Budget 2020: A critical reading of Economic Survey

Economic Survey 2019-20 and Budget 2020
Chief Economic Advisor KV Subramanian addressing a press conference on Friday.

The Economic Survey 2019-20 does ask some relevant questions about the functioning of the Indian economy, but does not reassure the readers that the government has a grip over the situation. It also does not provide viable answers or solutions to the ills of the economy. It fails to explain how and why people lost faith in the India Story. Not so long ago, the county was touted as the next miracle in the world economy.

Survey predicts 6-6.5% growth in 2020-21

The first two quarters of the current fiscal had 5% and 4.5% growth. Govt forecast for the entire year is 5%, but realistically it would be around 4.5-4.75%. It doesn’t explain how the government will achieve 6-6.5% growth in the next financial year.

No overstatement of growth: Survey

If the country is growing at the rates claimed by the government, why there is the panic? How corporate profits are under pressure? Why are unemployment rates so high? Why companies are refusing to invest? Why both exports and import shrinking? The survey should have answered these questions.

Wealth creation under Liberalisation 2.0

No viable plan other than a blind faith in the invisible hand of market and neoliberal economic policies that have resulted in income imbalances and seen as a disaster by renowned economists.
How will India strengthen capitalism? The survey only has some word play. Will Indian corporates/ multinationals trust this government and invest in the country? It is blaming socialism in pre-1990s, but doesn’t understand the capitalists of the time had expressed their inability to bankroll the economy.

India should have at least six banks in the top 100: Survey

By blaming public sector banks as inefficient, the government is creating the case for another round of disinvestment. One cannot be blamed for thinking that the government is selling PSUs just to meet its revenue shortfall, not because of any faith in private industry. Ironically, yesterday also witnessed SBI declaring its highest quarterly profit ever.

Controls distort Agri markets: Survey

The government is promising to reform the market for farm produce. Reforms without proper understanding of the rural economy will be far more disastrous than the demonetisation move. The government’s blind faith in markets will impoverish farmers and land-less farm labourers.

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