The Economic Survey 2018-19 was tabled in the Parliament on Thursday, July 4, 2019 by Finance Minister Nirmala Sitharaman, who laid out the plan of becoming a $5 trillion economy by 2024-25, as envisioned by Prime Minister Narendra Modi.
Economic Survey 2018-19 was tabled in the Parliament on July 4, 2019 by Finance Minister Nirmala Sitharaman
The Economic Survey 2018-19 was tabled in the Parliament on Thursday, July 4, 2019 by Finance Minister Nirmala Sitharaman, who laid out the plan of becoming a $5 trillion economy by 2024-25, as envisioned by Prime Minister Narendra Modi.
“India needs to sustain a real GDP growth rate of 8%. International experience, especially from high-growth East Asian economies, suggests that such growth can only be sustained by a “virtuous cycle” of savings, investment and exports catalysed and supported by a favourable demographic phase,” said the Survey that projects the health of the Indian economy.
The Survey has projected 7% GDP growth in 2019-20.
Sitharaman said the survey adopted a “blue sky thinking” approach to myriad issues using evidence and suggestions for informed policymakers.
If India is able is to achieve the $5 trillion economy target by 2024-25, then it will become the 3rd largest economy in the world.
The Survey is prepared by the Chief Economic Adviser, Krishnamurthy Subramanian.
Sitharaman said: “It lays down a strategy to achieve the vision of an inclusive India by 2022 #India@75 and #Economy@5 trillion by 2024-25. It elucidates various new ideas like use of principals of behavioural economics for effective policy making, data as a public good, emphasise on legal reform, significance of policy consistency, efficient labour markets, use of technology, support to MSMEs among others. The Survey aims to facilitate creation of a self-sustaining virtuous cycle, which spurs investment and thereby growth.”
This Survey makes the case for investment as the “key driver” that can create a self-sustaining virtuous cycle in India. This investment can be both government investments in infrastructure, as such investment crowds in private investment, and private investment in itself.
The Fiscal Responsibility and Budget Management (FRBM) Act of 2003, which got a new lease of life since 2016, determines the glide path for the ratio of Gross Fiscal Deficit (GFD) to GDP to reach an eventual target of 3%. The ratio declined from 4.5% in 2013-14 to 3.4% in 2018-19. Other macro-stability indicators have similarly improved, the Survey indicated.
Banking on export, the Survey said with the share of consumption in GDP constrained by the high level of savings, domestic consumption can, at best, act as a force-multiplier when high income growth feeds consumption. So, where would the final demand for the large capacities created by high investment come from? The answer is exports. This is why an aggressive export strategy must be a part of any investment driven growth model.