July 5, 2019
India’s Survey 2018-19 departed from the traditional thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in an equilibrium
Rather than viewing economic growth, demand, exports and job creation as separate issues, the Survey approached the macroeconomic phenomena as complementary
The Survey said that investment, especially private investment, can drive economic growth, export, consumer demand, capacity building, and technology integration
The Survey also sought to strengthen the economy by encouraging entrepreneurship and setting up innovation-driven micro, small and medium enterprises (MSMEs)
The Economic Survey for the fiscal year 2018-19, tabled by India’s Finance Minister Nirmala Sitharaman in the Parliament on July 4th, presented a progressive plan to achieve a US$5 trillion economy by 2024-25, compared with the current US$2.7 trillion. This valuation, the survey said, can be achieved with an 8 per cent annual growth in the national gross domestic product (GDP) over the coming five years. One of the fastest-growing major economies in the world, India is estimated to have grown by 6.8 per cent during fiscal 2018-19. Meanwhile, the GDP growth during the last five years topped 7.5 per cent defining a new normal for the Indian economy. With a stable political environment and improving investment across the economy, India is expected to achieve renewed momentum following a slowdown in the aftermath of certain national policy enactments and global market weaknesses. In the current financial year 2019-20, the Indian economy is expected to record GDP growth of 7 per cent.
Learning from the global financial crisis, India’s Survey 2018-19 departed from the traditional thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in an equilibrium. Rather than viewing the national priorities of fostering economic growth, demand, exports as well as job creation as separate issues, the Survey approached the macroeconomic phenomena as complementary to each other. The Survey suggested that by driving the virtuous cycle with investment, especially private investment, as the main driver can enable growth in each of the important macro variables – inclusive economic growth, export activity, consumer demand, capacity building, and technology integration. The Survey also sought to strengthen the economy by encouraging entrepreneurship and setting up of micro, small and medium enterprises (MSMEs). Besides creating new jobs, this can empower manufacturing and R&D capabilities while ascertaining the best utilisation of resources.
The year 2018 reaped the benefits of Government’s leading economic policies and projects implemented over the last four years that focussed on developing skills as well as providing a range of services to the citizens, including electricity, digital connectivity, healthcare, higher education, banking services, housing and roadways, among others. The last four years also saw a steady rise in indigenous entrepreneurship. After India’s jumping 65 spots to reach the 77th place in the World Bank’s Ease of Doing Business ranking since 2015, the Central Government has launched a similar ranking of its 29 states and seven union territories, with Andhra Pradesh, Telangana, Haryana, Jharkhand and Gujarat grabbing the top five spots. Proactive policy amendments, regulatory measures as well as improved liberalisation, together with the nation’s high-margin and high-quality innovation and production environment, have led to a steady spike in interest of foreign investors when it comes to setting up operations in India.