Summary of Economic Survey 2017
As per the advance estimates released by the CSO, the growth rate of GDP at constant market prices for the year 2016-17 is placed at 7.1 per cent, as against 7.6 per cent in 2015-16.
The Union Finance Minister Arun Jaitley on 31 January 2017 presented the Economic Survey 2017 in the Parliament.
The survey observed that the Indian Economy has sustained a macro-economic environment of relatively low inflation, fiscal discipline and moderate current account deficit coupled with broadly stable rupee-dollar exchange rate.
Highlights of Economic Survey 2016-17
• Macro economy: As per the advance estimates released by the Central Statistics Office, the growth rate of GDP at constant market prices for the year 2016-17 is placed at 7.1 per cent, as against 7.6 per cent in 2015-16.
• This estimate is based mainly on information for the first seven to eight months of the financial year.
• For 2017-18, it is expected that the growth would return to normal as the new currency notes in required quantities come back into circulation and as follow-up actions to demonetisation are taken.
• On balance, there is a likelihood that Indian economy may recover back to 6.75 per cent to 7.5 per cent in 2017-18.
• Fiscal: Indirect taxes grew by 26.9 per cent during April-November 2016.
• The strong growth in revenue expenditure during April-November 2016 was boosted mainly by a 23.2 per cent increase in salaries due to the implementation of the Seventh Pay Commission and a 39.5 per cent increase in the grants for creation of capital assets.
• Prices: The headline inflation as measured by Consumer Price Index (CPI) remained under control for the third successive financial year.
• The average CPI inflation declined to 4.9 per cent in 2015-16 from 5.9 per cent in 2014-15 and stood at 4.8 per cent during April-December 2015.
• Inflation based on Wholesale Price Index (WPI) declined to (-) 2.5 per cent in 2015-16 from 2.0 per cent in 2014-15 and averaged 2.9 per cent during April-December 2016.
• Inflation is repeatedly being driven by a narrow group of food items. Among them,pulses continued to be the major contributor of food inflation.
• Trade: Trade deficit declined to USD 76.5 billion in 2016-17 (April-December) as compared to USD 100.1 billion in the corresponding period of the previous year.
• The current account deficit (CAD) narrowed in the first half (H1) of 2016-17 to 0.3 per cent of GDP from 1.5 per cent in H1 of 2015-16 and 1.1 per cent in 2015-16 full year.
• Robust inflows of foreign direct investment and net positive inflow of foreign portfolio investment were sufficient to finance CAD.
• In H1 of 2016-17, India’s foreign exchange reserves increased by USD 15.5 billion on Balance of Payments (BoP) basis.
• During 2016-17 so far, the rupee has performed better than most of the other emerging market economies.
• External Debt: At end-September 2016, India’s external debt stock stood at USD 484.3 billion, recording a decline of USD 0.8 billion over the level at end-March 2016.
• India’s key debt indicators compare well with other indebted developing countries and India continues to be among the less vulnerable countries.
• Agriculture: Agriculture sector is estimated to grow at 4.1 per cent in 2016-17 as opposed to 1.2 per cent in 2015-16.
• Industry: Growth rate of the industrial sector is estimated to moderate to 5.2 per cent in 2016-17 from 7.4 per cent in 2015-16.
• During April-November 2016-17, a modest growth of 0.4 per cent has been observed in the Index of Industrial Production (IIP).
• The eight core infrastructure supportive industries, viz. coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity registered a cumulative growth of 4.9 per cent during April-November 2016-17 as compared to 2.5 per cent during April-November 2015-16.
• Services: Service sector is estimated to grow at 8.9 per cent in 2016-17, almost the same as in 2015-16.
• The payouts of the Seventh Pay Commission are estimated to push up the growth in services.
• Social Infrastructure, Employment and Human Development: The Parliament has passed the Rights of Persons with Disabilities Act, 2016.
• The Act aims at securing and enhancing the rights and entitlements of Persons with disabilities.
• The Act proposed to increase the reservation in vacancies in government establishments from 3 per cent to 4 per cent for those persons with benchmark disability and high support needs.