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Preface

For second year running, the Economic Survey was written under the cloud of the Covid-19 pandemic. These
have been difficult times for the world economy. It is not just about the immediate disruptions and uncertainty
caused by repeated waves of the pandemic, but also the longer-term uncertainty about the post-Covid world due
to accelerated shifts in technology, consumer behaviour, supply-chains, geo-politics, climate change and a host
of other factors. Not only are these individual factors difficult to forecast, the impact of their interactions are
fundamentally unpredictable. The theme of this Economic Survey, therefore, relates to the art and science of policy-
making under conditions of extreme uncertainty.
The default mode of policy-making in India and most of the world has traditionally been to rely on a pre-determined
“Waterfall” approach – an upfront analysis of the issue, detailed planning and finally meticulous implementation.
This is the framework that underpins five-year plans and rigid urban master-plans. The problem is that the real
world is a complex and unpredictable place buffeted by all kinds of random shocks and unintended consequences.
The response of traditional economics was to create ever more detailed plans/regulations, and elaborate forecasting
models despite more than adequate evidence that this did not improve outcomes. In his Nobel Prize acceptance
speech, economist Friedrich Hayek dubbed this “The Pretence of Knowledge”.

This Economic Survey sets out to explain the alternative “Agile” approach that informed India’s economic response
to the Covid-19 shock. This framework is based on feed-back loops, real-time monitoring of actual outcomes,
flexible responses, safety-net buffers and so on. Planning matters in this framework but mostly for scenario-
analysis, identifying vulnerable sections, and understanding policy options rather than as a deterministic prediction
of the flow of events. The last Economic Survey did briefly discuss this approach, but this time it is a central theme.
Some form of feedback loop based policy-making was arguably always possible, but the Agile framework is
particularly relevant today because of the explosion of real-time data that allows for constant monitoring. Such
information includes GST collections, digital payments, satellite photographs, electricity production, cargo
movements, internal/external trade, infrastructure roll-out, delivery of various schemes, mobility indicators, to
name just a few. Some of them are available from public platforms but many innovative forms of data are now
being generated by the private sector. Short-term policy responses, therefore, can be tailored to an evolving situation
rather than what a model may have predicted.
The same recognition of uncertainty informs the longer-term supply-side strategy: the combination of policies
that encourage economic flexibility through innovation, entrepreneurship and risk-taking on one hand, and
simultaneously invests in resilient infrastructure, social safety-nets and macro-economic buffers on the other. Thus,
it is hoped that readers will be able to see the links between seemingly disparate policies ranging from deregulation,
process simplification, privatization, foreign exchange reserves accumulation, inflation-targeting, housing-for-
all, green technology, the Insolvency and Bankruptcy Code, health insurance for the poor, financial inclusion,
infrastructure spending, direct benefit transfers and so on. They are all about protection from or taking advantage
of an uncertain future.

As readers would have noticed, this Economic Survey has shifted from the two-volume format of recent years
to a single volume plus a separate volume for statistical tables. In this context it is worthwhile looking at a brief
history of the document. The Survey was first published in 1950-51 and was initially part of the Budget documents.
The document was less than 50 pages in the 1950s and contained a brief outline of economic developments of the
previous year. For example, the Survey of 1957-58 had just 38 pages. It was primarily descriptive and contained
little in the way of analysis and policy prescriptions.

From 1958-59, the length of the survey started increasing with the introduction of more charts and tables. A Hindi
translation also seems to have been initiated around this time. The ambition of the document increased significantly
in the sixties. The Survey of 1962-63 was divided into two parts where the first part focused on broader economic

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