Key Highlights of Economic Survey
2019-20
The
Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2019-20 in the Parliament
on 31 January 2020.
The
Key Highlights of the Economic Survey 2019-20 are as follows:
Wealth
Creation: The Invisible Hand Supported by the Hand of Trust
·
India’s dominance as global economic power
for three-fourths of economic history manifests by design.
·
Kautilya’s
Arthashastra postulates the role of prices in an economy
(Spengler, 1971).
·
Historically, Indian economy relied on the
invisible hand of the market with the support of the hand of trust:
·
o Invisible hand of the market reflected in
openness in economic transactions.
·
o Hand of trust appealed to ethical and philosophical
dimensions.
·
Post-liberalisation,
Indian economy supports both pillars of the economic model advocated in our traditional
thinking.
·
Survey illustrates enormous benefits accruing
from enabling the invisible hand of the market.
·
Exponential rise in India’s GDP and GDP
per capita post-liberalisation coincides with wealth generation.
·
Survey shows that the liberalized sectors
grew significantly faster than the closed ones.
·
Need for the hand of trust to complement
the invisible hand, illustrated by financial sector performance during 2011-13.
·
Survey posits that India’s aspiration to
become a $5 trillion economy depends critically on:
·
Strengthening the invisible hand of the
market.
·
Supporting it with the hand of trust.
·
Strengthening the invisible hand by promoting
pro-business policies to:
·
Provide equal opportunities for new entrants.
·
Enable fair competition and ease doing business.
·
Eliminate policies unnecessarily undermining
markets through government intervention.
·
Enable trade for job creation.
·
Efficiently scale up the banking sector.
·
Introducing the idea of trust as a public
good, which gets enhanced with greater use.
·
Survey suggests that policies must empower
transparency and effective enforcement using data and technology.
Entrepreneurship
and Wealth Creation at the Grassroots
·
Entrepreneurship as a strategy to fuel productivity
growth and wealth creation.
·
India ranks third in number of new firms
created, as per the World Bank.
·
New firm creation in India increased dramatically
since 2014:
o 12.2%
cumulative annual growth rate of new firms in the formal sector during 2014-18,
compared to 3.8% during 2006-2014.
o About
1.24 lakh new firms created in 2018, an increase of about 80% from about 70,000
in 2014.
·
Survey examines the content and drivers
of entrepreneurial activity at the bottom of the administrative pyramid – over 500
districts in India.
·
New firm creation in services is significantly
higher than that in manufacturing, infrastructure or agriculture.
·
Survey notes that grassroots entrepreneurship
is not just driven by necessity.
·
A 10 percent increase in registration of
new firms in a district yields a 1.8% increase in Gross Domestic District Product
(GDDP).
·
Entrepreneurship at district level has a
significant impact on wealth creation at the grassroots.
·
Birth of new firms in India is heterogeneous
and dispersed across districts and sectors.
·
Literacy and education in a district foster
local entrepreneurship significantly:
o Impact
is most pronounced when literacy is above 70 per cent.
o New
firm formation is the lowest in eastern India with lowest literacy rate (59.6% as
per 2011 Census).
·
Physical infrastructure quality in the district
influences new firm creation significantly.
·
Ease of Doing Business and flexible labour regulation enable new firm creation, especially in the
manufacturing sector.
·
Survey suggests enhancing ease of doing
business and implementing flexible labour laws can create
maximum jobs in districts and thereby in the states.
Pro-business
versus Pro-markets
·
Survey says that India’s aspiration of becoming
a $5 trillion economy depends critically on:
O Promoting
‘pro-business’ policy that unleashes the power of competitive markets to generate
wealth.
O Weaning
away from ‘pro-crony’ policy that may favour specific
private interests, especially powerful incumbents.
·
Viewed from the lens of the Stock market,
creative destruction increased significantly post-liberalisation:
O Before
liberalisation, a Sensex firm expected to stay in it for
60 years, which decreased to only 12 years after liberalisation.
O Every
five years, one-third of Sensex firms are churned out, reflecting the continuous
influx of new firms, products and technologies into the economy.
·
Despite impressive progress in enabling
competitive markets, pro-crony policies destroyed value in the economy:
O An
equity index of connected firms significantly outperformed market by 7% a year from
2007 to 2010, reflecting abnormal profits extracted at common citizens’ expense.
