pipeline (NMP Volumes 1 & 2)’ in
consultation with infrastructure line ministries.
 Asset monetisation, entails a limited period license/ lease of an asset, owned by the
government or a public authority, to a private sector entity for an upfront or periodic
consideration.
 The private sector entity is expected to operate and maintain the asset based on the terms of
the contract/concession, generating returns through higher operating efficiencies and enhanced
user experience.
 Funds, so received by the public authority, are reinvested in new infrastructure, or deployed for
other public purposes. Such contracts include provision for transfer of asset back to the
authority at the end of the period.
 The pipeline includes selection of de-risked and brownfield assets with stable revenue
generation profile (or long rights) which will make for an attractive investment option.
 Total indicative value of NMP for core assets of the Central Government has been estimated at
Rs 6.0 lakh crore over 4-year period (5.4percent of total infrastructure investment envisaged
under NIP).

Social Infrastructure & Employment

India’s Health Response To The COVID-19

 To save lives, Government adopted a multi-pronged approach viz.,
o (i) restrictions/partial lockdowns,
o (ii) building capacity in health infrastructure,
o (iii) COVID-19 appropriate behaviour, testing, tracing, treatment, and
o (iv) vaccination drive.
 ArogyaSetu mobile app was launched to enable people to assess themselves the risk of their
catching the COVID-19 infection.
 As on 16th January 2022, a total of 156.76 crore doses of COVID-19 vaccines have been
administered: 90.75 crore first dose and 65.58 crore second dose

Trends In Social Sector Expenditure

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 Government’s spending on social services increased significantly during the pandemic. In 2021-
22 (BE), Centre and State governments earmarked an aggregate of Rs.71.61 lakh crore for
spending on social service sector.
 Although, the pandemic has affected almost all social services, yet the health sector was the worst
hit. Expenditure on health sector increased from Rs.2.73 lakh crore in 2019-20 (pre-COVID-19) to
Rs. 4.72 lakh crore in 2021-22 (BE), an increase of nearly 73 percent.
 For the education sector, the increase during same period was 20 percent.
 An assessment for the pre-pandemic year of 2019-20 for which data is available reveals that the
number of recognized schools & colleges continued to increase between 2018-19 and 2019-20,
except for primary & upper primary schools.
 Further, availability of teachers, measured by Pupil Teacher Ratio, an indicator whose decrease
signals improvement in quality of education, has improved at all levels continuously from 2012-
13 to 2019-20: from 34 to 26 at primary, 23 to 18 at upper primary, 30 to 18 at secondary, and
39 to 26 at higher secondary level.
 The improvement in the number of schools, teachers’ availability, and facilities in schools is
expected to help improve enrolment and reduce dropout rates. In 2019-20, 26.45 crore children
were enrolled in schools.
 During the year, schools enrolled about 42 lakh additional children, out of which 26 lakh were in
primary to higher secondary levels and 16 lakh were in pre-primary as per Unified District
Information System for Education plus (UDISE+) database.
 The enrolments increased across all levels8 viz., upper-primary, secondary, and higher secondary,
except for primary level. At primary level, enrolment reduced from 13.5 crore in 2012-13 to 12.2
crore 2019-20.
 This decline in enrolment was because of decline in total number of children in the age group 6-
10 years. Year 2019-20 saw decline in dropout rates11 at primary, upper-primary, and secondary
levels. In 2019-20, school dropout rate at primary level declined to 1.45 percent from 4.45 percent
in 2018-19. The decline is for both girls and boys.
 Gross enrolment ratio in higher education recorded at 27.1 percent in 2019-20, slightly higher
from 26.3 percent in 2018-19. For males, it has also increased from 26.3 percent in 2018-19 to
26.9 percent in 2019-20 while for females it has increased from 26.4 percent to 27.3 percent
respectively.
 To unlock the demographic dividend, several steps have been taken to increase the skill levels in
population. Periodic Labour Force Survey (PLFS) 2019-20 shows that formal vocational / technical
training among youth (age 15-29 years) and working population (age 15-59 years) have improved
in 2019-20 over 2018-19. The improvement in skills has also been for males and females, both in
rural and urban.

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