ECONOMIC SURVEY 2017-18 IMPORTANT POINTS
ECONOMIC SURVEY 2017-18
Economic Survey is a document
that provides information about developments in Indian Economy in the current
year vis-a- vis the budget plans. It is prepared under guidance of Chief
Economic Advisor and tabled by Finance Minister in Parliament. Highlights are
as under:
Major achievements of past year : Implementing GST, responding
quickly to transitional challenges,
tackling longfestering Twin Balance Sheet challenge by sending stressd debtors
to IBC & bank recap validation and first sovereign upgrade in 14 years.
• Economic growth pegged at 7-7.5 per cent for FY’19.
• For the fiscal year 2016-17, the
real GDP growth was 6.75% and the Economic Survey predicts 7-7.5% growth in
2017-18.
• The key focus areas in the medium term are employment, education and
agriculture.
• In 2017-18, the Gross Value Added (GVA) at constant
basic prices is expected to grow at the rate of 6.1% as compared to 6.6% in
2016-17. Agriculture, industry and
services sectors are expected to grow
at the rate of 2.1%, 4.4%, and 8.3% respectively in 2017-18.
• India’s GDP growth is highest
among major economies of the world having an average of 7.3% for the period
from 2014-15 to 2017-18.
• The next year’s agenda include
stabilizing the GST, solving twin balance sheet (TBS) problem and implementing
necessary actions, privatizing Air India, and ensuring macroeconomic stability.
• 50% increase in the number of indirect taxpayers has been
recorded.
• 18 lakh new individual income tax filers been recorded
since Nov 2016.
• Exports of readymade garments
(man-made fibers) increased by about 16% due to Rebate of State Levies (ROSL).
• 5 States namely Maharashtra,
Gujarat, Karnataka, Tamil Nadu and Telangana account for 70% of India’s
exports.
• India’s internal trade in goods and services is 60% of
GDP.
• IBC mechanism is being used actively to resolve NPA
problem.
• 2017-18 averaged the lowest inflation in the last six
years.
• Rs20,339cr approved for interest subvention in 2017-18.
• The ratio of domestic saving to
GDP reached 29.2% in 2013 to a peak of 38.3% in 2007, before falling back to
29% in 2016.
• Weighted average collection rate
(incidence) of GST is about 15.6 per cent. As such, the single tax rate that
would preserve revenue neutrality is between 15 to 16 per cent.
• Tax departments have gone in for
contesting several tax disputes but also with a low success rate, which is
below 30 per cent.
• Largest firms account for much
smaller exports than in other comparable countries. Top 1% of Indian firms
account only for 38% of exports unlike in other countries where they account
for substantially greater share – (72, 68, 67 and 55% in Brazil, Germany,
Mexico, and USA, respectively).
• Indian society exhibits a strong
desire for a male child. Most parents continue to have children until they get
the desired number of sons.
Sectoral
Growth
• 2017-18 industry growth seen at 4.4 per cent
• 2017-18 farm sector growth seen at 2.1 per cent
• 2017-18 services sector growth seen at 8.3 per cent
Fiscal
deficit
• Current account deficit for
2017-18 expected to average 1.5-2 per cent of GDP
• Pause in general government
fiscal consolidation cannot be ruled out in 2017-18
• Suggests modest (fiscal)
consolidation that signals a return to path of gradual but steady deficit
reductions
Inflation,
policy rates
• Persistently high oil prices
remain a key risk, to affect inflation
• If inflation doesn’t deviate from
current levels, policy rates can be expected to remain stable
• Average CPI inflation seen at 3.7% in 2017-18
• Policy vigilance required next
fiscal if high oil prices persist or stock prices correct sharply
• Policy agenda for next year —
support agriculture, privatise Air India, finish bank recapitalisation.
•
Tax collection by states, local governments significantly lower
than those in other federal countries
• Urban migration leading to feminisation of farm sector
• Rs 20,339 cr approved for
interest subvention for farmers in current fiscal
• FDI in services sector rises 15% in 2017-18 on reforms
• Fiscal federalism, accountability
to help avoid low equilibrium trap
• India’s external sector to remain
strong on likely improvement in global trade
• Swachh Bharat initiative improved
sanitation coverage in rural areas from 39% in 2014 to 76% in Jan 2018
• Priority to social infrastructure
like education, health to promote inclusive growth
• Centre, states should enhance
cooperation to deal with severe air pollution
• Suvey 2017-18 in pink colour to highlight gender issues
• FDI in services sector rises 15% in 2017-18 on reforms
• For 2017-18, Gross national income at current prices and
constant prices (2011-12 serices) is Rs.16438895 cr and Rs.12835004 cr. (annual
growth rate 9.6% and 6.6%) repsectively.
