NEW DELHI: Economic Survey 2019, presented in Parliament on July 5, projects the country’s gross domestic product (GDP) to grow at a rate of seven per cent in the fiscal year 2019-20, against a five-year low of 6.8 per cent the previous year. The growth can be attributed to political stability aiding a pick-up in demand and investments. India would need to grow at 8 per cent annually to become a $5-trillion economy by fiscal year 2025, the Survey assessed.
The estimate is the same to the Reserve Bank of India’s (RBI) reading, which lowered its forecast by 20 basis points from 7.2 per cent in June. India continues to be the fastest growing major economy in the world, ranking third in terms of size after U S and China.
The investment rate, meanwhile, is predicted to pick up following an improvement in consumer demand and bank lending. Oil prices staying well below their 2018 peak is also a positive for consumption, which accounts for about 60 per cent of GDP, the Survey said.
Consumer inflation (rate of increase of prices) was contained within 4 per cent and it has shown a downward trend since FY 2016. The Index of Industrial Production, an indicator of growth across key industries, registered a rise in FY 2017 and FY 2018, but has dipped in FY 2019.
India’s economic growth will depend upon the ability to provide affordable, reliable and sustainable energy to citizens and the country is required to raise per capita energy consumption by at least 2.5 times to increase per capita income by $5,000, the survey said.
The survey predicted that the national Total Fertility Rate (TFRl) would be lower than the replacement rate by 2021. The TFR for India as a whole is 2.3, currently. Rural areas have a TFR of 2.5, while urban areas are comparatively lower at 1.8.
The Survey also noted that electric vehicles would be the future of mobility in India and highlighted that the country can emerge as a manufacturing hub of EVs with favorable policy support.