Union Finance Minister Arun Jaitely on 26 February 2016 presented Economic Survey of India 2015-16 in the Parliament.
The Survey reviews the developments in the Indian economy over the previous 12 months, summarises the performance on major development programmes and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.
Expenditure on Social Infrastructure
• Expenditure on education as a proportion of GDP has hovered around 3 per cent during the period 2008-09 to 2014-15.
• Similarly, there has not been any significant change in the expenditure on health as a proportion of GDP, which has remained stagnant at less than 2 per cent during the same period.
• Though India has made considerable progress in education over the years, there still persist inequalities in access and achievements across regions and populations.
• There has been perceptible improvement in the education of girls, with the Gender Parity Index becoming favourable at all levels of school education, except for SC students in higher education and ST students at all levels of education, for which special efforts have to be made.
• As per the fourth Annual Employment-Unemployment Survey conducted by the Labour Bureau during the period January 2014 to July 2014, the Labour Force Participation Rate (LFPR) (usual principal status) is 52.5 for all persons.
• The LFPR of women is significantly lower than that of males in both rural and urban areas.
• A notable aspect of the employment situation in India is the large share of informal employment and growth in informal employment in the organized sector.
• The share of informal employment in total employment has remained above 90 per cent throughout the period 2004-05 to 2011-12.
Health and Sanitation
• According to the World Bank’s Universal Health Coverage (UHC) Index 2015, India’s level of immunization is very low.
• With the aim of covering all those children who are either unvaccinated, or are partially vaccinated, against seven vaccine-preventable diseases by 2020, Mission Indradhanush was launched in December 2014 and has covered 352 districts of the country so far.
• Swachh Bharat Mission: More than 122 lakh toilets have already been constructed in rural areas since the beginning of the Swachh Bharat Mission (Gramin).
• The incidence of poverty declined from 37.2 per cent in 2004-5 to 21.9 per cent in 2011-12 for the country as a whole with a sharper decline in the number of rural poor.
• The estimates were based on the Tendulkar Committee methodology using household consumption expenditure survey data collected by the NSSO in its 68th round (2011-12).
Technology for Efficient Delivery of Services
• The government has introduced the game changing potential of technology-enabled Direct Benefits Transfers (DBT), namely the JAM (Jan Dhan-Aadhaar-Mobile) Number Trinity solution.
• It offers possibilities for effectively targeting public resources to those who need them most, and including all those who have been deprived in multiple ways.
• It is paving way for expenditure rationalization and is ensuring the removal of, so far undetected, fake and duplicate entities from the beneficiary lists.
• So far, it resulted in substantial savings of public money for giving renewed focus on social welfare schemes.
Climate Change and Sustainable Development
• India has submitted ambitious targets in its Intended Nationally Determined Contribution (INDC) in the renewable energy sector, mainly from solar and wind energy.
• India’s INDC is comprehensive and covers all elements, i.e. adaptation, mitigation, finance, technology and capacity building.
• With a potential of more than 100 GW, the aim is to achieve a target of 60 GW of wind power as well as
• 100 GW of solar power installed capacity by 2022.
• India has also taken the initiative of setting up an International Solar Alliance (ISA), an alliance of 121 solar-resource-rich countries, lying fully or partially between the Tropic of Cancer and Tropic of Capricorn.
Outlook for Indian Economy
• With improved industrial growth supplementing the buoyant services sector, overall economic growth has also picked up in recent months. This trend is expected to continue in near future.
• Amidst uncertainties at the global level, the Indian economy stands out as a haven of macroeconomic stability, resilience and optimism.
• India’s GDP growth could be in the range of 7.0 to 7.75 per cent during the 2016-17 financial year.
• With focus on reforms in key sectors coupled with stable macroeconomic conditions, the above growth prospect for the economy in the next year appears reasonable.
• However, the outlook will be conditioned by a number of factors and strongest of them being weak global demand.
• In the short run, Indian growth may fall short of its growth potential of 8-9 per cent. Yet, the economy could continue weathering the global sluggishness with resilience and consolidate the gains in macroeconomic stability in 2016-17.
• As a proportion of GDP, the CAD is likely to be in the low range of 1-1.5 per cent.
• India’s external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices.
• As such, while export slowdown may continue for a while before picking up in 2016-17, continuance of low global commodity prices augurs well for sustaining low trade and current account deficits.
• In 2015-16, the rupee values of exports and imports (of goods and non-factor services) are both projected to decline. Notably, such a dual decline would be the first since 1965-66.
• While export decline will be on account of the sluggish global demand and imports decline due to steep decline in international crude oil prices.
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