Frontline – August 02, 2019

BUDGET 2019

THEEconomicSurveyfor 2018-
19, presented by Krishnamurthy
Subramanian, Chief EconomicAd-
viser(CEA) to thegovernment, has
all the trappingsof a lectureon man-
agement at a business schoolwhere
flowery jargon oftenfills in for eco-
nomiclogic.To makemattersworse,
thereareunprecedentedandsigni-
ficantdeviationson the national in-
comeassumptionsforthecurrent
yearbetweenSubramanian’s estim-
ate andthosepresented a daylaterby
FinanceMinisterNirmalaSithara-
manin herBudget.
TheSurvey, delayed thisyearbe-
causeof the LokSabhaelection,was
expectedto addressseveralgraveis-

suesthathavebeen plaguingthe In-

dianeconomyforthelastseveral

years.Theunmistakable signsof an

economic slowdown—most strik-

ingly demonstrated by auto sales

datafor June 2019 , whichwerethe

worstin twodecades—werean im-

portantissuethatthe Survey wasex-

pectedto address.

Relatedto thiswerethe vexatious

issuesplaguing the Indianstatistical

system,mostnotablythe key dataon

nationalincomes illustratedby the

controversialestimatesof thegross

domesticproduct(GDP).Theex-

pectation thatagriculturalgrowthin

the currentyearwilllikelybe halfof

thatin the previousyearmarked an-

othersignificantworry.A steepde-

clinein ruralincomescausedby a

combination of collapsing output

pricesandstagnantwagesaddedto

expectationsthattheSurveywould

offera roadmapto addressthisvital

question.

Anotherexpectationcentredon

theprolongedslowdown in private

investment,which,for far toolong,

hasbeenblamed on thedisinclina-

tionof banksto lendor on thehigh

costof credit.Relatedto thiswasthe

situationthattheIndianfinancial

system—notjustbanksbutalsothe

so-called shadow banks—is cur-

rentlyin, saddledby theburdenof

non-performingassets.To addto the

Vacuous survey

TheEconomic Surveywaxeseloquent onthestandouteconomic

problems ofourtimes,withoutofferingsolutionsora road mapto

nudgethecountryon thepathofgrowth.BYV.SRIDHAR

COPIESof the EconomicSurvey2018-19held up outsideParliamentHouse on July 4

T.

NARAYA

N/BLOOM

BERG