The Economic Survey, prepared by Chief Economic Advisor, Krishnamurthy Subramanian, projects the economic growth at 6-6.5% in the next fiscal year starting April 1, claiming that growth has bottomed out.
Finance Minister Nirmala Sitharaman, today, tabled the Economic Survey 2020-21 in the Parliament. The survey is a review of the developments in the economy over the last 12 months and also acts as a blueprint for the next financial year.
According to the survey, weak global growth affecting India, as well as an investment slowdown due to financial sector issues, had led to the growth falling to an 11-year low in current fiscal.
Key Takeaways:
- Puts the current fiscal year 2019-20's growth rate at 5%.
We can create 4 crore jobs by 2025 and 8 crore jobs by 2030 by focussing on exports.
- To make India a $5 trillion economy by 2024–2025, India needs to spend about $1.4 trillion ( ₹100 lakh crore) during the period on infrastructure.
- Consumer Price Index (CPI) inflation has increased from 3.7 per cent in 2018-19 (April to December 2018) to 4.1 per cent in 2019-20 for the corresponding period.
- Wholesale Price Index (WPI) inflation has seen an increase between 2015-16 and 2018-19. It, however, fell from 4.7 per cent in 2018-19 (April to December 2018) to 1.5 per cent during 2019-20 in the same period.
- CEA Subramanian said the economic slowdown since 2017 has been due to the lagged effect of reduced investment from 2013 which occurred due to credit boom-bust.
- India's march towards achieving Sustainable Development Goals is firmly anchored in investing in human capital and inclusive growth.
- GST collections grew by 4.1% for the Centre during April-November 2019.
- Around 2.62 crore new jobs were created in rural and urban areas between 2011-12 and 2017-18 among regular wage and salaried employees.
- Gender disparity in India's labour market widened due to a decline in female labour force participation, especially in rural areas.
- Around 60% of productive age (15-59) group engaged in full-time domestic duties.
- Exports of network products can provide one-quarter of the increase in value-added required for making India a $5 trillion economy by 2025.
- Total formal employment in the economy increased from 8% in 2011-12 to 9.98% in 2017-18.
- India has unprecedented opportunity to chart a China-like, labour-intensive, export trajectory.
- Improving governance in public sector banks and the need for more disclosure of information to build trust.
- Measures to start a new business, register property, pay taxes, enforce contracts easily.
- Government interventions seem to be ineffective in stabilising prices of commodities such as onion.
- For wealth to be distributed, it first has to be created and called for looking at wealth creators with respect.
- Fiscal deficit target for current fiscal may need to be relaxed to revive growth.
- The government is expected to widen its budget deficit target for the year through March to 3.8% of gross domestic product from a planned 3.3%.
Economic Survey explained that India's aim of becoming a $5 trillion economy depends on two things:
- Promoting a 'pro-business' policy that unleashes the power of competitive markets to generate wealth.
- Weaning away from 'pro-crony' policy that may favour specific private interests, especially powerful incumbents.
Also Read: What Are People's Expectations From Budget 2020?