Economic Survey 2019-20

News

• The Economic Survey 2018-19, tabled in Parliament.

Aadhaar aided MGNREGS beneficiaries

• Economic Survey 2018-19 has used the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) as a case study to show the benefits of the use of technology in improving targeting and efficiency in welfare schemes, especially for the most vulnerable groups.
• The Survey cites data on the timeliness of wage payments, worker turnout, demand and supply of work under the scheme before and after Aadhaar-linked payments (ALP) were implemented as a proof for its benefits.
• Data show that in 2014-15, less than 27% of wage payments were generated within 15 days. Direct benefit transfers were introduced two years later. By 2018-19, more than 90% of wage payments were generated within 15 days.
• Payment delays drive away farmers in genuine distress, while others not in distress take the benefits. A person undergoing economic distress needs immediate and certain liquidity.
• Working for uncertain promised wages, which are likely to be realised with a substantial lag, presents an unattractive proposition for a person in distress as delayed payments effectively imply zero wages in adverse times, says the Survey.
• Scholarships, pensions, and subsidies for food, kerosene, and gas cylinders should be next in line to implement Aadhaar-based payments.

Economic Survey moots central welfare database of citizens

• The Economic Survey 2018-19, pitched for setting up a central welfare database of citizens by merging different data maintained by separate Ministries and departments which can be tapped for enhancing ease of living for citizens, particularly the poor.
• While the Survey pointed out that governments can create data as a public good within the legal framework of data privacy, it added that care must also be taken not to impose the “elite’s preference of privacy on the poor, who care for a better quality of living the most.”
• It also recommended granting access to select database to private sector for a fee, given that “stringent technological mechanisms exist to safeguard data privacy.”
• The government could utilise the information embedded in these distinct datasets to enhance ease of living for citizens, enable truly evidence-based policy, improve targeting in welfare schemes, uncover unmet needs, integrate fragmented markets, bring greater accountability in public services and generate greater citizen participation in governance, etc.
• The datasets talked about inclusion of administrative data such as birth and death records, pensions, tax records, marriage records; survey data such as census data, national sample survey data; transactions data such as e-national agriculture market data, UPI data, institutional data and public hospital data on patients.

Economic Survey lays out blueprint for $5 trillion economy

• The Economic Survey 2019 focusses on moving to a “virtuous cycle” of savings, investments and exports to transform India into a $5 trillion economy in the next five years.
• According to the survey India’s GDP is forecast to expand by 7% in fiscal 2019-20, slightly higher than the 6.8% in 2018-19.
• Survey made the point that data must be viewed as a public good and used in a concerted way to deliver services. It said that as data of societal interest is generated by the people, it can be created as a public good within the legal framework of data privacy.
• Another key area of focus for the Survey was the MSME sector and how to make it grow so as to boost profit creation, job creation, and enhance productivity.
• It noted that ‘dwarf’ firms (with less than 100 workers), accounted for more than 50% of all organised firms in manufacturing by number. Despite this, their contribution to employment was just 14% and to productivity a mere 8%.
• Large firms, on the other hand, are just 15% in number but account for 75% employment and close to 90% of productivity. Therefore, there is a need to “unshackle” MSMEs and enable them to grow into larger firms.
• The Survey also pointed to the need for labour reform, highlighting the fact that factories in States that have flexible labour markets are much more productive than those in States with rigid laws.
• The Survey also pointed to the need for labour reform, highlighting the fact that factories in States that have flexible labour markets are much more productive than those in States with rigid laws.

Shift focus to water productivity

• The Economic Survey 2018-19 has said as far as agriculture is concerned, the country should shift its focus from land productivity to irrigation water productivity and on devising policies to incentivise farmers to adopt efficient ways of water use.
• This should become a national priority to avert a looming water crisis.
• Agriculture remains the predominant occupation in terms of number of people employed. Also, agriculture is dependent highly on water. So, appropriate mechanism needs to be framed for economical use of water among small and marginal farmers, said the Survey.
• The survey said States such as Tamil Nadu, Karnataka, Maharashtra and Andhra Pradesh, which have high land productivity, tend to have very low irrigation water productivity, reflecting inefficient use of water and the need to re-calibrate cropping pattern.
• Adopting improved methods of irrigation and irrigation technologies will have a critical role in increasing irrigation water productivity.

Economic Survey 2018-19 calls for improvement in contract enforcement regime

• Contract enforcement remains the single biggest constraint to improve India’s Ease of Doing Business (EODB) ranking, which currently stands at 163 in the world ranking, the Economic Survey 2018-19 said.
• It remarked that in spite of a number of actions to expedite and improve the contract enforcement regime, economic activity was affected by the long shadow of delays and pendency across the legal landscape.
• Noting that the relationship between economic governance and the rule of law (Dandaniti) is the key to prosperity, and a bulwark against Matsyanyaya(law of the fish/jungle), the survey said two key issues need to be dealt with in order to make the judiciary more efficient and to clear the ‘legal logjam.’
• Firstly, the courts must achieve a 100% case clearance rate (CCR) so that there is zero accumulation to the existing pendency. Secondly, the backlog of cases already present in the system must be removed.
• CCR is the ratio of the number of cases disposed of in a given year to the number of cases instituted in that year.
• District and Subordinate (D&S) courts, which account for the bulk of pendency, received 1.5 crore additional cases in 2018 and had a backlog of 2.87 crore (as on January 1, 2018).
• But it managed to dispose of 1.33 crore cases in the year, thus, closing 2018 at 3.04 crore.
• There are currently 17,891 judges compared to the sanctioned strength of 22,750. On average, a judge disposes of 746 cases.
• It suggested improving the efficiency of the courts, increasing number of working days of courts, establishment of Indian Courts and Tribunal Services, and deployment of technology in legal system.

Survey calls for tax cuts, space for hotels in infra boost to tourism

• The Economic Survey 2018-19 has recommended a series of measures to boost the tourism sector, which saw a “sharp slowdown” last year.
• The recommendations include increased budgetary allocation for development of infrastructure, making land available for hotels, and reduction in taxes.
• The Survey, added that there was a need to strengthen the coordination mechanism of various Ministries and stakeholders to resolve issues in promotion of tourism in the country.
• Additionally, the State governments need to be sensitised about tourism being a major driver of employment and poverty alleviation.
• Pointing out that the sector experienced a sharp slowdown in 2018, the Survey stated that the foreign tourist arrivals (FTAs) in 2018-19 stood at 10.6 million compared with 10.4 million in 2017-18.
• Likewise, foreign exchange earnings (FEEs) from tourism stood at $27.7 billion in 2018-19 as compared to $28.7 billion in 2017-18. In terms of growth, the FEEs declined from 20.6% in 2017-18 to -3.3% in 2018-19.
• The Survey also showed that FDI in hotel and tourism also declined from $1,132 million in 2017-18 to $1,076 million in 2018-19.