O In
contrast, the index underperforms market by 7.5% from 2011, reflecting inefficiency
and value destruction inherent in such firms.
·
Pro-crony policies such as discretionary
allocation of natural resources till 2011 led to rent-seeking by beneficiaries while
competitive allocation of the same post 2014 ended such rent extraction.
·
Similarly crony lending that led to wilful default, wherein promoters collectively siphoned off
wealth from banks, led to losses that dwarf subsidies for rural development.
Undermining
Markets: When Government Intervention Hurts More Than It Helps
·
Government intervention, though well intended, often
ends up undermining the ability of the markets to support wealth creation and leads
to outcomes opposite to those intended.
·
Four examples of anachronistic government
interventions:
o Frequent
and unpredictable imposition of blanket stock limits on commodities under ECA distorts:
• The incentives for the
creation of storage infrastructure by the private sector.
• Movement up the agricultural
value chain.
• Development of national
market for agricultural commodities.
o Imposition
of stock limits on dal in 2006-Q3, sugar in 2009-Q1 and onions in September,
2019 spiked up the volatility of the retail and wholesale prices of onions.
o The
Ministry of Consumer Affairs must examine whether the ECA is relevant in today’s
India.
o With
raids having abysmally low conviction rate and no impact on prices, the ECA only
seems to enable rent-seeking and harassment.
o Survey
suggests there is clear evidence for jettisoning this anachronistic legislation.
o The
regulation of prices of drugs, through the DPCO 2013, led to increase in the price
of the regulated pharmaceutical drug vis-à-vis that of an unregulated but similar
drug.
o The
increase in prices is greater for more expensive formulations than for cheaper ones
and for those sold in hospitals rather than retail shops.
o These
findings reinforce that the outcome is opposite to what DPCO aims to do - making
drugs affordable.
o Government,
being a huge buyer of drugs, can intervene more effectively to provide affordable
drugs by combining all its purchases and exercising its bargaining power.
o Ministry
of Health and Family Welfare must evolve non-distortionary mechanisms that utilise Government’s bargaining power in a transparent manner.
o Policies
in the food-grain markets led to:
• Emergence of Government
as the largest procurer and hoarder of rice and wheat.
• Crowding out of private
trade.
• Burgeoning food subsidy
burden
• Inefficiencies in the
markets, affecting the long run growth of agricultural sector.
o The
food-grains policy needs to be dynamic and allow switching from physical handling
and distribution of food-grains to cash transfers/food coupons/smart cards.
o Analysis
of debt waivers given by States/Centre:
• Full waiver beneficiaries
consume less, save less, invest less and are less productive after the waiver, compared
to the partial beneficiaries.
• Debt waivers disrupt
the credit culture.
• They reduce formal credit
flow to the very same farmers, thereby defeating the purpose.
·
Survey suggests that:
o Government
must systematically examine areas of needless intervention and undermining of markets;
but it does not argue that there should be no Government intervention.
o Instead
it suggests that the interventions that were apt in a different economic setting
may have lost their relevance in a transformed economy.
o Eliminating
such instances will enable competitive markets spurring investments and economic
growth.
Creating
Jobs and Growth by Specializing in Network Products
·
Survey says India has unprecedented opportunity
to chart a China-like, labour-intensive, export trajectory.
·
By integrating “Assemble in India for the
world” into Make in India, India can:
o Raise
its export market share to about 3.5% by 2025 and 6% by 2030.
o Create
4 crore well-paid jobs by 2025 and 8 crore by 2030.
·
Exports of network products can provide
one-quarter of the increase in value added required for making India a $5 trillion
economy by 2025.
·
Survey suggests a strategy similar to one
used by China to grab this opportunity:
o Specialization
at large scale in labour-intensive sectors, especially
network products.
o Laser-like
focus on enabling assembling operations at mammoth scale in network products.
o Export
primarily to markets in rich countries.
o Trade
policy must be an enabler.
·
Survey analyses the impact of India’s trade
agreements on overall trade balance:
O India’s
exports increased by 13.4% for manufactured products and 10.9% for total merchandise
o Imports
increased by 12.7% for manufactured products and 8.6 per cent for total merchandise.
o India
gained 0.7% increase in trade surplus per year for manufactured products and 2.3%
per year for total merchandise.
