The 2020-’21 Budget Session of India’s Parliament began with the address by the President of India Mr. Ram Nath Kovind to the joint sitting of both the Houses, the Lok Sabha and the Rajya Sabha. Thereafter, Finance Minister Mrs. Nirmala Sitharaman presented the Economic Survey. It is the largest statistical and analytical compilation of the country’s various economic achievements and shortcomings occurring in one financial year. The Economic Survey 2020 was especially being regarded as significant in the wake of the slowdown facing the Indian economy during recent months. Apart from forecasting a moderate 5% GDP growth rate for the year 2019-20, which was already on expected line, the Economic survey however, also came up with many strenuous points for the economy. The Survey believes that very soon Indian economy will take a new surge and is expected to achieve 6 to 6.5 percent growth rate in the year 2020-21.
The Economic Survey 2020 says, Indian economy has performed very well on the front of fiscal consolidation which remained well within the limit of 3.3 percent. Survey finds the situation of inflation tightly under the control which is 4.1 percent in case of retail inflation (CPI) and merely 1.9 percent in case of wholesale inflation (WPI). Apart from this, the Survey finds the country’s balance of payment in a better position, which has improved significantly because of import contraction and rising inflows of FDI, FII and record remittances of India Diaspora numbering 1.75 crores. The remittances touched US$ 38.4 billion in the first half of the current year. Survey finds the FOREX reserves is robust which was recorded at US$ 461.2 Billion on the 10th January 2020. According to the Economic Survey, the improvement in the country’s balance of payment (BoP) situation has occurred due to the lowering current account deficit from 2 percent to 1.5 percent and also record FDI inflows of US$ 24.4 Billion in the first 8 months of the current financial year.
The Survey has come up with two major remarkable events, which took place in the Indian economy, the first being the rising share of formal employment in the total employment, which has increased from 17. 6 percent to 22. 5 percent during last 5 years, thus helping the cause of formalizing the country’s employment scenario. Secondly, the stock markets of the country are now increasingly becoming the platforms for the new entrant business houses. Every five years, the stock markets are replacing around one-third of their listing companies and paving way for the listing of new firms, technologies, and products. Survey has termed this development as the creative destruction in the post-liberalization stock market era.
The Survey has also come up with a notable point that is about the massive entrepreneurial development taking place in the country.
According to the World Bank, India ranks third in the number of new firms created. In India, around 124,000 new firms were being created in the year 2018 compared to 70,000 in 2014. Against 3.8 % growth rate in the number of new firms created during 2006-14, growth rate during 2014-18 has risen to 12.2%. Economic Survey 2020 has come up with a new slogan that is “Assemble in India for the World”, thus mopping up the country’s export sector, which has enough potential to raise India’s export market share to about 3.5 % by 2025 and 6 % by 2030. The Survey has focused on “Network Products” Specialisation and Quantity Expansion in order to help India to become major exporter.
The Narendra Modi government is dedicated towards achieving the target of five trillion dollar economy in the next five years; therefore the Economic Survey has set a new theme to make a brand new ‘business prone’ environment in the country. Since country has already got leverage from the massive improvement registered in the ease of doing business ranking which has had ranking of 142 in 2014 to 63 now. Therefore, the theme of the Economic Survey 2020 is to enable markets, promote ‘pro-business’ policies and strengthen ‘trust’ in the Indian economy.
Script: Manohar Manoj, Journalist