The government struck a note of optimism on Friday with a forecast 8.1%-8.5% growth for India's economy in 2015-16 marking an uptick from the estimated 7.4% this year amid scope for big-bang reforms but grappled with a key question: how to create jobs for teeming millions that are joining the workforce.
"India has reached a sweet spot - rare in the history of nations - in which it could be launched on a double digit medium-term growth trajectory which would allow the country to attain the fundamental objectives of "wiping every tear from every eye," the annual Economic Survey for 2014-15 tabled in Parliament on Friday said.
The survey also said that the mandate received by the government affords a unique window of political opportunity which should not be foregone.
The survey, anchored by chief economic adviser Arvind Subramanian, said that a "momentous opportunity" ahead of the presentation of the first full budget of the NDA government on Saturday.
"India needs to follow what might be called "a persistent, encompassing, and creative incrementalism" but with bold steps in a few areas that signal decisive departure from the past and that are aimed at addressing key problems such as ramping up investment, rationalizing subsidies, creating competitive, predictable, and clean tax policy environment, and accelerating disinvestment," it said.
The survey, however, struck a note of caution of job creation.
"Given the fact that labour force growth (roughly 2.2-2.3%) exceeds employment growth (roughly about 1.5%), the challenge of creating opportunities will remain significant," it said.
In the months ahead, several reforms will help boost investment and growth. The budget should continue the process of fiscal consolidation, embedding actions in a medium-term framework.