Union Budget 2018: On Monday, Narendra Modi government presented the economic survey 2018 in the parliament which revealed a lot about Indian Economy. Other than the fact that India aims to grow at 7-7.5% in the coming fiscal year, the economic survey shed light on how the states that export, have a better lifestyle than the states that do not export. Economic Survey 2017-18 has shown a huge difference in the states that do inter-state trade and states that do international trade. Five states that account for 70% of India’s total export are coastal states of Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana. It is for the first time Economic Survey has listed data on international exports of states. However, the important aspect is of the survey is that it stresses on a strong relationship between export performance and the standard of living. The survey mentioned that states which export internationally and trade with other states have been found to be richer.
As mentioned in the survey: “The conventional wisdom is correct: a state’s Gross State Domestic Product (GSDP) per capita is highly correlated with its export share in GSDP (for the 20 major states that were analysed). The one major outlier in the chart is Kerala, but only because it is a large recipient of remittances. If remittances are added and created a broader globalization index for states, Kerala may not be an outlier.”
ALSO READ: Budget 2018: Modi government expected to slip on fiscal deficit target, and that’s perfectly OK
For the inter-state trade, the five states that export are Maharashtra, Gujarat, Haryana, Tamil Nadu and Karnataka. In case of inter-state trade, the five largest importing states are Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka, and Gujarat.
WATCH| 10 New Facts On The Indian Economy
According to the economic survey, India’s exports are also unusual in that the largest firms account for a much smaller share of exports than in other comparable countries. The top one per cent of Indian firms account only for 38 per cent of exports, unlike in other countries where they account for substantially greater share — 72 per cent in Brazil, 67 per cent in Mexico, 68 per cent in Germany and 55 per cent in the US. “There is one caveat which could help explain the atypical Indian distribution: unlike in other countries, Indian data include exports of services, where concentration ratios tend to be much lower than in manufacturing,” the survey said.
According to the economic survey, the logistics industry is worth more than $160 billion. The industry has grown at a compound annual growth rate (CAGR) of 7.8 per cent in the last five years. This sector provides employment to more than 22 million people. As per the Global Ranking of the World Bank’s 2016 Logistics Performance Index, India has jumped to 35th rank in 2016 from 54th in 2014 in terms of overall performance.
WATCH| Banks Wishlist From Budget 2018: Three Key Demands
The survey that was released year had estimated that India’s inter-state trade in goods was between 30 and 50 per cent of GDP. However, data from Goods and Services Tax suggest that India’s internal trade in goods and services, excluding non-GST goods and services, is even higher and is about 60 per cent of GDP. The GST regime was implemented in India from July 1, 2017.