2020 ECONOMIC SURVEY | CHAPTER- 1 | WEALTH CREATION: THE INVISIBLE HAND SUPPORTED BY THE HAND OF TRUST

India’s dominance as global economic power for three-fourths of economic history manifests by design.

• Kautilya’s Arthashastra postulates the role of prices in an economy (Spengler, 1971).
• Historically, Indian economy relied on the invisible hand of the market with the support of the hand of trust:
• Invisible hand of the market reflected in openness in economic transactions.
• Hand of trust appealed to ethical and philosophical dimensions.
• Post-liberalisation, Indian economy supports both pillars of the economic model advocated in our traditional thinking.
• Survey illustrates enormous benefits accruing from enabling the invisible hand of the market.
• Exponential rise in India’s GDP and GDP per capita post-liberalisation coincides with wealth generation.
• Survey shows that the liberalized sectors grew significantly faster than the closed ones.
• Need for the hand of trust to complement the invisible hand, illustrated by financial sector performance during 2011–13.
• Survey posits that India’s aspiration to become a $5 trillion economy depends critically on:
• Strengthening the invisible hand by promoting pro-business policies to:
• Provide equal opportunities for new entrants.
• Enable fair competition and ease doing business.
• Eliminate policies unnecessarily undermining markets through government intervention.
• Enable trade for job creation.
• Efficiently scale up the banking sector.
• Introducing the idea of trust as a public good, which gets enhanced with greater use.
• Survey suggests that policies must empower transparency and effective enforcement using data and technology.
• Strengthening the invisible hand of the market.
• Supporting it with the hand of trust.