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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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