Key Highlights of Economic Survey 2018-19
Shifting gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand
- Survey states that pathways for trickle-down opened up during the last five years; and benefits of growth and macroeconomic stability reached the bottom of the pyramid.
- Sustained real GDP growth rate of 8% needed for a $5 trillion economy by 2024-25.
- “Virtuous Cycle” of savings, investment and exports catalyzed and supported by a favorable demographic phase required for sustainable growth.
- Private investment- key driver for demand, capacity, labor productivity, new technology, creative destruction and job creation.
- Survey departs from traditional Anglo-Saxon thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium.
- Key ingredients for a self-sustaining virtuous cycle:
- Presenting data as a public good.
- Emphasizing legal reforms.
- Ensuring policy consistency.
- Encouraging behavior change using principles of behavioral economics.
- Nourishing MSMEs to create more jobs and become more productive.
- Reducing the cost of capital.
- Rationalizing the risk-return trade-off for investments