Finance Minister Nirmala Sitharaman will present the Union Budget for the financial year 2019-2020 on July 5. Hours before the Budget 2019, the Principal Economic Advisor Sanjeev Sanyal expressed his hopes. Sanyal enlisted the requirements for the government to make the vision of Prime Minister Narendra Modi to make India 5 trillion dollar economy a success.
Speaking to media, the Principal Economic Advisor said that to reach the target the growth rate has to rise by 8 percent every year. The investment rate is also required to rise like the East Asian countries namely Japan China and South Korea, he added. He highlighted that the government will have to decrease the interest rate and will have to look for investors so that it helps to increase the employment rate. He clarified that the investment should increase above 35 percent in order to achieve the goal of the 5 trillion economy.
The economic Survey 2019 was presented by July 4 by the Finance Minister in the Rajya Sabha. It talked in details about the tactics and the path required to follow to achieve the goal. A brief summary of what the Eco Survey 2019 suggested is given as follows:
The main requirement for India to become a 5 trillion economy, as per Economic Survey 2019, is to sustain a real GDP growth rate of 8%. International experience, especially from high-growth East Asian economies, suggests that such growth can only be sustained by a “virtuous cycle” of savings, investment and exports catalysed and supported by a favourable demographic phase. Investment, especially private investment, is the key driver that drives demand, creates capacity, increases labour productivity, introduces new technology, allows creative destruction and generates jobs, highlighted the Economic Survey 2019.
This survey is the first for the new government, which came to power with an overwhelming mandate. The Economic Survey said that India stands at a historic moment when sustained high economic growth has become a national imperative. The Prime Minister had envisioned 5 trillion dollar economy and had said: "If every one of the 130 crore Indians takes one step forward, the country too will go that many steps ahead."
An economy that is in a constant state of dis-equilibrium needs a new approach to navigate. The earlier attempt to create five-year plans, largely using the equilibrium framework, failed because it was too prescriptive for an inherently unpredictable world. Therefore, navigating this uncertain world of dis-equilibrium requires three elements :
(i) a clear vision
(ii) a general strategy to achieve the vision
(iii) the flexibility and willingness to continuously recalibrate tactics in response to unanticipated situations.