Indian Govt projects 6-6.5% growth for FY 2020-21

The Government of India in the Economic Survey for the financial year 2019-20 projected that the national economy will likely grow 6-6.5 per cent in 2020-21, marking a sharp recovery from a cyclical downturn

January 31, 2020

Building on the growing confidence, foreign investment (FDI) inflow during the first half of 2019-20 had recorded a 15 per cent year-on-year jump to reach US$26.1 billion

India currently ranks 3rd globally in the number of new firms created, as per the World Bank. This was achieved by the Government’s efforts to help grassroots entrepreneurs

Integrating “Assemble in India for the world” into Make in India, is expected to raise export market share to 6 per cent by 2030, creating 80 million new well-paid jobs by 2030

India’s steps to create an investment-friendly economy has gained global recognition with the nation jumping 79 places to the 63rd rank over 2014-2019 in the Doing Business list

The Government of India in the Economic Survey for the financial year 2019-20 projected that the national economy will grow by 6-6.5 per cent in 2020-21 starting April 1, 2020, marking a sharp recovery from a cyclical downturn. Meanwhile, during the ongoing fiscal, the world’s fifth-largest economy is expected to grow by 5%. Driven by proactive measures to amend and introduce policies and regulations to drive trade, investment as well as innovation and development partnerships, India has recorded an average growth of 7% in the last five years. Building on the growing confidence, foreign investment (FDI) inflow during the first half of 2019-20 had recorded a 15 per cent year-on-year jump to reach US$26.1 billion. Simultaneously, the economy’s current account deficit narrowed to 1.5% of the GDP during the first half of 2019-20, compared with 2.1% a year earlier. With these positive metrics, the economy is on its path to attain the targeted valuation of US$5trillion by 2024-25, up from the current US$2.7 trillion. 

The Government is targeting GDP expansion by strengthening the Indian market ecosystem and boosting export growth. Backed by high-margin and high-quality capabilities in industries spanning healthcare and food processing to defence and aerospace as well as a rapidly-growing local consumer base, the nation is emerging as a key player in the global economy. India currently ranks 3rd globally in the number of new firms created, as per the World Bank. This feat has been achieved by the Government’s efforts to help grassroots entrepreneurs, apart from reforms to boost investment, consumption, and exports. The efforts include – a) Speeding up of insolvency resolution under the IBC; b) Easing of credit, primarily for stressed real estate, NBFC sectors; and c) Announcing the National Infrastructure Pipeline 2019-2025, among others. While easing restrictions on foreign investments and opening up new trade avenues, India has also sought to promote healthy market competition by discontinuing ‘pro-crony’ policies. 

To usher in the US$5-trillion economy, the nation has planned US$1.4 trillion in infrastructure investment for the coming five years.

The focus on building roadways, railways, aviation network, shipping, telecom, oil and gas, power, mining and housing infrastructure is expected to bolster economic activity, besides creating jobs and improving prosperity for all. The progress will help India become better equipped to set up a China-like, labour-intensive export market. This will integrate “Assemble in India for the world” into Make in India, raising export market share to 6 per cent by 2030, creating 80 million new well-paid jobs by 2030. India’s steps to create an investment-friendly economy has gained global recognition with the nation jumping 79 places to reach the 63rd rank over 2014-2019 in the World Bank’s Doing Business list. India has also been recognised as one of the top 10 improvers for the third consecutive year owing to its progress in resolving insolvency, trading across borders, among other economic factors.

To further improve the Ease of Doing Business, the Economic Survey suggested better coordination between logistics, taxes and customs, and shipping and port authorities. A more targeted approach for individual industries like tourism and manufacturing is also expected to help. The survey added that India must focus on a set of industries, referred to as “network products,” where production processes are globally fragmented and controlled by leading MNEs within their “producer-driven” global production networks. The survey said that the incremental value added in the economy from the target level of exports of network products, which is expected to equal US$248 billion in 2025, would make up about one-quarter of the increase required for making India a US$5 trillion economy by 2025. In a fast-moving world, India has to enlarge the scope for Industry 4.0 that will encompass automation in industrial sectors. Economic Survey 2019-20, herein, showed the way for India to build a future-ready economy.