ECONOMIC SURVEY 2020

          The Economic Survey 2019-2020 was presented on 31st January, 2020 by the Chief Economic Advisor (CEA) Krishnamurthy V Subramanian. The theme for this year's survey was "Integrating old with new through trust in the economy; promoting pro-business policies and creating wealth and job opportunities". The Survey has given a lot of focus on wealth creation. 
         All the growth parameter is showing sign of slowdown. Here is a summary of how things stand currently at the moment in the economy.

           Lets see what the Survey says :

  • Wealth creation benefits all - The survey has given most emphasis on wealth creation and says that it act as as growth multiplier. When wealth is created, its get distributed and everyone benefits from it.
  • Entrepreneurship and wealth creation - The survey calls for creation of wealth through entrepreneurship. Entrepreneurship mostly on the level of working class so that wealth is created on grassroot level and poor people benefits. India currently ranks 3rd in number of new firms created and so we have a lot more potential to improve on this point.
  • Wealth creation : Invisible hand supported by the hand of trust - Invisible hand reflects openness in the economic transaction and hand of trust refer to ethical and philosophical dimension. It also talks about - equal opportunities for new entrant, introduction of the idea of trust as a public good, fair competition and ease of doing business.
  • Pro-business vs Pro-market - The survey says that India needs more pro-business policy. Till 2011, a lot of pro-crony policies were followed such as discretionary allocation of natural resources, crony lending that led to wilful default wherein promoters collectively siphoned off wealth from banks. In order to achieve $5 trillion economy by 2024-25, India need to promote pro-business policies and do away with pro-crony policies. 
  • Targeting Ease of Doing Business - This is one parameter where India is doing good. We were ranked 142nd in 2014 while our rank was 63rd in 2019. An increase of 79 position in 5 years. Despite this India is still trailing in few parameters such as ease of starting business, paying taxes, registering property and enforcing contracts. If India wants to enter the top 50 rank then these few parameters have to be improved significantly.
  •  Banking sector sub-skill compared to the economy - 2019 was celebrated as Golden Jubilee of bank nationalization. The banking sector is not growing proportionately with the economy since 1969. We have only 1 bank in the global top 100 bank (SBI - 55th rank) and so the world's 5th largest economy has only 1 bank in top 100 banks. China has 18 banks in global top 100 banks. Given the size of our economy, we should have atleast 6 banks in the list. Possible solution to improve the efficiency of PSBs are :                                                                                          - Employee Stock Option Plan (ESOP) for PSB employees                                                                                                         - Representations on board proportionate to the blocks held by employees to incentivize employees and align their interest with that of all shareholders of banks.                                                                                                                             - Creating a entity similar to GSTN to monitor borrowing through AI and Machine Learning.
  • Undermining market : Is Government intervention required - The survey suggests restricted government intervention in market as government intervention often well intended discourages investment and undermines the market ability leading to outcome not intended. The government must analyse and then decide whether intervention is required in a particular market or not.
  • Creation of Job and Growth - The survey suggest integration of "Assemble in India" with "Make in India" and also it suggests to follow China-like policy to export majorly to rich economies. India has a huge opportunity to chart a China-like, labour-intensive, export trajectory.
  • Thalinomics : The Economics of a plate of food in India - During 2006-07 to 2019-20 the affordability of a vegetarian thali improved by 29% whereas affordability of a non-vegetarian thali improved by 18%. Although the price decreased during this period but this price increased in 2019-20.
  • Privatization and wealth creation - The survey gives emphasis on privatization to boost job and wealth creation. The strategic disinvestment of HPCL led to a wealth creation of around Rs. 33000 crore. It also aggressive disinvestment of CPSEs to bring higher profitability, promote efficiency, increase competitiveness and promote professionalism.
  • Monetary policy and financial intermediation - Monetary policy remained accomodative in 2019-20. Repo rate was cut by 110 basis point 2019-20 due to slower growth rate and lower inflation, however it remained unchanged in december 2019.                                                                                                                                                                                  - Non-Performing Advances ratio remained unchanged for commercial banks at 9.3% during March-September 2019. Whereas it increased slightly for NBFCs.                                                                                                                             - Credit growth rate of banks and NBFCs declined.
  • Industry and Infrastructure - The industrial sector is expected to grow 2.5% in 2019-20. The fertilizer sector and steel sector is expected to grow at 4% and 5.2% respectively in 2019-20. Apart from this, total telephone connections in India touched 119.43 crore as on 30th September, 2019.
  • Agriculture and Food Management - The sector which employees the largest proportion of population seems to continuously decline.


  • Sustainable development and Climate change - The survey acknowledge that India is moving forward in the sustainability path very well with right initiatives and in doing so Kerala, Himachal Pradesh, Tamil Nadu and Chandigarh have came out as front runner whereas Assam, Bihar and Uttar Pradesh are achievers.                                - India hosted COP-14 of UNCCD which adopted the Delhi declaration                                                                                    - Forest cover in India increased to 80.73 million hectare, which is 24.56% of the geographical land of India.                  - One concern that still stays is the burning of agricultural residues that lead o high pollution and deteriorates air quality
  • Employment, Social Infrastructure and Human Development - The government's expenditure on on social services such as health and education in to 7.7% in 2019-20.                                                                                                                   - Human Development Index improved from 130th in 2017 to 129th in 2018.                                                                         - With 1.34% average annual HDI growth, India is among the fastest improving country.                                                     - Gender disparity widened due to decline in female labour force participation in rural area.                                               - About 76% of the household in rural area and 96% of the household in urban area had pucca house

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