Union Budget 2020: 'Economic Survey inspiring; pro-business policies will rebound growth trajectory'

 By Dr D K Aggarwal,

President, PHD Chamber of Commerce and Industry

While appreciating the Economic Survey 2019-20 said that Economic Survey is providing a clear direction in the economic thought process of the government and its determination to achieve a US$5 trillion economy.

The Economic Survey 2019-20 pegs India’s growth at 6-6.5% in FY2021 with growth revival expected from second half of FY2021.

Government’s commitment to carry the reform process forward indicates that the robust growth trajectory is not far away. The focus on maintaining consistency in policy making speaks volume on government’s agenda to rejuvenate economic growth of the country, said Dr Aggarwal.

The vision of the Economic Survey on strengthening the invisible hand of the market and supporting it with a hand of trust is in consonance with the idea of creating strong frameworks for enhancing the economic growth trajectory , said Dr D K Aggarwal.

The strengthening the invisible hand of markets with pro business policies and minimum government intervention would go a long way to build confidence of the policy makers, investors and the consumers, said Dr D K Aggarwal.

The vision of the government on the banking sector in proportion to the size of the economy is appreciable and forward looking as banking sector is a backbone of any economy, said Dr Aggarwal.

The Economic Survey suggests increasing exports by specialising at large scale in labour intensive sectors, focussing on enabling assembling operations at mammoth scale in network products and exporting primarily to markets in rich countries. These steps are highly appreciable as enhancing exports trajectory would facilitate in rejuvenating economic growth, said Dr Aggarwal.

The survey recongnizes the contribution of each and every unit that can make a big difference at the aggregate level as the Survey notes that a 10 percent increase in registration of new firms in a district yields a 1.8 % increase in Gross Domestic District Product, said Dr Aggarwal.

The Economic Survey suggests that with the integration of Assemble in India for the World in to Make in India, the share of exports can be raised to about 3.5 % by 2025 and 6 % by 2030 and more than 8 crore jobs can be created by 2030, said Dr D K Aggarwal.

At this juncture, bold and flexible reforms in land and labour would be crucial to attract domestic and foreign investors and create employment opportunities for millions of growing young workforce, said Dr Aggarwal.

The transmission of the policy rate cut by the banking sector in terms of reduced lending rates would be crucial to boost liquidity and induce demand in the country, added Dr Aggarwal.

The Economic Survey highlights the report of the Task Force on National Infrastructure Pipeline released recently which projects total infrastructure investment of Rs. 102 lakh crore during the period FY 2020 to 2025 in India, said Dr D K Aggarwal.

Increased expenditure of the government to enhance consumption demand along with implementation of Rs 102 lakh crore National Infrastructure Pipeline (NIP) has the potential to push economic growth trajectory to more than 8% in the next 3 years, said Dr D K Aggarwal.

The Survey notes the various reasons for lower growth of agricultural productivity such as lower level of mechanization, skewed pattern of regional distribution of agricultural credit, among others. For doubling farmers’ income, a properly designed market support scheme for agricultural produce and dismantling of barriers to markets for farmers must be pursued, said Dr Aggarwal.

APMC should be dismantled and e-NAM should become the vehicle for farmers’ produce across the states, added Dr Aggarwal.

We appreciate the performance of social sector schemes of the Government particularly the women empowerment, said Dr D K Aggarwal.

It is inspiring to know that total formal employment in the economy increased from 8 % in 2011-12 to around 10% in 2017-18, said Dr Aggarwal.

We are elated to know that the reform measures of the government have started bearing fruit as the share of regular wage/ salaried employees has increased by 5 percentage points (23%) with a significant jump of around 2.6 crore new jobs in this category, said Dr D K Aggarwal.

The Economic Survey notes that the expenditure on social services (health, education and others) by the Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 7.7% in 2019-20 (BE).

Going ahead, we expect further increase  in health and education expenditure to the level of 10% of GDP by 2022, said Dr. D K Aggarwal.

A robust analysis of current skill gaps to promote effective skill development should be undertaken to create more and more employment opportunities for the growing workforce in the country, said Dr Aggarwal.

At judiciary reforms front, vacancies of judges should be filled up in order to speed up the justice delivery system, said Dr Aggarwal.

Going ahead, we look forward to a pragmatic budget which focuses on enhancing consumption demand and investments to refuel economic growth trajectory, said Dr D K Aggarwal.