Economic Survey: Cautious & optimistic, CEA sees India beating China growth

Economic Survey 2018 is a flagship annual document of the Finance Ministry that reviews the overall state of the economy

12:23 PM

Vigilance required against a likely stock market bubble: Economic Survey

 

 

The Economic Survey 2017-18 called for a vigil against a likely stock market bubble and that "sustaining" the current high valuations require "future earnings" to meet high expectations.
 

 

According to Chief Economic Advisor Arvind Subramanian, past examples have shown that asset prices have a tendency to pull-back after they rise sharply.

 

 

"The higher the prices go, I think our vigilance should increase correspondingly," Subramanian said.

12:10 PM

Highlights of Economic Survey 2018

9:59 PM

Judicial reforms next frontier to improve World Bank's Ease of Doing Business ranking, says Economic Survey
 

Even as India jumped 30 places to break into the top 100 countries on ease of doing business for the first time, the next frontier is addressing pendency, delays and backlogs in the appellate and judicial arenas, according to the Economic Survey for 2017-18.
 

It added that India's ranking would get a further boost by the implementation of GST, which was not taken account of in this year's report.
 

According to the Economic Survey 2017-18, the judicial pendency, delays and backlogs were hampering dispute resolution and contract enforcement, discouraging investment, stalling projects and hampering tax collections.
 

The Survey report said they were also stressing taxpayers and escalating legal costs.

9:55 PM

Economic Survey more optimistic than what was projected last year, says NITI Aayog VC Rajiv Kumar

Kumar said growth prediction of 7-7.5 per cent as per the survey is definitely achievable.
 

"GST has been largely beneficial; and now, with the introduction of the e-way bill, tax collections will be made more seamless," he said.
 

Kumar said that he expected Budget 2018-19 to focus on solving health and education-related problems of the common man and the adoption of a holistic approach to doubling farmers' income.

9:51 PM

Economic Survey testifies Modi government's economic mismanagement, says Congress
 

The Economic Survey has affirmed "utter mismanagement" of India's economy by the Narendra Modi government in the last four years, the Congress said on Monday, after the Economic Survey 2017-18 was tabled in Parliament.
 

"The GDP growth is down, agriculture is in utter disarray, rural wages are declining, industrial growth is plunging, job creation figures are invisible, fresh Investment is low, education and health spending is in crises and 'Make in India' is floundering," Congress spokesman Randeep Singh Surjewala said.

"By the Economic Survey's own admission, the informal sector has been severely impacted thanks to demonetisation and flawed GST," Surjewala said.

9:49 PM

Economic Survey gives no proof to support growth claims, says P Chidambaram
 

Picking holes in the growth projections made by the Economic Survey, senior Congress leader and former Union Finance Minister P. Chidambaram said the Survey offered "little evidence" in support of its claims and added that the fiscal is likely to end with a growth rate of "between 6 and 6.5 per cent".
 

Calling the Survey as a "refreshingly candid document that has brought to surface internal contradictions within the government", Chidambaram pointed out that as per the document, the future course of economy is conditional on many "ifs".

8:41 PM

Make in India 2.0 to focus on these ten key sectors
 

Make in India 2.0 will accord renewed focus on ten champion sectors, including capital goods, auto, defence, pharma and renewable energy to push growth in manufacturing and generate job opportunities, the Economic Survey said.
 

The other sectors are biotechnology, chemicals, electronic system design and manufacturing, leather, textiles, food processing, gems & jewellery, construction, shipping, and railways.

8:31 PM

Budget 2018: Avoid ambitious fiscal deficit targets, says Economic Survey
 

Chief Economic Advisor Arvind Subramanian and his team did not rule out a Union fiscal deficit wider than the targeted 3.2 per cent of gross domestic product (GDP) for the current financial year (FY18).
 

  

Ahead of the Budget for 2018-19, the Economic Survey for 2017-18 said that ambitious targets of fiscal consolidation for the coming pre-election year be avoided. Does that mean the target of 3.2 per cent for the next year, given in the medium-term fiscal policy statement, is ambitious? The Survey did not go into that.

8:30 PM

Growth back on track; 50% rise in indirect taxpayers under GST, writes Mihir Sharma

The Survey estimated that the fading of shocks to economic activity like demonetisation together with a recovery in global demand and some domestic policy actions would raise growth in the coming financial year to 7-7.5 per cent. 
 

However, there are aspects to the analysis of the ongoing financial year that suggest the Survey has taken an optimistic view of growth. 
 

 

It admitted that in 2017-18, “fiscal deficits, the current account, and inflation were all higher than expected”. Manufacturing was still struggling, with the ration of factory exports to GDP declining, along with the manufacturing trade balance. And agriculture has not seen an increase in real value added for four years. 

