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ECONOMIC SURVEY 2017-2018
Released By Government of India Ministry of Finance Department of Economic Affairs Economic Division January 29, 2018 Presented By Roman Saini
List of Chapters 1. State of the Economy: An Analytical Overview and Outlook for Policy 2. A New.Exciting Bird's-Eye View of the 3. Investment and Saving Slowdowns and Recoveries: Cross-Country Insights for India 4. Reconciling Fiscal Federalism and Accountability: Is there a Low Equilibrium Trap 5. Is there a Late Converger Stall" in Economic Development? Can India Escape it? 6. Climate, Climate Change, and Agriculture 7. Gender and Son Meta-Preference: Is Development Itself an Antidote 8. Transforming Science and Technology in India 9 Ease of Doing Business' Next Frontier: Timely Justice ian Economy Through the GST
CHAPTER 1 1. Overview:Short Term and Medium Term State of the Economy: An Analytical Overview and Outlook for Policy 2. Recent Development 3. Outlook: 2017-18 4. Clothing Package of 2016
Overview: Short term and Medium Term Short Term The past year has been marked by some major reforms.These were following The transformational Goods and Services Tax (GST) was launched in July 2017. At the same time, decisive action was taken to grasp the nettle of the Twin Balance Sheet (TBS) challenge through Insolvency Bankruptcy Code (IBC) On the 4 R's of the TBS-Recognition, Resolution, Recapitalization, and Reforms-recognition was advanced further, while major measures were taken to address two other R's
The new Indian Bankruptcy Code (IBC) has provided a resolution framework that will help corporates clean up their balance sheets and reduce their debts. And in another critical move, the governmenta (about 1.2 percent of GDP) to strengthen the balance sheets of the public sector banks (PSBs) Macroeconomic developments this year have been marked by swings In the first half, India's economy temporarily "decoupled", that is deceleration of the Indian economy as the rest of the world accelerated even as it remained the second-best performer amongst maior countries,with strong macroeconomic fundamentals The reason lay in the series of actions and developments that buffeted the economy: Demonetization, Teething difficulties in the new GST .
High and rising real interest rates, . An intensifying overhang from the TBS challenge, Sharp falls in certain food prices that impacted agricultural incomes Reflecting the cumulative actions to improve the business climate, India jumped 30 spots to 100th position on the WorldBank's Ease of Doing Business rankings, while similar actions to liberalize the foreign direct investment (FDI) regime helped increase flows by 20 percent. Medium Term India has created one of the most effective institutional mechanisms for cooperative federalism, the GST Council. The "cooperative federalism technology" of the GST Council could be used to . Create a common agricultural market, Integrate fragmented and inefficient electricity markets,
. Solve interstate water disputes, Implement direct benefit transfers (DBT), . Make access to social benefits portable across states, Combat air pollution The IBC resolution process could prove a valuable technology for tackling the long-standing problem ("socialism with limited entry to marketism without exit") in the Indian corporate sector. The recently proposed Financial Resolution and Deposit Insurance (FRDI) bill would do the same for financial firm.s A major plank of government policy has been to rationalize government resources redirecting them away from subsidies towards public provision of essential private goods and services at low prices, especially to the poor.
Recent macroeconomic developments are a reminder that the battle for macro-economic stability is never won. However, yigilance is always needed India has two underlying macroeconomic vulnerabilities, fiscal account and current accounts, both of which tend to deteriorate when oil prices rise. Overcoming the fiscal vulnerability requires breaking the inertia of the tax-GDP ratio. It is striking that the center's tax-GDP ratio is no higher than it was in the 1980s, despite average economic growth of 6.5 percent, the most rapid in India's history . most rapid in India s Addressing the current account vulnerability requires raising the trajectory of export growth.Reviving manufacturing and making the sector internationally competitive have been the twin goals of the Make in India program. As a result, the share of manufacturing in GDP has improved slightly.
Finally, last year's Survey identified the unfinished agenda in terms of three meta-challenges: 1. addressing inefficient re-distribution; 2. accelerating the limited progress in delivery of essential public services, especially health and education correcting the ambivalence toward property rights, the private sector, and price incentives. 3. This year, the first new issue yet in some ways the oldest issue is agriculture Successful economic and social transformation has always happened against the background of rising agricultural productivity The other issue is the challenge of employment. Providing India's young and burgeoning labor force with good, high productivity jobs will remain a pressing medium-term challenge.