A series of major reforms have been undertaken by the Government with
a focus on GDP and as a result, the GDP is expected to reach 6.75 percent
financial year and it is in all probability will rise to 7.0 to 7.5 percent in
2018, establishing India as the world’s fastest growing major economy. This
information was conveyed in the Economic Survey 2017-18 which was tabled in
Parliament on 29 January 2018 by the Union Minister for Finance and Corporate
Affairs, Arun Jaitley.
The Survey also said that the reforms undertaken in 2017-18 can be
strengthened in 2018-19.
The ten new facts on Indian Economy are as follows:
1. Goods and Services Tax
(GST) has given a new perceptive of the Indian economy and new data has
emerged. There has been a fifty percent
increase in the number of indirect taxpayers. There has also been a large
increase in voluntary registrations, especially by small enterprises that buy
from large enterprises wanting to avail themselves of input tax credits.
The Survey also stated that fears of major producing states that the
shift to the new system would undermine their tax collections have been allayed
as the distribution of the GST base among the states got closely linked to the
size of their economies.
2. India’s formal sector,
especially formal non-farm payroll, is substantially greater than what it
currently is believed to be. It became evident that when “formality” was
defined in terms of social security provisions like EPFO/ESIC the formal sector
payroll was found to be about 31 percent of the non-agricultural work force.
When “formality” was defined in terms of being part of the GST net, such formal
sector payroll share was found to be 53 percent.
3. For the first time in
India’s history, data on the international exports of states has been dwelt in
the Economic Survey. Such data indicates
a strong correlation between export performance and states’ standard of
living. States that export
internationally and trade with other states were found to be richer. Such correlation is stronger between
prosperity and international trade.
4. India’s exports are
unusual in that the largest firms account for a much smaller share of exports
than in other comparable countries. Top one percent of Indian firms account
only for 38% of exports unlike in other countries where they account for
substantially greater share – (72, 68, 67 and 55 percent in Brazil, Germany,
Mexico and USA respectively). Such
tendencies were also found to be true for the top five or ten per cent of the
5. It was pointed out that
the Rebate of State Levies (ROSL) has increased exports of ready-made garments
(man-made fibers) by about 16 per cent but not of others.
6. The data highlighted
another seemingly known fact that Indian society exhibits a strong desire for a
male child. It pointed out that most
parents continued to have children until they get number of sons. The survey gave details of various scenarios
leading to skewed sex ratios and also gave a comparison on sex ratio by birth
between India and Indonesia.
7. The survey pointed out
that tax departments in India have gone in for contesting against in several
tax disputes but also with a low success rate which is below 30 per cent. About
66 per cent of pending cases accounted for only 1.8 per cent of value at
stake. It further stated that 0.2 per
cent of cases accounted for 56 per cent of the value at stake.
8. Extrapolating the data
the survey indicated that growth in savings did not bring economic growth but
the growth in investment did.
9. The survey mentions that
the collections of direct taxes by
Indian states and other local governments, where they have powers to collect
them is significantly lower than their counterparts in other federal countries.
A comparison has been given between ratios of direct tax to total revenues of
local governments in India, Brazil and Germany.
10. The survey captures the
footprints of climate change on the Indian Territory and consequent adverse
impact on agricultural yields. Extreme
temperature increases and deficiency in rainfall have been captured on the
Indian map and the graphical changes in agricultural yields are brought out
from such data. The impact was found to
be twice as large in un-irrigated areas as in irrigated ones.