Economic Survey 2015-16

Highlights : Economic Survey 2015-16

• Economy to clock more than 7 percent growth this fiscal. Expects GDP Growth
Rate for 2016-17 in the range of 7 to 7.75 percent
• Predicts over 8 percent growth in next couple of years as there is macro economic stability now.
• With reforms in key areas, there is reduction in macro-vulnerability
• Economy will continue to weather global sluggishness with resilience. Despite
difficult global environment, India is likely to be the fastest growing major
economy in the world in 2016,
• Outlook of multilateral institutions positive for India
• Amidst gloomy international economic landscape, India stands as a haven of stability.
• Increase in wages and benefits recommended by the 7th Pay Commission are
not likely to destabilize prices and will have little impact on inflation
• CPI inflation seen around 4.5 to 5 per cent in 2016-17, Expects RBI to meet 5 per
cent inflation target by March 2017
• 4 R (Recognition, Recapitalization, Resolution, and Reform) required to
comprehensively resolve the twin balance sheet challenge of Public Sector
Banks (PSBs) and some corporate houses.
• Fiscal deficit target of 3.9% for 2015-16 seems achievable. However, coming
year expected to be a challenging one from the fiscal point of view
• Better off taking the benefit of subsidies; recommends interventions and
rectification of anomalies
• Services sector remains the key driver of economic growth contributing almost
66.1% in 2015-16
• Trade deficit declines to 106.8 billion US dollars in April-January 2015-16 from
119.6 billion US dollars in corresponding period 2014-15.
• Current Account Deficit (CAD) limits at 1.4 percent of gross domestic product
during April-September, 2015-16
• Foreign exchange reserves stand at 351.5 billion US dollars as on 5th February,
2016
• Indian Economy needs to create enough “good” Safe productive well-paying
Jobs to exploit its demographic dividend and to meet the growing aspirations
of those entering the labour force.
• GST rollout to mark an unprecedented reforms measure in the modern global
tax history
• Proposes widening tax net from 5.5 percent of earning individuals to more than 20 percent, reasonable taxation of the better-off individuals with income from real estate and agriculture, phasing out of the tax exemption raj.
• Higher property tax rates to check speculation in real estate
• Free trade agreements leading to increased imports and Exports
• 2015 was a landmark year for India in climate change initiatives; India plays
important role in adoption of Paris agreement and launch of international solar
alliance
Highlights need for more investment in human capital, expresses concern at
declining educational outcomes, emphasizes importance of improving efficiency in delivery of services in the health sector.
• Labour force participation rate higher in rural areas than urban areas, significantly
lower for females than males.
• Women account for 57% of employment given under MGNREGA in the current
financial year.
• 1.75 lakh rural youth trained under Deen Dayal Upadhyaya Grameen Kaushalya
Yojana during 2015-16
• Addressing the twin balance sheet challenge, economic survey emphasizes on recalibration of growth expectations;
• Positive changes sweeping power sector. Impressive strides made in the power sector in the last two years: addition of record generation capacity, moves towards
one market in power, reform of discoms and development of renewable energy
• Time is ripe for industries to absorb excess generation capacity through “Open
Access” to energize “Make in India”
• Suggests possibility of achieving reasonably greater progressivity in tariff
structures with lower tariffs for the poor
• New paradigm of surplus power sets stage for continuing reforms for powering
“One India”
• The chakravyuha challenge: Ease to enter, barriers to exit; Indian economy
making great strides in removing barriers to entry for firms, talent, and
technology but less in relation to exit
• Several initiatives taken would help transforming infrastructure sector ; results
achieving & sustaining higher economic growth
• Indian equity market relatively resilient compared to other major emerging market
economies.
• Financial inclusion proceeding apace under PMJD yojana
• Emphasizes that JAM Trinity -jan dhan, aadhaar, mobile- can help government
to implement large-scale, technology-enabled and real-time Direct Benefit
Transfers (DBTs) to improve economic lives of India’s poor.
• Agriculture Sector needs a transformation to ensure sustainable livelihoods for
the farmers and food security
• Emphasizes for improved productivity in agriculture
• Disbursal of subsidy on fertilizers should shift to DBT
• Fixed amount of subsidy in the case of phosphorous and potassium fertilizer
subsidy
• There needs to be a shift to demand-driven agricultural advisory services
• In order to provide Food Security, in the current agriculture scenario, India
has to focus on supplies which are timely and uninterrupted and affordable for
the poor
57 per cent of households had calorie intake below 2160 kcal/consumer unit/day
• Average protein intake per capita per day rises steadily
• India has the second highest number of undernourished people which warrants
immediate attention
• Percentage share of horticulture output in agriculture is more than 33 percent.