Summary of the Economic Survey -2019

Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programs, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term. The Finance Minister presented the economic survey, 2019 in the parliament today. The key highlights of the economic survey as per the Press Information Bureau, Government of India are:

• Survey states that pathways for trickle-down opened up during the last five years; and benefits of growth and macroeconomic stability reached the bottom of the pyramid.
• Survey states Private Investment as the Key Driver of Growth, Jobs, Exports and Demand
• Using insights from behavioral economics to create an aspirational agenda for social change- 1. From ‘Beti Baco Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi). 2.From ‘Swachh Bharat’ to ‘Sundar Bharat’. 3.From ‘Give it up” for the LPG subsidy to ‘Think about the Subsidy’. 4. From ‘Tax evasion’ to ‘Tax compliance’.
• Survey focuses on enabling MSMEs to grow for achieving greater profits, job creation and enhanced productivity.
• Unshackling MSMEs and enabling them to grow by way of – Asunset clause of less than 10 years, with necessary grand-fathering, for all size-based incentives, Deregulating labor law restrictions to create significantly more jobs, as evident from Rajasthan. Re-calibrating Priority Sector Lending (PSL) guidelines for direct credit flow to young firms in high employment elastic sectors.
• Survey also focuses on service sectors such as tourism, with high spillover effects on other sectors such as hotel & catering, transport, real estate, entertainment etc., for job creation.
• Society’s optimal consumption of data is higher than ever given technological advances in gathering and storage of data.
• As data of societal interest is generated by the people, data can be created as a public good within the legal framework of data privacy.
• Government must intervene in creating data as a public good, especially of the poor and in social sectors.
• Merging the distinct data sets held by the Government already would generate multiple benefits.
• Productivity improvements of 25 percent in lower courts, 4 percent in High Courts and 18 percent in Supreme Court can clear backlog.
• Survey proposes reduction in economic policy uncertainty by way of consistency of actual policy with forward guidance.
• Quality assurance certification of processes in Government departments.
• Sharp slowdown in population growth expected in next 2 decades. Most of India to enjoy demographic dividend while some states will transition to ageing societies by 2030s.
• National Total Fertility Rate expected to be below replacement rate by 2021.
• Working age population to grow by roughly 9.7 mn per year during 2021-31 and 4.2mn per year during 2031-41.  Significant decline to be witnessed in elementary school-going children (5- 14 age group) over next two decades.
• States need to consolidate/merge schools to make them viable rather than build new ones.
• Policy makers need to prepare for ageing by investing in health care and by increasing the retirement age in a phased manner.
• 2.5 times increase in per capita energy consumption needed for India to increase its real per capita GDP by $5000 at 2010 prices, and enter the upper middle income group.
• 4 times increase in per capita energy consumption needed for India to achieve 0.8 Human Development Index score.
• India now stands at 4th in wind power, 5th in solar power and 5th in renewable power installed capacity.
• Rs 50,000 crore saved and 108.28 million tonnes of CO2 emissions reduced by energy efficiency programmes in India.
• Share of renewable (excluding hydro above 25 MW) in total electricity generation increased from 6% in 2014-15 to 10% in 2018-19.
• Thermal power still plays a dominant role at 60% share.
• Market share of electric cars only 0.06% in India while it is 2% in China and 39% in Norway.
• Survey says that efficacy of MGNREGS increased with use of technology in streamlining it.
• Significant reduction in delays in the payment of wages with adoption of NeFMS and DBT in MGNREGS.
• Demand and supply of work under MGNREGS increased, especially in distressed districts.
• Vulnerable sections of the society viz. women, SC and ST workforce increased under MGNREGS during economic distress.
• Survey proposes a well-designed minimum wage system as a potent tool for protecting workers and alleviating poverty.
• Present minimum wage system in India has 1,915 minimum wages for various scheduled job categories across states.
• 1 in every 3 wage workers in India not protected by the minimum wage law.
• Survey supports rationalization 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.
• Minimum wages by states should be fixed at levels not lower than the ‘floor wage’.
• Survey proposes a simple and enforceable Minimum Wage System using technology.
• Traceable health benefits brought about by Swachh Bharat Mission (SBM).
• 93.1% of the households have access to toilets.
• 96.5% of those with access to toilets are using them in rural India.
• 100% 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 improvements in the long-term.

The survey highlights the state of the economy. Here is the summary:

• Growth of GDP moderated to 6.8 per cent in 2018-19 from 7.2 per cent in 2017-18.
• Inflation contained at 3.4 per cent in 2018-19.
• Non-Performing Assets as percentage of Gross Advances reduced to 10.1 per cent at end December 2018 from 11.5 per cent at end March 2018.
• Investment growth recovering since 2017-18
• Current account deficit manageable at 2.1 percent of GDP.
• Fiscal deficit of Central Government declined from 3.5 percent of GDP in 2017-18 to 3.4 percent in 2018-19.
• Prospects of pickup in growth in 2019-20 on the back of further increase in private investment and acceleration in consumption.
• The public investments in social infrastructure like education, health, housing and connectivity is critical for inclusive development.
• Health: increased to 1.5 per cent in 2018-19 from 1.2 per cent in 2014-15.
• Education: increased from 2.8 per cent to 3 per cent during this period.
• Gross Value Added (GVA) in agriculture was at 2.9 per cent in 2018-19.
• Women’s participation 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.
• Overall Index of Eight Core Industries registered a growth rate of 4.3 percent in 2018-19.
• Road construction grew @ 30 km per day in 2018-19 compared to 12 km per day in 2014-15.
• Rail freight and passenger traffic grew by 5.33 per cent and 0.64 per cent respectively in 2018-19 as compared to 2017-18.
• Total telephone connections in India touched 118.34 crore in 2018-19
• The installed capacity of electricity has increased to 3, 56,100 MW in 2019 from 3, 44,002 MW in 2018.
• The services sector growth declined marginally to 7.5 per cent in 2018-19 from 8.1 per cent in 2017-18.
• Services share in employment is 34 per cent in 2017.