The Economic Survey 2018-19 was announced on July 4, 2019, by Ms Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, Government of India. The Survey forecasts a growth rate of 7 per cent for FY20, as compared to the growth rate of 6.8 per cent in FY19. Focus on enabling Micro Small and Medium Enterprises (MSMEs) to grow for achieving greater profits, job creation and enhanced productivity. To be an economy of US$ 5 trillion by 2024-2025, the sustainable real GDP growth rate of 8 per cent needed.  

Key Highlights:

Fiscal Deficit:

• Fiscal deficit in FY19 ended with 3.4 per cent of GDP and debt to GDP ratio of 44.5 per cent (Provisional).
• Total Central Government expenditure fell by 0.3 per cent of GDP, in 2018-19 over 2017-18:

• The target is to achieve fiscal deficit of 3 per cent of GDP by FY21 and debt of central government to 40 per cent of GDP by FY25.

GDP Growth:

• The expected growth rate of GDP is 7 per cent for 2019-20.
• The GDP growth is 6.8 per cent in 2018-19 compared to 7.2 per cent in 2017-18.
• GVA growth at basic prices is expected to be 6.1 per cent in 2017-18

Inflation and monetary policy:

• Average retail inflation, measured by Consumer Price Index (CPI), in 2018-19 seen at 3.4 per cent.
• Average Wholesale Price Index (WPI) inflation, in 2018-19 seen at 4.3 per cent from 3.0 per cent in 2017-18.

External Sector:

• The current account deficit has declined to reach about 2.1 per cent of GDP in FY2019.
• During FY2019, exports grew 12.5 per cent to US$ 330.18 billion, while imports decreased by 15.4 per cent to US$ 514.29 billion.
• Foreign Exchange Reserves stood at US$ 412.9 billion in 2019, which was US$ 424.4 billion in 2018
• Industrial growth rate was valued at 6.9 per cent in 2018-2019, higher than 5.9 per cent in 2018.

Performance of key sectors:

Agriculture and food management:

• The growth rate in Gross Value Added (GVA) by the agriculture and allied sectors improved from a negative 0.2 per cent in 2014-15 to 6.3 per cent in 2016-17 but decelerated to 2.9 per cent in 2018-19.
• Participation of women in agriculture increased to 13.9 per cent in 2015-16 from 11.7 per cent in 2005-06 and their concentration is highest (28 per cent) among small and marginal farmers.
• In fisheries sector, India is the second largest producer in the world and in dairying, India is the largest producer of milk.

Industries, corporate and infrastructure sector:

• Growth rate of 4.3 percent registered by overall index of eight core industries in 2018-19.
• Assessed by the World Bank Doing Business (DB) Report, India’s rank has improved by 23 and reached to 77th position in 2018-19 among 190 countries.
• In 2018-19, rail freight and passenger traffic grew by 5.33 per cent and 0.64 per cent respectively as compared to 2017-18.
• Road construction grew at the rate 30 km per day in 2018-19 compared to 12 km per day in 2014-15.
• The installed capacity of electricity has increased to 3,56,100 MW in 2018-19 from 3,44,002 MW in 2017-18.
• Total telephone connections in India touched US$ 16.93 million in 2018-19

MSME Growth by Restructuring policies:

• Large firms (more than 100 employees) account for 75 per cent employment and close to 90 per cent of productivity in the face of accounting for about 15 per cent by number.
• Releasing MSMEs and allowing them to grow by way of:
  • For high employment elastic sectors to young firms to direct credit flow by re-adjusting Priority Sector Lending (PSL) guidelines.
  • A sunset clause of less than 10 years, with necessary grand-fathering, for all size-based enticements.
  • More jobs are created by deregulating labour law restriction.
• Service sectors such as tourism, with high spillover effects on other sectors such as hotel & catering, transport, real estate, entertainment etc. for job creation.

From Swachh Bharat to Sundar Bharat via Swasth Bharat: An Evaluation of the Swachh Bharat Mission:

• Definite health benefits brought about by Swachh Bharat Mission (SBM).
• 93.1 per cent of the households now have access to toilets.
• 100 per cent Individual Households Latrine (IHHL) Coverage in 30 states and UTs.
• Financial savings from a household toilet exceed the financial costs to the household by 1.7 times on average and 2.4 times for poorest households.
• Environmental and water management issues need to be incorporated in SBM for sustainable upgrades in the long-term.
   

Reforming a Minimum Wage System in India for Inclusive Growth:

• Survey recommends a well-designed minimum wage system as an effective tool for protecting workers and improving poverty.
• Present minimum wage system in India has 1,915 minimum wages for a variety of scheduled job categories across states.
• 1 in every 3 wage workers in India not protected by the minimum wage law.
• Survey supports restructuring of minimum wages as proposed under the Code on Wages Bill.
• Minimum wages to all employments/workers proposed by the Survey.
• ‘National Floor Minimum Wage’ should be notified by the Central Government, varying across five geographical regions.
• ‘National level dashboard’ under the Ministry of Labour & Employment for regular reports on minimum wages, proposed by the Survey.
• Toll-free number to register grievance on non-payment of the statutory minimum wages.
• Effective minimum wage policy as an inclusive tool for more durable and sustainable economic development.
   

Using visions from behavioral economics to build an aspiring agenda for social change:

• From ‘Beti Bachao Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi).
• From ‘Swachh Bharat’ to ‘Sundar Bharat’.
• From ‘Give it up” for the LPG subsidy to ‘Think about the Subsidy’.
• From ‘Tax evasion’ to ‘Tax compliance’.

Click here for more details on the Economic Survey 2018-19.