Economic Survey 2021-22: Would govt be able to handle rising unemployment?

By Priyanka Saharia, Dr. Prashant Kumar Choudhary*
India releases its economic survey 2021-22 on 31st Jan, 2022 and brings a new dimension to it by adopting agile approach to policy making and tracking development through satellite images and cartography. Survey estimates that India will register real GDP growth rate of 9.2 percent for the fiscal year 2021-22. It predicts that agriculture, industry and service sector is expected to grow by 3.9, 11.8 and 8.2 per cent respectively which were 3.6, -7.0 and -8.4 per cent in 2020-21. It further predicts India will witness a real GDP growth rate of 8-8.5 percent in FY23’ which is below the prediction of World Bank (8.7%) and International Monetary Fund (9%).
Economic survey 2021-22 mentions that most of the macroeconomic indicators are strong. India’s foreign exchange reserves remained unaffected by COVID-19. According to RBI, on 31st December, 2021 foreign exchange reserve pegs at $634bn which is more than sufficient for merchandise imports for next 13 months. Country’s CPI inflation stands at 5.6 per cent Y-o-Y in December 2021 which is under tolerable band. Annual real growth in demand side of GDP and its components are also expected to recover from pandemic. Total consumption and gross fixed capital formation are expected to rise up to 7.0 percent (from -7.3 per cent of the year 2020-21), and 15.0 (from -10.8 per cent for the year 2020-21) respectively. India’s gross fiscal deficit as a percentage of GDP remains a matter of concern and it is as high as 10 percentage of GDP which is 2 percentages higher than the period of global financial crisis, 2008.
Recovery from pandemic is also reflected in terms of higher tax collection including both direct and indirect taxes from April to November, 2021. State has collected 7 lac crores (in INR) direct tax and 8.2 lac crore indirect tax which is way higher than the 4.3 lac crore direct tax and 5.9 lac crore indirect tax in previous year’s quarter of the same period.
As the macroeconomic indicator shows strong sign of economic recovery and is reaching the pre-pandemic level, India is still falling short of 12% than the real GDP growth rate if the pandemic was not there. Economic recovery of 2021-22 is subject to the base. Indian economy is recovering but from a low base of pandemic. Manufacturing growth has also touched a bit above pre pandemic level but it is falling short of 24% than the normal growth.
Economic survey 2021-22 also states that government’s spending on social services has increased significantly during pandemic but expenditure on social services as a percentage to GDP in education sector witnessed a jump by very small margin i.e., 2.8 percent to 3.1 percent. Learning loss of students due to pandemic has become a major challenge in education in India, especially for children from marginalized communities. To protect students from COVID-19, schools and colleges were closed repeatedly in the last two years. Online learning became most prominent and safest mode of learning. However, huge digital divide created hurdles for students to have access to education. Two years of discontinuity in education, India might witness a sharp increase in dropout rate and gender gap in Indian schools and colleges. However, recovery from these challenges remains unknown as Economic survey 2021-22 covers only pre-pandemic data till 2019-20. To bridge the gap and compensate this loss, India should increase its spending on education and create active awareness program to bring children back to schools.
Economic survey 2021-22 shows that as per the periodic labor force survey data up to March 2021, employment affected by COVID-19 in urban sector has recovered to pre-pandemic level. To provide necessary safety net to rural unorganized labor, allocation of funds to MNREGA has also increased. However, recent CMIE data has shown in December, 2021 unemployment rate touches four month high with 7.91 percentages (urban unemployment -9.30%, rural unemployment- 7.28%). In January, 2022 unemployment rate has fallen to 6.57 but urban unemployment rate is higher than rural unemployment rate (urban unemployment rate 8.16 %, rural unemployment rate 5.84 %). Unemployment rate was all time high in May, 2021 with 11.84% (urban unemployment rate 14.72 percent and rural unemployment 10.55 percent).
One of the biggest concerns which stems from the survey is, whether this projected growth is tenable during the pandemic knowing the fact that it is not over yet. As it seems, the economy might need some months to recover fully from its impact on a condition that new variant of Corona does not force another economy standstill. The expected growth might depend much on whether market is ready to invest more during pandemic and people have the buying capacity. We have already witnessed that during the pandemic, several companies’ (manufacturing, services etc.) sales went down drastically which resulted into layoffs of employees and that contributed to high unemployment in the country. The market needs to show confidence in the measures taken up the government such as Credit guarantee scheme for MSME sectors or PLI schemes for 13 key sectors so as to invest more to achieve the projected growth by the government. Additionally, banking sector is also showing signs of recovery as several of its indicators have increased positively in the months of April-November, 2021 such as bank credit growth (Y-o-Y), capital adequacy ratio etc. However, these indicators should be able to help the companies to get the loans from the banks and in turn invest back in the market.
The biggest worry however for the government would be to handle the rising unemployment issue exacerbated due to pandemic which hardly hit all the sectors and forced people to migrate back to their villages. According to several sources, there in definite strong rise of unemployed people in absolute numbers. It is pertinent for the government to deal with rising unemployment issue starting with filling up lacs of vacant posts in public sector such as railways, SSC, universities etc. This might help to the economy in the long run it would increase the purchasing power of the consumers, as essential factor to drive the economic growth of the country.
—
*Priyanka Saharia is Ph.D. Scholar, Centre for Economic Studies and Policy, Institute for Social and Economic Change (ISEC), Bangalore; Dr. Prashant Kumar Choudhary is Assistant Professor, Department of Political Science, Kumaraguru College of Liberal Arts and Science, Coimbatore

Comments

From snowstorms to heatwaves: India’s alarming climate shift in 2025

By Dr. Gurinder Kaur* Climate change is no longer a future concern—it is visibly affecting every country today. Since the beginning of 2025, its effects on India have become starkly evident. These include unseasonal snowfall in hill states, the early onset of heatwaves in southern regions, a shortening spring season, and unusually early and heavy rainfall, among other phenomena.

