Key highlights: Finance Minister Arun Jaitley tables Economic Survey in Parliament
Agencies July 9, 2014
A day ahead of presenting his maiden Budget, Finance Minister Arun Jaitley tabled the Economic Survey in Lok Sabha.
The annual report was prepared by Ila Patnaik, a well-respected economist who was appointed as senior economic advisor to the finance ministry in April.
Key highlights from the document:
>> GDP growth for 2014-15 pegged at 5.4 to 5.9 per cent
>> WPI inflation shows sings of receding, expected to decline further
>> Improvement in current account and fiscal deficits to spur higher growth in 2014-15
>> Govt should move towards low and stable inflation regime through fiscal consolidation
>> Improvement in manufacturing, Balance of Payments (BoP) expected in 2014-15
>> There are concerns over El Nino emergence this year
>> Direct Taxes Code required as clean and modern replacement for Income Tax laws
>> Need to expand decentralised procurement for public distribution system
>> Need to promote structural changes in manufacturing in the medium term
>> Biometric identification to improve subsidy scheme
>> GDP growth has slowed down on domestic, external factors
>> Rupee has stablised, reflecting an overall sense of confidence in forex and capital markets
>> Long-term external debt accounts for 78.2 per cent of total external debt at end-December 2013 against 76.1 per cent at end-March 2013. Long-term debt at end-December 2013 increased by $25.1 billion (8.1 per cent) over the level at end-March 2013 while short-term debt declined by $4 billion (4.1 per cent), reflecting a fall in imports
>> Wholesale Price Index inflation fell to three-year low of 5.98 per cent during 2013-14
>> Consumer Price Inflation also showed signs of moderation
>> Fiscal consolidations remains imperative for the economy
>> Fiscal consolidation recommended through higher tax-GDP ratio then merely reducing the expenditure-GDP ratio
>> Proactive policy action helped government remain in fiscal consolidation mode in 2013-14
>> Fiscal deficit for 2013-14 contained at 4.5 per cent of GDP
>> Total outstanding liabilities of the central and state governments decline as a proportion of GDP
>> India's balance-of-payments position improved dramatically in 2013-14 with the current account deficit (CAD) at $32.4 billion (1.7 per cent of GDP) as against $88.2 billion (4.7 per cent of GDP) in 2012-13
>> The annual average exchange rate of the rupee went up from 47.92 per dollar in 2011-12 to Rs.54.41 per dollar in 2012-13 and further to Rs.60.50 per dollar in 2013-14
>> India's foreign exchange reserves increased from $292 billion at end March 2013 to $304.2 billion at end March 2014
>> Passage of PFRDA Act, shift of commodity futures trading into the finance ministry and the presentation of the FSLRC report were the three major milestones of 2013-14
>> FSLRC, in its report, has given wide-ranging recommendations, broadly in the nature of governance enhancing principles for enhanced consumer protection, greater transparency in the functioning of financial sector regulators in terms of their reporting system, greater clarity on their interface with the regulated entities and greater transparency in the regulation making process by means of mandatory public consultations and incorporation of cost benefit analysis, among others
>> Gross NPAs of banks registered a sharp increase. Overall NPAs of the banking sector increased from 2.36 per cent of credit advanced in March 2011 to 4.40 per cent of credit advanced in December 2013.
>> RBI has identified infrastructure, iron and steel, textiles, aviation and mining as stressed sectors
>> New Pension System (NPS), now National Pension System, represents a major reform of Indian pension arrangements, and lays the foundation for a sustainable solution to ageing in India by shifting to an individual account, defined-contribution system.
>> Till May 7, 2014 67.11 lakh members have been enrolled under the NPS with a corpus of Rs. 51,147 crore
>> Swavalamban Scheme for workers in the unorganized sector launched in 2010, extended to five years for the beneficiaries enrolled in 2010-11, 2011-12, and 2012-13; benefits of co-contribution would be available till 2016-17.