In July 2019, India’s chief economic adviser Krishnamurthy Subramanian released his first Economic Survey, a document that predicted 7% GDP growth for the country in FY’20 and called for ‘blue-sky’ thinking.<br /><br />The idea was that if the government and the country’s citizens adopted an uninhibited approach to problem-solving, everyone could achieve their goals.<br /><br />A year later, and India has stumbled on its journey to becoming a $5 trillion economy. GDP growth did not turn out at 7% as Subramanian’s team had predicted. It instead is set to clock in at a much lower 5%, on the back of falling consumption and muted private investment.<br /><br />Economic Survey 2020 acknowledges this, with Subramanian noting in a press conference on Friday afternoon that the slump has bottomed out. More importantly though, the document and believes the slump has bottomed out but places India’s slowdown in two contexts.<br /><br />The document situates the events of last year within the global economy’s slowdown – “world output growth estimated to grow at its slowest pace of 2.9% since the global financial crisis” – and in the framework of India’s financial sector “acting as a drag on the real sector”.