Targeting
Ease of Doing Business in India
·
A jump of 79 positions to 63 in 2019
from 142 in 2014 in World Bank’s Doing Business rankings.
·
India still trails in parameters such as
Ease of Starting Business, Registering Property, Paying Taxes and Enforcing Contracts.
·
Survey has numerous case studies:
O For
merchandise exports, the logistics process flow for imports is more efficient than
that for exports.
O Electronics
exports and imports through Bengaluru airport illustrate how Indian logistical processes
can be world class.
·
The turnaround time of ships in India has
almost halved to 2.48 days in 2018-19 from 4.67 days in 2010-11.
·
Suggestions for further Ease of Doing Business:
O Close
coordination between the Logistics division of the Ministry of Commerce and Industry,
the Central Board of Indirect Taxes and Customs, Ministry of Shipping and the different
port authorities.
O Individual
sectors such as tourism or manufacturing require a more targeted approach that maps
out the regulatory and process bottlenecks for each segment.
Golden
jubilee of bank nationalisation: Taking stock
·
Survey observes 2019 as the golden jubilee
year of bank nationalization
·
Accomplishments of lakhs of Public Sector
Banks (PSBs) employees cherished and an objective assessment of PSBs suggested by
the Survey.
·
Since 1969, India’s Banking sector has not
developed proportionately to the growth in the size of the economy.
·
India has only one bank in the global top
100 – same as countries that are a fraction of its size: Finland (about 1/11th),
Denmark (1/8th), etc.
·
A large economy needs an efficient banking
sector to support its growth.
·
The onus of supporting the economy falls
on the PSBs accounting for 70% of the market share in Indian banking:
O PSBs
are inefficient compared to their peer groups on every performance parameter.
O In
2019, investment for every rupee in PSBs, on average, led to the loss of 23 paise, while in NPBs it led to the gain of 9.6 paise.
O Credit
growth in PSBs has been much lower than NPBs for the last several years.
Solutions to make PSBs more efficient:
O Employee
Stock Ownership Plan (ESOP) for PSBs’ employees
O Representation
on boards proportionate to the blocks held by employees to incentivize employees
and align their interests with that of all shareholders of banks.
O Creation
of a GSTN type entity that will aggregate data from all PSBs and use technologies
like big data, artificial intelligence and machine learning in credit decisions
for ensuring better screening and monitoring of borrowers, especially the large
ones.
Financial
Fragility in the NBFC Sector
·
Survey investigates the key drivers of Rollover
Risk of the shadow banking system in India in light of the current liquidity crunch
in the sector.
·
Key drivers of Rollover Risk:
O Asset
Liability Management (ALM) Risk.
o Interconnectedness
Risk.
o Financial
and Operating Resilience of an NBFC.
o Over-dependence
on short-term wholesale funding.
·
Survey computes a diagnostic (Health Score)
by quantifying the Rollover risk for a sample of HFCs and Retail-NBFCs (which are
representative of their respective sectors).
·
The analysis of the Health Score has the
following findings:
o The
HFC sector exhibited a declining trend post 2014 and overall health of the sector
worsened considerably by the end of FY2019.
o The
Score of the Retail-NBFC sector was consistently below par for the period 2014 -19.
o Larger
Retail-NBFCs had higher Health Scores but among medium and small Retail- NBFCs,
the medium size ones had a lower score for the entire period of 2014-19.
·
Survey suggests that the Health Score provides
an early warning signal of impending liquidity problems.
·
Equity markets react favourably to increase in Health Score of individual HFCs and
Retail-NBFCs.
·
The Survey prescribes this analysis to efficiently
allocate liquidity enhancements across firms (with different Health Scores) in the
NBFC sector, thereby arresting financial fragility in a capital-efficient manner.
Privatization
and Wealth Creation
·
Survey examines the realized efficiency
gains from privatization in the Indian context and bolsters the case for aggressive
disinvestment of CPSEs.
·
Strategic disinvestment of Government’s
shareholding of 53.29 per cent in HPCL led to an increase of around Rs. 33,000 crore in national wealth.
·
Survey presents an analysis of the before-after
performance of 11 CPSEs which underwent strategic disinvestment from 1999-2000
to 2003-04:
o Financial
indicators such as net worth, net profit, return on assets (ROA), return on equity
(ROE) etc of the privatized CPSEs, on an average, have
improved significantly.
o Privatized
CPSEs have been able to generate more wealth from the same resources.
