A day before the Union Budget Day, the Finance Minister of India presented the Economic Survey 2018-19. The economic survey outlines the state of the Indian economy along with the challenges that lie ahead, conducting sectoral overview to comment on reformed measures.
It called for the adoption of behavioural economics, marking milestones such as ‘Beti Bachao Beti Padhao’ to ‘Badlav’; shifting from ‘Swachh Bharat’ to ‘Sundar Bharat’, ‘Tax evasion’ to ‘Tax compliance’, and ‘Give It Up’ to Think about the subsidy’.
The survey highlighted the need for robust infrastructure and technology to create a $10 Trillion economy by 2032 at sustained GDP growth of 8 per cent It said that such a rate could be sustained by a ‘virtuous cycle’ that involves saving, investment, and exports.
The GDP growth was projected to be at 7 per cent for the year 2019-20, citing the pickup in investment and consumption. India’s GDP is projected to be even higher, growing at 7.3 per cent in 2013 according to the April 2019 World Economic Outlook Report of International Monetary Fund.
The survey presented before the financial budget highlighted that private investment will bring in demand, capacities in industries, more labour and newer technologies to help for creative distribution to make an effective workforce. The Government aims to push up GDP growth while maintaining fiscal stability. It said that if the private investment has to scale up, then it cannot be allowed to be crowded by public investment.
The ‘virtual cycle’ aimed at sustaining such a rate and push for private investment will work by various measures such as presenting data as public good, emphasizing legal reforms to ensure that there is a consistency in the implementation of a certain policy. It also aims to push for Micro, Small, and Medium Enterprises (MSMEs) which will scatter out the workforce and skills to regions across, and not just limited to tier-1 cities.
The Union Budget of India 2019 could highlight more on the job prospects of emerging and existing sectors, but before the financial budget is to be laid out and more about it is heard in the budget news, the economic survey said that job creation is clinical to achieving a $5 trillion economy, and for that MSMEs will play an important role.
The survey stated that deregulating labour law restrictions can create more jobs, citing the recent changes in Rajasthan when it became the first state to introduce labour reforms in Factories Act, Apprenticeship Act, Industrial Disputes Act, and the Contract Labour Act. Other states followed suit. It said that the ‘flexible states’ that have done so have reduced transaction costs by 40 per cent or more after 2014.
For the Government, creating jobs is a part of the ‘virtuous cycle’ and ‘inter-linked gears’ that bring together the idea of investment, growth, savings, and jobs together.
The Economic Survey of 2019 issued a slowdown in India’s population growth in the next two decades. The working age population is expected to grow by around 9.7 million per year during 2021-31 and 4.2 million per year during 2031-41. To have these youths involved, the report suggested, could help propel the economy of India.
The survey before the general budget day also highlighted the need to prepare for a generation which was old, ageing, and to make necessary investments into the healthcare sector. It said that if the retirement age is to be expanded, the signal for it should be given at least a decade before so that the current workforce braces up for it, and that there’s enough time to work on pension plans and other retirement plans for the retiring individuals.
Another step to make India a 5 trillion economy falls around an inclusive growth with the help of sustained, reliable, and affordable means of energy, which is something the Government could focus more in the Union Budget 2019.
The economic survey noted that “energy is the mainstay of the development process of any economy”. It highlighted that the priority for the Government is ensuring access to sustainable and clean energy sources.” For India to enter the upper-middle income group by having its real per capita GDP increase by $5000, the report said that it needs to see an increase in per capita energy consumption by 2.5 times.
According to the survey, energy efficiency programs have led to a cost savings of about Rs 53,000 crore in 2017-18, besides leading to a reduction of 108.28 million tonnes of carbon dioxide emissions.
The chief economic advisor said that the roadmap to a greater economy has been inspired by Mahatma Gandhi’s talisman, which aimed to include the poorest and the most common man.