Key Highlights of Economic Survey 2018-19
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in the Parliament today.
The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in the Parliament today. The Key Highlights of Economic Survey 2018-19 are as follows:
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.
- Policy for Real People, Not Robots: Leveraging the Behavioral Economics of “Nudge”
- Decisions by real people deviate from impractical robots theorized in classical economics.
- Behavioral economics provides insights to ‘nudge’ people towards desirable behavior.
- Key principles of behavioral economics:
- Emphasizing the beneficial social norm.
- Changing the default option.
- Repeated reinforcements.
- Using insights from behavioral economics to create an aspirational agenda for social change:
- From ‘Beti Baco Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi).
- From ‘Swachh Bharat’ to ‘Sundar Bharat’.
- From ‘Give it up” for the LPG subsidy to ‘Think about the Subsidy’.
- From ‘Tax evasion’ to ‘Tax compliance’.
To read the complete Economic Survey 2018-19, click here.
Source : PIB