Can Economic Survey Give A Clear Roadmap? | NDTV Profit
Category
đź—ž
NewsTranscript
00:00Can the economic survey give us a clear road map, what have been the big highlights?
00:05I'm talking about all of this and more with Prachi Mishra, she's former Chief Systemic
00:10Issues Division of the IMF. We're speaking on the economic survey and of course on the eve of the
00:16budget. Ms. Mishra, great to have you on NDTV network. Thank you so much for speaking with us.
00:22Absolute pleasure. Let's start with one key point or key data point in the economic survey and I'm
00:29keen to know your view on it. Is the growth outlook, the GDP growth outlook that the survey
00:35puts across, the forecast is between 6.5 to 7 percent. Is it a conservative forecast considering
00:43that a lot of global agencies have actually upped India's growth forecast to 7 percent.
00:49We have grown as high as 8 percent in the last quarterly numbers.
00:53Thank you, thank you Tamanna. A pleasure to be here. So I think let's put your question in a bit
01:02of perspective. I think the economic survey actually very rightfully highlights the
01:08impressive performance of the Indian economy despite a series of domestic and global shocks.
01:15So for FY24, actually real GDP growth as you know is estimated at a whopping 8.2 percent and
01:24so this is a third strong, third successive year of strong growth. So if you look at 7 percent
01:34against this backdrop, it's definitely not conservative and in fact the survey correctly
01:44highlights that in the medium term what you need is a sustained growth and note the
01:54emphasis on sustained growth. So if we can really sustain growth of 7 percent or more
02:00in the medium term, that can you know take us to achieving the goal of exit Bharat.
02:10So long story short, I think you know the forecast, the projection of 7 percent or between
02:186.5 to 7 percent is realistic. It's prudent and don't forget that it's against the backdrop of
02:27a series of very strong growth years. Let me stop here. Okay, so it's not conservative. 7 percent
02:37definitely isn't. I was talking about the lower end of it, 6.5 percent looking at the kind of
02:41growth we had. Also in the context of another statement that the Chief Economic Advisor made,
02:47talking about strong growth in private capex. I thought that was fairly interesting,
02:53Miss Mishra, considering that this has been our bugbear, isn't it? That private capex is
02:57not coming back or not growing at the extent which is required. What are your thoughts on that and
03:03if there's anything else which really stood out for you from this year's economic survey?
03:09Right, I think actually the survey correctly points out that private GFCF as gross fixed
03:20capital formation has grown. We are seeing growth in private sector capital formation.
03:31So, I think for FI, if I'm looking at the figures directly for FI24, it was about 8 lakh,
03:40even above, it's actually close to 9 lakh, very close to 9 lakh crores. It's up from,
03:49you know, if you compare pre-COVID, it was about 5 lakh crore. So, private sector capex is picking
03:56up and a lot of high frequency indicators are pointing to a pickup in private sector capex.
04:02Real estate, as you know, you know, real estate after series of shocks, the real estate sector
04:08and construction is picking up and we are seeing private sector capex picking up. But many high
04:15frequency indicators of investment, even if you look at investment, good imports, or you look at
04:22you look at cement, several of these indicators are actually, you know, fairly above pre-pandemic
04:30levels. So, I think the survey correctly points out that we are actually seeing a pickup. And
04:36again, I think, you know, what is important is to sustain the pickup. And so, to go on to your
04:44other question, what really, you know, stuck to me from the survey is, you know, it really,
04:55while it highlights the resilience of the Indian economy, at the same time, it does strike
05:00appropriate caution. And it highlights the importance of achieving sustained growth,
05:06sustaining the achievements so far to, you know, to take, you know, to achieve our bigger goal of
05:17becoming a big sub-par. And there, as you know, the, you know, and then the survey lays out
05:23six priority areas, which include, you know, which include among other things,
05:31developing, giving the right fillip to agriculture markets as well.
05:36Yeah. So, I started, in fact, this conversation talking about how the economic survey, and we
05:42often as journalists, at least look for clues from the economic survey to what we could see
05:45in the budget. Would you say that the Vixit Bharat roadmap is definitely one of those clues,
05:52is going to be a big focus, and the economic survey lays out with quite a bit of clarity
05:58how you get there? You know, it's hard to, you know, guess, I think, what is going to come
06:08tomorrow. But I think if you ask me, first and foremost, I think it clearly seems that the
06:17government will stick on its plan for fiscal consolidation, whether, you know, whether
06:23the number is going to be 5.1 or slightly below that. But it's fairly clear, you know,
06:34you know, I would expect the budget to stick to its path of fiscal consolidation, you know,
06:39highlight, you know, the asset. Another, you know, important thing which the survey highlights is
06:45the asset monetization program. So, the asset monetization program actually is gaining
06:51quite a bit of traction, you know, some of the targets that were highlighted in FY22 budget
06:57are actually being fructified now. So, I do expect a continuation of, so, you know, how,
07:03you know, how do you stick to a fiscal consolidation target when you're increasingly
07:08moving to CAPEX spending? And as we know that, you know, public sector CAPEX has played a big role,
07:13how do you sustain that? And, you know, I think one of the ways is to, you know, raising resources
07:19and the asset monetization program has been one of the flagships. And I was very, you know,
07:27encouraged to see that a survey highlighted that the program, the asset monetization program,
07:34going back to FY22 budget, you know, these things take time, it's actually beginning
07:38to gain traction and it's very close to what was targeted. I want to just get your sense
07:45also on the PLI scheme and I thought this was another highlight. Now, we know, we have been
07:51seeing that the PLI scheme has really worked, especially in some segments, your EMS, mobile,
07:58etc., IT hardware also will be one to watch out for. So, that's what the economic survey also says.
