Business Standard

The Budget, the Survey and the trilemma

The Economic Survey correctly argues for investment-led growth. The Budget understandably wants to tap a cheap pool of global savings. But can these co-exist?

Economic Survey 2018-19 which was tabled in Parliament, during the ongoing budget session in New Delhi
Premium

Economic Survey 2018-19 which was tabled in Parliament, during the ongoing budget session in New Delhi

Sajjid Chinoy
Two big themes emerged from this year’s Economic Survey and Budget — one explicit and the other more implicit. The Survey explicitly batted for re-stoking investment-led growth. This is foundational. As the contrasting experiences of Latin America and East Asia — as well as India’s own experience in the mid-2000s — have revealed, strong growth can only be sustained when underpinned by private investment. Bursts of consumption-driven growth are unsustainable because they inevitably spawn imbalances, either domestic (higher inflation) or external (wider current account deficits). An investment-led strategy therefore has to be the lynchpin for sustained 8 per cent growth. 

Meanwhile,
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jul 28 2019 | 10:50 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com