THE NEWS
The Finance Minister (FM) Arun Jaitley presented the Economic Survey in Parliament, a 500-page economic report card, stressing on women empowerment, and identified 10 new facts on the Indian economy.
ECONOMIC SURVEY 2017-18
- Expected growth rate: The Economic Survey stated that Indian economy is set to grow at 7-7.5% in 2017-18, thereby reinstating the economy as the world’s fastest-growing major economy.
- GDP growth: The survey points out that the GDP growth has averaged 7.3 % for the period from 2014-15 to 2017-18, which is the highest among the major economies of the world.
- Increase in direct taxpayers: The survey recorded that there has been 50% increase in direct taxpayers under GST regimes as compared to previous year.
- Effects of note ban, GST receded: The survey says that the effects of note ban and GST have receded now.
- The decline in saving and investment: Despite the robust economic growth, the saving and investment as a ratio of GDP have been declined.
- Area of improvement: The survey highlighted the three main areas that would require a policy focus- employment, education, and agriculture.
- The reforms undertaken in 2017-18 can be strengthened further in 2018-19.
10 NEW FACTS ON THE INDIAN ECONOMY:
- There has been a large increase in the registered indirect and direct taxpayers.
- The revenue generated from non-farm activities are much greater than believed.
- State’s prosperity is positively correlated with their international and inter-state trade.
- India’s firm export structure is substantially more egalitarian than in other large countries.
- Export of readymade garments has increased by about 16% through clothing incentive package.
- Indian parent continues to have children until they get the desired number of sons.
- The Indian tax departments have gone in for contesting against in several tax disputes but also with a low success rate which is below 30 %, that could be reduced by the government.
- Increase in investment is much more important than the increase in saving for economic growth.
- The collection of direct taxes by Indian states and other local government is considerably lower than their counterparts in other federal countries.
- The survey captures the footprints of climate change and its adverse effects on Indian agriculture.
CONCERN REGARDING ECONOMY
In the new financial year, there can arise in global oil prices in the international market, the possibility of sharp correction in stock prices, RBI’s further interest rate-cut can shrink, Indian economy can move to stigmatized capitalism.
WAY FORWARD
If continued on the same path of economic reforms the coming Financial Year can witness greater economic growth. The new reform measures like the implementation of the Insolvency and Bankruptcy Code, the recapitalization plan for public sector banks to address the twin balance sheet (TBS) problem afflicting both corporates and banks, expectation of greater stability in GST, finalising the privatisation of Air India can further boost the economic growth and the economy may begin to accelerate in the second half of the year.
