Economic Survey 2020 Highlights: With focus on Modi govt’s Thalinomics and China model for job creation, India’s GDP growth pegged at 6-6.5%

The Economic Survey focuses on wealth creation for Indians and outlines a multi-faceted strategy to achieve a USD 5 trillion economy through enterprise, exports and the ease of doing business, Prime Minister Narendra Modi said on Friday. Economic Survey 2019-20 projected the revival of economic growth to 6-6.5 per cent in the next fiscal beginning April 1 but suggested the government should relax the budget deficit target to boost growth from a decade low. (PTI)

- Inflation Trends: Inflation witnessing moderation since 2014

- 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).

- Drivers of CPI - Combined (C) inflation: During 2018-19, the major driver was the miscellaneous group

- During 2019-20 (April-December), food and beverages was the main contributor.

- Among food and beverages, inflation in vegetables and pulses was particularly high due to low base effect and production side disruptions like untimely rain.

• Top export items: Petroleum products, precious stones, drug formulations & biologicals, gold and other precious metals.
• Largest export destinations in 2019-20 (April-November): United States of America (USA), followed by United Arab Emirates (UAE), China and Hong Kong.
• The merchandise exports to GDP ratio declined, entailing a negative impact on BoP position.
• Slowdown of world output had an impact on reducing the export to GDP ratio, particularly from 2018-19 to H1 of 2019-20.
• Growth in Non-POL exports dropped significantly from 2009-14 to 2014-19.

• 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 for a total of five times during 2019-20 (up to December 2019).
• Structural reforms undertaken in taxation during the current financial year: Change in corporate tax rate.
• Measures to ease the implementation of GST.
• Fiscal deficit of states within the targets set out by the FRBM Act.
• Survey notes that the General Government (Centre plus States) has been on the path of fiscal consolidation.

• An attempt to quantify what a common person pays for a Thali across India.
• A shift in the dynamics of Thali prices since 2015-16.
• Absolute prices of a vegetarian Thali have decreased significantly since 2015-16 across India and the four regions; though the price has increased during 2019-20.
• Post 2015-16: Average household gained close to Rs. 11, 000 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 on average per year during the same period.
• From 2006-07 to 2019-20: Affordability of vegetarian Thalis improved 29 %.
• Affordability of non-vegetarian Thalis improved by 18 %.

Economic Survey of India 2020 has revealed a few pivotal details about current state of Indian economy. Read 5 startling facts about India that you shouldn’t miss! by Smriti Jain

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  GDP growth is a critical variable for decision-making by investors and policymakers. Therefore, the recent debate about accuracy of India’s GDP estimation following the revised estimation methodology in 2011 is extremely significant.
• As countries differ in several observed and unobserved ways, cross-country comparisons have to be undertaken by separating the effect of other confounding factors and isolating effect of methodology revision alone on GDP growth estimates.
• Models that incorrectly over-estimate GDP growth by 2.7 % for India post-2011 also misestimate GDP growth over the same period for 51 out of 95 countries in the sample.
• Several advanced economies such as UK, Germany and Singapore have their GDPs misestimated with incompletely specified econometric model.
• Correctly specified models that account for all unobserved differences and differential trends in GDP growth across countries fail to find any misestimating of growth in India or other countries.
• Concerns of a misestimated Indian GDP are unsubstantiated by the data and are thus unfounded

• A jump of 79 positions to 63 in 2019 from 142 in 2014 in World Bank’s Doing Business rankings.
• India still trails in parameters such as Ease of Starting Business, Registering Property, Paying Taxes and Enforcing Contracts.

India Economic Survey Live: Survey analyses the impact of India’s trade agreements on overall trade balance:
- India’s exports increased by 13.4 % for manufactured products and 10.9 % for total merchandise
-  Imports increased by 12.7 % for manufactured products and 8.6 per cent for total merchandise.
-  India gained 0.7 % increase in trade surplus per year for manufactured products and 2.3 % per year for total merchandise.

• Survey suggests a strategy similar to one used by China to grab this opportunity:

- Specialization at large scale in labour-intensive sectors, especially network products.

- Laser-like focus on enabling assembling operations at mammoth scale in network products.

- Export primarily to markets in rich countries.

- Trade policy must be an enabler.

Survey says India has unprecedented opportunity to chart a China-like, labour-intensive, export trajectory.

By integrating “Assemble in India for the world” into Make in India, India can:
o Raise its export market share to about 3.5 % by 2025 and 6 % by 2030.

o Create 4 crore well-paid jobs by 2025 and 8 crore by 2030.

• 12.2 % cumulative annual growth rate of new firms in the formal sector during 2014-18, compared to 3.8 % during 2006-2014.
• About 1.24 lakh new firms created in 2018, an increase of about 80 % from about 70,000 in 2014.

• Enable markets, promote 'pro-business' policies and strengthen 'trust' in the economy
• Ethical wealth creation key to India becoming a $ 5 trillion economy by 2025

• The overarching theme of Economic Survey 2019-20 is wealth creation and the policy choices that enable the same
• The doing Business 2020 Report Recognizes India as One of the Ten Economies that have Improved the Most
• For more than Three-Fourths of Known Economic History, India has been the Dominant Economic Power Globally; for this, India Relied on the Invisible Hand of the Market for Wealth Creation with the Support of the Hand of Trust
• Survey shows clearly that sectors that were liberalized grew significantly faster than those that remain closed
• Government interventions often lead to unintended consequences such as price increases, compared to markets that are unregulated

• Promoting Pro-Business Policy Critical for India to become a $5 trillion Economy says Economic survey
• Pro-Crony Policies Erode Wealth & Destroy Value in Economy

