Economic Survey 2018-19

Economic Survey 2018-19

Question: Consider the following statement in respect to the Economic Survey 2018-19 and choose the correct option given below:
(1) Union Finance Minister, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in the Parliament on July 04, 2019.
(2) The theme of Economic Survey, 2018-19 is “Shifting Gears towards a $5 trillion Indian economy by 2024-25”.
(3) Total Exports (including re-exports) for the year 2018-19 stood 23, 07,663 Cr.
Choose the correct option:
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) All of the above
Answer: (d)
Related facts:

  • The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2018-19 in the Parliament on July 04, 2019.
  • This is the first survey by the new chief economic advisor Krishnamurthy V Subramanian.
  • The theme of Economic Survey, 2018-19 is “Shifting Gears towards a $5 trillion Indian economy by 2024-25”.

The Key Highlights of Economic Survey 2018-19 are as follows:
Shifting gears: Private Investment as the Key Driver of Growth, Jobs, Exports and Demand

  • Survey states that pathways for trickle-down opened up during the last five years; and benefits of growth and macroeconomic stability reached the bottom of the pyramid.
  • Sustained real GDP growth rate of 8% needed for a $5 trillion economy by 2024-25.
  • Private investment- key driver for demand, capacity, labor productivity, new technology, creative destruction and job creation.

Nourishing Dwarfs to become Giants: Reorienting policies for MSME Growth

  • Survey focuses on enabling MSMEs to grow for achieving greater profits, job creation and enhanced productivity.
  • Dwarfs (firms with less than 100 workers) despite being more than 10 years old, account for more than 50% of all organized firms in manufacturing by number.
  • Contribution of dwarfs to employment is only 14% and to productivity is a mere 8%.
  • Large firms (more than 100 employees) account for 75% employment and close to 90% of productivity despite accounting for about 15% by number.
  • Unshackling MSMEs and enabling them to grow by way of:
  • A sunset clause of less than 10 years, with necessary grand-fathering, for all size-based incentives.
  • Deregulating labor law restrictions to create significantly more jobs, as evident from Rajasthan.

Data “Of the People, By the People, For the People”

  • Society’s optimal consumption of data is higher than ever given technological advances in gathering and storage of data.
  • Government must intervene in creating data as a public good, especially of the poor and in social sectors.

Ending Matsyanyaya: How to Ramp up Capacity in the Lower Judiciary

  • Delays in contract enforcement and disposal resolution are arguably now the single biggest hurdle to the ease of doing business and higher GDP growth in India.
  • Around 87.5 per cent of pending cases are in the District and Subordinate courts. 100 per cent clearance rate can be achieved by filling out merely 2279 vacancies in the lower courts and 93 in High Courts.

India’s Demography at 2040: Planning Public Good Provision for the 21st Century

  • Sharp slowdown in population growth expected in next 2 decades.
  • Working age population to grow by roughly 9.7mn per year during 2021-31 and 4.2mn per year during 2031-41.

From Swachh Bharat to Sundar Bharat via Swasth Bharat: An Analysis of the Swachh Bharat Mission

  • Traceable health benefits brought about by Swachh Bharat Mission (SBM). 93.1% of the households have access to toilets. 96.5% of those with access to toilets are using them in rural India.
  • 100% Individual Households Latrine (IHHL) Coverage in 30 states and UTs.
  • Financial savings from a household toilet exceed the financial costs to the household by 1.7 times on average and 2.4 times for poorest households.

Enabling Inclusive Growth through Affordable, Reliable and Sustainable Energy

  • India now stands at 4th in wind power, 5th in solar power and 5th in renewable power installed capacity.
  • Rs 50,000 crore saved and 108.28 million tonnes of CO2 emissions reduced by energy efficiency programmes in India. Thermal power still plays a dominant role at 60% share.
  • Market share of electric cars only 0.06% in India while it is 2% in China and 39% in Norway.

Effective Use of Technology for Welfare Schemes – Case of MGNREGS

  • Survey says that efficacy of MGNREGS increased with use of technology in streamlining it along with significant reduction in delays in the payment of wages with adoption of NeFMS and DBT in MGNREGS.
  • Demand and supply of work under MGNREGS increased, especially in distressed districts.
  • Vulnerable sections of the society viz. women, SC and ST workforce increased under MGNREGS during economic distress.

Redesigning a Minimum Wage System in India for Inclusive Growth

  • Present minimum wage system in India has 1,915 minimum wages for various scheduled job categories across states. 1 in every 3 wage workers in India not protected by the minimum wage law.
  • ‘National Floor Minimum Wage’ should be notified by the Central Government, varying across five geographical regions.
  • ‘National level dashboard’ under the Ministry of Labour & Employment for regular notifications on minimum wages, proposed by the Survey.

State of the Economy in 2018-19: A Macro View

  • India is still the fastest growing major economy in 2018-19.
  • Growth of GDP moderated to 6.8 per cent in 2018-19 from 7.2 per cent in 2017-18.
  • Inflation contained at 3.4 per cent in 2018-19.
  • Non-Performing Assets as percentage of Gross Advances reduced to 10.1 per cent at end December 2018 from 11.5 per cent at end March 2018.
  • Current account deficit manageable at 2.1 percent of GDP.

