Sobering Survey
The pre-Budget Economic Survey offers a sobering picture of the Indian economy, which is expected to expand by a modest 6.3-6.8 per cent in the coming financial year. This figure is nowhere near the growth rate of nearly 8 per cent that is required over the next two decades to achieve the grand goal of becoming a developed nation (Viksit Bharat) by 2047. India continues to be the fastest-growing major economy in the world, but sustaining the momentum would not be easy in the face of international trade tensions and Trump-induced protectionism. The survey has insisted on greater deregulation and reforms to enhance economic freedom and spur growth. The message to the states is loud and clear: Liberalise standards and controls on businesses to improve ease of doing business. This is an unusual throwback to then Finance Minister Manmohan Singh’s landmark 1991 Budget, which had unleashed the animal spirits of the economy. It seems the BJP-led Union Government has not managed to remain oblivious to MMS’s pathbreaking policies, which have witnessed a revival of keen interest after his recent death.
The ‘Make in India’ initiative, launched in 2014 with the objective of transforming the country into a global hub for design and manufacturing, remains a work in progress. It’s a major challenge to dovetail this flagship mission with the ‘Make for the world’ goal, which needs a booster shot to scale up India’s export competitiveness and enhance its participation in global supply chains.
The facts are inescapable: Merchandise exports have grown moderately due to sluggish global demand, while imports have increased significantly amid strong domestic demand. When it comes to trade deficit — the difference between imports and exports — India finds itself in an unenviable position vis-a-vis the majority of its top trading partners, particularly China. Signs of a thaw in bilateral ties might further skew the trade situation in favour of Beijing. Global as well as regional headwinds, besides aggravating factors like climate change, are set to test the famed resilience of the Indian economy.
