NEW DELHI:
India needs to grow at 8 percent per annum to become a $5 trillion economy by FY25, says Economic Survey 2019, that is released day before Budget, analysing the economic situation of the country.
India on Thursday forecast its annual economic growth could accelerate to 7 per cent in the 2019/20 fiscal year from an estimated 6.8 per cent in the previous year, two government sources said, that could help it regain the status of world’s fastest-growing major economy by overtaking China.
The government’s economic survey, to be presented to parliament later on Thursday, also says India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector, the sources said.
The economic survey has made a case for investment as a key driver and has said that focus on SMEs will be key.Aggressive export strategy must be a part of investment-driven model, said the annual economic document,
The economic survey has said that decline in the non-performing assets (NPAs) should help push the capital expenditure cycle.
The annual Economic Survey 2019 says that the government policies are expected to further lift restrictions on Foreign Direct Investment (FDI) inflows and the general fiscal deficit is expected at 5.8 percent in FY19 against 6.4 percent in FY18.
Savings and growth are positively co-related. Savings have to be more than investments to allow accumulation of precautionary savings.Accommodative monetary policy to help cut real lending rates.There could be an upward pressure on crude prices as the global growth grows.Liquidity has remained systematically tight since September 2018, impacting yields.Oil prices are seen declining in FY20 from the existing levels, said Economic Survey 2019.