• India Jumps up 79 positions in World Bank Doing Business Rankings, Improving From 142 In 2014 To 63 in 2019
• Turnaround Time of Ships Halves from 4.67 Days in 2010-11 to 2.48 Days in 2018-19
• Time Taken For Customs Clearance, Ground Handling and Loading At Sea Ports Should Reduce
• Scope for Improvement in Time Taken in Enforcing Contracts Says Economic Survey

• India Ranks Third in Number of New Firms Created; 1,24,000 New Firms Created in 2018 Compared to 70,000 In 2014
• As Against 3.8 % Growth Rate in Number of New Firms Created During 2006-14, Growth Rate During 2014-18 Rises to 12.2%
• More Service Sector Firms Created Compared to Manufacturing, Agriculture or Infrastructure; Entrepreneurial Activity Highest in Delhi, UP, Mizoram, Kerala, A&N Islands & Haryana
• Entrepreneurial Activity in Manufacturing Sector Highest in Gujarat, Meghalaya, Puducherry, Punjab and Rajasthan
• Birth of New Firms Heterogeneous Across Indian Districts & Sectors: Economic Survey

- 47.33 Lakh Houses Completed Per Year in 2018-19 Under Pradhan Mantri Awaas Yojana- Gramin over 11.95 Lakh Houses in 2014-15: Economic Survey

- Over 10 Crore Toilets Built in Rural Areas Under Swachh Bharat Mission- Gramin (SBM-G) Since 2014

- 10 Year Rural Sanitation Strategy (2019-2029) Launched to Focus on Sustaining Sanitation Behaviour Change

According to the Economic Survey tabled today in the parliament, Around 2.62 Crore new jobs were created in rural and urban areas between 2011-12 and 2017-18 among regular wage/salaried employees. Also, 69.03 lakh candidates trained under Pradhan Mantri Kaushal Vikas Yojana as in November 2019. 8 per cent increase in regular Employment of Women in 2017-18 over 2011-12.

The Survey states that across India and also the 4 regions- North, South, East and West- it is found that the absolute prices of a vegetarian Thali have decreased significantly since 2015-16 though the price has increased in 2019.  (Image - PIB)

India Economic Survey Live: Thalis are more Affordable for the Common Person Now, Says the Economic Survey. Affordability of Thalis vis-à-vis a day’s pay of a worker has improved over time, indicating improved welfare of the common person. The Economic Survey 2019-20 presented in Parliament today by the Union Minister for Finance and Corporate Affairs Smt Nirmala Sitharaman states that affordability of vegetarian Thalis improved 29 per cent from 2006-07 to 2019-20 while that for non-vegetarian Thalis by 18 per cent.

Uptick in GDP Growth Expected in Second Half of 2019-20; First Advance Estimates peg Growth for Overall Fiscal at 5% GDP Growth expected to grow in the range of 6.0% to 6.5% in 2020-21 

Economic Survey observed that India has the Second largest Emerging Green Bond Market after China. The SBI entered the market with an US$650 million Certified Climate Bond. India also joined International Platform on Sustainable Finance (IPSF) in 2019 to scale up the environmentally sustainable investments.

India Economic Survey Live: Forex reserve estimated at $ 461.2 billion in 2019-20

- India’s Balance of Payments Position Improves, as Current Account Deficit Declines Further

- Foreign Exchange Reserves Continue to Be Comfortable

- FDI Inflows and Overseas Remittances on an Upward Graph

India Economic Survey Live: Inflation Witnessing Moderation Since 2014. The volatility of Prices for Most Essential Food Commodities Down in 2018-19. WPI average estimated at 1.5% in 2019-20 against 4.3% in 2018-19. CPI Combined Average in 2019-20 estimated at 4.1% against 3.4% in 2018-19.

2.62 Crore New Jobs Created in Rural and Urban Areas Between 2011-12 and 2017-18. Check key highlights here

India Economic Survey Live: Agriculture and allied sectors to grow at 2.8 per cent in coming financial year. Growth in current year estimated as 2.9%.

India Economic Survey Live: Industrial growth in 2019-20 is estimated at 2.5 per cent, down from 2018-19's provisional estimates of 6.9 per cent.

The theme of Economic Survey, 2019-20
- India’s aspiration of Economy @ 5trillion with its theme of Wealth Creation
- Wealth creation benefits all
- Markets enable wealth creation

India Economic Survey Live: Housing prices remain elevated. Greater home sales can clean up Bank, NBFC balance sheet. 

India Economic Survey Live: Banks may remain risk-averse unless IBC process speeds up. Private investment may get crowded on higher govt infrastructure spend.

India Economic Survey Live: Centre, state to get revenue position due to GST buoyancy. The FY20 tax collection is expected to be to be lower than the estimates

Economic Survey 2020: The government needs to relax the fiscal gap target for FY20 to boost growth, according to the economic survey 2020 tabled by the government in the Parliament on Friday. Read more

India Economic Survey Live: Deduction in Capex can hurt India's growth and non-committed revenue spend must be trimmed.

Finance Ministry’s flagship annual document – Economic Survey 2019-20 – giving detailed information about the Indian economy was presented ahead of Budget 2020 today and it can be accessed on the government’s website. Click here to know more

Economic Survey 2020 Live: See FY tax collections to be lower than expected. High tax revenue growth not sustainable year on year

Economic Survey 2020 Live: India's FY21 GDP growth is seen at 6-6.5 per cent. FY21 is expected to pose challenges on fiscal front.

The government has tabled Economic Survey 2020 in the parliament now.  FY21 GDP growth seen at 6-6.5%