Economic Survey, blueprint to achieve PM's vision for USD 5 tn economy

Union Finance Minister Nirmala Sitharaman

The Economic Survey 2018-19 tabled by Union Finance Minister Nirmala Sitharaman today in Parliament provides a blueprint to achieve the Prime Minister's vision for a 5 trillion-dollar economy by 2024-25, the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a press release.

It provides an appropriate policy direction that the government should adopt to achieve the goal of sustained growth and development, FICCI said.

"FICCI completely agrees with the prognosis of Economic Survey that identifies the need to foster inter-linkages to meet the macro challenges of growth, demand, exports, and job creation and these will have to be driven through investments, especially private investment. We hope that tomorrow's Union Budget will accordingly present proposals that can resolve the current economic challenges holistically," said Mr. Sandip Somany, President, FICCI.

Though the GDP growth projection as per Economic Survey for 2019-20 at 7 percent is amongst the highest in the world, yet it is lower than the desired growth of 8 percent plus required for achieving the goal of 5 trillion-dollar economy, Somany added.

The deceleration in these three key parameters over the last few years has been the reason behind growth moderation and there is a need to revive these for building the growth momentum going ahead.

The Economic Survey has noted an improvement in the performance of the banking sector with a decline seen in the Non-Performing Assets (NPA) ratios and recoveries through the IBC process. At the same time, the Economic Survey has highlighted that the liquidity situation continues to remain tight and financial flows remain constrained.

"FICCI is of the opinion that the flow of finance to the productive sectors must continue unhindered to facilitate the growth of private investment. The government must look at measures for improving the liquidity scenario in the financial sector, particularly in the Non-bank financial institution (NBFC) segment. It is imperative to bring down the cost of capital for businesses through a complete transmission of the policy rate cuts," Somany added.

As regards building the fiscal capacity, the survey identifies the key priorities as broadening and deepening the direct tax base and stabilization of goods and services tax. It also emphasizes improving the quality of expenditure.

The survey suggests reorienting policies to enable the growth of the Ministry of Micro, Small and Medium Enterprises (MSMEs) and encouraging small firms to grow bigger in scale and size. This is critical for enhancing the global competitiveness of the Indian industry. FICCI is looking up to the government in order to speed up the process of labor law reforms and provide flexibility to employers.

On the agriculture front, the survey suggests a shift in focus from land productivity to 'irrigation water productivity' through greater thrust on micro-irrigation. It also recommends the adoption of organic and natural farming techniques including Zero Budget Natural Farming to improve water use efficiency and soil fertility.

FICCI is looking forward to adequate budget allocation in the above areas in tomorrow's Budget.

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