India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector. However, the investment rate was expected to pick up following improvement in consumer demand and bank lending, said the government's Economic Survey report. (Highlights)

The real GDP growth projection reflects a recovery in the economy after a deceleration in the growth momentum in 2018-19. Growth is expected to pick up in 2019-20 as macroeconomic conditions continue to be stable while structural reforms initiated in the previous few years are continuing on course.

However, both downside risks and upside prospects persist for economic growth in 2019-20, according to the Economic Survey 2018-19. (Also read: Political stability should push animal spirits of economy, says Economic Survey)

The performance of consumption will be crucial in deciding the growth path of economy, the report added.

“The theme of the survey - ‘Shifting Gears' - is intended to achieve a sustained growth rate of 8 per cent. Using the learning from the Global Financial Crisis, the Survey departs from traditional thinking to view the economy in either a vicious or a virtuous cycle,” said Mr Subramanian. “The Survey makes a sincere effort to live up to the expectation of being an indispensable guide for following, understanding and thinking about the Indian economy."

Rural wages growth seems to have bottomed out and has started to increase since mid-2018. Further growth in rural wages should help spur rural demand, according to the Economic Survey.

Investment rate, which was declining from 2011-12, seems to have bottomed out and is expected to pick up in the year 2019-20 on the back of higher credit growth, said the Economic Survey.

The government stood by its path of fiscal consolidation in financial year 2018-19, stated the Economic Survey, which expects the general fiscal deficit at 5.8 per cent in 2018-19 as against 6.4 per cent in 2017-18. General fiscal deficit is defined as the balance of income and expenditure, and includes the deficit of the central and state governments.

As the flagship document of the finance ministry, the Economic Survey provides detailed statistical data covering all aspects of the economy. Typically, an Economic Survey provides a policy perspective for the Union Budget. (Also read: What Economic Survey is and what does it contain)