The Economic Survey 2019 presented by Chief Economic Adviser (CEA) Krishnamurthy Subramanian

focusses on moving to a “virtuous cycle” of savings, investments and exports to transform India into a

$5 trillion economy in the next five years.

According to the survey, India’s GDP is forecast to expand by 7% in fiscal 2019-20, slightly higher than

the 6.8% in 2018-19.

In his preface to the survey, the CEA said the team had been guided by a ‘blue sky’ thought process, an

unfettered approach to thinking about the appropriate economic model for India.

“When the economy is in a virtuous cycle, investment, productivity growth, job creation, demand and

exports feed into each other and enable animal spirits in the economy to thrive,” the survey’s authors

wrote. “In contrast, when the economy is in a vicious cycle, moderation in these variables dampen

each other and thereby dampen the animal spirits in the economy.”

In his first Survey, Dr. Subramanian highlighted the fact that private investment was a key driver for

demand, capacity, labour productivity, new technology adoption, and for job creation.

Further, he said, implicit in the emphasis on private investment was the fact that the government had

and would stick to its fiscal consolidation glide path. It has committed to a fiscal deficit of 3.4% of GDP

in 2019-20, and 3% each in the subsequent two years.

Moving the economy into a virtuous cycle would require the adoption of certain practices and norms

on data, legal reforms and policy certainty, and some micro-economic aspects such as boosting

MSMEs and reducing the cost of capital.

Notably, the Survey made the point that data must be viewed as a public good and used in a concerted

way to deliver services. It said that as data of societal interest is generated by the people, it can be

created as a public good within the legal framework of data privacy.

The government must intervene in creating data as a public good, especially of the poor and in social

sectors. Interestingly, the Survey talked about merging the distinct datasets held by the government

into a single dataset, which would generate “multiple benefits.”

Another key area of focus for the Survey was the MSME sector and how to make it grow so as to

boost profit creation, job creation, and enhance productivity. It noted that ‘dwarf’ firms (with less

than 100 workers), accounted for more than 50% of all organised firms in manufacturing by number.