What is Economic survey? – Economic Survey 2018

What is Economic survey?

• The Economic Survey projects the official version of the state of the economy
• Generally presented in Parliament a day before the presentation of the annual Budget – acts as a precursor to the Budget.
• It discusses the outlook, prospects and challenges of the economy while recommending reform measures that are essential to propel the economy.
• It is prepared and presented by the Ministry of Finance under the guidance of C.E.A.

CEA – Arvind Subramanian (2014 – )

  • ‘’With this cover, we are extending our support to the movement for women’s rights.”
  • PINK-COLOR ECONOMIC SURVEY 2017-18 HIGHLIGHTS GENDER ISSUES AGAINST BACKDROP OF  DEVELOPMENT

GDP growth for 2017-18 (FY18) – 6.75 %
GDP growth prediction for 2018-19 (FY19) – 7.0 – 7.5 %

 

Increase in Tax Payers

Indirect taxpayers increased by 50% after GST Rollout

Large Increase in voluntary registrations under GST

9.8 million unique GST registrants, an increase by 3.4 million compared to the previous tax regime. While Maharashtra, UP, Tamil Nadu and Gujarat have the number of GST registrants

Strong correlation between export performance(international trade data) and interstate trade (GST data) with states’ standard of living

India’s firm export structure is substantially more egalitarian than in other large countries

Direct tax collections by States and local governments are significantly lower than those of their counterparts in other federal countries

GST revenues doing well: 12 percent growth, better buoyancy than previous taxes
GST council shows that cooperative federalism is a ‘technology’ for reforms in several other areas.

Formal non-agricultural payroll is much greater than believed − More than 30 % when formality is defined in terms of social security (EPFO/ESIC) provision 53 % when defined in terms of being in the GST net

Growth in Savings

The ratio of domestic saving to GDP reached 29.2 percent in 2013 to a peak of 38.3 percent in 2007, before falling back to 29 percent in 2016.
Post which it has been growing – due to demonetisation

India’s agriculture sector is likely to grow at 2.1 % in 2017-18, followed by Industry at 4.4% and  services at 8.3%

India’s understanding of the private sector has moved away from “crony socialism to stigmatised capitalism”
It is that zeitgeist (or Maahaul) of stigmatised capitalism—an accumulated legacy inherited by the government—that made policy reforms so difficult

Policy vigilance in coming year if high oil prices persist or stock prices correct sharply.
Rising oil prices affected consumption and held back real economic activity
For every $10 increase in crude oil prices, the thumb rule is that GDP will come down by 0.02- 0.03% and Inflation will rise by 0.4 percent.”

Growth is picking up because the temporary impact of demonetisation has dissipated.
Exports have picked up. 
Manufacturing export growth is about 11.3%. India’s external sector to remain strong on likely improvement in global trade

India’s firm export structure is substantially more egalitarian than in other large countries
Top 1 percent of Indian firms account for 38 percent of exports; in all other countries
They account for a substantially greater share (72, 68, 67, and 55 percent of exports in Brazil, Germany, Mexico, and USA respectively)

TECH ENABLED INITIATIVES TO BRING TRANSPARENCY AND ACCOUNTABILITY FOR ENFORCEMENT OF LABOUR LAWS
As India emerges as one of the world‘s largest economics, it needs to gradually move from being a net consumer of knowledge to becoming a net producer.
Swachh Bharat initiative improved sanitation coverage in rural areas from 39% in 2014 to 76% in January 2018 ‘Meta Preference’ for sons – Indian parents often continue to have children till they have desired number of sons –leading to skewed sex ratio
✓ Beti Bachao Beti Padhao Yojana
✓ Sukanya Samriddhi Yojana
✓ Madatory Maternity leaves
Inflation

Inflation
Below 4% for more than 12 months (since November 2016)
For FY18
CPI inflation – 3.3% (lowest in 6 years)
WPI inflation – 2.9%

GROWING MIGRATION BY MEN IS CAUSING “FEMINISATION’’ OF AGRICULTURE SECTOR

  • The footprint of climate change is evident and extreme weather adversely impacts agricultural yields
  • The impact of weather is felt only with extreme temperature increases and rainfall deficiencies
  • This impact is twice as large in Non-irrigated areas as compared to irrigated ones
  • Need to address the issues of pendency, delays and backlogs in the appellate and judicial arenas towards Ease of Doing Business
  • Tax departments have a large number of cases filed and poor success rate

  • On the Ease of doing Business, the Economic Survey highlights that India has leapt 30 ranks over its previous rank of 130 in the World Bank‘s latest Doing Business Report 2018.
  • Credit rating company Moody‘s Investors Service has also raised India‘s rating from the lowest investment grade of Baa3 to Baa2
  • Growth in Indian economy is due to Investments, not due to savings
  • Consistent rise in Jan Dhan accounts indicates financial inclusion at the lowest levels
  • Fall in zero balance accounts indicates increasing use of banking services. 

Policy agenda for next year –
✓ support agriculture
✓ stabilise GST
✓ privatise Air India
✓ finish bank recapitalisation

 

  • Focus Areas/Key challenges in Future
  • EMPLOYMENT
  • EDUCATION
  • AGRUICULTURE

 

Conclusion

CEA Subramanian
‘’Government does not have to do anything radical
Just finishing what it has started already would be a very
ambitious and fantastic agenda to complete

Watch Video In Hindi/English – Economic survey