The Economic Survey, 2017-18 has been tabled in the Indian Parliament by the Union Finance Minister Arun Jaitley.
Highlights of Economic Survey 2017-18 –
- It has highlighted that after a short phase of “decoupling” from global growth, India has been re-instated as the world’s fastest growing major economy, and is expected to have a 7 to 7.5 per cent growth in real GDP in 2018-19.
- The significant reforms launched last year like GST, Indian Bankruptcy Code and big bang recapitalisation packages have led to the major revival of Indian economy, the Survey emphasised. However, the Survey has cautioned that the persistence of high international oil prices and interest differentials leading to “sudden stall” in capital flows are two formidable challenges ahead.
- With the infusion of capital through recapitalisation packages, twin balance-sheet (TBS) problem has been adequately attended, the survey noted. This could spur public investment in the economy.
- The policy agenda prescribed by the Survey for the next year includes stabilising the GST, tackling Twin Balance sheet problem, privatising Air India, and maintaining macro-economic stability.
- On the fiscal front, the Survey noted that the GST Council offers a model “technology” of cooperative federalism to apply to many other policy reforms.
- Linking federalism and fiscal accountability, the Survey has highlighted that apart from China, India has the lowest share of direct taxes in general government revenue. The survey also highlighted the “fiscal accountability” issue that the state governments collect low levels of taxes even relative to the powers they already have, which imply a “low-equilibrium accountability-delivery trap”.
- Over the medium term, the survey identifies three areas of policy focus which needs to be carried out: they are, providing jobs for the young and burgeoning workforce, especially for women; creating an educated and healthy labour force and raising farm productivity while strengthening agricultural resilience.
- The Survey has highlighted a few Sustainable Development Goals (SDG)-related issues as well. After a gap of 17 years, the economic survey has resumed a chapter on gender. The survey by the National Institute of Public Finance and Policy (NIPFP) has flagged three important areas of improvement for India on gender. They include; how to increase the female employment, reproductive choice, and reduce son preference & Son “Meta” Preference.
- Yet another commendable initiative in the survey is the analysis linking climate change commitments to agriculture using data. The survey has highlighted that revival of investment in agriculture is a significant move to increase growth rate. In the last four years, the level of real agricultural GDP and real agriculture revenues has remained constant, owing in part to weak monsoons in two of those years, the survey noted.
- The analysis in the survey suggests that “climate change” might reduce farm incomes by up to 20-25 percent in the medium term. The government’s objective of addressing agricultural stress and doubling farmers’ incomes consequently requires radical follow-up action, including decisive efforts to bring science and technology to farmers, replacing untargeted subsidies (power and fertiliser) by direct income support, and dramatically extending irrigation but via efficient drip and sprinkler technologies.
To conclude, the government has to keep an eagle’s eye over certain developments which are indeed a matter of concern for the Indian economy. For instance, the bond yields have increased sharply since August 2017. The fiscal deficit has also widened for a variety of reasons.
- It is an annual publication, prepared under watch of the Chief Economic Adviser, in Ministry of Finance.
- It is a crucial document which contains the annual review of Indian economy vis-à-vis its performance in the previous year. It also highlights the roadmap of major policy steps by the Government in the coming year.