The Union Minister for Finance & Corporate Affairs, Ms Nirmala Sitharaman presented the Economic Survey 2019-20 in the Parliament on January 31st, 2020. The key highlights of the Economic Survey 2019-20 are as follows:
Creating Jobs and Growth by Specializing in Network Products
- By integrating “Assemble in India for the world” into Make in India, India can:
- Raise its export market share to about 3.5 per cent by 2025 and 6 per cent by 2030.
- Create 4 crore well-paid jobs by 2025 and 8 crore by 2030.
- The impact of India’s trade agreements on overall trade balance:
- India’s exports increased by 13.4 per cent for manufactured products and 10.9 per cent for total merchandise
- Imports increased by 12.7 per cent for manufactured products and 8.6 per cent for total merchandise.
- India gained 0.7 per cent increase in trade surplus per year for manufactured products and 2.3 per cent per year for total merchandise.
- Promote 'pro-business' policies that unleash the power of competitive markets to generate wealth as against 'pro-crony' policies that may favour incumbent private interests.
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.
- The turnaround time of ships in India has almost halved to 2.48 days in 2018-19 from 4.67 days in 2010-11.
Thalinomics: The Economics of a Plate of Food in India
- The Survey tries to relate economics to the common person using something that an individual encounter every day - a plate of food i.e., a Thali.
- Post 2015-16:
- Average household gained close to Rs 11,000 (US$ 155.69) 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 (US$ 169.85) on average per year during the same period.
- From 2006-07 to 2019-20:
- Affordability of vegetarian Thalis improved 29 per cent.
- Affordability of non-vegetarian Thalis improved by 18 per cent.
India’s Economic Performance in 2019-20
- India’s GDP growth is expected to grow in the range of 6.0 to 6.5 per cent in 2020-21.
- GDP growth moderated to 4.8 per cent in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
- In 2019-20, fiscal deficit was budgeted at Rs 7.04 lakh crore (US$ 99.56 billion) (3.3 per cent of GDP), as compared to Rs 6.49 lakh crore (US$ 91.86 billion) (3.4 per cent of GDP) in 2018-19.
- Inflation increased from 3.3 per cent in H1 of 2019-20 to 7.35 per cent in December 2019-20 due to temporary increase in food inflation.
- 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.
- The National Infrastructure Pipeline for the period FY 2020-2025 launched.
- 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 (US$ 14.15 billion) for a total of five times during 2019-20 (up to December 2019).
- India’s Balance of Payments (BoP) position improved from US$ 412.9 billion of forex reserves in end March 2019 to US$ 433.7 billion in end September 2019.
- Foreign reserves stood at US$ 461.2 billion as on 10th January 2020.
- The Current Account Deficit (CAD) narrowed to 1.5 per cent of GDP in H1 of 2019-20 from 2.1 per cent in 2018-19.
- India’s top five trading partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.
- 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.
- Indian Logistics industry expected to reach US$ 215 billion by 2020 from US$ 160 billion, currently.
- According to World Bank's Logistics Performance Index, India ranked 44th in 2018 globally, up from 54th rank in 2014.
- Net FDI inflows continued to be buoyant in 2019-20 attracting US$ 24.4 billion 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 billion.
- Net remittances from Indians employed overseas continued to increase, receiving US$ 38.4 billion in H1 of 2019-20 which is more than 50 per cent of the previous year level.
- External debt remained low at 20.1 per cent of GDP as at end September 2019.
Monetary Management and Financial Intermediation
- Repo rate was cut by 110 basis points in four consecutive MPC meetings in the financial year due to slower growth and lower inflation.
- The Gross Non-Performing Advances ratio remained unchanged for Scheduled Commercial banks at 9.3 per cent between March and September 2019.
- Bank Credit growth (YoY) moderated from 12.9 per cent in April 2019 to 7.1 per cent as on December 20, 2019.
- Capital to Risk-weighted Asset Ratio of SCBs increased from 14.3 per cent to 15.1 per cent between March and September 2019.
Prices and Inflation
- 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).
- 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).
Sustainable Development and Climate Change
- India moving forward on the path of SDG implementation through well-designed initiatives
- SDG India Index:
- Himachal Pradesh, Kerala, Tamil Nadu, Chandigarh are front runners.
- Assam, Bihar and Uttar Pradesh come under the category of Aspirants.
- Forest and tree cover increased and has reached 80.73 million hectares covering 25.56 per cent of the geographical area of the country.
Performance of key sectors:
Agriculture and Food Management
- GVA at Basic Prices for 2019-20 from ‘Agriculture, Forestry and Fishing’ sector is estimated to grow by 2.8 per cent.
- Livestock sector grew at a CAGR of 7.9 per cent during last five years.
- During the last 6 years ending 2017-18, Food Processing Industries sector grew at an Average Annual Growth Rate (AAGR) of around 5.06 per cent. The sector constitutes as much as 8.83 per cent and 10.66 per cent of GVA in Manufacturing and Agriculture sector respectively in 2017-18 at 2011-12 prices.
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 per cent during 2018-19 (April-November).
- Fertilizer sector achieved a growth of 4.0 per cent 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 per cent during 2019-20 (April-November) as compared to 3.6 per cent 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 (US$ 1.44 trillion) during the period FY 2020-2025 in India.
Services sector in the Indian economy contributes:
- About 55 per cent of the total size of the economy and GVA growth.
- Two-third of total FDI inflows into India.
- About 38 per cent of total exports.
- More than 50 per cent of GVA in 15 out of the 33 states and UTs.
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 per cent in 2014-15 to 7.7 per cent in 2019-20 (BE).
- India’s ranking in Human Development Index (HDI) improved to 129 in 2018 from 130 in 2017, with 1.34 per cent average annual HDI growth.
- The share of regular wage/salaried employees has increased by 5 percentage points from 18 per cent in 2011-12 to 23 per cent 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 per cent in 2011-12 to 9.98 per cent in 2017-18.
- 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 per cent of the households in the rural and about 96 per cent in the urban areas had houses of pucca structure.
- A 10-year Rural Sanitation Strategy (2019-2029) launched to focus on sustaining the sanitation behaviour change and increasing access to solid and liquid waste management.
Note: Conversion rate used as on 31st January 2019, Re 1 = US$ 0.014154