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Economic Survey Calls for a Sustained 8% Growth Rate for India to Become a USD 5 Trillion Economy by 2024-25

The Economic Survey tabled by the Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman in Parliament today portends bright prospects for economic growth. The Survey says its theme is about enabling a “shifting of gears”, “to achieve the objective of becoming USD 5 trillion economy by 2024-25, as laid down by the Prime Minister”.  It says, for this “India needs to sustain a real GDP growth rate of 8%”. The Survey says that it departs from “traditional thinking by advocating a growth model for India that views economy as  being either in a virtuous or a vicious cycle, and thus never in equilibrium”.

The Survey says that it “makes the case for investment, especially private investment as key driver, that drives demand, creates capacity, increases labour productivity, introduces new technology and generate jobs”.  The Survey suggests that “Exports must form an integral part of the growth model because higher savings preclude domestic consumption as the driver of final demand.”

The Survey suggests that to tackle various economic challenges of demand, jobs, exports these elements are to be all complimentary and not as separate problems. The Survey states that these macro-economic elements exhibit significant complementarities, and may become a part for catalyzing the “economy into a virtuous cycle”.  The Survey presents “data as a public good, emphasizes legal reform, calls for policy consistency and for encouraging behavior change using principles of behavioral economics.”

The Economic Survey states the key ingredients should “include focus on policies that nourish MSMEs to create more jobs and become more productive, reduce the cost of capital and rationalize the risk-return trade-off for investments.”

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