indianeconomicpanorama
38 News the Newsbehind JULY 08, 2019enhanced productivity.- Dwarfs (fi rms with less than 100
workers) despite being more than
10 years old, account for more than
50 per cent of all organised fi rms in
manufacturing by number. - Contribution of dwarfs to
employment is only 14 per cent
and to productivity is a mere 8 per
cent. - Large firms (more than 100
employees) account for 75 per cent
employment and close to 90 per cent
of productivity despite accounting
for about 15 per cent by number. - Unshackling MSMEs and enabling
them to grow by way of:
1 A sunset clause of less than 10 years,
with necessary grand-fathering, for
all size-based incentives.
2 Deregulating labor law restrictions
to create signifi cantly more jobs, as
evident from Rajasthan.
3 Re-calibrating Priority Sector
Lending (PSL) guidelines for direct
credit fl ow to young fi rms in high
employment elastic sectors.
- Survey also focuses on service sectors
such as tourism, with high spillover
eff ects on other sectors such as hotel
and catering, transport, real estate,
and entertainment among others for
job creation.
Agriculture and Food Management - The agriculture sector in India
typically goes through cyclical
movement in terms of its growth. - Gross Capital Formation (GCF) in
agriculture as percentage of GVA
marginally declined to 15.2 per cent
in 2017-18 as compared to 15.6 per
cent in 2016-17. - Th e public sector GCF in agriculture
as a percentage of GVA increased to
2.7 per cent in 2016-17 from 2.1 per
cent in 2013-14. - Women’s participation in agriculture
increased to 13.9 per cent in 2015-
16 from 11.7 per cent in 2005-06
and their concentration is highest
(28 per cent) among small and
marginal farmers.- A shift is seen in the number
of operational land holdings and
area operated by operational land
holdings towards small and marginal
farmers. - 89 per cent of groundwater extracted
is used for irrigation. Hence, the focus
should shift from land productivity
to ‘irrigation water productivity’.
Th rust should be on micro-irrigation
to improve water use effi ciency.
Industry and Infrastructure - The overall Index of Eight Core
Industries registered a growth rate
of 4.3 percent in 2018-19. - India’s ranking improved by 23 to
77 position in 2018 among 190
countries assessed by the World
Bank Doing Business (DB) Report,
2019. - Road construction grew at 30 km
per day in 2018-19 compared to 12
km per day in 2014-15. - Rail freight and passenger traffic
grew by 5.33 per cent and 0.64
per cent respectively in 2018-19 as
compared to 2017-18. - Th e total telephone connections in
India touched 118.34 crore in 2018-
19 - Th e installed capacity of electricity
has increased to 3, 56,100 MW in
2019 from 3,44,002 MW in 2018. - Public Private Partnerships are
quintessential for addressing
infrastructure gaps - Building sustainable and resilient
infrastructure has been given due
importance with sector specific
flagship programmes such as
SAUBHAGYA scheme, PMAY etc. - Institutional mechanism is needed
to deal with time-bound resolution
of disputes in infrastructure sector
ANALYSES
FOCUS ON A $5-TRILLION
ECONOMY
Th e Economic Survey’s strategy on
India becoming a $5-trillion economy is
a growth model built around investment
and exports with private investment
being catalysed by conducive foreign
investment rules, political stability, and
an effi cient judiciary.
Overall, India needs to grow at the
rate of at least 8 per cent to reach this
target by the end of 2024-25. India is
not there yet. Compared to the growth
rate of the gross domestic product of 6.8
per cent during 2018-19, the projected
growth for 2019-20 is estimated to be at
7.0 per cent. Th e Survey has mentioned
emphatically that private investment
will be the key driver of the growth.
What is not clear, writes Th e Telegraph
“is how to stimulate private investment.
Two things have been mentioned in this
regard. Th e fi rst is that reduced policy
uncertainty helps boost investment......
Th e second element mentioned is that
there is a need for a strategic blueprint
and identifi cation of tactical tools to
achieve the target. Constraints such
as overcrowded courts and legal delays
have been mentioned. Th e target is clear
and certainly not easy, but the road map
to attain it is unclear.”
Th e Business Line writes that the
key feature that sets apart this year’s
Survey from its predecessors is its
single-minded focus on Prime Minister
Narendra Modi’s vision of transitioning
India to a $5 trillion economy by
FY25. It argues that “policy-making
today needs to account for global
economies being in a constant state
of dis-equilibrium and proceeds to
outline a blueprint to achieve the $5
trillion goal. Upending conventional
wisdom that India needs to fi re up its
consumption engine for high growth,
it argues that it needs to shift gears to
an investment-led model that sets off
a virtuous cycle. It demonstrates, with