·
Survey suggests aggressive disinvestment
of CPSEs to:
o Bring
in higher profitability.
o Promote
efficiency.
o Increase
competitiveness.
o Promote
professionalism.
Is
India’s GDP Growth Overstated? No!
·
GDP growth is a critical variable for decision-making
by investors and policymakers. Therefore, the recent debate about accuracy of India’s
GDP estimation following the revised estimation methodology in 2011 is extremely
significant.
·
As countries differ in several observed
and unobserved ways, cross-country comparisons have to be undertaken by separating
the effect of other confounding factors and isolating effect of methodology revision
alone on GDP growth estimates.
·
Models that incorrectly over-estimate GDP
growth by 2.7% for India post-2011 also misestimate GDP growth over the same period
for 51 out of 95 countries in the sample.
·
Several advanced economies such as UK, Germany
and Singapore have their GDPs misestimated with incompletely specified econometric
model.
·
Correctly specified models that account
for all unobserved differences and differential trends in GDP growth across countries
fail to find any misestimating of growth in India or other countries.
·
Concerns of a misestimated Indian GDP are
unsubstantiated by the data and are thus unfounded.
Thalinomics: The Economics of a Plate of Food in India
·
An attempt to quantify what a common person
pays for a Thali across India.
·
A shift in the dynamics of Thali prices
since 2015-16.
·
Absolute prices of a vegetarian Thali have
decreased significantly since 2015-16 across India and the four regions; though
the price has increased during 2019-20.
·
Post 2015-16:
·
Average household gained close to Rs. 11, 000 on average per year from the moderation in prices
in the case of vegetarian Thali.
·
Average household that consumes two non-vegetarian
Thalis gained close to Rs. 12, 000 on average per year
during the same period.
·
From 2006-07 to 2019-20:
·
Affordability of vegetarian Thalis improved
29%.
·
Affordability
of non-vegetarian Thalis improved by 18%.
India’s
Economic Performance in 2019-20
·
India’s GDP growth moderated to 4.8% in
H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
·
Real consumption growth has recovered in
Q2 of 2019-20, cushioned by a significant growth in government final consumption.
·
Growth for ‘Agriculture and allied activities’
and ‘Public administration, defense, and other services’ in H1 of 2019-20 was higher
than in H2 of 2018-19.
·
India’s external sector gained further stability
in H1 of 2019-20:
·
Current
Account Deficit (CAD) narrowed to 1.5% of GDP in H1 of 2019-20 from 2.1% in 2018-19.
·
Impressive
Foreign Direct Investment (FDI).
·
Rebounding
of portfolio flows.
·
Accretion
of foreign exchange reserves.
·
Sharper
contraction of imports as compared to that of exports in H1 of 2019-20, with easing
of crude prices.
·
Headline inflation expected to decline by
year end:
·
Increased from 3.3% in H1 of 2019-20 to
7.35% in December 2019-20 due to temporary increase in food inflation.
·
Rise in CPI-core and WPI in December 2019-20
suggests building of demand pressure.
·
Deceleration in GDP growth can be understood
within the framework of a slowing cycle of growth:
·
Financial sector acted as a drag on the
real sector (investment-growth-consumption).
·
Reforms undertaken during 2019-20 to boost
investment, consumption and exports:
·
Speeding up the insolvency resolution process
under Insolvency and Bankruptcy Code (IBC).
·
Easing
of credit, particularly for the stressed real estate and NBFC sectors.
·
Announcing
the National Infrastructure Pipeline 2019-2025.
·
Survey expects an uptick in the GDP growth
in H2 of 2019-20:
·
5% GDP growth for 2019-20 based on CSO’s
first Advance Estimates.
·
Expeditious
delivery on reforms for enabling the economy to strongly rebound in 2020-21.
Fiscal
Developments
·
Revenue Receipts registered a higher growth
during the first eight months of 2019-20, compared to the same period last year,
led by considerable growth in Non-Tax revenue.
·
Gross GST monthly collections have crossed
the mark of Rs. 1 lakh crore for a total of five times
during 2019-20 (up to December 2019).
·
Structural reforms undertaken in taxation
during the current financial year:
·
Change in corporate tax rate.
·
Measures to ease the implementation of GST.
·
Fiscal deficit of states within the targets
set out by the FRBM Act.
