The Economic Survey 2019- 20 has been tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman a day before the presentation of budget 2019-20. The survey Projects a GDP growth rate of 7 percent for FY 2020 up from 6.8 percent in the last fiscal.
Presenting the economic survey the Chief Economic Advisor (CEA) KV Subramanyam said the economy is poised to take off to make major strides to realize the Prime Minister’s dream of making India a 5 Trillion Dollar economy.
He said Survey is imbued by the spirit “blue sky thinking” thinking and outlines the appropriate economic model for India. The theme of the Economic Survey is to enable Shifting Gears to accelerate and sustain a real GDP growth rate of 8% and thereby achieve the vision of $5 trillion economy.”
Chief Economic Advisor KV Subramanian on #EconomicSurvey 2018-19: Theme that underlies this economic survey is, the sky blue colour, the colour used for the survey, captures unfettered blue sky thinking which is what we've indulged in trying to come with the idea for this survey pic.twitter.com/kTN6AyKwp5
— ANI (@ANI) July 4, 2019
The economic survey says that India maintained its macro-economic stability by containing inflation within 4% and by maintaining a manageable current account deficit to GDP ratio. He claims the economy over the last five years have laid a clear cut path for trickle-down effect.
Regarding the increasing Current Account Deficit (CAD) the survey says it has shot up this fiscal (FY19-20) from the previous year’s largely due to increase in global oil prices. It also projects that oil prices are expected to decline further this year which may see a corresponding reduction in CAD.
Key highlights of Economic Survey 2019-20
· Survey projects 7 percent GDP growth in FY20
· India needs to grow at 8 percent per year to become a 5$ trillion economy by 2025
· Survey makes case for investment driven virtuous cycle to sustain 8 percent growth
· “Virtuous Cycle” of savings, investment and exports catalyzed and supported by a favorable demographic phase required for sustainable growth.
· Political stability to push the animal spirits of the economy
· Presenting data as a public good as a key ingredient for a self-sustaining virtuous cycle. Data “Of the People, By the People, For the People”
· Behavioral economics provides insights to ‘nudge’ people towards desirable behavior.
· Using insights from behavioral economics to create an aspirational agenda for social change
· Sharp slowdown in population growth expected in next 2 decades. Most of India to enjoy demographic dividend while some states will transition to ageing societies by 2030s.
· Survey proposes a well-designed minimum wage system as a potent tool for protecting workers and alleviating poverty.
· Survey supports rationalization of minimum wages as proposed under the Code on Wages Bill
· Current account deficit manageable at 2.1 percent of GDP.
· Prospects of pickup in growth in 2019-20 on the back of further increase in private investment and acceleration in consumption.
· Banking system improved as NPA ratios declined and credit growth accelerated.
· Insolvency and Bankruptcy Code led to recovery and resolution of significant amount of distressed assets and improved business culture.
· For mainstreaming Resource Efficiency approach in the development pathway for achieving SDGs, a national policy on Resource Efficiency should be devised
· In Indian rupee terms growth rate of exports increased owing to depreciation of the rupee while that of imports declined in 2018-19
· The share of foreign direct investment has risen and that of net portfolio investment fallen in total liabilities, reflecting a transition to more stable sources of funding the current account deficit.
· Adopting appropriate technologies through Custom Hiring Centers and implementation of ICT are critical to improve resource-use efficiency among small and marginal farmers.
· Diversification of livelihoods is critical for inclusive and sustainable development in agriculture and allied sectors.
· Substantial progress in both quantitative and qualitative indicators of education is reflected in the improvements in Gross Enrolment Ratios, Gender Parity Indices and learning outcomes at primary school levels.