You are here: Home » Budget » Economic Survey » Top Stories
Business Standard

Naari Shakti, Nirvana and some JAM - A Snapshot of the Economic Survey

Presenting a snapshot of this year's Economic Survey

Sundaresha Subramanian  |  New Delhi 


  • Inspired by the IMF’s World Economic Outlook
  • Departs structurally from its predecessors
  • Aims to be as accessible as a blog, without sacrificing on rigour
  • Volume 1 discusses the outlook and prospects and topical policy concerns
  • Volume 2 describes recent developments in the economy and statistical tables and data

  • Unlike the last time, when then finance secretary Arvind Mayaram had to step in to write the foreword, this time CEA Arvind Subrmanian took over
  • CEA quotes Keynes to justify the survey’s focus on emphasising urgent over important
  • Has liberal sprinkling of Hindi phrases such as Naari Shakti, Nirvana and Modi-esque acronyms such as JAM

  • A political mandate for reform and a benign external environment to propel India to a double-digit growth trajectory
  • Expects falling oil prices, increasing monetary easing and moderating inflation to favour growth
  • Inflation showing declining trend due to government measures and falling oil prices
  • FY15 GDP growth seen at 7.4%
  • Using the new estimate for 2014-15 as the base, it expects growth at market prices of 8.1-8.5% in 2015-16

Read our full coverage on Union Budget

  • Concrete actions needed in the to control expenditure via subsidy reductions, improvement in altering the mix between public consumption and investment in favour of the latter, and moving India towards borrowing only for public investment
  • Broadly, the increase in fiscal space, including that gained from subsidy reductions and higher disinvestment proceeds, should be devoted to public investment
  • Fiscal deficit target of 4.1% of GDP achievable
  • The government provides both producer and consumer subsidies, totalling about Rs 1,25,000 crore
  • Eliminating subsidies desirable, but not possible
  • Prices and monetary management
  • Price subsidies can distort markets in ways that ultimately hurt the poor
  • The government and RBI need to conclude the monetary policy framework agreement to consolidate recent gains in inflation control and codify into an institutional arrangement the de facto practice

  • FY15 current account deficit seen at 1.3% of GDP
  • CAD seen falling to 1% next year
  • Muted export growth is a concern ; Key is reversal of subdued export performance

  • Price subsidies can distort markets in ways that ultimately hurt the poor
  • The government and RBI need to conclude monetary policy framework agreement to consolidate recent gains in inflation control and codify into an institutional arrangement the de facto practice

  • Subsidy leakages are large and universal
  • Leakages undermine the effectiveness of product subsidies
  • Eliminating or phasing down subsidies is neither feasible nor desirable unless accompanied by other forms of support to cushion the poor

  • Jan Dhan Yojana, Aadhaar and Mobile numbers allow the state to offer support to poor households in a targeted way

  • At end of the third quarter of FY15, for every Rs 100 of projects under implementation, Rs 10.3 worth of projects was stalled; the number for private sector stood at Rs 16
  • Projects worth Rs 8.8 lakh crore stalled; of these, those worth Rs 7 lakh crore are in the private sector
  • An independent renegotiation committee mooted to deal with this problem

  • Growth in size of private banks has slowed after the collapse of Lehman Brothers
  • Paradox of private sector-led growth without private bank financing
  • Wide divergences in performance paramaters within public sector banks
  • 4D policy proposed: deregulate, differentiate within PSBs, diversify and disinter

  • Strong case for channelling resources to transport infrastructure, with spillover effects on the economy
  • Massive underinvestment; China invests 11 times as much in per capita terms
  • Reform agenda: Structure of the railways, its adoption of commercial practices, rationalising tariff policies, an overhaul of technology

  • Preferred sectors are those that move towards high-productivity activities
  • Convergence of both domestic and international is key
  • Make in India should go hand-in-hand with ‘Skilling India’

  • APMCs levy multiple fees of substantial magnitude, which are non-transparent and are, thus, a source of political power
  • State Acts create fragmented markets and commission agents rule the roost
  • A central law is envisaged to override state laws, paving the way for a national market

  • India has cut subsidies and increased taxes on fossil fuels (petrol and diesel), turning a carbon-subsidy regime into one of carbon taxation
  • This has significantly increased petrol and diesel prices, while reducing annual carbon dioxide emissions
  • Potential large gains yet to be reaped through reform in coal pricing and further reform in petroleum-pricing policies

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 28 2015. 00:41 IST