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Sunday, 7 July 2019

The Hindu Analysis: 5 July, 2019


ECONOMIC SURVEY HIGHLIGHTS
• Note: These highlights are from the
hindu only....the whole Economic
Survey will be covered later.
What is Economic Survey
• The Department of Economic Affairs,
Finance Ministry of India presents the
Economic Survey in the parliament every
year, just a day before the Union budget.
• The Economic Survey is essentially:
o a review of the developments in the
Indian economy over the previous 12
months.
o a summary of the performance on
major development programmes,
o highlights the policy initiatives of the
government, and
o the prospects of the economy in the
short to medium term.
Economic Survey 2019
• The Economic Survey 2019 presented by
Chief Economic Adviser (CEA)
Krishnamurthy Subramanian focuses on
moving to a “virtuous cycle” of savings,
investments and exports to transform
India into a $5 trillion economy in the next
five years.
GDP
• According to the survey, India’s GDP is
forecast to expand by 7% in fiscal 2019-20,
slightly higher than the 6.8% in 2018-19.
Industry
• It is accounted for more than
50% of all organised firms in manufacturing
by number.
o Despite this, their contribution to
employment was just 14% and to
productivity a mere 8%.
o Large firms, on the other hand, are
just 15% in number but account for
75% employment and close to 90% of
productivity. Therefore, there is a need
to “unshackle” MSMEs and enable
them to grow into larger firms.
• Regarding employment, the Survey pointed
out that the general apprehension was that
a high investment rate would mean labour
would be substituted out by capital.
o This, the authors said, was an
incorrect assessment as shown by
the Chinese model.
Retirement Age and Total Fertility Rate
• Economic Survey 2018-2019 proposes
to raise retirement age.

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