Economic survey 2019

Economic survey 2019

Economic survey 2019               

The Survey is inspired by Gandhiji's Talisman: “…Recall the face of the poorest man [woman], and ask yourself, if the step you contemplate is going to be of any use to him [her].

With the heading “blue sky thinking” the Economic Survey underscored the ambitious agenda of applying principles of  behavioral economics to achieve 8 per cent of sustained GDP growth to make India a $5-trillion economy by 2024-25. Prime Minister Narendra Modi has already laid down the vision of India becoming a USD 5-trillion economy by 2025.

➢ Highlights of economic survey 2019: -

• Survey sees FY20 GDP growth at 7%, higher growth on stables macros.
India needs to grow at 8% per year to be $5 trillion economy by FY25.

• Survey suggests diplomatic type privileges, naming roads for top taxpayers.
It recommends a renewed focus on pushing up exports. 

• Govt. should foster the growth of large firms instead of focusing on smaller firms. 

• Use public data to revolutionize development in the country. 

• Looking beyond the economics of equilibrium, survey makes case for investment-driven “virtuous cycle” to sustain growth at 8%. 

• Investment the "key driver" of simultaneous growth in demand, jobs, exports & productivity

• Green shoots in investment activity seems to taking hold.

• Rural wage growth started increasing since mid-2018.

• Political stability should push the animal spirits of economy.

• Poor enforcement of contracts and dispute resolution is a big hurdle. Faster legal process should be top priority. 

• Savings & growth are positively co-related. Savings must increase more than investment.

• Constant recalibration based on real time data. Data must be created as a public good “of the people, by the people, for the people.

• Survey argues that nudging behavior change is simplest way to solve many social issues. 

• Top policymakers must ensure actions are predictable. Policymaking needs: 1. Clear Vision 2. Strategic blueprint 3. Tactical tools for constant recalibration. 

• Success of MGNREGS shows govt. schemes can make a difference on the ground with skilful use of technology

• A minimum wage policy for bottom rung of wage earners to drive up demand and strengthening the middle class.

• Indian MSMEs need to be freed from shackles that convert them into dwarfs. MSMEs need to be seen as a source of innovation, growth and job creation.

• Policy should enable MSMEs to grow, create greater profits for their owners and contribute to job creation and productivity in the economy.

• India needs to increase per capita energy consumption to raise real per capita GDP by US$ 5000 and improve its HDI ranking. 

• India will enjoy the “demographic dividend” phase in the next two decades but some states will start transitioning to an ageing society by the 2030s.

• India moving forward from Swachch Bharat to Swasth and Sundar Bharat.

• The Survey visualizes creating a Detroit for Electric Vehicles in India. 

• Ease labor laws to spur job growth. 

• The Survey seeks reform in lower judiciary

• Govt. stands by the fiscal consolidation path.

• Jan-March economic slowdown due to poll related related activity. 

• Green shoots in investment seems to be taking hold.

• NBFC stress reason for FY19 slowdown.

• Decline in NPAs should push up CAPEX cycle. 

• General fiscal deficit seen at 5.8% in FY19 VS 6.4% inFY18 

• Investment rate seen higher in FY20 on improved demand

• Oil prices seen declining in FY20

• Accommodative MPC policy to help cut real lending rates