The Finance Ministry on Wednesday released the Economic Survey 2018-19, projecting a growth of 7 per cent in 2019-20. Drafted initially by Chief Economic Adviser Krishnamurthy V Subramanian, the survey lists key fiscal challenges ahead of the Narendra Modi government along with emphasising on the need to abandon a roadmap for meeting extra welfare spending.
On Thursday, Nirmala Sitharaman will make her mark on history to become the first full-time woman finance minister to announce India’s annual accounts of revenue and expenditure. In the 89th Union budget, the government is expected to further its aim of making India a USD 5 trillion economy by 2024. In order to achieve this goal, the Indian economy will have to clock a sustained annual growth rate of 8 per cent. To put things in context, China recorded a Gross Domestic Product (GDP) of 6.4 per cent in the first three months of 2019 as compared to India’s 5.8 per cent at the same time.
While this government faces several challenges which can be deemed unprecedented, economists have stressed explicitly on the need for the government to not overspend money it may not have in the first place. This balance of expenditure and revenue will allow India to maintain a reasonable fiscal deficit which in turn will keep the economy’s international credit rating robust.
As has been pointed out, employment and domestic demand are low as compared to previous years. Add to that, a water crisis unlike anything India has seen before and which will most likely have an adverse impact on an already worsening agrarian crisis and the task ahead of Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman seems mammoth.
Stating his questions for the ruling dispensation at the centre, Economist Akash Jindal asks, “How do we make it up that numbers of 8 per cent continue to sustain growth when the government is expecting a 7 per cent growth? When and where do we expect the deficiency and gap to be made up?”
Adding to the argument, senior journalist Vivek Kaul tells Mirror Now, “We need to get rid of this obsession to become the world’s fastest growing economy.” He adds that India has never grown at 8 per cent for five years straight except between 2004 and 2007 when the Indian economy grew at a little over 9 per cent as per the erstwhile GDP data.
Former Commerce Secretary Ajay Dua says, “I think there is something amiss about the projected 8 per cent growth of the economy which is currently about USD 2.7 trillion to USD 5 trillion in a period of five years.” Meanwhile, referring to the taxation levied on India’s working class, senior economist Mohan Guruswamy says, “In the present economic circumstances, tax cut is a ridiculous notion. What needs to be thought about is how to increase tax revenues.”
Representing the Bharatiya Janata Party (BJP), Dr Syed Zafar Islam told Mirror Now, “Yes, it is a consumption-led economy but, local consumption is not the only thing government is focusing on. Government is also focusing on exports as well, which is an important factor of global trade.”
SOURCE- ET NEWS
