New Delhi 

 

The Economic Survey, tabled by the Union Minister for Finance and Corporate Affairs Nirmala Sitharaman in the Parliament today just one day before the Budget 2019-20, lays down the strategic blueprint for fructifying the Prime Minister Narendra Modi’s vision of India becoming a $5 trillion economy by 2025 (#Economy@5trillion).

 

The theme of the survey is about enabling a “shifting of gears” to sustained economic growth for objective of $5 trillion by 2024-25. To achieve the vision of $5 trillion economy, India needs to shift its gears to accelerate and sustain a real GDP growth rate of 8%. The survey departs from traditional thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium. Rather than viewing the national priorities of fostering economic growth, demand, exports and job creation as separate problems, the Economic Survey views these macroeconomic phenomena as complementary to each other. 

 

The cover design captures the idea of complementary inter-linkages between these macroeconomic variables using the pictorial description of several inter-linked gears. The team for Economic Survey 2018-19 has been guided by “blue sky thinking.” The Survey adopts an unfettered approach in thinking about the appropriate economic model for India. This endeavour is reflected in the sky blue cover of the Survey.

 

Learning from the global financial crisis, the economy has been viewed as either in a virtuous cycle or a vicious cycle and therefore the concept of equilibrium economics has been disbanded. Second, rather than trying to tackle various economic challenges of demand, jobs, exports etc in silos, the Survey makes the case that these phenomena are all complimentary. Therefore, creating the virtuous cycle with investment, especially private investment, as the main driver can enable growth in each of these important macro variables.

 

In an uncertain world, three key elements are necessary: a vision, a strategic blueprint to achieve the vision, and practical tools to recalibrate constantly to the strategic blueprint. The Prime Minister has laid out the vision and Economic Survey 2018 -19 lays out the strategic blueprint to achieve that vision along with the tactical tools to stay on the path of the strategic blueprint. Among these, treating people as humans and not as robots as in classical economics, creating data as a public good, enhancing the legal system for enforcement of contracts, insuring consistency of policy with the blueprint are some tools that have been discussed, the Survey adds.

 

This year’s Survey also utilises advances in Behavioural Economics to address issues of gender equality, a healthy and a beautiful India, savings, tax compliance and credit quality. It recognises the role of social norms in the success of initiatives such as Beti Bacho Beti Padhao, Swacch Bharat Mission and Jan Dhan Yojana to effect behavioral change.