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Economic Survey 2017-18
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- 2. ACHIEVEMENTS • Launch ofthe GST on midnight of July 1st 2017 which was a success under which one tax one nation implemented. • Validation of achievements, recognition of medium term prospects • Sovereign rating of India increased in 14 years • India Jumped in ease of doing business • TWIN Balance Sheet Challenge • Over Rated Firm • Under capitalized Bank • IBC & NCLT • Recapitalization
- 3. DECOUPLING OF INDIAN ECONOMY •Till 2016, India’s growth was accelerating when in other countries it was decelerating but in 2017 it went converse of this. • Major Reasons • First, Real Interest Rate increased by 2.5 percentage points. • depressed consumption and investment • attracted capital inflows especially into debt instruments • Second, Demonetization • Third, GST • Forth, Twin Balance Sheet Challenge – Non-performing Asset • Fifth, Oil Prices
- 4. SHORT TERM OUTLOOK •Growth is picking up because of Demonetization and GST • Government is injecting fair demand in the economy • Exports have picked up quite briskly in past 3 quarters and manufacturing export growth is 11.3% • Private investment will depend upon capacity utilization and progress under IBC • Consumption is going on decreasing due to increase in oil prices
- 5. GROWTH PROJECTION • NominalGDP of India in 2017-18 is 10.5% and real GDP is 6.75 % • Inflation is higher in the second half as compared to the first half • Estimates are higher than the CSO prediction because of CSO not able to estimate the recent development • In 2018-19 the GDP would be 7% - 7.5% as per the IMF and World Bank projections • Export are growing in line with the world growth but it is less than it was in the previous period • If IBC process progress well then private investment could go up this year
- 6. FACTORS WHICH WESHOULD BE WATCHFUL ABOUT • If oil prices maintain at current level what could be the consequences • Sharp corrections to elevated stock prices • Having seen current market emerges around the world in 20-25 years when macro risk mounts and asset prices are high then there is a sudden market stall which means sudden stop in capital stocks a classic dilemma between stability and growth • Oil prices high by 16% from previous year and IMF forecasted for next year that it will be 12% higher from this year • Stock prices are at record levels because of GDP profit • Interest rate have risen very sharply concerns about deficit • Slightly higher inflation • Duality Concept of Revival and Risks have made it easy for the current macro economics policies
- 7. POLICY AGENDA • Agriculturalstress which is described in the economic survey • Stabilize GST - export refund, compliance and revenue still have to achieve the equilibrium • Resolution and Recapitalization • Single private sector in Major areas • Privatize air India • Head off macro economic pressures
- 8. IMPORTANT NEW EVIDENCES •Since November 2016 big increase in tax payers by 1.8 million addition • 50% increase in GST tax payers • GST numbers revenues was ₹ 7.41 lakh crores in 2017-18 and in this year it will be 12% growth bouncy above historical • Textile package boosted export of key man made garments by about 15% • Market is false judging, borrowings by central and state government which is ₹40000 crores and it does not define the deficit
- 9. NEW ANALYSIS ANDRESEARCH • In the non agricultural sector around 30-50% of the people are employed in formal sector • It is an stock estimate and not the flow estimate • States which have high exports internationally also have higher GDP • Saving and investments both showed slowdown in 4 years they went up till 9% but it went to 6% in the last 8 years • Can India go dynamism with the world? • Middle income trap
- 10. SON META PREFERENCES •Sexratio highly screwed in Punjab, Haryana •How to measure son meta preference • Last birth child in the family not the first birth child • More male than female •Missing women
- 11. SCIENCE & TECHNOLOGY •R & D • IN mission More • Lack of dogma EASE OF DOING BUSINESS • DEPENDENCIES and DELAYS in • High court • Supreme court • Tax department • National company law Appellate tribunal
- 12. LESSONS FOR FUTURE •Key challenges education, employment, agricultural • During the period of 60 years the interest had moved to private sector • From crony socialism to stigmatized capitalism • GST council show that cooperative federalism is a technology the reform in several other areas
- 13. SOME KEY ISSUES •Borrowings of ₹60000 crores by the NSFF is showing deficits • Inflation have been rising • Direct Tax – State or Local Government • Tax on Land • Stamp duty • Oil Prices • Shale oil should come back to $55 • Saudi Arabia
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