Economic survey 2018: Highlights and 10 New Facts on The Indian Economy
Economic survey 2018. If you are preparing for IBPS, SBI, LIC, SSC, Railways, and others competitive Exams, you are bound to find a few questions on Current Affairs in your General Awareness section on Economic survey and Budget. So be prepared to tackle it all!
The Economic survey, an annual document of the Ministry of Finance, reviews the developments in the economy over the previous 12 months, in both houses of Parliament during the Budget Session, which summarizes the performance on major development programme, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term. It also details the main policy initiatives of the government.
Here, we are sharing the Economic Survey 2017-18 of India presented by the Union Finance Minister ‘Arun Jaitley’ for the period 2017-18 in the Parliament on 29th January 2018.
Economic survey 2017-18: 10 New Facts on The Indian Economy
1. There has been a large increase in registered indirect and direct taxpayers.
- A 50 percent increase in unique indirect taxpayers under the GST compared with the pre-GST system.
- Similarly, there has been an addition (over and above trend growth) of about 1.8 million in individual income tax filers since November 2016.
2. Formal non-agricultural payroll is much greater than believed.
- More than 30 percent when formality is defined in terms of social security (EPFO/ESIC) provision.
- More than 50 percent when defined in terms of being in the GST net.
3. States’ prosperity is correlated with their international and inter-state trade
States that export more internationally, and trade more with other states, tend to be richer. But the correlation is stronger between prosperity and international trade.
4. India’s firm export structure is substantially more egalitarian than in other large countries.
Top 1 percent of Indian firms account for 38 percent of exports; in all other countries, they account for a substantially greater share (72, 68, 67, and 55 percent of exports in Brazil, Germany, Mexico, and USA respectively). And this is true for the top 5 percent, 10 percent, and so on.
5. The clothing incentive package boosted exports of readymade garments.
The relief from embedded state taxes (ROSL) announced in 2016 boosted exports of ready-made garments (but not others) by about 16 percent.
6. Indian society exhibits strong son “Meta” Preference.
Parents continue to have children until they get the desired number of sons. This kind of fertility-stopping rule leads to skewed sex ratios but in different directions: skewed in favor of males if it is the last child, but in favor of females if it is not the last (see the top two panels on India). Where there are no such fertility-stopping rules, ratios remain balanced regardless of whether the child is the last or not (see bottom panels on Indonesia).
7. There is substantial avoidable litigation in the tax arena which government action could reduce
- The tax department’s petition rate is high, even though its success rate in litigation is low and declining (well below 30 percent).
- Only 0.2 percent of cases accounted for 56 percent of the value at stake; whereas
- About 66 percent of pending cases (each less than Rs. 10 lakhs) accounted for only 1.8 percent of the value at stake.
8. To re-ignite growth, raising investment is more important than raising saving.
Cross-country experience shows that growth slowdowns are preceded by investment slowdowns but not necessarily by savings slowdowns may not.
9. Own direct tax collections by Indian states and local governments are significantly lower than those of their counterparts in other federal countries.
This share is low relative to the direct taxation powers they actually have.
10. The footprint of climate change is evident and extreme weather adversely impacts agricultural yields
- The impact of weather is felt only with extreme temperature increases and rainfall deficiencies
- This impact is twice as large in unirrigated areas as in irrigated ones
Economic survey 2018: Highlights
- 2018-19 Growth seen at 7% to 7.5%
- 2017-18 GDP growth seen at 6.75%
- 2017-18 industry growth seen at 4.4%
- 2017-18 farm sector growth seen at 2.1%
- Economic management will be challenging in the coming year
- Biggest source of upside to growth to be from exports
- Cyclical conditions may lead to lower tax and non-tax revenues in 2017-18
- Private investment poised to rebound
- Target for fiscal consolidation specially in a pre-election year can carry a high risk of credibility
- Current account deficit for 2017/18 expected to average 1.5-2% of GDP
- Pause in general govt fiscal consolidation cannot be ruled out in 2017-18
- Suggests modest (fiscal) consolidation that signals a return to the path of gradual but steady deficit reductions
- 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
|Key indicator||Sub-Indicator||Financial Year 2016-17||Financial Year 2017-18 (Current Financial Year)|
|GDP at Constant Market Price||7.1 %||6.50%|
|GDP at Constant Basic Price||6.6 %||6.10%|
|IIP (Growth Rate)||4.6 %||3.2 % (April-November 2017)|
|Inflation||WPI||1.7 %||2.9 % (April-December 2017)|
|CPI Combined||4.5 %||3.3 % (April-December 2017)|
|Deficit||Gross Fiscal Deficit||3.5 % of GDP||3.2 % of GDP (Budget Estimates)|
|Revenue Deficit||2.1 % of GDP||1.9 % of GDP (Budget Estimates)|
|Primary Deficit||0.4 % of GDP||0.1 % of GDP (Budget Estimates)|