Economic Survey 2020 | Government to help airlines double fleet size by 2024
The government is looking to ease conditions that will allow airlines in India to double their fleet by 2024, according to the Economic Survey 2020.
Economic Survey 2020 projects economic growth at 6-6.5 percent in the fiscal year starting April 1. FY20 GDP seen at 5 percent. Copies of the document have been distributed to MPs in Parliament on January 31. Parliament is adjourned till 11 am tomorrow.
A full copy of the document can be found here.
This blog will also bring you LIVE updates on the Economic Survey to be presented at 1.45 pm on January 31 by the Chief Economic Advisor (CEA) Krishnamurthy V Subramanian.
The annual Economic Survey is usually presented a day before the finance minister tables the Union Budget in the Parliament. Prepared by the economic division of the Department of Economic Affairs, it serves as the official report of the economy.
The Economic Survey document comprises of Volume I, Volume II and the statistical appendix. Tabled in both Houses of the Parliament, it reviews the developments that took place in the Indian economy over the past financial year.
It gives a detailed account of the state of the economy, prospects and the policy challenges. It carries sectoral overviews and comments on reform measures that are required. The survey’s outlook serves as a marker about future policy moves.
The survey puts out economic growth forecasts, giving out detailed reasons why it believes the economy will expand faster or decelerate. Commentary on topics such as GDP growth, job growth and GST collection is expected in this year's Economic Survey.
Authored by Chief Economic Adviser Krishnamurthy Subramanian and his team, the Survey serves as the official report of the economy and as a policy guide. The government is not bound to follow these recommendations.The Survey, in the past, has favoured policy moves that come into conflict with the official line of thinking of the government in power. These do not necessarily serve as pointers to what to expect in the Budget. On many occasions, policy changes recommended in the document have not found a place in Budget proposals.
As of September last year, road construction slowed down to 12.7 km a day, the Economic Survey 2019-20 noted. This decline in pace has largely been attributed to subdued private sector interest in existing models and issues in land acquisition for highways. Private sector investment in roads sector stands at Rs 12,000 crore until September 2019.
The Survey is peppered with quotes from ancient philosophers, iconic litterateurs, Nobel laureates, modern-day politicians and sacred writings from holy texts, including the Bhagvad Gita and Rig Veda.
Healthcare spending, as percentage of total expenditure, has remained flat at 5.3 percent in last two consecutive financial years, according to Economic Survey 2020. In terms of Gross Domestic Product (GDP) the government spending on healthcare is 1.6 percent in the FY20 budget estimate, a small rise from 1.5 percent in FY19
In the economic survey 2020, Chief Economic Adviser Krishnamurthy Subramanian has strongly countered former CEA, Arvind Subramanian's questions on the accuracy of Indian GDP numbers.
CII President to CNBC-TV18: Some divestments, like that of Air India, need to be done as fast as possible. Need mutual trust between industry and government and between industry and society. Government has been listening to industry to try and build trust. Industry has to stop working on a “jugaad” basis and work on a global governance. Industry has to gain more maturity in both running business and its interactions with government.
CII President to CNBC-TV18: China, Vietnam were assembling before they became manufacturing hubs. Coastal economic zones have worked in other countries, can work in India as well. Coastal economic zones will work only if bureaucracy is removed. Cost of doing business is as important a parameter as ease of doing business. Monetisation of government assets via a Temasek-like model is a long-term plan.
Confederation of Indian Industry President to CNBC-TV18: Economic Survey talks about free markets, that is the way to go. Industry should be 'left alone' as much as possible.
Rajani Sinha, Chief Economist and National Director – Research, Knight Frank India: The Economic Survey has projected GDP growth of 6-6.5 percent in FY21. This will require strong boost to consumption for the growth to pick up to these levels. Sharp pick up in investment growth looks difficult given the excess capacity in the manufacturing sector, poor health of NBFC sector and high NPAs plaguing the banking sector. The Survey has correctly identified the weakening health of the NBFC sector and suggested a framework for policy makers to efficiently allocate liquidity enhancements in the sector. The detailed discussion on infrastructure shows the Government’s strong intent to push up infrastructure investment as long-term growth propeller for the economy. The more critical aspect would be increased budgetary allocation for infrastructure investment in the Union Budget for FY21.
Elias George, Partner and National Head – Infrastructure, Government and Healthcare (IGH), KPMG India: The government has rightly emphasised the need to ramp up and modernise India’s infrastructure stock for improving everyone’s ease of living, for enabling and enhancing livelihoods, and for reviving economic growth. The survey underlines the need to spend $1.4 trillion to attain our national aspirations of becoming a $5 trillion dollar economy by 2025, and also highlights the need for building next generation infrastructure, as well as for measures to create an appropriate enabling environment to meet the requirements of industry 4.0.
The focus of the survey on further simplifying processes involved in setting up new businesses, as well as on facilitating business aspirations at a district level are in accordance with its overarching goal of equitable and universal wealth creation.
Realising economic growth targets and attaining national aspirations call for not just renewed focus and investment in key sectors like infrastructure and rural empowerment, but also on establishing and enabling a climate of trust. Consequently, the survey’s emphasis on strengthening India’s trust economy and on the creation of simpler and speedier contractual enforcement regimes are indeed most welcome.
CEA Subramanian to CNBC-TV18: Government intervention makes sense when there is a market failure. The market failure that exists today in some areas in the economy is not as bad.
CEA Subramanian to CNBC-TV18: Should wait for impact of measures taken with respect to NBFCs and Realty. Steps that have been taken manifest on NBFCs, realty sector to manifest with lags.