The Finance ministry of India released The Economic Survey 2017 on 31, January, 2017. This time the economic survey mentioned some interesting facts about Indian Economy which are important to know about our diversified economy. Here, we have also attached important facts about Economic Survey in the table.
1. Increase in migration
The estimates of railway passenger traffic data reveal annual work-related migration of about 9 million people, almost double what the 2011 Census suggests.
2. Wrong Methodology of Ranking
China’s credit rating was upgraded from A+ to AA- in December 2010 while India’s has remained unchanged at BBB-. From 2009 to 2015, China’s credit-to-GDP soared from about 142 percent to 205 percent and its growth decelerated. The contrast with India’s indicators is striking.
3. Weak Targeting of Social Programs and Welfare Spending
New Evidence on Weak Targeting of Social Programs Welfare spending in India suffers from misallocation: as the pair of charts show, the districts with the most poor (in red on the left) are the ones that suffer from the greatest shortfall of funds (in red on the right) in social programs. The districts accounting for the poorest 40% receive 29% of the total funding.
4. Political Democracy but Fiscal Democracy?
India has 7 taxpayers for every 100 voters ranking us 13th amongst 18 of our democratic G-20 peers.
5. India's Distinctive Demographic Dividend
India’s share of working age to non-working age population will peak later and at a lower level than that for other countries but last longer. The peak of the growth boost due to the demographic dividend is fast approaching, with peninsular states peaking soon and the hinterland states peaking much later.
6. India Trades More Than China and a Lot Within Itself
As of 2011, India’s openness - measured as the ratio of trade in goods and services to GDP has far overtaken China’s, a country famed for using trade as an engine of growth. India’s internal trade to GDP is also comparable to that of other large countries and very different from the caricature of a barrier-riddled economy.
7. Divergence within India
Time Spatial dispersion in income is still rising in India in the last decade (2004-14), unlike the rest of the world and even China. That is, despite more porous borders within India than between countries internationally, the forces of “convergence” have been elusive.
8. Property Tax Potential Unexploited
Evidence from satellite data indicates that Bengaluru and Jaipur collect only between 5% to 20% of their potential property taxes.
What is Economic Survey?
The Economic Survey is presented in the parliament every year by The Finance Ministry of India. The Economic Survey is usually presented in Parliament a day before the presentation of the Union Budget.
This survey acts as a precursor to the budget. It discusses the prospects, challenges and outlook of the economy. Apart from it, it recommends reform measures that are essential to thrive and propel the economy.
It can be said that the economic survey is the finance ministry’s view on the annual economic development of the Indian economy over the previous 12 months.
The government’s performance on major development programs, and the policy initiatives of the government and the prospects of the economy in the short to medium term are summarized in this document.
Earlier, the budgetary exercise was completed only by mid-May and with the monsoon arriving in June, most of the programs and expenditures by states did not take off until October. It left just half-a-year for their implementation.
In September previous year, the government decided to end a nearly a century-long practice and it merged the railways budget with the General Budget. And the presentation of the budged was decided to be advanced to expedite spending and boost the economy.
What is the chronology of The Economic Survey?
In India, the first Economic Survey was presented in 1951 for 1950-51. Till1964, Economic Survey document was used to be circulated along with Budget papers. It is intriguing that the words Budget and Economic Survey are not mentioned in the Constitution of India. They drive their authority from Article 112 of the Constitution, which states that the government shall present the "annual financial statement" before Parliament. In Britain, such documents are generally called budget. So it can be said that India borrowed the term and tradition from Britain.
Major things to be focused on this Economic Survey
The major issues to be focused on The Economic survey 2017 are the economic logic behind demonetizing higher denomination notes of Rs 1,000 and Rs 500 and its impacts on the economy, its analysis of economic growth trajectory especially after the International Monetary Fund speculated growth projection for India to 6.6% for 2016-17 and 7.2% in 2017, and the Universal Basic Income, which guarantees a minimum income to every citizen.
Are the recommendations made by survey mandatory for the government to follow?
The recommendations and suggestions made by the economic survey serve only as a policy guide for the government. The government is not bound to follow them. In past too, suggestions charted out in the economic survey were not followed in budget proposals on many occasions.