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The focus of the Economic Survey (2019-20) on ‘wealth creation’ to achieve an ambitious $5-trillion economy by 2025 has been welcomed by marketmen. The Economic Survey has emphasised free-market dynamics and trust, conducive policies for entrepreneurship, and labour-intensive export.
According to Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, the Economic Survey focussed on the importance of market forces for economic growth and development.
Importantly, with wealth creation as an overarching theme of the survey, the Economic Survey continues to push forward with the vision of the $5-trillion economy over the next few years.
“The details of the survey are also encouraging with focus on exports, lower government interventions, establishing trust as a public good, targeting ease of doing business, privatisation, etc, clearly outlines the government’s approach to boosting potential growth of the economy,” he said.
Deepthi Mary Mathew at Geojit Financial Services, said, “It is welcoming that the Survey emphasises the need for improving the business climate that would aid the economy to achieve the target of $5 trillion.”
Wide variance worry
The Economic Survey 2020 projects economic growth at 6-6.5 per cent for FY2021. This could be a good indicator of the Budget being pro-growth as the current GDP growth for FY2020 is at nearly 5 per cent. Hence, all eyes would be on the fiscal deficit numbers for FY2021, said Lakshmi Iyer, CIO (Debt) & Head of Products, Kotak Mutual Fund. A very wide variance from the fiscal responsibility and Budget management glide path may disappoint the markets, she cautioned.
The Survey highlighted the need to relax the fiscal slippage in terms of prudent spending with the primary objective of bouncing back from economic doldrums. As India Inc appreciates the significant progress of the nation’s global rankings across various parameters, a lot more needs to be done to nullify the economic gaps, said Niranjan Hiranandani, President, Assocham & Naredco.
“We strongly recommend bold fiscal stimulus in the labour-intensive sectors which will have a domino effect to enhance employment generation and GDP ratio,” he further said.
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