8:27 PM

Claims worth Rs 3.13 trillion under insolvency proceedings
 

The Economic Survey 2018 said that of the 11 companies under the Corporate Insolvency Resolution Process (CIRP), most are either seeking an extension or have already been granted additional time.
 

In June last year, the Reserve Bank had identified 12 accounts, each having more than Rs 50 billion of outstanding loans accounting for 25 per cent of total NPAs or bad loans of banks, for immediate referral for resolution under the bankruptcy law.

7:38 PM

7:33 PM

Economic Survey is saying that we have reasons to believe that we are on a strong growth path. Reforms, which have taken place over the last few years have resulted in growth and the next year seems to be even stronger in terms of growth, says CII Director Chandrajit Banerjee

7:21 PM

7:19 PM

Why is Economic Survey 2018 cautiously optimistic about GDP growth?

Economic Survey 2017-18 betrays cautiousness on growth, indicating that the economy continues to be in a state of repair, and still has some way to go before growth rates move up to 8 per cent-plus levels.
 

In a year that will see the full benefit of the GST implementation accrue, where a large part of the rate rationalisation or tweaking has already been done and issues related to processes have largely been ironed out, the Economic Survey says, India’s real gross domestic product (GDP) will grow between 7 and 7.5 per cent in 2018-19 versus an estimated growth of 6.75 per cent for 2017-18. That is an increase of just 75 basis points, at the upper end of the band. In fact, many experts peg India’s potential at a much higher level.

7:17 PM

Economic Survey 2018 hints at price regulation for diagnostic tests
 

“An analysis of prices of diagnostic tests across various cities in India reveals that there are not only wide differences in average prices of diagnostic tests but the range in prices is also substantial. The data on quality and accreditation of diagnostic establishments in the country is scanty. There is a need to prioritise standardisation of rates by devising appropriate quality assurance framework and regulatory mechanism,” the survey has said.

6:30 PM

Economic Survey 2018: These sectors will provide 15 mn jobs in 5 years

The real estate and construction sector will create over 15 million jobs over the next five years despite signs of stress in the segment in the last few quarters, the Economic Survey said today.

Real estate and construction together is the second largest employment provider in the country, next only to agriculture, said the survey.
 

The sector employed over 40 million workforce in 2013, and as per projections, it is slated to employ over 52 million workforces by 2017 and 67 million workforce by 2022.

6:29 PM

Steel exports surge 53% to 7.6 million tonnes in April-December 2017

The survey noted that in the backdrop of a slowing world economy and over-capacity of steel production, India has been witnessing a rise in imports of cheap steel from countries like China, South Korea and Ukraine at low prices since early 2014-15.
 

The government notified anti-dumping duties and countervailing duties on various steel products in February 2017.
 

At the same time, a significant cutback in China's production capacity of Steel has led to rising international prices of steel, especially post June 2017.

 

6:25 PM

Crop, motor and health insurance policies majorly enabled the non-life insurance sector to log 33% growth in 2016-17

Gross Direct Premium of non-life insurers (within India) was Rs 1.30 trillion, registering 33 per cent growth (highest ever since 2000-01).
 

Crop insurance, motor sales, health insurance and others helped the industry report this growth.
 

On the other hand, the life insurance industry recorded a premium income of Rs 4.18 trillion as against Rs 3.67 trillion in the previous financial year, registering a growth of 14.04 per cent, the Survey said.

6:23 PM

Economic Survey 2018: Telcos under stress due to debt pile, tariff war

The Economic Survey 2017-18 today said the telecom sector is going through stress due to a huge debt pile, tariff war and irrational spectrum costs and called for policy measures to minimise over-bidding of assets during auctions.
 

The survey document said auctions in case of spectrum as also coal and renewables led to transparency and avoided rent-seeking, although they "may have led to a winners' curse, whereby firms overbid for assets, leading to adverse consequences in each of the sectors".

5:51 PM

India expects to be fastest-growing major economy again in FY19
 

India on Monday forecast its economic growth would accelerate to 7 to 7.5 per cent in the 2018/19 fiscal year, to once again become the world's fastest-growing major economy.
 

Fuelled by stronger private investment and exports, the recovery forecast for India's growth rate comes after the country posted its slowest growth in three years in 2017/18.
 

The budget is expected to step up funding of rural development programmes and help small businesses as Prime Minister Narendra Modi's nationalist government heads into a national election in 2019.

5:47 PM

From 'tarikh-par-tarikh' to 'mere desh ki dharti', Economic Survey 2018 peppered with Bollywood quips

Bollywood actor Sunny Deol's iconic dialogue 'tarikh-par-tarikh' (dates after dates) is used in the Economic Survey 2017-18 to highlight the frequent delays in the judicial process.
 

