Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget. It is the ministry's view on the annual economic development of the country.
2. Introduction
The Economic Survey of India 2018 was tabled in the Parliament
on 29th January 2018 by Finance minister Arun Jaitley.
The document outlines major economic indicators, flagship
programs, happenings, challenges and policies of the previous 12
months
The Economic Survey of India 2018,had bright pink cover to send the
message of empowerment of women and gender equality
Pink also emphasis on the fact that the government stands in
solidarity with women’s rights and movements.
Numerous issues focused upon: agriculture, job creation, education
and women empowerment
3. Two Volumes
I. State of the Economy: An Analytical Overview and
Outlook for Policy
II. A New, Exciting Bird’s Eye View of the Indian Economy
Through the GST
III. Investment and Saving Slowdowns and Recoveries:
Cross-Country Insights for India
IV. Reconciling Fiscal Federalism and Accountability: Is there
a Low Equilibrium Trap?
V. Is there a “Late Converger Stall” in Economic
Development? Can India Escape it?
VI. Climate, Climate Change, and Agriculture
VII. Gender and Son Meta-Preference: Is Development Itself
an Antidote?
VIII. Transforming Science and Technology in India
IX. Ease of Doing Business’ Next Frontier: Timely Justice
I. An Overview of India’s Economic Performance in
2017-18
II. Fiscal Developments
III. Monetary Management and Financial Intermediation
IV. Prices and Inflation
V. Climate Change, Sustainable Development and
Energy
VI. External Sector
VII. Agriculture and Food Management
VIII. Industry and Infrastructure
IX. Services Sector
X. Social Infrastructure, Employment and Human
Development
VOLUME I VOLUME II
4. Achievements
► Launch of transformational Goods and Service Tax (GST)
► Decisive tackling of Twin Balance Sheet (TBS) challenge
► Improvement in Business ecosystem
► Bank recapitalization scheme
► India’s ranking in the taxation and insolvency parameters improved
by 53 and 33 spots
► 30 spot jump in ease of doing business
5. GDP Predictions
GDP growth expected to be between 6.5 and 6.75 per cent in 2017-18.
Real GDP growth expected at 6.5 per cent in 2017-18
GVA growth at basic prices is expected to be 6.1 per cent in 2017-18
7.00
6.75
7.50
5.0
5.2
5.4
5.6
5.8
6.0
6.2
6.4
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
8.2
2012-13 2014-15 2015-16 2016-17 2017-18 2018-19
6. Factors warranting heightened vigilance
► Persistently high oil prices at
close to current levels
► Sharp corrections to elevated
stock prices
► Classic emerging market “sudden
stall” in capital flows
► Macro-economic policies may
then need to be tighter
Period US$/bbl
2014-15 over 2013-14 -10.1%
2015-16 over 2014-15 -46.2%
2016-17 over 2015-16 -11.4%
2017-18 over 2016-17 15.9%
2018-19 over 2017-18 12%
19/May/15 19/May/16 19/May/17
20,000
22,000
24,000
26,000
28,000
30,000
32,000
34,000
36,000
6.1
6.5
6.9
7.3
7.7
G-sec BSE Sensex (RHS)
7. New Evidences
► Increase in tax filers
Post-demonetization and GST increase in new tax filers of about 1.8 million
► GST revenues doing well:
Growth of about 12 percent and buoyancy above historical experience
► Textile package boosted exports of key man-made garments by about 15
percent
► Markets are misinterpreting borrowing by central and state governments
► India’s stock market boom is different from other economies but warrants
heightened vigilance
► Formal non agricultural payroll is much grater than belived
8. New Insights from GST data
► Reforms have increased tax rolls
► 50 percent increase in unique indirect taxpayers, after GST
► 1.8 million addition made post November,16 ( figure 1B)
► Formal sector much bigger than believed
► 75 million (30%) more if formality defined as firms providing social security
► 127 million (50%) more when defined as firms being in the GST net.
► Firm structure of exports highly diversified
► Top 1 percent of Indian exporters account for 38 percent of exports
► 72, 68, 67, and 55 percent in Brazil, Germany, Mexico, & USA, respectively
► States are big traders
► inter-state trade is about 60 % of GDP
► States that export more internationally are more prosperous
9. India’s investment and saving slowdown is unusual, long and
ongoing: Re-igniting investment is more important than
raising saving
10. Comparison between the Indian and US stock
market booms
The paths of the Indian and US economies have differed in three striking ways:
The stock market surge in India has coincided with a deceleration in
economic growth, whereas US growth has accelerated.
India’s current corporate earnings/GDP ratio has been sliding since the
Global Financial Crisis, falling to just 3½ percent, while profits in the US have
remained a healthy 9 percent of GDP.
Critically, real interest rates have diverged substantially. Rates in the US have
persisted at negative levels, while those in India have risen to historically high
levels.
During this period ,US real rates had average -1.0% compared to India’s 2.2%.
12. Road Ahead
Support agriculture
From “crony socialism to stigmatized capitalism”
GST Council shows that “cooperative federalism” is a technology for
reforms in several other areas
Complete twin balance sheet actions with the reforms
Topmost priority given to social infrastructure like education, health,
and social protection
Stabilize GST
Head off macro-economic pressures and possibility of a “sudden stall”
from rising oil prices and sharp correction in stock prices