'Incoherent, dogmatic': Near collapse of international communist movement

By Harsh Thakor* The international communist movement today lacks coherence or organizational unity. Many groups worldwide identify as communist, Marxist-Leninist, or Maoist, but most promote dogmatism, reformism, or capitulation, using revolutionary rhetoric. Some trace their origins to historical betrayals, like Trotsky’s efforts to undermine the Soviet socialist transition or the 1976 coup in China that restored a bourgeoisie under Deng Xiaoping. Others focus on online posturing rather than mass engagement. Small communist organizations exist in places like Turkey, South Asia, and the Philippines, where Maoist-led struggles continue. No international forum unites them, and no entity can forge one.

Priced out of life: The silent crisis in India's healthcare... who pays attention, and who takes responsibility?

By Aysha* Manisha (name changed) has been living with a disease since the birth of her third child—over ten years now—in the New Seemapuri area of North East Delhi. She visited GTB Hospital, where a doctor told her that treatment would cost ₹50,000, as the hospital would charge for the cost of an instrument that needs to be implanted in her body. Several NGOs have visited her home, yet she has received no support for treatment and continues to live with the illness. Manisha is divorced, without access to ration or pension, and lives with her three children by begging outside a temple.

Madhya Pradesh village's inspiring example of how small budget effort conserves water amidst heat wave

By Bharat Dogra Heat waves have been intensifying over vast areas of India in recent days and there are also many reports of water scarcity making the conditions worse for people. However the situation can differ significantly in various villages depending on whether or not significant water conservation efforts have been made. In recent years I have visited several villages of good water conservation efforts where I noticed that even at the time of adverse weather conditions, people of these villages as well as farm and other animals feel important relief in terms of access to adequate water. Due to water and moisture conservation, conditions of farms and pastures is also much better. What is more, with the participation and involvement of people, even quite low budgets have been utilized well to achieve very useful and durable results.

Population explosion: India needs a clear-headed policy, data-driven governance, long-term planning

By N.S. Venkataraman* At the upcoming G7 summit in Canada, Prime Minister Narendra Modi has been invited as a special guest, with Canadian Prime Minister Justin Trudeau citing two main reasons: India’s rise as the world’s fifth-largest economy and its status as the most populous nation. While economic growth is undoubtedly a point of pride, the latter distinction—India’s population—raises an important question: should this be seen as a strength or a source of growing concern? India has not conducted a national census since 2011, leaving the current population figures largely speculative. Estimates place the population at around 1.4 billion, with projections reaching 1.8 billion by 2050. Despite modest declines in fertility and death rates, the annual population growth remains between 1.5% and 2%. The next census, scheduled for 2026, will provide a more accurate demographic picture, but until then, policymaking remains uninformed by crucial data. Over the past eleven years, the gov...

Victim to cricketing politics, Alvin Kalicharan was a most organized left handed batsman

By Harsh Thakor* On March 21st Alvin Kalicharan celebrates his 75th birthday. Sadly, his exploits have been forgotten or overlooked. Arguably no left handed batsman was technically sounder or more organized than this little man. Kalicharan was classed as a left-handed version of Rohan Kanhai. Possibly no left-handed batsmen to such a degree blend technical perfection with artistry and power.

Vishwamitri river revival? New report urges action on pollution, flood risks, wildlife protection

By A Representative The Vishwamitri Committee, formed by the Gujarat State Human Rights Commission, has submitted two supplementary reports on June 5, 2025, detailing efforts to rejuvenate the Vishwamitri River in Vadodara, considered Gujarat's cultural capital. The reports (click here and here ) respond to directives from a May 26, 2025, GSHRC hearing. Comprising environmentalists, urban planners, and zoologists like Neha Sarwate, Rohit Prajapati, Dr. Ranjitsinh Devkar, Dr. Jitendra Gavali, and Mitesh Panchal, the committee focuses on mitigating pollution, stabilizing riverbanks, managing flood risks, and preserving biodiversity, particularly for crocodiles and turtles.

Mumbai jetty project: Is Colaba residential associations' outrage manufactured?

By Gajanan Khergamker When the Maharashtra Maritime Board (MMB) filed an affidavit before the Bombay High Court defending its long-planned public jetty project, it did more than just respond to a writ petition by a Colaba Residents Association. It exposed, albeit inadvertently, a far more corrosive phenomenon festering beneath the surface of urban civil life across India—a phenomenon where residential associations, many unregistered and some self-professed custodians of ‘public sentiment,’ conspire to stall governance under the veil of representation.

Central London discussion to spotlight LGBTQ+ ex-Muslim rights and persecution

By A Representative On June 13, 2025, the Dissident Club in Central London will host a public discussion to mark the 18th anniversary of the Council of Ex-Muslims of Britain (CEMB) and to commemorate World Refugee Day. The event, scheduled from 7:00 to 9:00 pm, will feature speakers Ali Malik, Maryam Namazie, and Taha Siddiqui, who are expected to address the intersecting challenges faced by LGBTQ+ ex-Muslims globally.

Search This Blog