Highlights of Economic Survey 2018

Union Finance Minister ‘Arun Jaitley’ for the period 2017-2018 in the Parliament on 29th January 2018.

Economic Survey:

• Economic Survey of India is a review document of the annual economic development of the country.
• It is basically the Finance Ministry’s view on overall economic development.
• This document will go under the name of Chief Economic Adviser Arvind Subramanian.
• The central government presents Economic Survey just ahead of the Union Budget every year.Here are the key points from the Economic Survey 2018 of India. 
  • The Economic Survey forecasts that the country’s gross domestic product (GDP) will grow by 7% to 7.5% in 2018-19.
  • Increase in registered indirect and direct taxes.
    • The Goods and Services Tax (GST) embodies and heralds a radical alteration and enlargement in the understanding of the Indian economy.  
    • The Goods and Services Tax (GST) has been a 50% increase in the number of indirect taxpayers.
    • There has also been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises wanting to avail themselves of input tax credits.
    • There has been an addition of about 18 lakh individual income taxfilers since November 2016.
  • Agriculture, industry & services sectors are expected to grow at the rate of 2.1%, 4.4%, and 8.3% respectively in 2017-18. 
  • India’s formal sector is substantially greater than what it currently is believed to be.
    • It became evident that when “formality” was defined in terms of social security provisions like EPFO/ESIC the formal sector payroll was found to be about 31 percent of the non-agricultural workforce.
    • “formality” was defined in terms of being part of the GST net, such formal sector payroll share was found to be 53%.
  • Data on the international exports of states has dwelled in the Economic Survey.
    • States that export internationally and trade with other states were found to be richer.
    • Such correlation is stronger between prosperity and international trade
  • India’s exports are unusual in that the largest firms account for a much smaller share of exports than in other comparable countries.
    • Top one percent 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 & USA respectively).
    • Such tendencies were also found to be true for the top 5 or 10 % of the Indian companies.
  • The Rebate of State Levies (ROSL) has increased exports of readymade garments (man-made fibers) by about 16% but not of others.
  • The data highlighted another seemingly known fact that Indian society exhibits a strong desire for a male child.
    • It pointed out that most parents continued to have children until they get a number of sons.
    • The survey gave details of various scenarios leading to skewed sex ratios and also gave a comparison of sex ratio by birth between India and Indonesia.
  • The survey pointed out that tax departments in India have gone in for contesting against in several tax disputes but also with a low success rate which is below 30%.
    • Around 66% of pending cases accounted for only 1.8% of the value at stake and 0.2% of cases accounted for 56% of the value at stake.
  • Extrapolating the data the survey indicated that growth in savings did not bring economic growth but the growth in investment did.
  • Collections of direct taxes by Indian states and other local governments, where they have powers to collect them is significantly lower than their counterparts in other federal countries.
    • A comparison has been given between ratios of the direct tax to total revenues of local governments in India, Brazil, and Germany.
  • The survey captures the footprints of climate change on the Indian territory and consequent adverse impact on agricultural yields.
    • Extreme temperature increases and deficiency in rainfall have been captured on the Indian map and the graphical changes in agricultural yields are brought out from such data.
    • The impact was found to be twice as large in un-irrigated areas as in irrigated ones.

  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)