India's latest economic survey lays down the bare essentials for the economy to hit $5 trillion by 2025
- The economy has to grow 8% in the next six years.
- Savings have to outpace the growth in investments.
- Exports must grow way faster and oil must remain cheap.
- Government must lift restrictions on foreign direct investments.
The Indian economy has to grow 8% in the next six years for the government to achieve its $5 trillion goal by March 2025, according to the latest annual economic survey from the Chief Economic Advisor Krishnamurthy Subramanian.
The document has been released a day ahead of the Union Budget for the financial year ending March 2020 to be revealed by Finance Minister Nirmala Sitharaman.
India's Gross Domestic Product (GDP) is expected to grow 7% in the year ending March 2020. That's one-sixth short of the 8% target set by Subramanian.
Savings have to outpace the growth in investments and government policies must further lift restrictions on Foreign Direct Investment (FDI), are among the other important recommendations. "Aggressive export strategy must be a part of investment-driven model," the survey further added.
"The Economic Survey reminds us about achieving a minimum of 8 per cent annual growth so that India joins the select group of $5 trillion economies. The Survey also gives us a pointer about some decisive and bold measures in the Budget to be presented by Finance Minister Mrs Nirmala Sitharaman tomorrow," said BK Goenka, the president of the corporate lobby Assocham.
The risk of a spike in oil prices remain a big concern. While the prices may remain soft in the current year, there could be an upward pressure on crude prices as the global growth picks up pace, Subramanian has warned. The first few years of the Narendra Modi regime was blessed with rock-bottom oil prices that helped the economy shore up its finances.
Cheap oil is very important for India which imports over 80% of all the crude oil it needs.
The economic survey has come at a time when India's GDP growth rate has slowed down to 5.8%, the slowest in 5 years, in the January-March quarter.
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