Economic Survey 2019 Highlights: The 'Sky-blue Survey' reveals 5 key drivers to boost

growth
The new Chief Economic Adviser Krishnamurthy Subramanian in the Economic Survey
sees growth to accelerate in the current fiscal.
ET Online| Updated: Jul 04, 2019, 01.34 PM IST

A day before the Modi government's first Budget in the second term, the government today tabled Economic Survey
for the last fiscal year in the Parliament. Laying out a road map for the Modi government's next five years, the new
Chief Economic Adviser Krishnamurthy Subramanian in the Economic Survey has highlighted five key drivers of
investment, savings, exports, growth and jobs as the primary engines to drive Indian economy.

Releasing the Survey, CEA said Economic Survey is imbued by the spirit “blue sky thinking” thinking and outlines the
appropriate economic model for India. The theme of the Economic Survey is to enable Shifting Gears to accelerate
and sustain a real GDP growth rate of 8% and thereby achieve the vision of $5 trillion economy.

Here are the key highlights from the Economic Survey:

* 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.

*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.

* One of the biggest hurdles to the economy is poor enforcement of contracts and dispute
resolution. Steps to speed up legal process should be top priority.

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

* Tactical tools for constant recalibration based on real time data. Data must be created as
a public good “of the people, by the people, for the people.

* Real people respond to context rather than narrow “rational” calculations. Survey argues
that nudging behaviour change is simplest way to change gender equations, business
culture, sanitation culture, health culture and so on.
* Top policymakers must ensure actions are predictable. In an unpredictable world,
policymaking needs:
1. Clear Vision 2. Strategic blueprint 3. Tactical tools for constant recalibration

* Success of MGNREGS shows government schemes can make a difference on the ground
when skilful use of technology is combined with effectiveness

* An effective minimum wage policy for vulnerable 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.

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

* 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].

* India moving forward from Swachch Bharat to Swasth and Sundar Bharat

* Investment rate seems to have bottomed out.

* Govt stands by the fiscal consolidation path.

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

* Greenshoots 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% in FY18.

* Investment rate seen higher in FY20 on improved demand.

* Oil prices seen declining in FY20.

*Accomodative MPC policy to help cut real lending rates.

Source: ET Online
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