The Economic Survey on tabled on Thursday, a day before the Union Budget 2019 presentation, reveals Chief Economic Adviser Krishnamurthy Subramanian's plan to making India a $5-trillion economy. The survey gives an idea of the economy's performance in the last one year and where the country is placed in terms of growth.
With growth at the core of the Economic Survey, Subramanian said that he expects the Indian GDP (gross domestic product) to grow at 7 percent in the financial year 2019-20, and also said that this higher growth (from the earlier estimated 6.8 percent) will come in the wake of the stable macros. He further said that to become a $5 trillion economy by 2025, India needs to sustain a GDP growth at the rate of 8 percent.
The survey has attribued the January-March 2019 slowdown in GDP mainly to oil-related uncertainty. It also said the NBFC (non-banking financial sector) stress also made a significant dent to growth.
Subramanian said oil prices have been declining in FY20. This and the political stability induced after Modi winning another term as the Prime Minister with strong majority will help "boost animal spirits going forward."
The survey also pointed out that the government stood by the path of fiscal consolidation in FY 19 and the decline in NPAs (non-performing assets) should help push capex cycle from here.
It also said that an accommodative monetary policy will also help cut real interest rates.
A fall in prices in the last fiscal year demotivated the farmers, thus declining farm production as well share of manufacturing in the informal sector. The survey also said that the rural wages growth has been seen increasing since mid-2018.