• For 2017-18, Net national income at current prices and
constant prices is Rs.14710563 cr and Rs.11404413 cr (annual growth rate 9.7%
and 6.7%) respectively
• For 2017-18, Per capita net
national income at current prices and constant prices is Rs.111782 and Rs.86660
(annual growth rate 8.3% and 5.3%) respectively.
• For 2017-18, Gross Domestic
Product at constant prices (2011-12) : Rs.12985363 cr and Rs.16627585 cr at
current prices.
Key Indicators of Indian Economy
|
Data category
|
2015-16
|
2016-17
|
2017-18
|
|
GDP at constant prices (Rs.Cr)
|
11381002
|
12189854
|
12985363
|
|
GDP growth rate (%)
|
8.0
|
7.1
|
6.5
|
|
GVA at constant basic prices (Rs.cr) 10490514
|
11185440
|
11871321
|
|
|
GVA growth rate (%)
|
7.9
|
6.6
|
6.1
|
|
Per capita net national income (Rs.)
|
94130
|
103219
|
111782
|
|
Foodgrains (million tonnes)
|
251.6
|
275.7
|
134.7#
|
|
WPI Inflation (%)
|
-3.7
|
1.7
|
2.9
|
|
CPI Combined inflation (%)
|
4.9
|
4.5
|
3.3
|
|
Forex reserves (USD billion)
|
360
|
370
|
409
|
|
Gross Fiscal deficit to GDP (%)
|
3.9
|
3.5
|
3.2@
|
|
Revenue deficit to GDP (%)
|
2.5
|
2.1
|
1.9@
|
|
Primary deficit to GDP (%)
|
0.7
|
0.4
|
0.1@
|
# Apr-Nov 2017 @Budget estimate
• Largest firms account for much
smaller exports than in other comparable countries. Top 1% of Indian firms
account only for 38% of exports unlike in other countries where they account
for substantially greater share – (72, 68, 67 and 55% in Brazil, Germany,
Mexico, and USA, respectively).
• Indian society exhibits a strong
desire for a male child. Most parents continue to have children until they get
the desired number of sons.
Sectoral
Growth
• 2017-18 industry growth seen at 4.4 per cent
• 2017-18 farm sector growth seen at 2.1 per cent
• 2017-18 services sector growth seen at 8.3 per cent
Fiscal
deficit
• Current account deficit for
2017-18 expected to average 1.5-2 per cent of GDP
• Pause in general government
fiscal consolidation cannot be ruled out in 2017-18
• Suggests modest (fiscal)
consolidation that signals a return to path of gradual but steady deficit
reductions
Inflation,
policy rates
• Persistently high oil prices
remain a key risk, to affect inflation
• If inflation doesn’t deviate from
current levels, policy rates can be expected to remain stable
• Average CPI inflation seen at 3.7% in 2017-18
• Policy vigilance required next
fiscal if high oil prices persist or stock prices correct sharply
• Policy agenda for next year —
support agriculture, privatise Air India, finish bank recapitalisation.
•
Tax collection by states, local governments significantly lower
than those in other federal countries
• Urban migration leading to feminisation of farm sector
• Rs 20,339 cr approved for
interest subvention for farmers in current fiscal
• FDI in services sector rises 15% in 2017-18 on reforms
• Fiscal federalism, accountability
to help avoid low equilibrium trap
• India’s external sector to remain
strong on likely improvement in global trade
• Swachh Bharat initiative improved
sanitation coverage in rural areas from 39% in 2014 to 76% in Jan 2018
• Priority to social infrastructure
like education, health to promote inclusive growth
• Centre, states should enhance
cooperation to deal with severe air pollution
• Suvey 2017-18 in pink colour to highlight gender issues
• FDI in services sector rises 15% in 2017-18 on reforms
• For 2017-18, Gross national income at current prices and
constant prices (2011-12 serices) is Rs.16438895 cr and Rs.12835004 cr. (annual
growth rate 9.6% and 6.6%) repsectively.
• For 2017-18, Net national income at current prices and
constant prices is Rs.14710563 cr and Rs.11404413 cr (annual growth rate 9.7%
and 6.7%) respectively
• For 2017-18, Per capita net
national income at current prices and constant prices is Rs.111782 and Rs.86660
(annual growth rate 8.3% and 5.3%) respectively.
• For 2017-18, Gross Domestic
Product at constant prices (2011-12) : Rs.12985363 cr and Rs.16627585 cr at
current prices.
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