Economic Survey predicts 7% GDP in FY20 on stable macro landscape

Key Highlights: 

• Survey sees FY20 GDP growth at 7%, higher growth on stable macro conditions.

   

• India will need to grow at 8% p.a. to be a $5tn economy by FY25. Investment will have to be key driver to create virtuous cycles.

   

• Investment rate seems to have bottomed out, however, greenshoots in investment seems to be taking hold.

   

• Jan-March economic slowdown was mainly due to poll-related related activity.

   

• NBFC stress stated as reason for FY19 slowdown. Decline in NPAs is expected to enhance Capex cycle.

   

• General fiscal deficit seen at 5.8% in FY19 vs. 6.4% in FY18.

   

• Oil prices expected to fall in FY20.

   

• Accomodative MPC policy will help cut real lending rates.

   

• Rural wage growth has begun rising since mid-2018.

   

• A big hurdle to economy is poor enforcement of contracts and dispute resolution. Hence, steps to speed up legal process should be top priority.

   

• Savings & growth are positively co-related. Savings must increase more than investment.

   

• Indian MSMEs need to be seen as a source of innovation, growth, and job creation.

   

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