Budget 2020 : Economic Survey sets the tone for Budget 2020

The Survey's theme is 'Wealth Creation'

The Indian economy, which is buffeted with several challenges, is predicted to grow 6-6.5 percent in 2020-21, consistent with the Economic Survey tabled in Parliament on Friday.

This GDP growth forecast is seen as somewhat ambitious, provided that Indian economy is widely expected to shut current fiscal with 5 per cent growth.
The latest Economic Survey for 2019-20 was tabled in both Houses of Parliament by minister of finance Nirmala Sitharaman.

Wealth creation goal

With 'Wealth Creation' the theme for this year's edition, the most recent Economic Survey, which is the report of the performance of the economy, has come up with ten new ideas on the way to fulfil this wealth creation goal.

An important suggestion is that the Survey calling for "aggressive disinvestment" of Central Public Sector Enterprises (CPSEs) to bring in higher profitability, promote efficiency, increase competitiveness and promote professionalism.

It may be recalled that last year the Economic Survey for 2018-19 was imbued by the spirit of the “unfettered blue sky thinking” to attain the rainbow dream to become a $ 5 trillion economy by 2025. the newest Survey builds on the India's declared aspiration of becoming a $ 5 trillion economy.

Govt intervention

The Survey also focused on the govt interventions, and said that though the interventions are well-intended, they often end up undermining the power of the markets to support wealth creation, and that they cause outcomes opposite those intended. It listed four samples of anachronistic government interventions cited by the Survey are Essential Commodities Act related measures like blanket stock limits, Drug price control under ECA, Debt Waivers and Government intervention in grain markets.

The Survey suggests that Government must systemically examine areas of needless intervention and undermining of markets.

At best, the Economic Survey, prepared by the Chief Economic Advisor within the Finance Ministry Krishnamurthy Subramanian and his team, serves only as a policy guide and will only hint the path that Government could take in the upcoming budget as regards fiscal management.

The Government isn't bound to follow the policy prescriptions recommended in the Survey.

The Economic Survey for 2019-20 delves deep into the reasons for current economic slowdown while putting out a technique for the manufacturing sector to focus on 'assemble in India' paradigm in the coming days.

Current slowdown

This Survey is being presented at a time when the country is faced with a economic slowdown and therefore the budget is widely expected to sharply revise downwards the general tax revenue projection by Rs 1-1.5 lakh crore so on arrive at a sensible target.

If the tax revenue projection are cut on Saturday, this will be the second time that the projection will be changed for the present financial year .

Direct taxes collection (net of refunds) had declined 5.17 per cent till the previous week of January in 2019-20. This was due to whopping Rs 1.41 lakh crore refund. Government had collected Rs 7.32 lakh crore for this period (Rs 7.71 lakh crore).

Direct tax collection target for 2019-20 was Rs 13.35 lakh crore. this means government had to collect Rs 6 lakh crore in two months. The GST collections have also been but projected in most of the months this fiscal.

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