India needs to shift gears and sustain a real GDP growth rate of 8 per cent for fructifying Prime Minister Narendra Modi's vision of the country becoming a 5 trillion dollar economy by 2025, said the Economic Survey 2018-19 tabled by Finance Minister Nirmala Sitharaman in the Parliament on Thursday.
The survey departs from traditional thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium. Rather than viewing the national priorities of fostering economic growth, demand, exports and job creation as separate problems, the survey views these macroeconomic phenomena as complementary to each other.
"Thus creating the virtuous cycle with investment, especially private investment, as the main driver can enable growth in each of these important macro variables," said the survey.
In an uncertain world, it said, three key elements are necessary: a vision, a strategic blueprint to achieve the vision, and practical tools to recalibrate constantly to the strategic blueprint.
Among these, treating people as humans and not as robots as in classical economics, creating data as a public good, enhancing the legal system for enforcement of contracts, insuring consistency of policy with the blueprint are some tools.
The survey also utilises advances in behavioural economics to address issues of gender equality, a healthy and a beautiful India, savings, tax compliance and credit quality. It recognises the role of social norms in the success of initiatives such as Beti Bacho Beti Padhao, Swacch Bharat Mission and Jan Dhan Yojana to effect behavioural change.