“Economic Survey of India 2018”
The first law of economics: there is never enough of anything that is required. Therefore economics tells us how societies, businesses, governments, households and individuals allocate their resources.
In view of the economic development of the country, the finance minister presents the economic survey in the parliament every year. It is the annual document of the government that summarizes the performance of the nation over the previous 12 months. The economic survey is presented to both houses of the parliament.
There are few highlights of the Economic Survey 2018,
The GDP of India is expected to grow at the rate of 7 – 7.5% in the fiscal year-2018-19 and the recorded GDP growth is 6.75% in fiscal year-2017-18.
The survey said that due to a series of reforms undertaken last year will help to accelerate the economy. The launch of GST reform, resolution of Twin Balance sheet, implementation of major recapitalization package to strengthen the public sector banks, liberalization of foreign direct investment and the enhancement of export which had played a major role in boosting the growth of the economy.
There is 50% increase in the number of indirect taxpayers.
This was post introduction of GST. As the number increases besides a large increase in voluntary registrations especially by small enterprises.GST data shows that there were 9.8 million unique GST registrants in December 2017 which was slightly more than total indirect tax registrants under the old system.
The direct tax collections by states are significantly lower than those of other their federal countries.
When it comes to growth then agriculture sector is expected to grow at 2.1%, the growth was seen in the industrial sector is 4.4% and the growth seen in the service sector is 8.3% which is the highest compared to other sectors.
‘FEMINIZATION’ of agriculture sector
Due to the large increase in migration of men from rural to urban, there has been the feminization of the agriculture sector. The government suggested that we access to resources such as land, water, credit, technology and training.
The government is confident of achieving the fiscal deficit of 3.2% of GDP for 2017-18. The expected capital account deficit is 1.5-2% of GDP. The survey has suggested that the revenues and the fiscal deficit of states as a percentage of budget estimates are lower in the current year as compared to previous year.
This survey expected that there will be average price rising of crude oil of about 1.2% in fiscal year-19. So a policy intervention is necessary for next fiscal year if oil price persists or stock prices rose sharply.
INFLATION AND MONETARY POLICY
Consumer price index measured the average retail inflation which is seen at 3.3%in 2017-18. The Reserve bank of India has also cut the repo rate by 25 basis points to 6% in August 2017 and it would affect inflation in the economy.
The economic survey shows data on the international exports of states for the first time in India’s history. There is a strong correlation between export performance and states standard of living shown in the data. It is found that states which export internationally and trade with other countries are richer.
There is a substantial increase in the sanitation coverage in rural India due to launch of Swachh Bharat Mission on 2nd October 2014 which now ranges from 39% to 76%. 296 districts and 3,07,349 villages from all over India have been declared as Open defecation free(ODF)
It is expected that the global economy will accelerate from 3.2% in 2016 to 3.6% in 2017 and 3.7% in 2018. India’s balance of payment is favourable in the first half of 2017-18. India’s trade deficit has widened which stood at US$ 74.5 billion in the first half of 2017-18 then it shot up by nearly 46% in 2017-18(April-December). It is now at US$114.9 billion.
EASE OF DOING BUSINESS
India has jumped 30 places for the first time to enter the top 100 in the World Bank’s ease of doing business. It has leapt 83 spots in the taxation and 33 spots in the insolvency indices which is an outcome of tax reforms and IBC(2016). There is a concern about the high number of delays and pendency of economic cases in Supreme Court, Economic Tribunals and Tax departments. The government has taken a number of measures to improve the contract enforcement regime including the scrapping of over 1000 redundant legislation, amending the arbitration and conciliation act,2015 and expanding of Lok Adalat programme.
Report: Divya Mehra