A day before the Budget day financial minister Nirmala Sitharaman, tabled the economic survey report of the financial year 2018-19, today in the Rajya Sabha.
The survey was prepared by Chief Economic Adviser Krishnamurthy Subramanian, in the Parliament. The Economic Survey talks about the current state of the Indian economy and outlines the challenges.
As per the survey, the Indian economy has hit a 5-year low of 6.8% in 2018-19 and the fourth quarter growth has slumped to 5.8% which is a 17-quarter low.
- Economic survey sees investment rate picking up in FY2020 on higher credit growth and improved demand
- Economic survey predicts 2019-20 GDP growth at 7 percent
- The survey says that 2019-20 GDP growth seen picking up on higher private investment and robust consumption
- It also suggests that lower global growth, increased uncertainty over trade tension may hit exports.
- Slow growth, GST, farm schemes were suggested to be the challenges on fiscal front
- Rural wage growth that had bottomed out, started to rise since mid-2018
- The survey said rebound in consumption is tied to a recovery in farm sector growth, which in turn depends on rainfall.
- Government policies expected to further lift restrictions on FDI inflows
- India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector.
- Oil prices expected to decline in 2019-20.
- Downside risks to the Indian economy include weaker exports growth and a spillover of the stress in shadow banking sector this year.
- General fiscal deficit seen at 5.8% in FY19 against 6.4% in FY18
- To become a $5 trillion economy by 2025, India need to sustain a GDP growth rate of 8%.
- The upside and downside risks to growth are evenly balanced, with monsoon rainfall seen tipping the scales.
- Estimates 2.9% growth rate for the agriculture, forestry and fishing sector.
- The Economic Survey has projected 283.4 million tones of foodgrains production for 2018-19.
- Pick-up in investments will help in job creation
- Forex reserves projected at $412.9 billion for the fiscal 2018-19.
Chief Economic Advisor KV Subramanian on #EconomicSurvey 2018-19: Theme that underlies this economic survey is, the sky blue colour, the colour used for the survey, captures unfettered blue sky thinking which is what we’ve indulged in trying to come with the idea for this survey pic.twitter.com/kTN6AyKwp5
— ANI (@ANI) July 4, 2019
The major theme of the survey is shifting gears towards making India a $5 trillion economy.
“Blue Sky Thinking” – new ideas for policymaking, blueprint for a sustained growth rate of 8%, Behavioral ‘nudges’ to design and deliver optimal outcomes, policies to unshackle MSMEs to grow, create jobs and enhance productivity, data as a public good ” of the people, for the people and by the people”, Legal reform, policy consistency, efficient labour markets and use of technology are focus areas.
The survey also puts out an ambitious agenda for behavioural change including gender equality, a healthy & beautiful India, savings, tax compliance and credit quality.
The cover design of “inter-linked gears” captures the idea of investment, savings, exports, growth and jobs being complementary and therefore forming components of a “Virtuous Cycle” with investment as the key driver said Chief Economic Advisor Subramanian.
He said that the economic survey is imbued by the spirit “blue sky thinking” in thinking about the appropriate economic model for India. “This is reflected in the sky blue cover of the Survey,” he said.
“Real people respond to context rather than narrow “rational” calculations. #EcoSurvey2019 argues that nudging behaviour change is simplest way to change gender equations, business culture, sanitation culture, health culture and so on,” CEA said in a tweet.
The Economic Survey said India continues to be the fastest growing major economy in the world, even though the world output growth falling to 3.6% in 2018 from 3.8% in 2017.
“Growth rate of world output is projected to fall further to 3.3% in 2019 as growth of both advanced and emerging and developing economies are expected to decline,” it saids.
The survey highlights the immense potential of data of societal interest, says data should be “of the people, by the people, for the people”.
Krishnamurthy Subramanian said in an unpredictable world, policymaking needs clear vision, strategic blueprint, tactical tools for constant recalibration based on real time data.
“Data must be created as a public good of the people, by the people, for the people,” he said on Twitter.
“Our team has put in a lot of effort with a lot of dedication. I hope the results are good, and we are able to contribute to the ideas for the economy. I hope the almighty blesses us,” he added.