Economic Survey: New firm creation higher in services sector than mfg, agri

New firm creation in the services sector is more than that in sectors like manufacturing, infrastructure and agriculture, according to the Economic Survey.

The finance ministry in a statement said that the Economic Survey tabled in Parliament on Friday said that "access to nutrition and electricity" resulted in higher growth rate in India's gross domestic product (GDP) and new firm creation in service sector is far greater than that in manufacturing, infrastructure or agriculture.

The survey also said that there is a need to invest in ramping up India's statistical infrastructure. It also said that India has made impressive improvements in several social development indicators.

The survey observed that India has taken several initiatives to foster investment like relaxing FDI norms, cutting corporate taxes, containing inflation, accelerating infrastructure creation, improving ease of doing business or reforming taxation etc.

"As India is one of the fastest growing economies in the world, investors see an unparalleled opportunity here. The level and growth rate of a country's GDP informs several critical policy initiatives by serving as a barometer of the country's size and health," it added.

Saying that the GDP growth is critical variable for decision-making by investors as well as policymakers, the Economic Survey highlighted the recent debate about whether India's GDP is correctly estimated following the revision in estimation methodology in 2011 is extremely significant, the ministry said.

The Survey carefully examined the evidence, leveraging existing scholarly literature and econometric methods to study whether India's GDP growth is higher than it would have been and concluded that using careful statistical and econometric analysis, it finds no evidence of miss-estimation of India's GDP growth, it added.