The survey, tabled in Parliament today, called for coordinated action between government and the judiciary to address the delays and boost economic activity.
 

Another well-known song from Manoj Kumar starer - Upkaar - 'Mere desh ki dharti sona ugle ugle heerey moti' (My country's soil where crops grow like gold, diamonds, and pearls), figured in the climate change and agriculture chapter of the survey.

 

 

 

 

5:28 PM

Student Classroom Ratio and Pupil-Teacher Ratio of the govt-run schools witness 'significant progress'

SCR is defined as an average number of pupils per classroom in a school in a given school-year and the ideal size is 30 students per classroom.

Besides, Gender Parity Index (GPI) has also improved "substantially" at primary and secondary levels by increasing enrolment of girls, although in higher education, gender disparities still prevail.

 

5:16 PM

Economic Survey 2018 is pink: Arvind Subramanian says it's dedicated to women power
 

The colour of this year's survey cover was chosen as a symbol of support for the growing movement to end violence against women, which spans continents.
 

The percentage of working women has declined over time from 36 per cent being employed in 2005-06 to 24 per cent of women employed in 2015-16, pointed out the Survey

As per the Survey, nearly 47 per cent of women do not use any contraception, and of those who do, less than a third use female-controlled reversible contraception.

 

4:59 PM

Rise in future earnings needed to sustain stock valuation, says Economic Survey
 

The Economic Survey 2017-18 tabled in Parliament on Monday said that "sustaining" current stock valuations in India requires "future earnings performance to rise to meet still high expectations".
 

According to the Economic Survey 2017-18 presented by the Finance Minister Arun Jaitley, earnings growth will "depend on whether a significant economic rebound is this time well and truly around the corner".

 

4:52 PM

Economic Survey highlights the need to revisit current solar, wind subsidies

As tariffs tumble to record lows in both solar and wind power, there is also increasing concern of states going back on power purchase agreements (PPAs) signed at higher rates. Economic Survey 2018 has highlighted the need to revisit the current subsidy and incentive mechanism to avoid cases of PPA renegotiation. 
 

"The discovery of very low tariffs through the auctioning process, though a welcome news, possibly contributed to some demands for renegotiation of the already signed PPAs. Some discoms have hinted at the possibility of renegotiating the PPAs signed by them at tariffs higher than those in the recent bids," said the survey.
 

During the past year, the solar tariff fell by 80 per cent to Rs 2.44 per unit, the lowest in six years. At the same time, competitive bidding was introduced in wind power, wherein tariff fell to Rs 2.43 per unit. 

 

4:42 PM

Govt cannot rule out fiscal consolidation pause this year

India cannot rule out a pause in its fiscal consolidation plan in the year through March, a key government adviser said, setting the government’s tone ahead of Thursday’s Union budget 2018.
 

 

"Setting overly ambitious targets for consolidation — especially in a pre-election year — based on optimistic forecasts that carry a high risk of not being realised will not garner credibility," Chief Economic Adviser Arvind Subramanian said in the Economic Survey presented in Parliament on Monday.

3:53 PM

Expenditure on social sector continues to hover around 6%
 

 

The Economic Survey 2017-18 on Monday pointed that education, skill development and health, sanitation would continue to be the priority areas for the Central government. However, the expenditure on social infrastructure has continued to be around six per cent.
 

 

“The expenditure on social services by the Centre and States as a proportion of GDP had remained in the range of 6 per cent during 2012-13 to 2014-15. There has been a marginal decline to 5.8 per cent in 2015-16 which has further moved up to 6.6 per cent in 2017-18 (BE),” the Survey said.

3:51 PM

Economic Survey 2018: State-wise exports included for the first time

 

The prospects of the country's external sector look bright in the coming years as global trade is expected to increase, although the rise in oil prices could create problems, the Economic Survey said today. 

 

"For the "first time in India's history", data on the international exports of states has been dwelt upon in the Survey. Such data indicates a strong correlation between export performance and states' standard of living."

3:49 PM

One or 2 states to introduce universal basic income within 2 years, says Chief Economic Advisor Arvind Subramanian.

3:48 PM

India needs $ 4.5 trillion by 2040 to develop Infra

India will need about $4.5 trillion in the next 25 years for infrastructure development, of which it will be able to garner about USD 3.9 trillion, the Economic Survey said.

"The Global Infrastructure Outlook reflects that rising income levels and economic prosperity is likely to further drive demand for infrastructure investment in India over the next 25 years.
 

"Around $4.5 trillion worth of investments are required by India till 2040 to develop infrastructure to improve economic growth and community well being," the Survey tabled by Finance Minister Arun Jaitley in Parliament today said.