‘Economic Survey: Vision document of the people, by the people, for the people of India’

(Article is presented in two parts - Part 1 covers about India’s Vision document: Economic Survey while Part 2 is on Union Budget 2019: Mission document and how their intricacies are trying to guide us for the vision of US Dollar 5 trillion economy by 2024-2025 as envisaged in Economic Survey 2019)

                                                                      

                                                             Part 1

‘Economic Survey: Vision document of the people, by the people, for the people of India’

‘Economic Survey 2019’ for the first time made a departure from past trends on many fronts. It’s a departure of India’s past for the future while travailing its path of present. It has aspirations, ambitions and data centric targets. It lays emphasis on ‘Behavioural Economics’ in the age of Robotics!! There is a fine departure from past trends ‘Classical Economics’ which envisages economy always in equilibrium, into an economy which is either in virtuous or vicious cycle and thus can never be in an equilibrium. It focuses on Behavioural Economics, Nudge Theory which Chief Economic Advisor of India studied during his Chicago Booth days from none other than Richard Thaler!! (Noble Prize for Economics in 2017). There might be some who neither understand or believe nor glorify the contents of ‘Nudge Theory’ but Noble Prize and empirical research has made it sacrosanct in Modern Economics. People of India, politicians, economists or any learned person whatever be your ideology can’t target Economic Policy 2019 neither its shift to Behavioural Economics when world has celebrated ‘Nudge Theory’ with a Nobel Prize. Further, everyone knows how economic equilibrium was challenged in the aftermath of global recession 2008.

 

‘Economic Survey 2019’ is touted as Country’s Vision document and guided by ‘Blue Sky Thinking’ & US dollar 5 trillion economy by 2024-2025. It’s the first time youngest CEA Krishnamurthy V. Subramanian & PEA Sanjeev Sanyal, two of India’s finest minds have come up with short videos of approx. 2mins detailing outlines of each chapters like chapter 1: shifting gears & other chapters like- policy for real people, not robots, Nourishing dwarfs to become trees etc. and ‘chapters at a glance’ at every chapter end thus concluding it perfectly for a layman. Economic Survey entails some of important aspects concerning political-socio-economic conditions of India’s progress and it highlights -

• Report tells about Virtuous cycle of saving, consumption & investment, exports and jobs. Investment will lead to increase in production which leads to increase in exports & Jobs. It lays emphasis on US dollar 5 trillion economy by 2024-2025
• Easing out labour laws with an example of Rajasthan vis-a-vis with rest of country where how the state has benefited from it
• Data of the people, by the people, for the people and how Marginal cost of data goes down vs Marginal cost of benefit creating a massive social impact
• Chapter 5 touches a very critical issue impacting everyone and rural India in a lot: Ease of contractual improvement through productivity increase of Judiciary and a well-defined data percentage point improvement where backlog cases can be improved by efficiency improvement of 25% for lower courts, 18% for Supreme Court & 5% for High Court with same level of sanctioned persons allotted.
• Growth model is again put on time & tested export-oriented one while taking examples and data analysis from East Asian countries, China, Japan of 80s, Mexico, US & others with marvellous data patterns
• Economic Survey touches upon Demographic pattern of each Indian states till 2041 where competition is shown on declining trend in year 2041 but it forgets to mention about ageing population in year 2041 and how it will impact our society & economy
• A centralised Minimum wages scheme is suggested to look upon when country has more than 1k minimum wages provisions for different states & Industries

Economic Survey and Economic Advisor in his speech puts special emphasis on private investment, data as public good, judicial reforms & India’s emergence as EV hub is quite inspiring.

It emphasises for EVs in India, a switch from conventional combustion engine players which makes one remember about complex political compulsion during introduction of computers in 90s or the use of ‘Jute-plastic’ and was a headache for government then. India has ambitious plan of leapfrogging to EVs that will eventually knock out conventional combustion engine cars which has to follow another regulatory reforms BS VI by 2020 adding more to their costs.

Government has put special emphasis for Electric Vehicles and its infrastructure. INR 10,000 crore allocated to the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme over three years. The industry is in its nascent stage but there’s a thrust in Union Budget and Government has introduced deduction of interest upto INR 150,000 on loan taken for purchasing electric vehicles is like envisioning a leap-frogging launch for E-mobility. Further, exemption on import of specified parts of electric vehicles such as E-Drive assembly, On board charger, E-Compressor and Charging Gun is made to encourage the segment. Government has recommended reduction of GST from 12% to 5% on EVs to GST council. It may not be unrealistic to visualise one of the Indian cities emerging as Detroit of EVs in the future.

There are definitely contradictions in report and from past official government deliberations as it talks about convergence of data which was against the spirit of ‘Aadhaar Act’ where it has put some restrictions of how to use it and for what Supreme Court has upheld its decision. Convergence of data has beneficial effects if used in a controlled and limited manner like the one it talks about-  Telangana Government ‘Samagra Vedika Initiative’ where seven categories of information about individuals are integrated for providing better potential benefits. Government is required to show restraint in the matter and build a better data protection authority.

The reports further gives the pill of ‘Nudge’ everywhere like suggesting and naming schemes after what they offer will nudge people to take them without considering that most of them have Hindi names having less impact in Non-Hindi states.

But finally you may call ‘India’s Economic Survey 2019’ as unrealistic or may laugh at calling it secular and philosophical but the Economic Survey 2019 has carried out a fantastic report and should be called as ‘BADLAV’ in real sense firstly due to its departure from past trends.

Economic Survey mentions BADLAV as - Beti Apki Dhan Laxmi aur Vijay Laxmi as an adoption of Behavioural economics; transforming from ‘Beti Bachao Beti Padhao’ and there are other references such as Vaidic women sages - Gargi, Maitreyi, Janki Raman and Radha-Krishn which is a welcome step for presenting it with an Indian touch in itself.