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Strongly criticising the Economic Survey 2018 for having failed the people, the Congress party said it would need a miracle for the Indian economy to achieve a growth rate of 6.75% in 2017-18 and said the Survey created grounds for almost certain overall economic failure because it was based on premises that were questionable.
In a statement, former finance minister P Chidambaram said the future success of the economy was based on two conditions that were shaky: that the world economy would hold; and oil prices would hold. Neither premise, he said, looks particularly stable. According to Chidambaram, the government admits it has failed to meet the challenge of education, employment and agriculture. It also concedes progress on toilets, Jan Dhan, LPG connection and village electrification is inadequate and has not resulted in tangible outcomes.
Chidambaram said: “The Survey admits to the two underlying macroeconomic vulnerabilities — fiscal deficit and current account deficit and hints at slower consolidation. This admission belies the government’s claim of sound macro-economic fundamentals." He added that the government’s reliance on private investment and exports, suggests it has given up.
Simultaneously, Randeep Surjewala, spokesman for the Congress, said the Economic Survey lowering GDP growth forecasts to 6.75% is an admission that there may be a further downside due to demonetisation. The construction sector, which employs over 40 million workers, most of whom are migrants from the farm sector, who have returned dispirited to the villages. “Despite over 60% spurt in MGNREGA demand post-demonetisation, 19 States have a negative balance on MGNREGA funds as Central government has failed them on this count too,” Surjewala said.
Surjewala also pointed to the covetous eye being cast on the RBI: In a section on “Excess Capital with the RBI,” on page 99, the Economic Survey makes a renewed case for the RBI transferring Rs 4 trillion to the government. It suggests that this be used either to address NPAs and stressed assets or to retire a portion of the national debt. Surjewala said this money was expected to be the windfall from demonetization and when it did not fructify, the government wants the RBI to make good the fiscal gap.
“This is the RBI’s capital, which it deploys to stabilise the rupee as also our economy. Through the Economic Survey, Modi government is seeking ‘intellectual cover’ for its sinister design to utilise RBI’s capital to bail out a handful of crony capitalists from the NPA mess,” he said.
He said the nation had a lot to worry about with rising oil prices, no private investment, and limited government investment.