CEA sees growth rebounding to 6%

CEA sees growth rebounding to 6%

1. Growth estimates for the present fiscal
➢ The Economic Survey notes that there has been a slowdown with the economy poised to grow at
just 5% in 2019-20, which would be the slowest in 11 years.
➢ The survey has attributed the deceleration to slower global growth and domestic financial sector
woes.
2. Estimate for the next fiscal
The Economic survey expects GDP growth to revive from the 5% estimated for the current fiscal to a
range between 6 – 6.5% in the next fiscal.
3. Important observations
➢ India’s economy is estimated to be the fifth-largest in the world.
➢ The center’s gross fiscal deficit as a share of GDP has come down in the past five years. It now
stands close to 3.3%.

Suggestions:


➢ The Survey hints at going easy on fiscal deficit targets to revive growth.
➢ The survey calls for undoing/easing of the multiple regulations stifling the Indian industry’s global
competitiveness.
➢ The survey talks about encouraging units and sectors which import inputs, assemble them and re-
export them, even if there is very little value-addition at home. The survey notes that focusing on
just six such ‘network’ sectors could generate 4 crore jobs by 2025 and 8 crore jobs by 2030 and
reverse the country’s poor job creation rate.
➢ The survey noting the economic history of India, calls for moving away from the misplaced
socialistic instincts. The Survey delves into texts from 4th century BC and cites Tamil poet
Tiruvalluvar’s Thirukural and Kautilya’s Arthashastra to bring out the virtues of the invisible hand of
the market combined with trust in wealth creation.
➢ It calls upon the policymakers to acknowledge the role of entrepreneurs in wealth creation, instead
of demonizing them.
➢ The survey notes that there is a need for larger banks in India to sustain the vision of a $5 trillion
economy.

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