Economic Survey calls for strengthening invisible hand of markets

News:The Economic Survey 2020 has illustrated enormous benefits from enabling the invisible hand of the market.

Facts:

Achieving $5 trillion economy:The survey has said that India’s aspiration to become a $5 trillion economy depends critically on:

• Strengthening the invisible hand of the market.
• Supporting it with the hand of trust.

About Invisible Hand:

• The phrase Invisible Hand was introduced by Adam Smith in his book ‘The Wealth of Nations’.
• It states that unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically is the invisible hand.
• In other words,it basically assumes that an economy can work well in a free market scenario where everyone will work for his/her own interest.

Suggestions:The invisible hand needs to be strengthened by promoting pro-business policies to:

• provide equal opportunities for new entrants, enable fair competition and ease doing business
• eliminate policies that unnecessarily undermine markets through government intervention
• enable trade for job creation and 
• efficiently scaling up the banking sector to be proportionate to the size of the Indian economy.