“Even though the target of India becoming a $5 trillion economy looks ambitious, it is realistic and achievable considering multiple successes in all domains of governance in the last five years”, said Prof. KV Subramanian, Chief Economic Advisor, Government of India. He was addressing the Assistant Collectors under Training of 2018 batch allotted to Telangana, Military Engineer Services Probationers, Group-I Officers of
Telangana State, at DrMCR HRD Institute.
The theme of his presentation was “The State of Indian Economy Prof.Subramanian said that investments, which would be the key driver to reach the target of $ 5 trillion economies in the next five years, would not only give a big boost to Industry, Services, and Business, but would also create innumerable jobs for all sections of society, including their poorer counterparts, and thereby making the process of development and growth truly inclusive in nature. Continuing his address, Prof. Subramanian pointed out that India took a long period of 55 years to reach the first trillion economy mark and thereafter grew consistently from $ 1.7 trillion to a whopping $ 2.7 trillion in the last five years,
that is, from 2014-19.
“Currently, India is the 6th largest economy and reaching the mark of $ 5 trillion economy would make it the 3rd largest economy, only after the US and China. “For this to happen, the real term growth of 8% per annum is the need of the hour. And the Economic Survey, 2018-19 lays down a strategic blueprint to achieve this cherished goal”, stated Prof. Subramanian. Prof Subramanian said that many enterprises preferred to stay small to benefitfrom incentives, and as a result, their growth was lower compared to their real potential. He, therefore, underlined the importance of providing incentives tothose enterprises which have the real potential to grow at a rapid pace.Prof. Subramanian called upon the States, across the country, to bring in labour reforms enhancing the threshold of employee number to increase theirproductivity.
Citing Rajasthan as a successfulexample of enhancing productivity, Prof Subramanian said that it enhanced the limit of employees to 300 from 100 to benefit from labour rules. “The productivity in this case increased from 3.65 percent to a staggering 9.33 percent, after labour reforms”, he added. Prof Subramanian pointed out that larger firms have greater potential for employment generation in the longer run and the Micro, Small & Medium Enterprisesrun the risk of becoming less impactful in generating employment.
Highlighting the accomplishments in the last five years, Prof Subramanian said that reduction in average inflation by about half, that is, the Consumer Price Index from a soaring 12% to 6% and Gross Fiscal deficit from 4.5% during 2013-14 to 3.4% during 2018-19 helped achieve macroeconomic stability.
