It stifles freedom: Economic Survey cautions Modi govt against excessive intervention in market | 10 points

The Economic Survey has said govt interventions often result in undermining the market's ability to support wealth creation and lead to outcomes which are opposite to those intended.

Cautioning the Narendra Modi government against excessive intervention in the market, the Economic Survey has said such interventions, though well-intentioned, often result in "stifling economic freedom".

Elaborating on this, the Economic Survey has said that government interventions often result in undermining the market's ability to support wealth creation and lead to outcomes which are "opposite to those intended".

"While there is a case for government intervention when markets do not function properly, excessive intervention, especially when markets can do the job of enhancing citizens' welfare perfectly well, stifles economic freedom," the Economic Survey says.

It recommended that the government must systematically "examine areas of needless intervention and undermining of markets".

However, the Survey does not argue that the government should not intervene at all.

It suggests: "the interventions that were apt in a different economic setting may have lost their relevance in a transformed economy. Eliminating such instances will enable competitive markets spurring investments and economic growth."

The Economic Survey, which was tabled in both houses of Parliament on Friday, has asked the central government to deliver expeditiously on reforms to revive the economy's growth. The theme of the Economic Survey this time is wealth creation, promotion of pro-business policies, strengthening of trust in the economy.

Here are other top 10 highlights from the Economic Survey:

1) India's GDP growth is likely to hover between 6 and 6.5 per cent in financial year 2020-21. This will be higher than the 5 per cent growth in this fiscal.

2) The Economic Survey has said in order to revive growth, the government may need to relax its fiscal deficit targets for the current financial year (2019-20).

3) The share of formal employment has increased from 17.9 per cent in 2011-12 to 22.8 per cent in 2017-18. This reflects increasing formalisation of the Indian economy. A rise in share of formal employment indicates that more people are getting regular jobs and being employed in the organised sector.

4) The Economic Survey said as per the World Bank, India ranks third in number of new firms created. It said that between 2014 and 2018, new firms in the formal sector saw a cumulative growth rate of 12.2 per cent, as compared to 3.8 per cent during 2006-2014. "About 1.24 lakh new firms were created in 2018. This was an increase of about 80 per cent from about 70,000 firms in 2014."

5) In regards to the Modi government's ambitious goal of making India a $5 trillion economy, the Economic Survey has said ethical wealth creation will be the key to achieving this target by 2025.

6) The Survey states that to achieve a GDP of $5 trillion by 2024-25, India needs to spend about $1.4 trillion over these years on infrastructure.

7) Reflecting on job creations by the Modi government, the Economic Survey said 2.62 crore new jobs were created in India between 2011-12 and 2017-18. These jobs were among regular wage/salaried employees.

8) Projecting a positive picture on gender parity in employment, the Economic Survey states that regular employment of women has increased by 8 per cent in 2017-18 over 2011-12.

9) The Survey has also opposed the policies of debt waivers and said such initiatives disrupt the credit culture and reduce formal credit to farmers.

10) The Survey also calls for improving governance in public sector banks, more disclosures to build trust. It says measures must be taken to make it easier to start new business, register property, pay taxes and enforce contracts.