·
Survey notes that the General Government
(Centre plus States) has been on the path of fiscal consolidation.
External
Sector
·
Balance of Payments (BoP):
·
India’s BoP position improved from US$ 412.9 bn
of forex reserves in end March, 2019 to US$ 433.7 bn in
end September, 2019.
·
Current account deficit
(CAD) narrowed from 2.1% in 2018-19 to 1.5% of GDP in H1 of 2019-20.
·
Foreign reserves stood
at US$ 461.2 bn as on 10th January, 2020.
·
Global trade:
·
In sync with an estimated
2.9% growth in global output in 2019, global trade is estimated to grow at 1.0%
after having peaked in 2017 at 5.7%.
·
However, it is projected
to recover to 2.9% in 2020 with recovery in global economic activity.
·
India’s merchandise trade
balance improved from 2009-14 to 2014-19, although most of the improvement in the
latter period was due to more than 50% decline in crude prices in 2016-17.
·
India’s top five trading
partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.
·
Exports:
·
Top export items: Petroleum products, precious stones, drug formulations
& biologicals, gold and other precious metals.
·
Largest export destinations
in 2019-20 (April-November): United States of America (USA), followed by United
Arab Emirates (UAE), China and Hong Kong.
·
The merchandise exports
to GDP ratio declined, entailing a negative impact on BoP
position.
·
Slowdown of world output
had an impact on reducing the export to GDP ratio, particularly from 2018-19 to
H1 of 2019-20.
·
Growth in Non-POL exports
dropped significantly from 2009-14 to 2014-19.
·
Imports:
·
Top import items: Crude petroleum, gold, petroleum products, coal,
coke & briquittes.
·
India’s
imports continue to be largest from China, followed by USA, UAE and Saudi Arabia.
·
Merchandise imports to
GDP ratio declined for India, entailing a net positive impact on BoP.
·
Large Crude oil imports
in the import basket correlates India’s total imports with crude prices. As crude
price raises so does the share of crude in total imports, increasing imports to
GDP ratio.
·
Significant Gold imports
also correlate India’s total imports with gold prices. However, share of gold imports
in total imports remained the same during 2018-19 and the first half of 2019-20,
despite an increase in prices, possibly due to increase in import duty that reduced
the import of gold.
·
Non-POL-non-gold imports are positively
correlated with GDP growth.
·
Non-POL-non-oil imports fell as a proportion
to GDP from 2009-14 to 2014-19 when GDP growth accelerated.
·
This may be because of consumption driven
growth while investment rate declined, lowering non-POL-non-gold imports.
·
Continuous decline in investment rate decelerated
GDP growth, weakened consumption, dampened the investment outlook, which further
reduced GDP growth and along with it non-POL-non-gold imports as a proportion of
GDP from 2018-19 to H1 of 2019-20.
·
Under trade facilitation,
India improved its ranking from 143 in 2016 to 68 in 2019 under the indicator, “Trading
across Borders”, monitored by World Bank in its Ease of Doing Business Report.
·
Logistics industry of India:
·
Currently estimated to be around US$ 160 billion.
·
Expected to touch US$ 215 billion by 2020.
·
According to World Bank's Logistics Performance Index, India ranks
44th in 2018 globally, up from 54th rank in 2014.
·
Net FDI inflows continued to be buoyant
in 2019-20 attracting US$ 24.4 bn in the first eight months,
higher than the corresponding period of 2018-19.
·
Net FPI in the first eight months of 2019-20
stood at US$ 12.6 bn.
·
Net remittances from Indians
employed overseas continued to increase, receiving US$ 38.4 billion in H1 of 2019-20
which is more than 50% of the previous year level.
·
External debt:
·
Remains low at 20.1% of
GDP as at end September, 2019.
·
After significant decline
since 2014-15, India’s external liabilities (debt and equity) to GDP increased at
the end of June, 2019 primarily by increase in FDI, portfolio flows and external
commercial borrowings (ECBs).
Monetary
Management and Financial Intermediation
·
Monetary policy:
·
Remained accommodative in 2019-20.
·
Repo rate was cut by 110 basis points in
four consecutive MPC meetings in the financial year due to slower growth and lower
inflation.
·
However, it was kept unchanged in the fifth
meeting held in December 2019.
·
In 2019-20, liquidity conditions were tight
for initial two months; but subsequently it remained comfortable.
