HYDERABAD: “Even though the target of India becoming a $5 trillion economy looks ambitious, it is realistic and achievable, considering multiple successes in all domains of governance in the last five years,” Prof KV Subramanian, Chief Economic Advisor, Government of India, said at an event here on July 13.
Investments, which would be the key driver to reach the $5-trillion-economy target in the next five years, would not only give a big boost to the industry, services, and business but also create innumerable jobs for all sections of society, thereby making the development truly inclusive, Subramanian added.
‘Real-term growth of 8% per annum need of the hour’
Addressing the 2018 batch of assistant collectors under training allotted to Telangana, military engineer services probationers, group-I officers of Telangana State, senior officers from Madhya Pradesh and other trainees at Dr. MCR HRD Institute in Hyderabad on Saturday, Subramanian made a presentation on ‘The State of Indian Economy’. He pointed out that India took 55 years to reach the first trillion-dollar-economy mark, and thereafter, grew from $1.7 trillion to a whopping $2.7 trillion in the last five years, that is, from 2014-19.
India is now the sixth-largest economy, and reaching the $5-trillion mark would make it the third-largest economy, only behind the US and China. “For this to happen, real-term growth of 8 per cent per annum is the need of the hour; and the Economic Survey 2018-19 lays down a strategic blueprint to achieve this cherished goal,” Subramanian said. The chief economic advisor further said that many enterprises preferred to stay small to benefit from incentives, and as a result, their growth was less than their real potential. He underlined the importance of providing incentives to enterprises that have the potential to grow rapidly.
Subramanian called upon all States to bring in labour reforms by enhancing the threshold of the number of employees, to increase their productivity. Citing Rajasthan as an example of this, he said it increased the limit of employees from 100 to 300 to benefit from labour rules. “The productivity in this case increased from 3.65 per cent to a staggering 9.33 per cent, after labour reforms in Rajasthan,” he pointed out.
Highlighting the accomplishments in the last five years, Subramanian said reducing the average inflation by about half, that is, the Consumer Price Index from a soaring 12 per cent to 6 per cent, and gross fiscal deficit from 4.5 per cent in 2013-14 to 3.4 per cent in 2018-19 helped achieve macroeconomic stability.
Responding to Subramanian, Special Chief Secretary and director general of MCR HRD Institute BP Acharya said that while encouragement to large industries was important in its own right, micro, small and medium enterprises should not be ignored, considering their substantial role in generating employment, especially for women from humble backgrounds and lower education levels, and thereby reducing poverty. “There are multiple success stories of MSMEs, with multiple beneficial outcomes for all stakeholders.”