Economic Survey 2014-15: Govt suggests three pointers to revive Indian economy

In the Economic Survey 2014-15 tabled today, the government has come up with a three-pronged strategy to bring India back on the growth radar. The government’s focus remains the same: reviving investors’ sentiments and improving the overall business climate in the country. Here are the three key drivers suggested by the Centre.

Clear stalled projects

In order to develop the economy of the country, the government has realised that it first needs to clear the backlog of stalled projects. In the Economic Survey 2014-15, the government has noted that stalled projects have been at 7% of GDP in the last four years. “The stock of stalled projects at the end of December 2014 stood at Rs 8.8 lakh crore or 7% of GDP,” suggested the report.

Revive public investments

On investments front, the Centre has suggested that in order to attract larger investments from the private sector, the government must revive public investments. The Centre highlighted that public investments are required for meeting the short-term goals of the government as well as compliment the investments flowing in from the private sector.

“The stock of stalled projects remains extraordinarily high; firm profitability, especially for firms working in the infrastructure sector, remains low,” added the report.

Restructure PPP model

The government has stressed on re-orienting and restructuring the public-private partnership model. If revamped, it could attract huge investments from the private sector, thus ensuring faster completion of crucial projects, which are critical to the growth of other sectors and industries in the country. “…The PPP model at least in infrastructure will need to be re-fashioned to become more viable going forward (the institutional challenge),” noted the report.