Economic Survey of India: This year, it is prepared by Chief Economic Adviser Krishnamurthy Subramanian
Finance Minister Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament today. In the first Economic Survey by the Narendra Modi government in its second term, GDP or gross domestic product growth is projected at 7 per cent in financial year 2019-20, higher from a five-year low of 6.8 per cent recorded in the previous year. India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector, according to the government's Economic Survey. The release of Economic Survey 2018-19 - prepared by Chief Economic Adviser Krishnamurthy Subramanian - comes a day ahead of the presentation of Union Budget in Parliament.
Here are the key highlights of Economic Survey 2019:
"The important thing to understand here is that the growth slowdown itself has been because of an overhang from the era before 2014. We ended up having a problem on both the corporate and bank balance sheets. Moreover, the quality of investment itself was so poor that it led to a slowdown in investment," Mr Subramanian said.
"In particular we are trying to do is to signal a change in the way we think about development and economy in our country... First we view jobs, demand, exports etc. in silos - trying to solve separate problems - when they actually are complementary to each other one without the other does not work," Krishnamurthy Subramanian told NDTV.
"Secondly, one of the ways in which we are departing is that rather than thinking about the economy being in an equilibrium, economies are actually either in a virtuous cycle or a vicious cycle."
Average inflation in the last five years was less than the inflation level of the preceding five years, matching the lowest levels attained in the country's post-independence history, according to the Economic Survey. Core inflation averaged higher than last year, it adds.
"With the aspirations that have been kindled among our predominantly young population, India stands at a historic moment when sustained high economic growth has become a national imperative," Krishnamurthy Subramanian writes in his preface to the Economic Survey report.
Here are highlights of what Mr Subramanian said:
- We need to shift gears to grow at 8% continuously
- Economic survey is blueprint to achieve vision of Indian economy at $5 trillion
- Economy is poised to take off and first chapter provides a blueprint of take-off
- Increase in investment rate helps in bringing down unemployment
- Demographic change to enable growth
- "Beti bachao" project improved birth ratio
- Behavioural economics can enable change in India
- Small firms are 85% of all firms
- Need to incentivize infant firms rather than small firms
- Labour reforms can enable more jobs in small firms
- Need to unshackle small firms to create more jobs
- Need to clear legal logjam in lower courts
- Government needs to invest in data as public good
Chief Economic Adviser Krishnamurthy Subramanian addressed a press conference after the release of Economic Survey 2018-19.
Tabling the survey document in the Rajya Sabha, Finance Minister Nirmala Sitharaman said global crude oil prices are expected to decline in the current financial year 2019-20.
India needs to sustain a GDP growth rate of 8% to become a $5 trillion economy by 2025, according to the Economic Survey. Such growth can only be sustained by various cycle of savings, investment and exports, it said.
"The theme of the survey - 'Shifting Gears' - is intended to achieve a sustained growth rate of 8 per cent. Using the learning from the Global Financial Crisis, the Survey departs from traditional thinking to view the economy in either a vicious or a virtuous cycle," said Krishnamurthy Subramanian, the main author of the Economic Survey 2018-19.
"The Survey makes a sincere effort to live up to the expectation of being an indispensable guide for following, understanding and thinking about the Indian economy."
India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector. However, the investment rate was expected to pick up following improvement in consumer demand and bank lending, according to the Economic Survey 2018-19.
"The growth in the economy is expected to pick in 2019/20 as macroeconomic conditions continue to be stable," said Chief Economic Adviser Krishnamurthy Subramanian.
