The Economic Survey of India 2019, tabled in the Parliament on Thursday, had one core idea at its base – making India a $5-trillion dollar economy by FY25. In order to achieve the target, India has to grow at 8 percent per annum in the next couple of years, states the report prepared by Chief Economic Adviser KV Subramanian.
The Survey also predicted a 7 per cent GDP growth rate in FY20 basis stable macroeconomic conditions, and an expected recovery in the second half of the current year. Besides, it envisages a growth rate rebound from a 5-year-low.
Interestingly, the Economic Survey also predicted fiscal deficit at 5.8% in FY19 against 6.4% in FY18. The prediction is much higher than the revised budget estimate of 3.4%.
Besides, the Finance Ministry expects an uptick in investment rate in FY20 spurred by improved demand and higher credit growth. Oil prices are expected to decline in FY20, perhaps giving a big boost to the Indian economy which has relied on oil imports, according to the Economic Survey 2018-19.
The survey hinted at an accommodative stance by the RBI’s Monetary Policy Committee in FY20. Such a stance can boost India’s consumption story.
Meanwhile, the Economic Survey pinned the blame for the economic slowdown in the January-March quarter on poll-related uncertainties in the country.
Here are some of the key highlights of Economic Survey 2018-19:
- FY20 GDP growth seen at 7%
- Stress in NBFC sector a reason for FY19 slowdown
- Political stability should push Economy going ahead
- Govt stood with its fiscal consolidation path in FY19
- Accomodative MPC policy to help cut real lending rates
- Decline in NPAs should push up CAPEX cycle
- Oil prices seen declining
- Farmers may have produced less in FY19 on food price fall
- Jan-March economic slowdown due to poll-related activities.GDP growth in Jan-March quarter was 5.8%
- India's GDP average at 7.5% over the last 5 years
- Investment rate seen higher in FY20 on higher credit growth
- Crude could see upward pressure as growth slows globally
- Aggressive export strategy should be part of investment-driven model
- Yields impacted due to tight liquidity since September 2018
- Uncertainty over trade tension, lower global growth may hit exports
- Fiscal front to face challenges from slow growth, GST and farm schemes
- Govt policy expected to lift more restrictions from FPI inflows
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