Economic Survey 2017-18 Analysis (Part 1) Shyam S Kaggod
Economic Survey Important Points Two Volumes Volume 1-Theoreotical Volume 2-Factual Do not read all the pages of Vol 2 Supplement the information from the budget Questions can from both the volumes in both Prelims and Mains
Vol 1-Contents State of the Economy: An Analytical Overview and Outlook for Policy A New, Exciting Bird s-eye View of the Indian Economy Through the GST Investment and Saving Slowdowns and Recoveries: Cross-Country Insights for India Reconciling Fiscal Federalism and Accountability: Is there a Low Equilibrium Trap Is there a Late Converger Stall in Economic Development? Can India Escape it? Climate, Climate Change, and Agriculture Gender and Son Meta-Preference: Is Development Itself an Antidote Transforming Science and Technology in India Ease of Doing Business Next Frontier: Timely Justice Vol 2-Contents An Overview of India s Economic Performance in 2017-18 Review of Fiscal Developments Monetary Management and Financial Intermediation Prices and Inflation Sustainable Development, Energy and Climate Change External Sector Agriculture and Food Management Industry and Infrastructure Services Sector Social Infrastructure, Employment and Human Development
V1C1 Some achievements GST council provides an opportunity IBC to take care of TBSP Rationalization of revenue expenditure
V1C1 Two Vulnerabilities Twin Deficits FD CAD
How to overcome FD? V1C1
V1C1 How to overcome CAD? Promote exports Promote Make In India
Indian Decoupling V1C1
Indian Decoupling-Reasons-Real Interest Rates (MP) V1C1
Reasons for Decoupling Real Interest Rates V1C1
Indian Decoupling-Reasons-Demonetization V1C1
Indian Decoupling-Reasons-TBS Challenge V1C1
Indian Decoupling-Reasons-TBS Challenge V1C1
Indian Decoupling-Reasons-Oil Prices V1C1
V1C1 Outlook For 2017-18 For 2018-19
V1C1 The government needs to Banking Reforms (Recapitalization and Consolidation) Stable GST Privatizing Air India Counter disruptions to the economy
V1C1 The Global Outlook As per the World Economic Outlook, the global GDP growth 2016-3.2% 2017-3.6% 2018-3.9%
V1C2 GST Is a unified indirect tax Is a destination/consumption based tax Came into effect from 1 st July 2017 Will lead to creation of a national market GST has a dual structure One hidden benefit is Repository of Information
Taxpayer Base V1C2
V1C2 Tax base & Spatial distribution The size of the tax base and Revenue Neutrality The concern of the manufacturing states that a destination based
Concern of the manufacturing states V1C2
Size of the firms and their transactions V1C2
International Trade, Inter-state trade and Economic Prosperity V1C2 5 states-maharashtra, Gujarat, Karnataka, Tamil Nadu and Telanganaaccount for 70% of India s exports The inter-state trade in India is above 60% of the GDP The five largest exporting states are Maharashtra, Gujarat, Haryana, Tamil Nadu and Karnataka The five largest importing states are Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka and Gujarat
Relation between prosperity and exports V1C2
V1C2 Formality and Informality of the Economy Hard core Formal (part of tax net & social security net) Purely Informal
V1C3 Savings & Investment - Gross Capital Formation Private Households (Financial and Physical) Gross Savings companies Public
Gross Capital Formation V1C3 GCF GFCF Stock Infrastructure such as building, machinery, means of transport, roads, canal etc Change in raw materials, inventories, finished/semi-finished goods etc
Savings and Investment V1C3 2003 (% of GDP) 2007 (% of GDP) 2017 (% of GDP) GFCF 26.5% 35.6% 26.4% Domestic Savings 29.2% 38.3% 29% (for 2016)
Savings & Investment V1C3
Changes in Savings/Investments V1C3
V1C3 Two questions What should be given more priority policies to promote investment or policies to promote savings? What is the solution?
V1C3 Way Out The government has already Stepped up public investment IBC Further it needs to Easing the costs of doing business Creating a clear, transparent and stable tax and regulatory environment Creating a conducive environment for small and medium industries to prosper and invest, which will revive private investment