·
The Gross Non Performing Advances ratio:
·
Remained unchanged for Scheduled Commercial
banks at 9.3% between March and September 2019
·
Increased slightly for the Non-Banking Financial
Corporations (NBFCs) from 6.1% in March 2019 to 6.3% in September 2019.
·
Credit growth:
·
The financial flows to the economy remained
constrained as credit growth declined for both banks and NBFCs.
·
Bank Credit growth (YoY) moderated from
12.9% in April 2019 to 7.1% as on December 20, 2019.
·
Capital to Risk-weighted Asset Ratio of
SCBs increased from 14.3% to 15.1% between March 2019 and September 2019.
Prices
and Inflation
·
Inflation Trends:
o
Inflation witnessing moderation since 2014
o
Consumer Price Index (CPI) inflation increased
from 3.7 per cent in 2018-19 (April to December, 2018) to 4.1 per cent in 2019-20
(April to December, 2019).
o
WPI inflation fell from 4.7 per cent
in 2018-19 (April to December, 2018) to 1.5 per cent during 2019-20 (April to December,
2019).
·
Drivers of CPI - Combined (C) inflation:
·
During 2018-19, the major driver was the
miscellaneous group
·
During 2019-20 (April-December), food and
beverages was the main contributor.
·
Among food and beverages, inflation in vegetables
and pulses was particularly high due to low base effect and production side disruptions
like untimely rain.
·
Cob-web Phenomenon for Pulses:
o
Farmers base their sowing decisions on prices witnessed
in the previous marketing period.
o
Measures to safeguard farmers like procurement under
Price Stabilisation Fund (PSF), Minimum Support Price
(MSP) need to be made more effective.
·
Divergence Between Retail and Wholesale
price:
·
Observed for essential agricultural commodities
in four metropolitan cities of the country from 2014 to 2019.
·
Divergence particularly high for vegetables
like onion and tomato. This may be due to the presence of intermediaries and high
transaction costs.
·
Volatility of Prices:
o Volatility
of prices for most of the essential food commodities with the exception of some
of the pulses has actually come down in the period 2014-19 as compared to the period
2009-14.
o Lower
volatility might indicate the presence of better marketing channels, storage facilities
and effective MSP system.
·
Regional variations:
o CPI-C
inflation has been highly variable across States ranging between (-)0.04 per cent
to 8.1 per cent across States/UTs in financial year (FY) 2019-20 (April-December).
o In
most states, CPI-C inflation in rural areas is lower than the CPI-C inflation in
urban areas
o Rural
inflation has been more variable across states than urban inflation.
·
Inflation dynamics:
o Convergence
of headline inflation towards core inflation as per the CPI-C data from 2012 onwards.
Sustainable
Development and Climate Change
·
India moving forward on the path of SDG
implementation through well-designed initiatives
·
SDG India Index:
o Himachal
Pradesh, Kerala, Tamil Nadu, Chandigarh are front runners.
o Assam,
Bihar and Uttar Pradesh come under the category of Aspirants.
·
India hosted COP-14 to UNCCD which adopted
the Delhi Declaration: Investing in Land and Unlocking Opportunities.
·
COP-25 of UNFCCC at Mandrid:
o India
reiterated its commitment to implement Paris Agreement.
o COP-25
decisions include efforts for climate change mitigation, adaptation and means of
implementation from developed country parties to developing country parties.
·
Forest and tree cover:
o Increasing
and has reached 80.73 million hectare.
o 24.56%
of the geographical area of the country.
·
Burning of agricultural residues, leading
to rise in pollutant levels and deterioration of air quality, is still a major concern
though the total number of burning events recorded reduced due to various
efforts taken.
·
International Solar Alliance (ISA)
o ‘Enabler’
by institutionalizing 30 Fellowships from the Member countries.
o
‘Facilitator’
by getting the lines of credit worth US$ 2 Billion from EXIM Bank of India and 1.5
Billion from AfD, France.
o ‘Incubator’
by nurturing initiatives like the Solar Risk Mitigation Initiative.
o ‘Accelerator’
by developing tools to aggregate demand for 1000 MW solar and 2.7 lakh solar water
pumps.
Agriculture
and Food Management
·
Largest Proportion of Indian population
depends directly or indirectly on agriculture for employment opportunities as compared
to any other sector.
