New Delhi: The Economic Survey for 2018-19, tabled by Finance Minister Nirmala Sitharaman in Parliament on Thursday, a day before unveiling of her first budget, outlines a strategic blueprint to achieve Prime Minister's vision for $5 trillion economy by 2024-25.
"India needs to sustain a real GDP (gross domestic product) growth rate of 8%," the survey said, even while admitting the GDP growth has slipped from 7.2% in 2017-18 to 6.8% in 2018-19 and is projected to remain still low at 7% this financial year.
The survey is putting all hopes on private investments as the key driver for demand, capacity, labour productivity, new technology and job creation. The survey lays stress on nourishing the MSMEs (mini, small and medium enterprises) to create more jobs.
The Survey takes a note of "Dwarfs" -- a term coined for firms with less than 100 workers accounting for more than half the organised firms in manufacturing but contributing only 14% employment and mere 8% productivity.
In this context, the survey calls for unshackling all MSMEs by deregulating labour law restrictions to create significantly more jobs.
The survey looks for job creation coming in a big way from the service sectors such as "tourism, with high spill over effect on other sectors such as hotel & catering, transport, real estate, and entertainment."
Noting how policy uncertainty in India over the last one decade affected investments, the survey proposes reduction in the economic policy uncertainty through "consistency of actual policy with forward guidance.’’
The report also unfolds the government's new agenda for social change that moves from "Swachh Bharat" to "Sundar Bharat," from "Tax evasion" to "Tax compliance", from "Give up" LPG subsidy to "Think about the subsidy" and from "Beti bachao beti padhao" to "Badlav" (Beti Aapki Dhan Lakshmi aur Vijay Lakshmi).
It envisages moving from "Swachh Bharat" to "Sundar Bharat" via "Swasth Bharat" and talks of redesigning a minimum wage system in India for inclusive growth that was cleared by the Union Cabinet only on Wednesday to fix a national floor minimum wage, forcing the states not to fix minimum wages at lower rates.
Turning to the state of economy in 2018-19, the survey stresses that India is still the fastest growing major economy and notes that the investment growth is recovering since 2017-18, picking up from 8.3% in 2016-17 to 9.3% next year and further to 10% in 2018-19.
It says the banking system has improved as the non-productive accounts (NPA) ratios declined and credit growth accelerated as the banks recovered Rs 50,000 crore from the previous NPA.
The survey also credited the government for the inflation based on the CPI’s continued declining trend for the fifth straight financial year, remaining below 4% in the last two years while food inflation continued to decline for the fifth financial year, remaining below 2% in the last two consecutive years.