Boost agriculture, privatise Air India, continue banks recapitalisation, says Economic Survey policy agenda

 Highlighting the major achievements of the current fiscal, the impact of GST, India's egalitarian export structure, the preference of the Indian society for a male child and lower tax collections.
Union Minister for Finance and Corporate Affairs Arun Jaitley (PTI)
Union Minister for Finance and Corporate Affairs Arun Jaitley (PTI)
Updated on
3 min read

NEW DELHI: Following are the highlights:

  •  GDP to grow 7-7.5% in FY19; India to regain fastest-growing major economy tag

  • GDP growth to be 6.75% in FY2017-18

  • Policy vigilance required next fiscal if high oil prices persist or stock prices correct sharply

  • Policy agenda for next year -- support agriculture, privatise Air India, finish bank recapitalisation

  • GST data shows 50% rise in number of indirect taxpayers

  •  Tax collection by states, local governments significantly lower than those in other federal countries

  • Demonetisation has encouraged financial savings Insolvency Code being actively used to resolve NPA woes

  • Retail inflation averaged 3.3 percent in 2017-18, lowest in last 6 fiscals

  • India needs to address pendency, delays and backlogs in the appellate and judicial arenas

  • Urban migration leading to feminisation of farm sector

  • Rs 20,339cr approved for interest subvention for farmers in current fiscal

  • FDI in services sector rises 15% in 2017-18 on reforms

  • Fiscal federalism, accountability to help avoid low equilibrium trap

  • India's external sector to remain strong on likely improvement in global trade

  • Technology should be used for better enforcement of labour laws

  • Swachh Bharat initiative improved sanitation coverage in rural areas from 39% in 2014 to 76% in January 2018

  • Priority to social infrastructure like education, health to promote inclusive growth

  • Centre, states should enhance cooperation to deal with severe air pollution

  • Survey 2017-18 in pink colour to highlight gender issues

  • Indian parents often continue to have children till they have desired number of sons

  • There has been a large increase in registered indirect and direct taxpayers: A 50 percent increase in unique indirect taxpayers under the GST compared with the pre-GST system. Similarly, there has been an addition (over and above-trend growth) of about 1.8 million in individual income tax filers since November 2016.

  • The formal non-agricultural payroll is much greater than believed: More than 30 percent when formality is defined in terms of social security (EPFO/ESIC) provisions; more than 50 percent when defined in terms of being in the GST net.

  • The prosperity of the states is correlated with their international and inter-state trade: states that export more internationally, and trade more with other states, tend to be richer. But the correlation is stronger between prosperity and international trade.

  • India's firm export structure is substantially more egalitarian than in other large countries: The top one percent of Indian firms account for 38 percent of exports; in all other countries, they account for a substantially greater share (72, 68, 67, and 55 percent of exports in Brazil, Germany, Mexico, and the US, respectively). And this is true for the top five per cent, 10 per cent, and so on.

  • The clothing incentive package boosted exports of ready-made garments: The relief from embedded state taxes (ROSL) announced in 2016 boosted exports of ready-made garments (but not others) by about 16 percent.

  • Indian society exhibits strong son "Meta" preference: Parents continue to have children until they get the desired number of sons. This kind of fertility-stopping rule leads to skewed sex ratios but in different directions.

  • There is substantial avoidable litigation in the tax arena which government action could reduce: The tax department's petition rate is high, even though its success rate in litigation is low and declining (well below 30 percent). Only 0.2 percent of cases accounted for 56 percent of the value at stake; whereas about 66 percent of pending cases (each less than Rs 10 lakh) accounted for only 1.8 percent of the value at stake.

  • To re-ignite growth, raising investment is more important than raising saving: cross-country experience shows that growth slowdowns are preceded by investment slowdowns but not necessarily by savings slowdowns. 

  • Own direct tax collections by Indian states and local governments are significantly lower than those of their counterparts in other federal countries: This share is low relative to the direct taxation powers they actually have.

  • The footprint of climate change is evident and extreme weather adversely impacts agricultural yields: The impact of weather is felt only with extreme temperature increases and rainfall deficiencies. This impact is twice as large in unirrigated areas as in irrigated ones.

(With INPUTS from PTI and REUTERS)

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