Decline in NPAs should help push capex cycle: Economic Survey
Accommodative Monetary Policy Committee to help cut real lending rates: Economic Survey
January-March slowdown partly due to poll-related uncertainty: Economic Survey
Country's GDP growth has averaged 7.5% in the last 5 years: Economic Survey
Political stability should push animal spirits in the economy: Economic Survey
Pick up in food prices should help in increasing rural incomes and spending capacity and hence rural consumption demand: Economic Survey
The performance of consumption will be crucial in deciding the growth path of economy: Economic Survey
Rural wages growth which was declining seems to have bottomed out and has started to increase since mid-2018. Further growth in rural wages should help spur rural demand: Economic Survey
Investment rate, which was declining from 2011-12 seems to have bottomed out. It is expected to pick up further in the year 2019-20 on the back of higher credit growth: Economic Survey
The growth in economy is expected to pick up in 2019-20 as macroeconomic conditions continue to be stable while structural reforms initiated in the previous few years are continuing on course: Economic Survey
Growth in 2019-20 seen picking up as macroeconomic conditions continue to be stable: Economic Survey
The government has tabled the economic survey in Parliament. The economic survey has predicated 7 per cent GDP growth in FY20 on stable macro economic conditions.
The survey comes weeks after Mr Subramanian in a research paper claimed India was overestimating its economic growth rate by up to 2.5 percentage points, a claim rejected by the Economic Advisory Council to the Prime Minister (EAC-PM), which said his analysis ignores data on services and agriculture and shows blind trust in a private firm, CMIE. (Read more
Unemployment in the country rose to a multi-year-high of 6.1 per cent in financial year 2017-18. Economists say that any recovery in consumer demand will be a key factor to watch in the coming months. (Also read: Key challenges before the economy
In January-March, annual growth slumped to 5.8 per cent, the slowest pace in 20 quarters. Growth for the financial year that ended in March was 6.8 per cent, also a five-year low, and indicators such as plummeting industrial output and automobile sales have stoked fears of a deeper slowdown.
Economic Survey 2019
: Today's Economic Survey comes at a time the economy is facing a range of challenges such as slowing growth and weakening consumption.
Krishnamurthy Subramanian was appointed Chief Economic Adviser for a period of three years in December 2018. A professor from the Indian School of Business, Mr Krishnamurthy Subramanian filled the role vacated by Arvind Subramanian, who left the finance ministry after a four-year stint in June.
The Economic Surveys for past four years (2014-15, 2015-16, 2016-17 and 2017-18) were prepared by then Chief Economic Adviser Arvind Subramanian.
The Economic Survey is presented a day before the Union Budget to both houses of Parliament during the Budget Session.
This year's Economic Survey is prepared by Chief Economic Adviser Krishnamurthy Subramanian. "Looking forward with excitement to table my first - and the new government's first - Economic Survey in Parliament on Thursday," he said on microblogging site Twitter.
At 10:19 am, the Sensex traded 96.84 points - or 0.24 per cent - higher at 39,936.09 while the Nifty was up 29.25 points - or 0.25 per cent - at 11,946.00.
Top gainers on the 50-scrip index at the time were Indiabulls Housing Finance, UPL, IndusInd bank, Bharti Airtel, Kotak bank and UltraTech Cement, trading between 1.60 per cent and 3.97 per cent higher. Kotak Bank, ICICI Bank and IndusInd Bank contributed the most to the advances in Sensex. (Click here for more on how the markets are faring ahead of Economic Survey
Domestic stock markets clocked mild gains ahead of the release of Economic Survey 2018-19, with the S&P BSE Sensex benchmark index gaining more than 100 points in early trade. The NSE Nifty index rose as much as 44.55 points to touch 11,961.30 in intraday trade, while the Sensex moved to as much as 39,976.53, up 137.28 points from the previous close.
This year's Economic Survey is expected to highlight a slowdown in the economy, which led to a growth of 6.8 per cent in financial year 2018-19. In the interim Budget, tabled in Parliament in February this year, the government had expected GDP or gross domestic product growth to come in at 7.2 per cent.
The Economic Survey highlights policy initiatives of the government and a roadmap to further boost the economy. It also summarises the performance on major development programmes and highlights the policy initiatives as well as the economic prospects over the short to medium period.