According to the Economic Survey, in the coming months, India will face challenge on the fiscal front following the economic slowdown that’s expected to impact tax collections amid rising state expenditure on the farm sector.
The other challenges will include oil prices after Iran sanctions, below-target revenue from the Goods and Services Tax, sourcing funds for big schemes, farmer’s income and healthcare.
The survey puts emphasis on fiscal consolidation and fiscal discipline and investments, especially private investments, as the growth driver. Private investment is the key driver for demand, capacity, labour productivity, new technology, creative destruction and job creation, the Economic Survey said.
It has also flagged fiscal devolution and federalism, expenditure reform, policies for micro, small and medium enterprises, the Goods and Services Tax and the reform of direct taxes.
Pointing out a demographic change, the Chief Economic Advisor said, “longevity of people is increasing, we have to think about increasing the retirement age”.
Regarding the minimum wage rules, the survey said currently, it doesn’t cover one in every three workers. “Minimum wages should cover all workers, irrespective of any wage ceiling… it should be fixed for four categories-unskilled, semi-skilled, skilled and highly skilled,” the survey said.
The Economic Survey has laid out a blue-print for growth and jobs for the coming five years, drawing on the initiatives by the NDA 1 government between 2014 and 2019.
The survey also advises using insights from behavioural economics to create an aspirational agenda for social change. Under this, the government’s flagship “Beti Baco Beti Padhao’ can become ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi), or from ‘Swachh Bharat’, the focus can shift to ‘Sundar Bharat’.
The roadmap to the 5 trillion dollar economy has been inspired by “Gandhiji’s talisman – think about the poorest person, the common man”, Chief Economic Advisor K Subramanian said.
