ECONOMIC SURVEY PRESENTED ON 31.1.2020 --HIGHLIGHTS
Economic Survey 2020 Highlights:
Economic Survey 2020 is out now
in PDF Download format. Have a look at the major highlights and detailed
analysis of Economic Survey 2019-20 here along with brief summary. Get to know
what Survey projects for GDP growth, Fiscal Growth, job creation plans and new
ideas to accelerate growth. Download Economic Survey 2020 PDF here.
RUPALI PRUTHI
FEB 1, 2020
09:12 IST
Economic Survey 2020 Highlights: The Chief Economic Advisor (CEA) Krishnamurthy V
Subramanian tabled the Economic Survey 2019-20 in the Parliament on January 31,
2019, just a day before the presentation of Union Budget 2020-21. Finance Minister
Nirmala Sitharaman will be presenting the Budget 2020 on February 1, 2020 to
make the public aware of the government finances and estimated revenue and
expenditure for 2020-21. The Economic Survey, on the other hand, talks about
the overall economic progress made in the previous fiscal year and the
challenges faced to achieve the targetted GDP Growth. Get here the
detailed analysis of the Economic Survey along with the highlights and brief
summary.
The Survey 2020 focuses on the theme of
integrating old with new through Trust in the economy; promoting pro-business
policies and creating wealth and job opportunities. The Survey projects India's
GDP growth at 6-6.5 percent in 2020-21. The Survey 2020 throws light on
new ideas to boost growth and accelerate wealth creation. These are –
Thalinomics, Adoption of China model, Trust and others. This annual document of
the Union Finance Ministry focuses on the implementation of various Government
Schemes and policies and their impact on the economy so far. Besides talking
about the macroeconomic and microeconomic factors, GDP growth rate, Inflation,
the Economic Survey 2019-2020 throws a light upon the major impact of
employment, agricultural policies and climate change on the Indian
Economy.
Theme of Economic Survey 2020
– “Enable Markets, Promote 'Pro-Business' Policy & Strengthen
'Trust' in Economy”
Key
Highlights of the Economic Budget 2020
10 New Ideas proposed by Economic
Survey 2019-20
India’s Overall Economic Performance in
2019-20: GDP, Inflation, Fiscal Developments, GST
- India witnessed a GDP growth of 4.8%
in the first half of 2019-20 amidst weakened global trade and demand
- Growth of Agriculture and allied
activities & Public administration, defence, and other services’ was higher
in the first half of 2019-20 in comparison to second half 2018-19.
- Current Account Deficit (CAD)
contracted to 1.5% of GDP in H1 of 2019-20
- Remarkable Foreign Direct Investment
(FDI) and increase of foreign exchange reserves
- Headline inflation mounted from 3.3%
in the first half of 2019-20 to 7.35% in December 2019-20 due to food inflation
rise
- Survey predicts 5% GDP growth for
2019-20 overall based on CSO’s first Advance Estimates
- Revenue Receipts registered higher
growth in H1 of 2019-20
- Gross GST monthly collections crossed
Rs 1 lakh crore for five times in 2019-20 till December 2019
GDP Growth in 2020-21: Economic Survey 2019-20 projects the GDP Growth of
6% - 6.5% in fiscal 2020-21.
Wealth Creation: Invisible Hand
Supported by Hand of Trust
The Economic Survey talks about the
need to bring openness in the market for the creation of wealth through
increased investment. In light of this, the survey points towards an Invisible
Hand that is supported by the Hand of Trust. It presents an amalgamation of old
and new; old in terms of ancient Indian tradition and new suggests the use of
FinTech in Indian Public Sector Banks. It calls for strengthening this invisible
hand through:
- Equal opportunities for new entrants
- Fair competition & ease doing
business
- Trade for job creation
- Scaling up of the banking sector
- Introduction of the idea
of trust as a public good
Entrepreneurship and Wealth Creation
The Survey calls for the creation of
wealth through:
- Entrepreneurship of the working class
- Pro-business policies to test the
power of competitive markets
- Elimination of policies that weaken
the markets
- Integration of Assemble in India into
Make in India
- Scaling up of the banking sector
- Privatization to foster efficiency
Pro-business versus Pro-markets
The Economic Survey says that India
needs more of pro-business policies and break away from pro-crony policies to
become a USD 5 trillion economy. The Survey says that till 2011, several Pro-Crony
policies were followed such as preferential allocation of natural resources.
