‘India needs to create new labor-intensive exports’

ANKARA

The economic survey of India “admits” the country needs to create new and focused labor-intensive exports like China did in the previous decades, an expert said on Friday.

The Narendra Modi-led Bharatiya Janata Party (BJP) government tabled on Friday in parliament country’s economic survey for 2019-20 and projected a growth of 6% to 6.5% for next fiscal. However, it said that 2019-20 GDP would be around 5%, lower than 7% which it predicted in previous economic survey.

“This is a highly optimistic projection considering that Gross Domestic Product (GDP) growth for 2019-20 is likely to be below 5%,” said M K Venu, one of India’s top journalists who writes on country’s economy.

Venu said that the economic survey suggests India create labor intensive exports that can generate 40 million new jobs.

On India’s banking sector, the survey according to Venu, admits that the scale of lending is too small with regard to India’s GDP of $3 trillion.

India is world’s seventh largest economy and Modi has set a target of becoming $5 trillion in coming years but the country is witnessing a constant slowdown in its economy.

Under Modi, India witnessed a downward spiral for last five quarters in a row with GDP growth falling to 4.5% in July-September period last year which is slowest pace of growth in last six years. It also recorded highest unemployment rate in last 45 years.

The latest survey, however, said that to achieve goal of India becoming $5 trillion economy, “the invisible hand of markets will need the support of the hand of trust”.

Suggesting reforms, the economic survey said India needs to “promote pro-business policies”. It added that continued global trade tensions could hit India's exports.

Venu said that the targets set by Modi government in the economic survey were to be achieved in his first five-year term from 2014 “but he could not succeed in steering the economy to a higher growth path”.

In a tweet, Indian Prime Minister Narendra Modi said: “The #EconomicSurvey 2019-20 focuses on wealth-creation for 130 crore Indians. It outlines a multi-faceted strategy to achieve a $5 trillion economy through enterprise, exports, ease of doing business and more. Do read!”