Union Finance Minister Arun Jaitely on 26 February 2016 presented Economic Survey of India 2015-16 in the Parliament.
The Economic 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.
GDP Growth: The growth rate of GDP at constant market prices is projected to increase to 7.6% in 2015-16 from 7.2% in 2014-15.
Real GDP growth for 2015-16 is expected to be in the 7% to 7.75% range.
Twin balance sheet problem: Resolving the challenge of twin balance sheet problem – the impaired financial positions of the Public Sector Banks (PSBs) and some corporate houses would require 4 Rs: Recognition, Recapitalization, Resolution, and Reform.
Energy: 2014-15 witnessed the highest ever increase in generation capacity of 26.5 GW compared to the average annual addition of around 19 GW over the past five years.
Horticulture: The percentage share of horticulture output in agriculture is more than 33 per cent. The share of plan outlay for horticulture, which was 3.9 per cent during Ninth Plan, has increased to 4.6 per cent during the Twelfth Plan.
Over the last decade, the area under horticulture grew by about 2.7% per annum and annual production increased by 7%
Milk Production: Production of horticulture crops have outpaced the production of food grain since 2012-13.
India ranks first in milk production, accounting for 18.5% of world production achieving an annual output of 146.3 million tonnes during 2014-15 as compared to 137.69 million tonnes during 2013-14 recording a growth of 6.26%.
Per capita availability of milk in India increased from 176 grams per day in 1990-91 to 322 grams per day by 2014-15.
Food Security: According to the data of the 66th round of the National Sample Survey (2009-10), the average dietary energy intake per person per day was 2147 Kcal for rural India and 2123 Kcal for urban India. 57 % of households had calorie intake below 2160 Kcal/Consumer unit/day.
India has the second highest number of undernourished people at 194.6 million person (FAO, State of Food Insecurity in the World, 2015) which warrants immediate attention.
Fiscal Management: Fiscal Deficit target of 3.9% for 2015-16 seems achievable.
The total expenditure for 2015-16 was estimated at Rs.17.77 lakh crore which was 5.7 per cent higher than the revised estimates of 2014-15.
A growth of 25.5 per cent was envisaged in capital expenditure, reiterating the focus on quality of expenditure.
Direct taxes grew by 10.7% in the first 9 months of 2015-16 while indirect taxes were also buoyant.
The aggregate capital expenditure of the government increased by 0.6% in 2015-16. This occurred both in the centre and states, with the former contributing 54% and the latter 46%.
Services: Services Sector remained the key driver of economic growth contributing almost 66.1 percent in 2015-16.
Services Sector continues to be the key driver of India’s economic growth and it accelerated to 10.3 per cent in 2014-15 from 7.8 per cent in 2013-14 and it is expected to be 9.2 per cent (constant prices) in 2015-16 as per the advanced estimates. This is due to lower growth in Public Administration, Defence and other Services.
Foreign Direct Investment (FDI): There has been a rising trend in FDI equity inflows to the services sector in the first seven months of 2015-16 with FDI inflows growing by 74.7 per cent.
Trade: Overall exports declined by about 18% in the first three quarters. Realizing India’s medium term growth potential of 8-10 percent will require rapid growth of export.
To achieve trajectory similar to China, India’s competitiveness will have to improve so that its services exports, currently about 3 percent of world exports, capture nearly 15% of world market share.
Trade deficit declined to 106.8 billion US dollars in April-January 2015-16 from 119.6 billion US dollars in corresponding period 2014-15.
Public Debt: At the end-September 2015, India’s external debt has remained in safe limits as shown by long term debt accounted for 82.2% of India’s total external debt, vis-à-vis 82.0% at end-March 2015.
The proportion of short term debt to total external debt decreased from 18.0% at end-March 2015 to 17.8% at end-September 2015.
External debt to GDP ratio of 23.7% and debt service ratio of 7.5% in 2014-15 are at comfortable levels, it adds.
Human Capital: Increasing investment in human capital is a key requirement to improve productivity of the population says the Economic Survey. The total expenditure on Social Services including Education, Health, Social Security, Nutrition, Welfare of SC/ST/OBC etc. during 2014-15 (RE) was 7% of GDP while it was 6.5% during 2013-14.
According to Annual Status of Education Report (ASER) 2014, there is sharp decline between 2007 and 2014 in the number of children in Standard V who can read a textbook of Standard II, in both government and private schools.
The expenditure on health as a percentage of total expenditure on social services increased from 18.6% in 2013-14 to 19.3% in 2014-15 (RE) and 19.5% in 2015-16 (BE).
The ‘under five mortality’ has declined from 126 in 1990 to 49 in 2013.
Employment: The proportion of economically active population (15-59 years) has increased from 57.7% to 63.3% during 1991 to 2013, as per Sample Registration System (SRS) data for 2013.
The employment growth in the organized sector (Public and Private combined) increased by 2% in 2012 over 2011, while it increased by only 1% in 2011 over 2010.
The annual growth rate of employment for the private sector was 4.5 % in 2012 over 2011 whereas the public sector registered a marginal growth of 0.4 % in the same year.
According to the Labour Bureau during the period January 2014 to July 2014 has shown that the Labour Force Participation Rate (LFPR) is 52.5 % for all persons.
The LFPR for rural areas stands at 54.7% which is much greater than that for rural areas i.e. 47.2 %.
The LFPR for women is significantly lower than that for males in both rural and urban areas.
The Unemployment Rate is 4.7 % in rural areas and 5.5% in urban areas. The total unemployment rate reported is 4.9% as per the Labour Bureau Survey.
National Sample Survey Office (NSSO, 2012-11) reported unemployment rate of 2.3% for rural areas, 3.8% for Urban Areas and 2.7% for India as a whole.
When: 26 February 2016