Union Finance Minister Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament on Thursday.

The economic survey has predicated 7 per cent GDP growth in FY20 on the back of anticipated pickup in the growth of investment and acceleration in the growth of consumption.
This is higher from a five-year low of 6.8 per cent recorded in the previous year.

Prepared by Chief Economic Adviser Krishnamurthy Subramanian, the Economic Survey is the first by the re-elected Narendra Modi government.

The survey outlines strategic plueprint to achieve Prime Minister Narendra Modi’s vision for $5 trillion economy. To become a $5 trillion economy by 2025, India needs to sustain a GDP growth rate of 8 per cent.

General fiscal deficit is further expected to decline from 6.4 per cent of GDP in 2017-18 RE to 5.8 per cent of GDP in 2018-19 BE.

The revised fiscal glide path envisages achieving fiscal deficit of 3 per cent of GDP by FY 2020-21.

The survey notes that the Medium Term Fiscal Policy Statement presented along with the Union Budget 2018-19 aimed to reach the fiscal deficit target of 3.3 per cent of GDP in 2018-19 BE.

“The FY 2018-19 has ended with fiscal deficit at 3.4 per cent of GDP and debt to GDP ratio of 44.5 per cent (Provisional). As per cent of GDP, total Central Government expenditure fell by 0.3 percentage points in 2018-19 PA over 2017-18, with 0.4 percentage point’s reduction in revenue expenditure and 0.1 percentage point increase in capital expenditure. With respect to States finances, their own tax and non-tax revenue display robust growth in 2017-18 RE which is envisaged to be maintained in 2018-19 BE,” says the document.

The survey provisionally estimates 2.9 per cent growth rate for the agriculture, forestry and fishing sector. It has projected 283.4 million tones of foodgrains production for 2018-19.

The economic survey says that the pick up in food prices will help in increasing rural incomes and spending capacity and hence rural consumption demand.

The performance of consumption will be crucial in deciding the growth path of economy.

According to the survey document, oil prices are expected to decline in 2019-20.

Rural wages growth which has started to increase since mid-2018 will help spur rural demand, the survey said.

Investment rate is expected to pick up further in the year 2019-20 on the back of higher credit growth.

The release of Economic Survey 2018-19 comes a day ahead of the presentation of Union Budget in Parliament.

“The theme of the survey – ‘Shifting Gears’ – is intended to achieve a sustained growth rate of 8 per cent. Using the learning from the Global Financial Crisis, the Survey departs from traditional thinking to view the economy in either a vicious or a virtuous cycle. The Survey makes a sincere effort to live up to the expectation of being an indispensable guide for following, understanding and thinking about the Indian economy,” said Krishnamurthy Subramanian, the main author of the Economic Survey 2018-19.