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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

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