The government on Thursday pegged the growth rate for the current fiscal at 7 percent, marginally up from the five-year low of 6.8 percent recorded in the previous fiscal according to the Economic Survey for 2018-19.
The Survey was tabled by Finance Minister Nirmala Sitharaman in the Rajya Sabha, “real GDP growth for the year 2019-20 is projected at 7 percent reflecting a recovery in the economy after a deceleration in the growth momentum throughout 2018-19.”
Ahead of Narendra Modi government’s maiden Budget to be presented on Friday, the Economic Survey projecting the state of health of the country’s economy and outlining the challenges showed general fiscal deficit at 5.8 percent in FY19.
— PIB India (@PIB_India) July 4, 2019
Economic Survey 2019 says lower global growth and increased uncertainty over trade tension may hit exports, according to Reuters. The Survey projects 283.4 million tonnes of foodgrains production for 2018-19.
Krishnamurthy Subramanian, Chief Economic Adviser (CEA) on Economic Survey said, “Our team has put in a lot of effort with a lot of dedication, I hope results are good and we are able to contribute to the ideas for the economy.” The economic survey has predicted 7 percent GDP growth in FY20 on stable macroeconomic conditions. Investment rate seems to have bottomed out.
Economic Survey says government policies expected to further lift restrictions on FDI inflows, Reuters said citing sources. A well-designed and effective implementation of minimum wages will strengthen the trend towards decreasing wage inequality, especially at lower levels. This becomes all the more significant as women constitute the majority of the bottom rungs of the wage distribution, said Sitharaman today. Rural wage growth that had bottomed out, started to rise since mid-2018, Sitharaman said. Slow growth, GST, farm schemes pose challenges on the fiscal front, the Survey said. The FY2019-20 GDP growth is seen picking up on higher private investment and robust consumption. Lower global growth, increased uncertainty over trade tension may hit exports, the Survey revealed.
#EcoSurvey2019 highlights the immense potential of data of societal interest, says data should be “of the people, by the people, for the people”#Economy5Trillion pic.twitter.com/cKSpTR1R7F — PIB India (@PIB_India) July 4, 2019
It said, lower global oil prices will boost consumption. The rate of investment is seen to be picking up in FY2020 on higher credit growth and improved demand, Reuters said, citing sources.
Under the World’s biggest rural job scheme, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), there was 20 % increase in the supply of work in blocks that are affected by drought. This suggests that the supply of work under MGNREGS also responds to the increase in demand in the blocks affected by drought. The Economic Survey 2018-19 was tabled in Parliament today by the Union Minister for Finance and Corporate Affairs, Smt Nirmala Sitharaman states that muster rolls, a form of attendance register signed by workers increased by 19 % in the blocks that were not affected by drought. In contrast, muster rolls increased by an enormous 44 % in the blocks that were affected by drought. Thus, the actual work done under MGNREGS also increased significantly in blocks affected by draught due to the use of Aadhar linked Payments, ALP. This increase was more than double the increase in blocks that were unaffected by drought.
The Economic Survey, the annual report of the Indian economy for the year gone by (2018-19), comes at a time when some critics said that the Modi government in its first term delivered a job less growth and it needed to re-invent to propel the economy and create jobs.
There are also concerns that the government might this year again slip on the fiscal deficit front given sluggish GST collections and lower-than-expected growth in direct taxes.
After breaching the Rs 1 lakh crore mark in goods and services tax (GST) collections for two consecutive months, indirect tax mop-up in June fell marginally to Rs 99,936 crore.
However, the average monthly collection for the April-June quarter stood at Rs 1.04 lakh crore, up by 7 percent from the corresponding period of last year.
There are also concerns with regard to lower than expected direct tax collection due to slow down in the economy.
The survey comes weeks after Subramanian’s predecessor Arvind Subramanian in a research paper claimed India was overestimating its economic growth rate by up to 2.5 percentage points.
The incumbent CEA has not commented on the findings of the research papers even as government bodies like EAC to the Prime Minister have not agreed with the conclusion.
Also questions have been raised on the credibility of the methodology of collecting data used to project macroeconomic numbers and the survey will be critically seen if it address these challenges.
Besides, it is likely to dwell upon issues like slow down in private investments, employment generation, banking and non-banking-finance-company crisis.
Since 2015, the survey document comes in two parts. One part consists of commentary on the state of the economy, which is released before the Union Budget. The other part carries key economic statistics and data, which is tabled in July or August.
This split in the presentation took effect after the Union Budget was moved from the last working day of February to the first day of the month in 2017.
The Economic Survey serves as a useful policy document since it also contains policy ideas, key statistics on economic parameters and in-depth research on macro and sectoral trends.
Often, the survey serves as a policy guideline for the Union Budget. However, its recommendations are not binding on the government.
Your guide to the latest cricket World Cup stories, analysis, reports, opinions, live updates and scores on https://www.firstpost.com/firstcricket/series/icc-cricket-world-cup-2019.html. Follow us on Twitter and Instagram or like our Facebook page for updates throughout the ongoing event in England and Wales.