08:04These schemes are gathering momentum as of May 2024, delivering handsomely.
08:09I want to understand from you, Prachi, do you think that there is room for more? Do we need
08:14to now expand PLI schemes to other sectors? Is that the way forward to achieve our goal of an
08:21impetus to manufacturing? You know, I think on the PLI scheme, let me also, it's very closely
08:32linked to the discussion of employment as well. And I thought, you know, I think the survey,
08:40you know, makes an important point about, you know, the private sector
08:51to come forward and to, you know, join, you know, what they call about, what they call,
09:00what the survey calls as the collective social responsibility. So, I think, so on the PLI
09:07schemes, I think, again, you know, picking, you know, picking sectors, first of all, you know,
09:16you know, again, it was encouraging to see the survey that, in the survey that, you know,
09:20how the PLI scheme has worked in several aspects. You know, I think a careful evaluation of what has
09:29worked and what has not and putting, you know, putting the eggs respectively in those baskets,
09:38I think would be the way, you know, would be the way forward in the sense that, you know,
09:43which are the sectors which the PLI can target and which can also be, you know, consistent with
09:52creating employment, you know, more employment and good quality employment for
10:00for, you know, an increasing, you know, for a workforce as the labour force participation
10:05increases. So, I think, long story short, I would say that, again, you know, I'm encouraged to see,
10:14you know, some of the evidence on PLI. It would be good to see more of it and accordingly,
10:22you know, targeting sectors which can, you know, boost manufacturing but at the same time
10:28boost, you know, those sectors which are also high, which are also intensive in
10:35domestic employment because, as you know, you know, India is a labour abundant country but
10:38increasingly we have seen, you know, capital to labour ratio or companies increasingly employing
10:44capital intensive techniques. So, the PLI scheme can actually be catered to industries which are
10:51more labour intensive that can be like, you know, killing two birds with one stone. So,
10:58basically, you can give a boost to manufacturing at the same time, those manufacturing sectors
11:03which have the potential to create high employment. But let me also add that, you know,
11:12when we think about PLI schemes, we mostly think about manufacturing but, you know, in principle,
11:17you could also think about high value agriculture and this is, you know, something,
11:21this is something which one of the six pillars which the survey highlighted was also, you know,
11:30exploiting the untapped potential in agriculture markets and, you know, at some point, you know,
11:36high value added agriculture could also be, you know, could also be, you know, one of the candidates
11:44for, you know, boosting the employment potential, of course, but also the export potential
11:54in agriculture. Absolutely. So, not just for semiconductors, also to help turning potatoes
12:00into potato chips, for example, could all be ways to use PLI schemes. Absolutely. Food and
12:06beverage textiles and food and beverage are the two largest, you know, the other two sectors which
12:12employ the highest, have the highest employment share in manufacturing, actually. Just one last
12:19point, one last point, Ms. Mishra, and this is just because I found this so interesting and so
12:24important and wanted your view on it as someone who sees the economy so closely across the world,
12:29actually. So, the economic survey talks about a lethal mix that could undermine public health and
12:36productivity and diminish India's economic potential and marks out four factors, social
12:43media, screen time, sedentary habits, and unhealthy food. Goes on to warn, quote-unquote, the private
12:51sector that don't push this at the peril of the nation's future. I just thought that was very,
12:57very interesting. What is your take on that, that there is an actual economic and a negative
13:02economic impact of things like this? Yeah, no, absolutely. So, I think I really appreciate the
13:09fact that the survey has gone beyond, you know, standard bread and butter stuff, which is, you
13:15know, just the economy, growth, inflation. You know, if you actually look at the employment
13:20section, again, you know, I'm focusing on this lot, a lot is in discussion. If you look at the
13:24employment section, I think it points out something very interesting, that employment is about dignity,
13:30self-worth, self-esteem, and self-respect, and standing in the family and community, and not just
13:35about the income it brings. And that is why it is in the enlightened self-interest of the Indian
13:40corporate sector, swimming in excess profits, to take its responsibility to create jobs seriously.
13:44So, I think this is another example of where, you know, in addition to what you said, you know, I
13:50think, you know, how do you boost productivity? How do you, you know, how do you create good jobs?
13:58You know, I think you have to go to some of the basics. And actually, there is research which has
14:04shown that, you know, increasingly, you know, Indian kids are getting into, you know, snacking
14:10habits, and it has detrimental effect on their health and productivity. So, again, I, you know,
14:15I would like to explicitly acknowledge and, you know, appreciate making the ambit of the survey
14:24a little bit wider beyond just the forecast for this year growth, and growth and inflation, and
14:30maybe the current account. So, absolutely, absolutely, I would say, you know, looking a
14:37little bit beyond the narrow focus, I think is much appreciated. And it really adds flavor to the
14:46survey. Completely, I found that an astonishingly insightful, you know, commentary coming in from
14:53the Economic Survey. Thank you so much, Miss Mishra for speaking with us. That was Prachi
14:57Mishra there on her take on the Economic Survey. And of course, we look forward to hearing you
15:01on the Budget Day after the announcements have made.