·
The share of agriculture and allied sectors
in the total Gross Value Added (GVA) of the country has been continuously declining
on account of relatively higher growth performance of non-agricultural sectors,
a natural outcome of development process.
·
GVA at Basic Prices for 2019-20 from ‘Agriculture,
Forestry and Fishing’ sector is estimated to grow by 2.8%.
Agricultural productivity is also constrained by lower level of
mechanization in agriculture which is about 40% in India, much lower than China
(59.5%) and Brazil (75%).
Skewed pattern of regional distribution of agricultural credit
in India:
o Low credit in Hilly, Eastern and North Eastern states (less than
1% of total agricultural credit disbursement).
Livestock income has become an important secondary source of income
for millions of rural families:
o An important role in achieving the goal of doubling farmers’ income.
o Livestock sector has been growing at a CAGR of 7.9% during last
five years.
During the last 6 years ending 2017-18, Food Processing Industries
sector has been growing:
o Average Annual Growth Rate (AAGR) of around 5.06%
o Constitutes as much as 8.83% and 10.66% of GVA in Manufacturing
and Agriculture sector respectively in 2017-18 at 2011-12 prices.
While interests of the vulnerable sections of the population need
to be safeguarded, Survey emphasizes on sustainability of food security operations
by:
o Addressing the burgeoning food subsidy bill.
o Revisiting the rates and coverage under NFSA.
Industry
and Infrastructure
·
The industrial sector as per Index of Industrial
Production (IIP) registered a growth of 0.6 per cent in 2019-20 (April-November)
as compared to 5.0% during 2018-19 (April-November).
·
Fertilizer sector achieved a growth of 4.0%
during 2019-20 (April-November) as compared to (-) 1.3 per cent during 2018-19 (April-November).
·
Steel sector achieved a growth of 5.2% during
2019-20 (April-November) as compared to 3.6% during 2018-19 (April-November).
·
Total telephone connections in India touched
119.43 crore as on September 30, 2019.
·
The installed capacity of power generation
has increased to 3, 64,960 MW as on October 31, 2019 from 3, 56,100 MW as on March
31, 2019.
·
Report of the Task Force on National Infrastructure
Pipeline released on 31.12.2019 has projected total infrastructure investment of
Rs. 102 lakh crore during the period FY 2020 to 2025 in
India.
Services
Sector
Increasing
significance of services sector in the Indian economy:
·
About 55% of the total size of the economy
and GVA growth.
·
Two-thirds
of total FDI inflows into India.
·
About 38 per cent of total exports.
·
More than 50% of GVA in 15 out of the 33
states and UTs.
Gross
Value Added growth of the services sector moderated in 2019-20 as suggested by various
high-frequency indicators and sectoral data such as air passenger traffic, port
and shipping freight traffic, bank credit etc.
On
the bright side, FDI into services sector has witnessed a recovery in early 2019-20.
Social
Infrastructure, Employment and Human Development
·
The expenditure on social services (health,
education and others) by the Centre and States as a proportion of GDP increased
from 6.2% in 2014-15 to 7.7% in 2019-20 (BE).
·
India’s ranking in Human Development Index
improved to 129 in 2018 from 130 in 2017:
·
With 1.34% average annual HDI growth, India
is among the fastest improving countries
·
Gross Enrolment Ratio at secondary, higher
secondary and higher education level needs to be improved.
·
The share of regular wage/salaried employees
has increased by 5 percentage points from 18% in 2011-12 to 23% in 2017-18.
·
A significant jump of around 2.62 crore
new jobs with 1.21 crore in rural areas and 1.39 crore in urban areas in this category.
·
Total formal employment in the economy increased
from 8% in 2011-12 to 9.98% in 2017-18.
·
Gender disparity in India’s labour market widened due to decline in female labour force participation especially in rural areas:
·
Around 60% of productive age (15-59) group
engaged in full time domestic duties.
·
Access to health services inter-alia through
Ayushman Bharat and Mission Indradhanush
across the country has improved.
·
Mission Indradhanush
has vaccinated 3.39 crore children and 87.18 lakh pregnant women of 680 districts
across the country.
·
About 76.7% of the households in the rural
and about 96% in the urban areas had houses of pucca structure.
·
A 10 Year Rural Sanitation
Strategy (2019-2029) launched to focus on sustaining the sanitation behavior change
and increasing access to solid and liquid waste management.