For 2020-21, Economic Survey pegs India's growth at 6-6.5%
What's the story
A day before Finance Minister Nirmala Sitharaman will present the Union Budget, the Economic Survey was tabled in the Parliament today. Prepared by Chief Economic Advisor Krishnamurthy Subramanian and his team, the Economic Survey projected India's growth at 6-6.5% in the fiscal year starting April 1, 2020, and ending on March 31, 2021. The growth for the ongoing fiscal year was pegged at 5%.
Statement
Subramanian congratulated the team for preparing the Economic Survey quickly
Before the survey was tabled, Subramanian praised his team for presenting the second survey in six months. "Our team has done a lot of hard work this time around also. The team has prepared the second economic survey in six months. The entire credit goes to them," he said. It's expected that the government will relax the fiscal deficit target in the budget.
Findings
Economic Survey tried explaining reason behind economic slump
Since India is going through a historic slump, all eyes are set on the Union Budget to kickstart the economy. And the Economic Survey attempted to explain why the economy is struggling. The survey said, "The deceleration in GDP growth can be understood within the framework of a slowing cycle of growth with the financial sector acting as a drag on the real sector."
Suggestions
"Assemble in India for world" will create jobs, said survey
To boost growth, the Economic Survey gave some suggestions. It said attention should be given to manufacturing such as "assemble in India for the world" as it will create more jobs. Removing red tape at ports will improve exports, the survey underlined. It also said steps should be taken to ease the starting of businesses, registering property, paying taxes, and enforcing contracts.
Inflation
Pre-budget survey said inflation fell in 2019
Further, the survey said wealth can only be distributed after it is created. Wealth-creators should be treated with respect, the survey said. Subramanian's survey lamented that despite the government's interventions, prices of commodities like onions didn't stabilize. But it noted that inflation has seen a dip from 3.2 percent in April 2019 to 2.6 percent in December 2019.
Real Estate
Real estate companies must clear their inventories: Economic Survey
According to the Economic Survey, the real estate companies should bring down the prices of homes to clear their inventories. It explained that once home sales go up, it will clear balance sheets of banks and non-banking financial companies. If the government spends on infrastructure, private investment may get crowded. The survey said there is a lot of room for rationalizing subsidies especially food.