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Virtuous Cycle and Economic Growth in India
A critique is offered after examining the claims in the Economic Survey that the concept of virtuous cycle is of recent origin and that during the planning period, the planners were unaware of such a way of imagining economic progress. The evidences provided to support the presence of the virtuous cycle in China and the East Asian countries are also questioned.
Chapter 1 of the Economic Survey 2018–19, Vol 1, presents a blue print of the economy for the next five years in terms of economic growth, job creation and exports. It restates the vision, articulated by the Prime Minister, that India aims to grow into a $5 trillion economy by 2024–25, which would make India the third largest economy in the world. To attain the targeted gross domestic product (GDP) level, the Economic Survey notes, the real GDP has to record an annual growth rate of 8% for the next five years. This chapter is important as it presents the overall framework based on which policy measures are suggested for realising the target.
On the basis of the recent growth experiences of countries across the world, particularly of China and the East Asian countries, the Economic Survey presents a growth model for India.
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