An optimistically cautious picture despite a slowdown

Amidst the slowdown, both in investment and consumption and fiscal deficit, the Narendra Modi-led NDA government today presented an economic survey report for the country. The survey which in principle appears just before the annual budget is a document or report card of the state of the economy of the country in the previous year, and is an eagerly awaited one.

Last year's survey, which was presented in the month of July, and pegged the economy to grow at 7%, but contrary to that the financial health, saw a downturn following global effect and internal issues also. The report was quick to point this that the economic growth suffered following the global impact.

The gap of 4.5% between nominal GDP, 7.5%, for 2019-20 and estimated one 12% will hasten fiscal deficit as tax collections will dip considerably. The estimated 3.3% fiscal deficit vis a vis GDP for 2019-20 will get crossed in all probabilities.

Authored by the chief economic advisor (CEA) Krishnamurthy Subramaniam the survey has kept the GDP growth for 2020-21 at 6-6.5 per cent and for the current financial year 5 per cent. Very candidly the survey accepted that the existing domestic financial sector issues along with the global pressure are currently afflicting the globe.

For remedies it strongly advocated about delivering on the reforms quickly 'as this will enable the economy recovery; distribution of wealth among all classes; 10 new ideas to benefit the market, and above all bringing in corrective measures in public sector banks.'

The economic survey keeps track of the issues relating to the economy; the major policy declared prepares a roadmap for the future.

Following his ascension on the seat of PM Modi had made an ambitious declaration that India would be a 5 trillion dollar economy by 2024. This raised eyebrows in many circles. The nay Sayers just pooh-poohed it and some believed it but with some riders. The survey says it depends basically on two aspects.

The market has to be made more competitive by allowing policies which are pro-business as this will pave the way for wealth generation. Secondly, the cronyism in policies needs to be done away with, thus allowing fair playground for all thus creating a perfect competitive playground. This also spoke about labour reforms as it talked about labour-intrusive industries as being practised in China for growth for ushering in both long and short term demand.

It also mentioned that GST grew by 4.1% for April-November 2019. Giving a comparative statement taking 2011-12 it mentioned that formal employment increased from 17.9% to 22.8%. The inflation declined from 3.2% to 2.6% in December 2019. Besides, three other important factors agriculture which shows the humble recovery, with foreign exchange reserve remaining at a very comfortable level and upward growth in foreign exchange and remittances.

Contributor: Raja Mohanty