BUDGET 2019: Economic Survey focuses on private industries for creating a 'virtuous cycle' of growth, to become $5 trillion economy

Changing focus of Modi government 2.0 from FDA to private sector, Ecomic Survey, prepared by CEA Krishnamurthy Subramanian and tabled in Rajya Sabha on Thursday, has suggested that to achieve aim of becoming a $5 trillion ecomy, a GDP growth rate of 8% must be maintained. It states that to do so focus must be on savings, investment supported by private industry which is a 'key demographic" in creating jobs.

"Such growth can be sustained by a "virtuous cycle" of savings, investment and exports. Private investment is "key driver" that drives demand, creates capacity, increases labour productivity - generates jobs.  Capital investment fosters job creation as production of goods, research & development and supply chains generate jobs," states survey.

n-Anglo Saxon 'equilibrium' approach

Differing Anglo-Saxon growth model for India, survey states that it views ecomic equilibrium differently ding that tritionally job creation, demand, exports and ecomic growth are tackled as different problems. Explaining how se macroecomic issues can be tackled by above mentioned 'virtuous cycle', survey states:

"By presenting data as a public good, emphasizing legal reform, ensuring policy consistency and behaviour changes through behaviour ecomics, Survey aims to enable a self-sustaining virtuous cycle," states survey.

BUDGET 2019 | Ecomic Survey Tabled In Parliament: 7% GDP Predicted In FY2019-20, Key Macro Takeaways From CEA Krishnamurthy Subramanian Here

Macroecomic issues in survey

survey in its heline projection has pegged India's GDP growth for ongoing 2019-20 fiscal at 7.0%, alongside a number of or key macro statistics and forecasts.

As mentioned above, Ecomic survey was tabled, first in Rajya Sabha, and projects that GDP growth for ongoing fiscal will rise to 7.0% versus 6.8% in fiscal that just ended, meaning that India would remain fastest-growing major ecomy in world. It also termed macroecomic condition as 'stable' for same period, holding that structural reforms of last few years are continuing to enable growth.

Ecomic Survey also outlined that investment rate - likely to be key to what emerges from Budget on Friday, seems to have bottomed out, with details likely to come to fore in due course.

BUDGET 2019: CEA Krishnamurthy Subramanian's Ecomic Survey To Be Tabled In Parliament A Day Ahe Of Modi 2.0's First Union Budget

What is in Ecomic Survey?

Ecomic Survey is a survey that outlines challenges and gives a report of ecomic performance. survey document has two parts. One part consists of commentary on state of ecomy, which is released before Union Budget. or part carries key ecomic statistics and data, which is tabled in July or August. This split in presentation took effect after Union Budget was moved from last working day of February to first day of month in 2017. Ecomic Survey serves as a useful policy document since it also contains policy ideas, key statistics on ecomic parameters and in-depth research on macro and sectoral trends. Often, survey serves as a policy guideline for Union Budget. However, its recommendations are t binding on government.