These pro-crony policies majorly led to willful defaults which drained off the
banks.
|
Pro-Crony
Meaning: In Favour of a close friend or
companion
|
Undermining Markets: Is Government
Intervention required?
The Survey suggests restricted
government intervention in the markets. It lists out several instances where
the intervention of Government has adversely affected the market such as
imposing stock limits under Essential Commodities Act (ECA), 1955 that led to
increase in onion prices in 2019; regulation of drug prices under ECA;
intervention in the food grain market and so on. The government must analyse
and then decide whether its intervention is even required in a particular
market. This will directly benefit by encouraging investments and economic
growth.
Creation of Jobs and Growth
The Economic Survey calls for the
integration of “Assemble in India” with “Make in India” to create more jobs and
accelerate growth. The survey seeks to:
- Increase export market share to 3.5%
by 2025 and 6% by 2030
- Creation of over 4 crore rewarding
jobs by 2025 and over 8 crore jobs by 2030
This can be achieved by adopting
China-like policies such as export of goods majorly to rich markets.
Targeting Ease of Doing Business
India was ranked at 63rd position in
World Bank’s Doing Business 2019 rankings, a jump of 79 positions from 142nd rank
in 2014. However, the economy is still trailing in several parameters such as
Ease of Starting Business, Paying Taxes, Registering Property and Enforcing
Contracts.
The Economic Survey calls for close
coordination between the Logistics Divisions of Union Ministry of Commerce and
Industry, Union Ministry of Shipping, Central Board of Indirect Taxes and Customs
and the port authorities. There are some sectors that require a more focused
approach such as the tourism sector, manufacturing sector and others.
Golden jubilee of Bank Nationalisation
The year 2019 marked the golden jubilee
year of Bank Nationalisation. The Survey points out that the growth of Indian
Banking Sector has not been proportionate with the overall growth of the
economy. So far, only one Indian bank has made it to the list of Global Top 100
Banks. In 2019, a Rupee investment in public sector banks (PSBs) led to a loss
of 23 paise on an average. The Survey calls for making PSBs more efficient
through:
- Employee Stock Ownership Plan (ESOP)
for employees of banks
- Creation of an entity similar to that
of GSTN to aggregate data from all PSBs and ensure better monitoring of
borrowers through artificial intelligence and machine learning
Privatisation and Wealth Creation
The Economic Survey 2020 calls for
privatization to boost job and wealth creation. It examines the before and
after the performance of over 10 CPSEs that underwent strategic disinvestment.
The Strategic disinvestment in BPCL has led to an increase of over Rs. 30,000
crore wealth in India. Collectively, the net profit, net worth, return on
assets (ROA) & equity (ROE) have improved notably. The more aggressive
disinvestment is suggested for higher profitability.
Thalinomics: Economics of Plate of Food
in India
This year, the Survey throws a light
upon the price paid by a person for a Thali in India anywhere. The prices of a
vegetarian Thali have declined sharply since 2015-16; however, this price
increased in 2019-20. During 2006 – 2020, the affordability of Indian
vegetarian Thalis improved by 29% and affordability of non-vegetarian Indian
Thali improved by 18%.
Monetary Policy & Financial
Intermediation
- RBI’s Monetary policy stance remained
“accommodative” in 2019-20
- The Repo rate was cut by 110 basis
points in 2019-20 due to slower growth & lower inflation.
- Non Performing Advances (NPA) ratio
remained unchanged for Commercial banks at 9.3% during March-September 2019
- Credit growth declined of banks &
NBFCs declined.
