Economic Survey predicts GDP growth at 7% for 2019-20

The Economic Survey 2019 was tabled in Parliament on Thursday.  The Economic Survey expects India’s gross domestic product (GDP) to grow at 7% for financial year 2019-20. The GDP growth rate for the previous fiscal was 6.8%.

Union Finance Minister Nirmala Sitharaman tabled the Economic Survey for 2018-19 in the Rajya Sabha. The survey said, “Real GDP growth for the year 2019-20 is projected at 7 per cent reflecting a recovery in the economy after a deceleration in the growth momentum throughout 2018-19.”

It survey projects India’s fiscal deficit at 5.8% for 2018-19 against 6.4% in 2017-18. At 5.8%, the fiscal deficit is up from revised budget estimate of 3.4% and a cause of concern for the government.

The Economic Survey referred to Prime Minister Narendra Modi’s stated target of making India a USD$ 5 trillion economy by 2025 and said that to achieve the target, the country needs to grow at 8%.

However, the GDP growth rate has been low for a while now. The survey blamed the fall in nominal GDP figures was due to issues faced by the manufacturing industry.

Below are a few highlights :-

– January-March economic slowdown due to poll related activity.
– Oil prices are likely to decline.
– Farmers may have produced less in FY19 on food price fall.
-The survey says revenue collection would be adversely affected in 2019-20 if GDP growth rate slows down.
– Greenshoots in investment seems to be taking hold.
– Accommodative policy of the Monetary Policy Committee of the Reserve Bank of India is likely to help cut real lending rates.
– Investment rate seems to have bottomed out.
– Decline in NPAs should push up CAPEX cycle.
– Rural India wages have grown since mid-2018.

The complete report can be fetched here.

Source : Various