Finance Minister Shri Arun Jaitley Presented Economic Survey 2016-17 in the Parliament today
Economic Survey says economic growth to
return to normal as new currency notes in required quantities come back into
circulation and follow-up action on demonetisation is taken.
The
CPI based core inflation remained stable in the current fiscal year averaging
around 5 per cent.
The
Economic Survey says that the rupee performed better than most of the other
emerging market economies.
The
total area coverage under Rabi crops as on 13.01.2017 for 2016-17 is 616.2 lakh
hectares which is 5.9 per cent higher than that in the corresponding week of
last year.
The area coverage under Gram (Channa
Dal) as on 13.01.2017 for 2016-17 is 10.6 percent higher than that in the
corresponding week of last year.
The Indian Economy has sustained a
macro-economic environment of relatively lower inflation, fiscal discipline and
moderate current account deficit coupled with broadly stable rupee-dollar
exchange rate. The Economic Survey 2016-17 presented in the Parliament today by
the Union Finance Minister Shri Arun Jaitley states that such a sustenance is
despite continuing global sluggishness. It says :
·
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.
Government final consumption expenditure is the major driver of GDP growth in
the current year.
·
Fixed
investment (gross fixed capital formation) to GDP ratio (at current prices) is
estimated to be 26.6 per cent in 2016-17, vis-à-vis 29.3 per cent in 2015-16.
·
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 ¾ per cent to 7 ½ 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 narrow group of food items, of these pulses
continued to be the major contributor of food inflation.
·
The
CPI based core inflation has remained sticky in the current fiscal year
averaging around 5 per cent.
Trade
·
The
trend of negative export growth was reversed somewhat during 2016-17
(April-December), with exports growing at 0.7 per cent to US$ 198.8 billion.
During 2016-17 (April-December) imports declined by 7.4 per cent to US$ 275.4
billion.
·
Trade
deficit declined to US$ 76.5 billion in 2016-17 (April-December) as compared to
US$ 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 leading to an accretion in
foreign exchange reserves in H1 of 2016-17.
·
In
H1 of 2016-17, India’s foreign exchange reserves increased by US$ 15.5 billion
on 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 US$ 484.3 billion, recording
a decline of US$ 0.8 billion over the level at end-March 2016.
·
Most
of the key external debt indicators showed an improvement in September 2016
vis-à-vis March 2016. The share of short-term debt in total external debt
declined to 16.8 per cent at end-September 2016 and foreign exchange reserves
provided a cover of 76.8 per cent to the total external debt stock.
·
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; the higher growth in agriculture sector is not surprising as
the monsoon rains were much better in the current year than the previous two
years.
·
The
total area coverage under Rabi crops as on 13.01.2017 for 2016-17 is 616.2 lakh
hectares which is 5.9 per cent higher than that in the corresponding week of
last year.
·
The
area coverage under wheat as on 13.01.2017 for 2016-17 is 7.1 percent higher
than that in the corresponding week of last year. The area coverage under gram
as on 13.01.2017 for 2016-17 is 10.6 percent higher than that in the
corresponding week of last year.
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. The production of refinery
products, fertilizers, steel, electricity and cement increased substantially,
while the production of crude oil, natural gas fell during April-November
2016-17. Coal production attained lower growth during the same period.
·
The performance of corporate sector (Reserve Bank of
India, January 2017) highlighted that the growth of sales grew by 1.9 per cent
in Q2 of 2016-17 as compared to near stagnant growth of 0.1 per cent in Q1 of
2016-17. Growth in net profit registered a remarkable growth of 16.0 per cent
in Q2 of 2016-17 as compared to 11.2 per cent in Q1 of 2016-17.
Services
·
Service
sector is estimated to grow at 8.9 per cent in 2016-17, almost the same as in
2015-16. It is the significant pick-up in public administration, defence and
other services, boosted by the payouts of the Seventh Pay Commission that is
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 has 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.
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