Key points of Economic Survey 2018-19


The Economic Survey underscored the ambitious agenda of applying principles of behavioural economics to achieve 8 per cent of sustained GDP growth to make India a $5-trillion economy by 2024-25. Prime Minister Narendra Modi has already laid down the vision of India becoming a USD 5-trillion economy by 2025.

* 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.

* Survey suggests diplomatic type privileges, naming roads for top taxpayers

* It recommends a renewed focus on pushing up exports.

*Govt should foster the growth of large firms instead of focusing on smaller firms.

* Use public data to revolutionise development in the country.

*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.

* Poor enforcement of contracts and dispute resolution is a big hurdle. Faster legal process should be top priority.

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

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

* Survey argues that nudging behaviour change is simplest way to solve many social issues.

* Top policymakers must ensure actions are predictable. Policymaking needs: 1. Clear Vision 2. Strategic blueprint 3. Tactical tools for constant recalibration

* Success of MGNREGS shows govt schemes can make a difference on the ground with skilful use of technology

* A minimum wage policy for 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.

* Policy should enable MSMEs to grow, create greater profits for their owners and contribute to job creation and productivity in the economy .

* 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 will enjoy the “demographic dividend” phase in the next two decades but some states will start transitioning to an ageing society by the 2030s.

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

* The Survey visualises creating a Detroit for Electric Vehicles in India.

*Ease labour laws to spur job growth.

* The Survey seeks reform in lower judiciary

* 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 :- Economic Times )

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