Mid-year economic review may soon be history

The decision to bring forward the Union Budget to late January or early February has eliminated the need for the government to release a mid-year economic analysis in December. Hence, from this year onwards, there might be no mid-year economic review, Business Standard has learnt.

The proposal has been discussed by top policymakers in the finance ministry and approved by Finance Minister Arun Jaitley, according to a senior government official. The previous review was presented on December 18, 2015.
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The Narendra Modi government is bringing forward the Budget to pass the Finance Bill before April 1 and implement a nationwide goods and services tax from that date. The final date of the 2017-18 Budget presentation will be decided at a later date, keeping in mind the political considerations as well as the upcoming state elections.

Chief Economic Advisor Arvind Subramanian had told Business Standard that the structure of the Economic Survey would change with the advancement of the Budget. “The aim is that there will be two surveys as it were. One, on the eve of the Budget. Then, somewhere around July we will have an Economic Survey to review the economic developments of the past year,” he had said. Confirming this, the senior government official cited above said: “Having these two surveys mean that we have no need of a mid-year review in December.”

The official added that quarterly statements on trends in central revenue and expenditure will continue to be presented according to the Fiscal Responsibility and Budget Management (FRBM) Act.

According to officials, the mid-year economic review was first presented in 2002, even before it was institutionalised by the FRBM Act. The finance ministry website has links to mid-year reviews going back to 2002.

The mid-year reviews, especially under Subramanian, have traditionally had two parts, just like the Economic Survey. The first part deals with the trends and macroeconomic environment of the first half of the year and sets the tone for the remainder of the year. The second part contains data and numbers. 

In the mid-year review in December last year, the government had lowered its forecast for 2015-16 gross domestic product growth to 7-7.5 per cent, down from an earlier projection of 8.1-8.5 per cent. Provisional estimates showed that India grew at 7.6 per cent that year.