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Economic Survey sets out blueprint for $5 tn economy
Projects GDP growth for 2019-20 at 7%, an improvement from last fiscal’s pace of 6.8%Suggests moving the economy into a ‘virtuous cycle’ of savings, investments and exportsBats for private investment to help propel growth in demand, jobs and productivity
The Economic Survey 2019 presented by Chief Economic Adviser (CEA) Krishnamurthy Subramanian 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.
In his preface to the survey, the CEA said the team had been guided by a “blue sky” thought process, an unfettered approach to thinking about the appropriate economic model for India.
“When the economy is in a virtuous cycle, investment, productivity growth, job creation, demand and exports feed into each other and enable animal spirits in the economy to thrive,” the survey’s authors wrote. “In contrast, when the economy is in a vicious cycle, moderation in these variables dampen each other and thereby dampen the animal spirits in the economy.”
In his first Survey, Dr. Subramanian highlighted the fact that private investment was a key driver for demand, capacity, labour productivity, new technology adoption, and for job creation.
“What we have tried to talk about is that investment is really critical; related to that is that investment by the private sector cannot happen unless there is no crowding out because of the government,” the CEA said at a press conference.
Further, he said, implicit in the emphasis on private investment was the fact that the government had and would stick to its fiscal consolidation glide path. It has committed to a fiscal deficit of 3.4% of GDP in 2019-20, and 3% each in the subsequent two years.
Fiscal glide path
“Implicit in the emphasis on private investment, what we are also talking about is sticking to the glide path, which over the last five years we have done a very good job of,” Dr. Subramanian said. “And, therefore, we anticipate that is the path we would continue on. We will be sticking to the fiscal path.”
Moving the economy into a virtuous cycle would require the adoption of certain practices and norms on data, legal reforms and policy certainty, and some micro-economic aspects such as boosting MSMEs and reducing the cost of capital, he said.
Govt. can sell PSU land, reduce majority stake to boost non-tax revenue: CEA
The government can sell land held by PSUs and potentially reduce its majority stake in some companies to make up for the significant shortfall in tax revenues, Chief Economic Adviser (CEA) Krishnamurthy Subramanian said on Thursday.
According to the figures in the Economic Survey 2019, the government is expected to receive as much as ₹1.6 lakh crore less than what was estimated in the interim Budget presented by then Finance Minister Piyush Goyal in February. Mr. Goyal’s interim Budget pegged the government’s receipts in 2018-19 at ₹17.2 lakh crore, while the Economic Survey’s provisional actual figures show this will be only ₹15.6 lakh crore.
The main reason for this sharp downward revision is a commensurate reduction in the tax revenue the government expects to earn in 2018-19. This has been slashed to ₹13.16 lakh crore, from the ₹14.84 lakh crore estimated in the interim Budget.
There are several avenues for the government to increase its non-tax revenue, the CEA said, including selling land held by PSUs and increasing disinvestment. “The non-tax revenues have a significant potential to expand, especially because our PSUs, many of them, are sitting on large pools of land which can be monetised,” Dr. Subramanian told The Hindu. “There is also an opportunity for greater returns from divestment.” Regarding disinvestment, Dr. Subramanian made the somewhat radical suggestion that the government could reduce its holdings in some PSUs to below the majority stake of 51% of direct control.
Indrani allowed to turn approver in INX case
She will now record her statement before a metropolitan magistrate
A special court here on Thursday allowed former director of INX Media, Indrani Mukerjea, to turn approver in a corruption case against the company.
She had moved an application to turn approver seeking pardon and promising help in the probe. Following the court’s approval, she will now record her statement before a Metropolitan Magistrate which will be kept in a sealed cover to be opened in the trial.
Former Union Minister P. Chidambaram’s son Karti Chidambaram is also an accused in the case.
Ms. Mukerjea is at present lodged in Mumbai’s Byculla jail along with her husband Peter Mukherjea in connection with the murder of her daughter, Sheena Bora.
They are facing trial for allegedly conspiring to kill Bora, Ms. Mukerjea’s daughter from an earlier relationship, in April 2012.
The CBI had last year arrested Mr. Karti Chidambaram in the INX case. He was later granted bail.
The probe agency had in 2017 lodged an FIR in the case alleging irregularities in the Foreign Investment Promotion Board’s (FIPB) clearance to the INX Media for receiving overseas funds to the tune of ₹305 crore in 2007 when P. Chidambaram was the Finance Minister.
Later, the Enforcement Directorate lodged a money laundering case in the matter under the Prevention of Money Laundering Act.
The probe agency’s allegation against Mr. Karti Chidambaram is that he demanded and accepted $1 million for scuttling a possible probe against INX Media for violation of FIPB’s conditions in 2007.
AAP MLA gets six months in jail for assault
Granted bail to appeal against conviction in 2015 case of beating up man
A Delhi court on Thursday awarded six months of rigorous imprisonment to Sadar Bazar AAP MLA Som Dutt for beating up a man with a baseball bat while campaigning for the 2015 Delhi Assembly elections. The MLA was also fined ₹2 lakh.
The court, however, granted him bail on furnishing a personal bond of ₹10,000, with the surety of a like amount to permit him to file an appeal against his conviction.
Dismissing Mr. Dutt’s plea for a lenient punishment, Additional Chief Metropolitan Magistrate Samar Vishal said: “When an influential person breaks the law, there is an impression in his mind that he may break through it [sic], in one way or the other. But that is not the case always... Nobody has more sacred obligation to obey the law than those who make it... I do not find it expedient to grant the benefit of probation to the convict.”
Mr. Dutt was convicted under Section 325 (voluntarily causing grievous hurt) of the Indian Penal Code. The man he had attacked was left with a fractured fibula. The court observed that the incident did not take place on the spur of the moment but was a “premeditated assault” carried out with a baseball bat.
Of pthe ₹2 lakh fine imposed on the MLA, the court ordered ₹1 lakph be paid to the complainant as compensation under Section 357 of CrPC. “In default of payment of fine, the convict shall undergo a further simple imprisonment of two months,” said the magistrate.