Money Management and Financial Intermediation

  • Banking system improved as NPA ratios declined and credit growth accelerated.
  • Insolvency and Bankruptcy Code led to recovery and resolution of significant amount of distressed assets:
  • Till March 31, 2019, the CIRP yielded a resolution of 94 cases involving claims worth INR 1, 73,359 crore.
  • As on 28 Feb 2019, 6079 cases involving 2.84 lakh crores have been withdrawn.
  • As per RBI reports, INR 50,000 crore received by banks from previously non-performing accounts.

Sustainable Development and Climate Change

  • India’s SDG Index Score ranges between 42 and 69 for States and between 57 and 68 for UTs:
  • Kerala and Himachal Pradesh are the front runners with a score of 69 amongst states.
  • Namami Gange Mission launched as a key policy priority towards achieving the SDG 6, with a budget outlay of INR. 20,000 crore for the period 2015-2020.

External Sector

  • India’s External Debt was US$ 521.1 billion at end-December 2018, 1.6 per cent lower than its level at end-March 2018.
  • Composition of India’s exports and import basket in 2018-19(P):
  • Exports (including re-exports): INR23, 07,663 Cr.
  • Imports: INR35, 94,373 Cr.
  • Top export items continue to be Petroleum products, precious stones, drug formulations, gold and other precious metals.
  • Top import items continue to be Crude petroleum, pearl, precious, semi-precious stones and gold.
  • India’s main trading partners continue to be the US, China, Hong Kong, the UAE and Saudi Arabia.
  • India has signed 28 bilateral / multilateral trade agreements with various country/group of countries. In 2018-19,
  • Exports to these countries stood at US$121.7 billion accounting for 36.9 per cent of India’s total exports.
  • Imports from these countries stood at US$266.9 billion accounting for 52.0 per cent of India’s total imports.

Agriculture and Food Management

  • Agriculture sector in India typically goes through cyclical movement in terms of its growth.
  • Gross Value Added (GVA) in agriculture improved from a negative 0.2 per cent in 2014-15 to 6.3 per cent in 2016-17 but decelerated to 2.9 per cent in 2018-19.
  • Gross Capital Formation (GCF) in agriculture as percentage of GVA marginally declined to 15.2 per cent in 2017-18 as compared to 15.6 per cent in 2016-17.
  • Women’s participation in agriculture increased to 13.9 per cent in 2015-16 from 11.7 per cent in 2005-06 and their concentration is highest (28 per cent) among small and marginal farmers.
  • 89% of groundwater extracted is used for irrigation. Thrust should be on micro-irrigation to improve water use efficiency.
  • Fertilizer response ratio has been declining over time. Organic and natural farming techniques including Zero Budget Natural Farming (ZBNF) can improve both water use efficiency and soil fertility.
  • Diversification of livelihoods is critical for inclusive and sustainable development. Policies should focus on
  • Dairying as India is the largest producer of milk.
  • Livestock rearing particularly of small ruminants.
  • Fisheries sector, as India is the second largest producer.

Industry and Infrastructure

  • Overall Index of Eight Core Industries registered a growth rate of 4.3 percent in 2018-19.
  • India’s ranking improved by 23 to 77th position in 2018 among 190 countries assessed by the World Bank Doing Business (DB) Report, 2019.
  • Road construction grew @ 30 km per day in 2018-19 compared to 12 km per day in 2014-15.
  • Rail freight and passenger traffic grew by 5.33 per cent and 0.64 per cent respectively in 2018-19 as compared to 2017-18.
  • Total telephone connections in India touched 118.34 crore in 2018-19
  • The installed capacity of electricity has increased to 3, 56,100 MW in 2019 from 3, 44,002 MW in 2018.
  • Building sustainable and resilient infrastructure has been given due importance with sector specific flagship programmes such as SAUBHAGYA scheme, PMAY etc

Services Sector

  • Services sector (excluding construction) has a share of 54.3 per cent in India’s GVA and contributed more than half of GVA growth in 2018-19.
  • The IT-BPM industry grew by 8.4 per cent in 2017-18 to US$ 167 billion and is estimated to reach US$ 181 billion in 2018-19.
  • The services sector growth declined marginally to 7.5 per cent in 2018-19 from 8.1 per cent in 2017-18.
  • Services share in employment is 34 per cent in 2017.
  • In tourism, 10.6 million foreign tourists received in 2018-19 compared to 10.4 million in 2017-18. Forex earnings from tourism stood at US$ 27.7 billion in 2018-19 compared to US$ 28.7 billion in 2017-18.

Social Infrastructure, Employment and Human Development

  • Government expenditure (Centre plus States) as a percentage of GDP on
  • Health: increased to 1.5 per cent in 2018-19 from 1.2 per cent in 2014-15.
  • Education: increased from 2.8 per cent to 3 per cent during this period.
  • Encouraging Skill Development by:
  • Introduction of the skill vouchers as a financing instrument to enable youth obtain training from any accredited training institutes.
  • Net employment generation in the formal sector was higher at 8.15 lakh in March, 2019 as against 4.87 lakh in February, 2018 as per EPFO.
  • Around 1, 90, 000 km of rural roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) since 2014.
  • About 1.54 crore houses completed under Pradhan Mantri Awas Yojana (PMAY) as against a target of 1 crore pucca houses with basic amenities by 31st March, 2019.
  • Accessible, affordable and quality healthcare being provided through National Health Mission and Ayushman Bharat scheme for a healthy India.

Links:
http://pib.nic.in/newsite/PrintRelease.aspx?relid=191213
https://www.indiabudget.gov.in/economicsurvey/

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