'Need huge boost in spending, reforms to accelerate growth'

The survey was presented in Parliament. Pic/PTI

New Delhi: India's economic growth will rebound from a five-year low this year, but would need a huge boost in spending and reforms to accelerate higher rate of expansion to double the economy's size to USD 5 trillion by 2024-25, the pre-Budget Economic Survey said Thursday.

Stepping up private investments, exports and job creation will be key to achieving the target, the survey presented in Parliament by Finance Minister Nirmala Sitharaman said.

The real gross domestic product (GDP) growth, which slowed to a five-year of 5.8 per cent in the first three months of 2019 - well below China's 6.4 per cent, is expected to rise to 7 per cent in the fiscal year 2019-20 that started in April, it said. GDP growth was 6.8 per cent in 2018-19, down from 7.2 per cent in 2017-18. India is currently the sixth-largest economy in the world with a size of USD 2.7 trillion. It is expected to overtake Britain to become the fifth-largest next year.

Authored by Chief Economic Adviser Krishnamurthy Subramanian, the Economic Survey said investment (especially private), is the 'key driver' that boosts demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction and generates jobs.

He said structural reforms such as ones in the labour sector are needed to bring in the much-needed private investment. Also, micro, small and medium enterprises (MSME) sector needs focus as the bulk of the job creation and growth support would come from this segment. The survey propagated the economics of "nudge" at the household level, judicial reforms to smoothen out enforcing of contracts, and investment reforms.

Catch up on all the latest Crime, National, International and Hatke news here. Also download the new mid-day Android and iOS apps to get latest updates