Economic Survey, an official economic report and an annual commentary on the state of economy of India, is usually presented a day before the annual Union Budget. Economic Survey 2019 has been tabled in parliament on 4th July 2019 by Finance Minister, Nirmala Sitharaman and prepared by new Chief Economic Advisor (CEA) – KV Subramanian.
Key Highlights of Economic Survey 2019
- The Survey projects GDP to grow at 7% during current fiscal of 2019-20
- This year’s Survey outlined a vision – India needs to sustain an investment-driven growth rate of 8% per annum in order to become $5 trillion economy by 2024-25
- India will face a challenge on fiscal front following economic slowdown impacting tax collections amid rising state expenditure on the farm sector
- General fiscal deficit seen at 5.8% in FY19 vis-a-vis 6.4% in FY18
- NBFC stress key reason for FY19 slowdown.
- Savings & growth are positively correlated. Savings must be increased at a rate higher than investment.
- Investment rate seen higher in FY20 on improved demand
- Oil prices are expected to decline in 2019-20
- Pointing out a demographic change, Survey predicts a rise in ageing population & need to rethink current retirement age.
- Survey visualizes creating a Detroit for Electric Vehicles in India
- Survey seeks reforms in lower judiciary
Focus Areas for Sustained Growth
The survey puts emphasis on increasing investment for simultaneous growth in demand, jobs, exports and productivity, use of public data to revolutionize development in the country, legal reforms, policy consistency, encouraging behavior change using behavioural economics, nourishing MSMEs, reducing cost of capital to bolster investments & fiscal consolidation.
- Survey claims that all data about country’s citizens is a public good. Currently much of this data is dispersed across different registries maintained by different ministries. Survey suggests merging of different datasets held by government to revolutionize development in the country.
- MSMEs need to be seen as a source of innovation, growth and job creation. Survey suggests MSMEs should get a 10-year sunset clause with deregulation of labour laws & sector be given priority in lending.
- Survey argues that behaviour change is the simplest way to solve many social issues. Survey suggests a behavioural economics approach to naming government’s flagship schemes:
- From ‘Beti Bachao Beti Padhao’ to ‘BADLAV’
- From ‘Swachh Bharat’ to ‘Swasth and Sundar Bharat’
- From ‘Give It Up’ for LPG subsidy to ‘Think About the Subsidy’
- From ‘tax evasion’ to ‘tax compliance’
Source Credit: ET Online, The Hindu Net Desk