Growth to be driven by investments, consumption
NEW DELHI: The Economic Survey of 2018-19 tabled by Chief Economic Adviser Krishnamurthy Subramanian in the Parliament on Thursday (July 4) has sought to achieve a GDP growth of 7 per cent for the current financial year 2019-20 against a multiple year low of 6.8 per cent recorded for 2018-19 (7.2 per for 2017-18), and an abysmally low growth of 5.8 per cent witnessed during the fourth quarter of the last fiscal.
The Department of Economic Affairs, Finance Ministry of India presents the Economic Survey in the both Houses of Parliament every year, just before the Union Budget. It is prepared under the guidance of the Chief Economic Adviser, Finance Ministry and represents the ministry’s view on the economic health of the country.
This annual document, which certainly will have a huge bearing on the ensuing budget also summarizes the performance on major development programs, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.
The survey strongly believes that the growth during the current year will be primarily driven by investments and consumption. In order to fulfil the prime minister’s dream to grow India’s economy into $5 trillion in size, a sustained 8 per cent average growth is needed in the coming years.
The positive aspect is that the present government enjoys a huge political mandate to carry on with tough economic decisions too, if needed.
While investment is the key driver of simultaneous growth in demand, jobs, exports & productivity, green shoots in investment is already tangible and a visible pick-up in credit growth was witnessed in the balance sheets of banks last year.
The crude oil scenario reminds one of the initial months of the first Modi Government when the prices went favourable and helped curb the growth of current account deficit (CAD). This time too, the Economic Survey believes the crude prices to fall during 2019-20 helping a push in consumption.
The general government fiscal deficit was seen at 5.8 pc in 2018-19, against 6.4 per cent in last fiscal. The foreign exchange reserves reached $422.2 billion towards June 2019.