Prices and Inflation
- CPI inflation increased to 4.1% in
2019-20 from 3.7% in 2018-19
- WPI inflation declined to 1.5%
in 2019-20 from 4.7% in 2018-19
- The major drivers of CPI inflation in
2019-20 were food and beverages, particularly vegetables and pulses
Sustainable Development and Climate
Change
- The Survey acknowledges that India is
rightly moving forward on the path of Sustainable Development Goals (SDG)
implementation. The states like Himachal Pradesh, Chandigarh, Kerala, and Tamil
Nadu came out as front runners in SDG India Index 2019.
- Apart from this, India hosted COP-14
of UNCCD which resulted in the adoption of “Delhi Declaration”
- India strongly committed itself to
implement the Paris Agreement at COP-25 of UNFCCC at Madrid, Spain.
- Indian Forest and tree cover
increased to 80.73 million hectare
- One of the major concerns is still
burning of agricultural residues that lead to high pollution levels and
deteriorates air quality.
- International Solar Alliance (ISA)
Agriculture and Food Management
- The Economic Survey states that the
largest proportion of the Indian population depends on agriculture for job
opportunities. However, the share of agriculture and allied sectors in Gross
Value Added (GVA) of India is continuously declining due to higher growth of
non-agricultural sectors.
- The GVA at Basic Prices of
‘Agriculture, Forestry and Fishing’ sector expected to grow by 2.8% for
2019-20.
- Livestock sector has grown at 7.9%
CAGR in the last five years. The income from Livestock has become a secondary
source of income for rural families.
- The Survey stresses on the
sustainability of food security by addressing the growing food subsidy bill and
revising the rates and coverage under NFSA.
Industry and Infrastructure
- The industrial sector has registered
a 0.6% growth in 2019-20 and 5% in 2018-19
- Fertilizer sector showcased a growth
of 4% in 2019-20
- Steel sector registered a growth of
5.2% in 2019-20
- Over 119 crore telephone connections
were provided until September 2019
- Report on National Infrastructure
Pipeline projects total investment of Rs 102 lakh crore on infrastructure from
2020 to 2025 in India
- Industrial growth is estimated at 2.5%
of fiscal 2019-20.
Employment, Social Infrastructure and
Human Development
- The Government’s expenditure on
social services such as health & education as a proportion of GDP increased
to 7.7% in 2019-20.
- India improved its position in the
Human Development Index by fetching 129th rank in 2018 from 130th in
2017.
- Total formal employment increased to
9.98% in 2017-18 from 8% in 2011-12.
- Gender disparity widened in the
labour market due to a decrease in the female labour force.
- Citizens’ access to health services
improved through Ayushman Bharat and Mission Indradhanush.
- Over 3.30 crore children & 87.18
lakh pregnant women have been vaccinated under Mission Indradhanush.
- In terms of houses, over 76% of
households in rural and 96% in urban areas had pucca houses.
|
Key points to note
|
|
The Economic Survey is tabled a day before the
presentation of Union Budget.
|
|
The Survey is prepared by the Finance Ministry's
Department of Economic Affairs.
|
|
The Chief Economic Advisor (CEA) of India is the
chief author of the Economic Survey.
|
|
It consists of Volume I, Volume II and
Statistical Appendix.
|
|
It details the state of Indian Economy, future
prospects and key challenges.
|
|
It reveals the true GDP growth achieved in the
past fiscal and projects the further GDP growth.
|
|
It talks about the job growth & annual
collection of the Goods and Services Tax (GST).
|
Economic Survey 2018-2019: A Summary
Theme: Shifting gears with Investment
as a key driver
The Economic Survey 2019 was focused on
achieving Prime Minister Narendra Modi’s vision of USD 5 Trillion Indian
Economy. The last year survey called for the adoption of behavioural economics
to “nudge” people towards expected behaviour. The Survey 2018-19 projected the
GDP growth at 7% for 2019-20. To achieve this growth, the Survey depicted
Private Investment as a key driver for the overall growth and job creation.
@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@
Post a Comment