The Economic Survey 2024, like its previous editions, may convey more over time than it does in the moment. At first blush, it seems to have prudence and conservatism written all over as it pegs GDP growth for 2024-25 at a modest 6.5-7 percent.
Chief Economic Adviser V Anatha Nageswaran even suggested that we do not need big-ticket reforms, but must fix the nuts and bolts to keep the economy humming. His six-pronged growth strategy is to shift away from structural reforms of the last decade that focused on supply-side interventions. Instead, he urged the government to target next-gen reforms that are bottom-up, encouraging private investments that will create jobs and increase incomes.
Over the past 30 years, India’s nominal GDP grew 35 times in rupee terms, while it saw a 12-fold rise in output from $300 billion in 1993 to $3.6 trillion in 2024.
According to Nageswaran, the country’s medium-term growth rate is pegged at above 7 percent. But first, he suggested an all-hands-on-the-table approach focusing on all sectors including agriculture, industry and services, rather than cherry-picking manufacturing or services.
As for unemployment, which the opposition claims is hovering at a 45-year high, the Survey noted that India must create 8 million jobs a year. Nearly half the 56.6-crore workforce is employed in agriculture. In other words, industry and services have a country mile to cover. The informal sector and smaller enterprises—the lifeblood of the Indian economy—need a helping hand, be it via credit support or deregulation.
Public investment has been playing the role of a relief pitcher for quite some time now, and it’s high time India Inc weighed in. It’s not that corporates are bleeding—far from it, they are raking in the dough. Yet, private investment growth continues to be squat in single-digits, waiting for household consumption to show a proof of life. But domestic demand is a product of quality jobs and rising incomes, for which the Survey squarely puts the onus on the private sector and the states. While companies are tasked to create jobs, it wants the states to address issues that influence growth, jobs and productivity. While they do have a role to play, it’s also true that growth and jobs are equally among the Centre’s key responsibilities. So, the reforms process at that level should not stop.