Economic Survey 2019 Key Highlights: Calls for change from ‘Beti Bachao Beti Padhao’ to ‘BADLAV’
Economic Survey 2019 key highlights: The Survey has projected the real GDP growth at 7 percent for the year 2019-20, considering the expected pickup in the growth of investment and consumption.
The Economic Survey 2018-19, the first survey of Modi 2.0 Government, was tabled in Parliament today by the Union Finance Minister Nirmala Sitharaman. The Survey has projected the real GDP growth at 7 percent for the year 2019-20, considering the expected pickup in the growth of investment and consumption. As per the April 2019 World Economic Outlook Report of International Monetary Fund (IMF), India’s GDP is projected to grow even higher at 7.3 percent in 2019. Check here the key highlights of the Economic Survey 2018-19:
Key Highlights of the Economic Survey 2018-19
1. Shifting gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand
• As per the Economic Survey 2019, the pathways for drop opened up in the last five years; and benefits of growth and macroeconomic stability reached to the bottom.
• Sustained real GDP growth rate of 8 percent is needed for a USD 5 trillion economy by 2024-25.
• Virtuous Cycle of savings, investment and exports supported by a favorable demographic phase is required for sustainable growth.
• Private investment is the key driver for demand, capacity, labor productivity, new technology, creative destruction and job creation.
• Survey views the economy as being either in a virtuous or a vicious cycle, and never in equilibrium.
Key ingredients for a self-sustaining Virtuous Cycle
|• Presenting data as a public good|
• Emphasizing legal reforms
• Ensuring policy consistency
• Encouraging behavior change using principles of behavioral economics
• Nourishing MSMEs to create more jobs and become more productive
• Reducing the cost of capital
• Rationalizing the risk-return trade-off for investments
Economic Survey- How to Download
Policy for Real People, Not Robots: Behavioral Economics of “Nudge”
• Decisions by real people diverge from impractical robots theorised in classical economics
• Behavioral economics provides insights to push or nudge people towards desirable behavior
• Key principles of behavioral economics: Emphasising the beneficial social norm; Changing the default option; and Repeated reinforcements.
Survey calls to create an aspirational agenda for social change by using insights from behavioral economics. Have a look:
• From ‘Beti Bachao Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi)
• From ‘Swachh Bharat’ to ‘Sundar Bharat’
• From ‘Give it up” for the LPG subsidy to ‘Think about the Subsidy’
• From ‘Tax evasion’ to ‘Tax compliance’
Reorientation of policies for MSME Growth: “Nourishing Dwarfs to become Giants”
• Here, “Dwarfs” refer to the firms having less than 100 workers despite being over 10 years old. These dwarf firms account for over 50 percent of all organised firms in manufacturing. Their contribution to employment is only 14 percent and just 8 percent to productivity.
• Large firms with more than 100 employees account for 75 percent employment and around 90 percent to productivity. These large MSMEs firms account for just 15 percent of the total organised sector by number.
• Survey throws light upon the growth of the MSME sector for achieving greater profits, boosting job creation and enabling enhanced productivity.
• Survey also focuses on tourism, hotel & catering, transport, real estate, entertainment sectors etc., for job creation.
• It calls for enabling MSMEs to grow by way of:
– A sunset clause of less than 10 years for all size-based incentives
– Deregulating labor law restrictions to create more jobs
– Re-calibrating Priority Sector Lending (PSL) guidelines for direct credit flow to young firms