Here are the key highlights of the economic survey, that was tabled in Parliament by Union Finance Minister, Nirmala Sitharaman:
1) The GDP for 2020-21 was pegged at 6% to 6.5%.
2) Economic Growth
a) India's GDP growth moderated to 4.8 % in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
b) Real consumption growth has recovered in Q2 of 2019-20, cushioned by a significant growth in government final consumption.
c) Growth for 'Agriculture and allied activities' and 'Public administration, defense, and other services' in H1 of 2019-20 was higher than in H2 of 2018-19.
d) India's external sector gained further stability in H1 of 2019-20.
e) Current Account Deficit (CAD) narrowed to 1.5 % of GDP in H1 of 2019-20 from 2.1 % in 2018-19.
3) India's aspiration of becoming a $5 trillion economy depends critically on:
Promoting 'pro-business' policy that unleashes the power of competitive markets to generate wealth.
Weaning away from 'pro-crony' policy that may favour specific private interests, especially powerful incumbents.
4) Need for efficiently scale up the banking sector.
5) Introducing the idea of trust as a public good, which gets enhanced with greater use.
6) Survey suggests that policies must empower transparency and effective enforcement using data and technology.
7) New firm creation in India increased dramatically since 2014:
2.2 % cumulative annual growth rate of new firms in the formal sector during 2014-18, compared to 3.8 % during 2006-2014.
About 1.24 lakh new firms created in 2018, an increase of about 80 % from about 70,000 in 2014.
8) Pro-crony policies such as discretionary allocation of natural resources till 2011 led to rent-seeking by beneficiaries while competitive allocation of the same post 2014 ended such rent extraction. Similarly crony lending that led to wilful default, wherein promoters collectively siphoned off wealth from banks, led to losses that dwarf subsidies for rural development.
9) Debt waivers: Analysis of debt waivers given by States/Centre:
a) Full waiver beneficiaries consume less, save less, invest less and are less productive after the waiver, compared to the partial beneficiaries.
b) Debt waivers disrupt the credit culture.
c) They reduce formal credit flow to the very same farmers, thereby defeating the purpose.