The Economic Survey 2019, tabled by Finance Minister Nirmala Sitaraman on Thursday (July 4) in Parliament, does not acknowledge the economic slowdown in India and refers to it as a ‘slight moderation in its GDP growth.’
“The growth of GDP moderated to 6.8 per cent in 2018-19 from 7.2 per cent in 2017-18.
However, India was still the fastest growing major economy,” notes the Economic Survey. It further pegs the real GDP growth for FY20 at 7 percent, reflecting a recovery in the economy after a deceleration in the growth momentum throughout FY19.
India’s economy has been facing challenges in manufacturing, industry and agriculture sectors as the growth rate slowed down to a 20-quarter low of 5.8 percent in the January-March quarter. Overall GDP growth stood at 6.8 per cent, below the 7-per cent mark.
Over the past few months, vehicle sales continued to slide, GST collections were recorded below par and job creation continued to suffer, raising concerns about the economy. Below average monsoon rains in many states are likely to deepen the agrarian crisis going forward, adding to the concerns of an economic slowdown.
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The survey talks about the need to sustain a GDP growth rate of 8 per cent to become $5 trillion economy by 2025, but it suggests no immediate policy measures to tackle the current economic slowdown.
“Outlook of Indian economy appears bright with prospects of pickup in growth in 2019-20 on the back of pick up in private investment and robust consumption growth,” the survey notes.
To achieve the target of $5 trillion economy, the Economic Survey pegs investment, especially private investment, as the “key driver” of economy. The Survey notes that investment creates demands, increases labour productivity, introduces new technology and generates jobs.
The cover design of the Economic Survey 2019 depicts “inter-linked gears”, capturing the idea of investment, savings, exports, growth and jobs being complementary and therefore forming components of a “virtuous cycle” with investment as the key driver, Chief Economic Advisor Krishnamurthy Subramanian said.
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“The growth in investment, which had slowed down for many years, has bottomed out and
has started to recover since 2017-18. The growth in fixed investment picked up from 8.3 per
cent in 2016-17 to 9.3 per cent in 2017-18 and further to 10.0 per cent in 2018-19,” the survey stated.