$5 trillion economy possible? Subramanian Swamy gives his opinion before Budget 2020

BJP's Dr. Subramanian Swamy opined on possibility of India reaching $5 trillion target by 2024, just hours ahe of Finance Minister Nirmala Sitharaman's Union Budget 2020 presentation. Responding to a Twitter query, BJP leer ted that anything is 'possible' in ecomic, however, in contrast also stated that it is t 'probable' to achieve target. To reach benchmark of $5 trillion, Swamy said that re needs to be a 18.6% growth in GDP per year, a 13.8% rise than current number. 

In a tweet, he said, "w since only 4 years to go it needs 18.6% per year GDP growth rate. Possible? Anything is ecomics is possible. Probable? !"

Chief Ecomic visor Krishnamurthy Subramanian on Friday, presented Ecomic Survey 2020 which spoke of how difficult 2019 was for Indian ecomy. In Survey's volume-2 - 'State of Ecomy', it details how world's growth shrunk to 2.9% in 2019 due to protectionist tendencies. Amidst this global slowdown, India too has witnessed a GDP slump to 4.8% as opposed to 6.2% which was expectation.

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Which factors pulled down India's growth?

Listing factors which pulled down Indian ecomy, Ecomic Survey states that  decline in real fixed investment due to sluggish demand was main reason behind declined growth in second half (H2) of 2018-2019 and first half (H1) of 2019-2020. Moreover, imports contracted more sharply than exports while inflation rose from 3.3% to 7.4% by December 2019 due to temporary increase in food inflation - suggesting demand pressure. contribution of industrial activities to GVA has also declined from 2009-14 to 2014-19 due to slump in Munaufacturing sector and slump in 'Agriculture and allied' areas due to relatively higher growth performance of tertiary sectors.

In an attempt to boost demand, 2019-20 has witnessed significant easing of monetary policy with repo rate having been cut by RBI by 110 basis points, implementation of  Insolvency and Bankruptcy Code (IBC) and easing of credit for stressed real estate and n-Banking Financial Companies (NBFCs) sectors. Based on first vance Estimates of India’s GDP growth for 2019-20 recorded at 5 per cent, an uptick in GDP growth is expected in H2 of 2019-20, states Ecomic Survey. It also vises government to use its strong mandate to introfduce reforms to strongly rebound in 2020-21. survey also estimated that based on  India's growth with macroecomic stability over last five year (Avg GDP: 7.5%, Inflation: 4.5%), ecomy can rebound to $5 trillion goal.

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