The survey said, "India has reached a sweet spot —rare in the history of nations — in which it could finally be launched on a double-digit medium-term growth trajectory". Attributing this to a "political mandate for reform and a benign external environment", it added that the central government should use this opportunity by taking decisive steps in some areas while pursuing "creative incrementalism" in others.
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Domestically, low inflation makes it possible to bring down interest rates, while externally, low oil prices help contain current account deficit and fiscal deficit, both of which contribute towards creating the sweet spot.
Find all Union Budget 2015 relates stories here
The suggested combination of a few bold steps towards reforms and some more gradual ones could over a period add up to "big bang reforms", the Survey suggested while making clear that big bang reforms as conventionally understood "are an unreasonable and infeasible standard for evaluating the government's reform actions".
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Most of the bold steps being mooted were along predictable lines: rationalizing subsidies; reforming labour laws; making sure the ordinances on land acquisition, coal and insurance get transformed into Acts; rolling out GST; ensuring fiscal discipline. But the Survey's reference to the political mandate clearly signalled the desire that unlike in the past this should not remain a wishlist to be aired annually.
The Survey called for a strong push to direct cash transfers through what it called the JAM (Jan Dhan-Aadhar-Mobile) Number Trinity Solution, as a tool to protect the poor. If this could be successfully implemented, it argued, it could lead to "Nirvana" for India by allowing prices to be freed up (rather than being kept artificially low for the poor) and hence act as market signals for allocating resources efficiently. "This will be the grand bargain in the political economy of Indian reforms," it said.
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Subsidies ranging from railway passenger fares to water and electricity reach only a small portion of intended benficiaries and are largely cornered by the relatively well off or leak through the system, the Survey argued with detailed data to butress the point.
The political awareness exhibited in the assessment of what is feasible in India's political context - and perhaps in the coinage of an acronym like JAM - was a characteristic of this year's Survey. Unlike in the past, where the authors - chief economic advisors to the finance ministry - have shied away from bringing in explicitly political references, the latest edition repeatedly refers to what the "new government" has done and in one place even to the "previous NDA government". Such references to political parties or alliances have rarely been a part of the Survey.
READ ALSO: Spread the JAM so fruits of subsidy reach the needy
The political awareness, however, does not mean that the CEA has necessarily bought into all of NDA's pet narratives. One area where he departed quite sharply is in the assessment of what had led to stalled private projects in the latter part of the UPA's tenure. While the popular narrative, and the one given currency by the BJP, has been that policy paralysis and blocked clearances were the main culprits, here's what the Survey has to say: "It is clear that private projects are held up overwhelmingly due to market conditions and non-regulatory factors whereas government projects are stalled due to lack of required clearances".
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Anticipating that private investments would continue to remain sluggish, the Survey urged the government to boost public spending, particularly in the railways, to "crowd-in" investments from the corporate sector.
The current CEA, Arvind Subramanian, was also not averse to stepping beyond the strict confines of economics and making suggestions on what would really be in the realm of geopolitics. He pointed out that while power might have flowed out of the barrel of the gun in the past, hard and soft power now come from a "war-chest of foreign exchange reserves". Citing China's use of its reserves to become a sort of IMF and World Bank rolled into one, the Survey posed the question whether India should also target to build up reserves of $750 billion to $1 trillion against the current roughly $330 billion - although it did caution that building up reserves isn't a costless exercise.
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The tone of the Survey seemed to have convinced the markets that the finance minister is likely to deliver a bold, pro-reform budget on Saturday, but whether that hope is belied, as it has so often been in the past, you'll know in a few hours time.
Read this in Hindi: इकॉनमी में 8 फीसदी से ज्यादा ग्रोथ का अनुमान: आर्थिक सर्वे
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