Published On: Thu, Jul 4th, 2019

Prime Minister Modi says Economic Survey outlines vision for $5 tn economy

New Delhi: Praising the Economic Survey 2018-19 presented in Parliament on Thursday, Prime Minister Narendra Modi has said that the survey outlines a vision to make India a $5 trillion economy.

The survey depicts the gains from advancement in the social sector, adoption of technology and energy security

“The #EconomicSurvey2019 outlines a vision to achieve a $5 Trillion economy,” the Prime Minister said in a tweet. He also said that the survey depicts the gains from advancement in the social sector, adoption of technology and energy security.

A Finance Ministry statement said the the theme of the survey is about enabling a shifting of gears towards sustained economic growth for objective of $5 trillion by 2024-25.

According to the survey, India’s real GDP will have to grow consistently at 8 per cent to achieve the target of $5 trillion economy by 2024-25.

The survey said that 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, it added.

“The economy witnessed a gradual transition from a period of high and variable inflation to more stable and low level of inflation in the last five years,” said the survey presented the Finance Minister Nirmala Sitharaman in Parliament on Thursday.

The Economic Survey 2018-19 said that India’s inflation scenario transitioned from its high and volatile levels to a low and stable condition in the last five years.

The survey also noted that India’s headline retail inflation based on the the Consumer Price Index-Combined (CPI-C) has been on a declining trend for the the last five years. The retail inflation was recorded at 3.4 per cent in 2018-2019, down from 3.6 per cent form the previous fiscal, it added.

“It stood at 2.9 per cent in April 2019 as compared to 4.6 per cent in April 2018. Food inflation based on Consumer Food Price Index (CFPI) declined to a low of 0.1 per cent during the financial year 2018-19,” it said.

Referring to wholesale inflation, which is based on the Wholesale Price Index (WPI), the survey said that it remained moderate at 3 per cent in 2017-18 compared to 1.7 per cent in 2016-17, and (-)3.7 per cent in 2015-16 and 1.2 per cent in 2014-15. In the last fiscal 2018-19, WPI inflation, however, rose on year-on-year basis to 4.3 per cent.

The Reserve Bank of India’s (RBI) yearly inflation target till 2021 is 4 per cent, in order to achieve macroeconomic stability.

According to the Economic Survey, the current phase of low inflation is also marked by reduction in both urban and rural inflation. It states that the decline in rural inflation is steeper than that of urban inflation since July 2018 resulting in decline in headline inflation.

“Fall in rural inflation is due to moderation in food inflation, which has been negative for last six months (October 2018 to March, 2019)” the survey added.

On the trend in global commodity prices, the survey, quoting the World Bank and Food and Agriculture Organization (FAO), observed that although energy commodity prices rose in the FY 2018-19, food prices recorded fall in prices during the year. WPI-based food inflation too declined during 2018-19 globally, it said.

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