Published: Fri, July 05, 2019
Markets | By Otis Pena

Economic Survey projects 7% GDP growth in 2019-20

Economic Survey projects 7% GDP growth in 2019-20

Sustained 8 per cent growth needed to become a Dollars 5-trillion economy by 2024-25.

Economic Survey 2019: The government puts major focus on manufacturing, among other sectors, and has been running the Make in India programme.

The government's economic survey also says India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector.

The benchmark policy rate was first hiked by 50 basis points (bps) and later reduced by 75 bps due to weaker than anticipated inflation, growth slowdown and softer worldwide monetary conditions, Finance Minister Nirmala Sitharaman said while tabling the survey in Parliament.

But for India to become a $5 trillion economy - more than double the current size by 2024-25 - it needs to sustain a real Gross Domestic Product (GDP) growth rate of 8 per cent, which global experience suggests is possible only through a sustained "virtuous cycle" of savings, investment and exports.

The Economic Survey also highlights a large number of social protection schemes taken up by the government during the last five years as a part of its commitment to provide social security to the people of the country.

USA govt staff told to continue blacklisting Huawei
With this last decision, many United States companies can now resume trade operations with the Chinese company. Huawei warned last month that the U.S. ban could cost it $30 billion in lost sales over the next two years.

The general government deficit is defined as the balance of income and expenditure of government, including capital income and capital expenditure.

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.

The survey noted that the current account deficit increased from 1.8 per cent of GDP in 2017-18 to 2.6 per cent in April-December period in 2018-19, largely due the rise in worldwide crude oil prices.

The current account deficit (CAD) in the economy increased from 1.9% of GDP in 2017-18 to 2.6% in April-December 2018. The trade deficit increased from US$ 162.1 billion in 2017-18 to US$ 184 billion 218-19. He added that there were no sector wise growth projections. As per the 3rd Advance Estimates released by Ministry of Agriculture & Farmers Welfare, the total production of foodgrains during 2018-19 is estimated at 283.4 million tones in 2017-18 (final estimate).

The survey acknowledges this, pointing out that expecting high export growth in the next year is unlikely.

"Rural wages growth which was declining seems to have bottomed out and has started to increase since mid-2018".

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