Economic Survey 2019-20: Salient Features

The Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman tabled the Economic Survey 2019-20 in Parliament on January 31, 2020.

Economic Survey 2019-20 Features

GDP Growth Rate: The Government says that based on first Advance Estimates, India’s GDP growth for 2019-20 would be recorded at 5 per cent. This suggests an uptick in GDP growth in second half of 2019-20 he Survey says, on a net assessment of both the downside/upside risks, India’s GDP growth is expected to grow in the range of 6.0 to 6.5 per cent in 2020-21 and it asks the Government to use its strong mandate to deliver expeditiously on reforms, which will enable the economy to strongly rebound in 2020-21.

Agriculture and allied sectors: Following the natural trajectory of development process and owing to structural changes taking place in economy share of agriculture and allied sectors in Gross Value Added (GVA) of the country at current prices has declined from 18.2 per cent in 2014-15 to 16.5 per cent in 2019-2020.

Insolvency and Bankruptcy Code (IBC): The Economic Survey 2019-20 highlights that The Insolvency and Bankruptcy Code (IBC) has improved resolution processes in India compared to the earlier measures. The IBC proceedings take 340 days on an average compared to 4.3 years earlier and resulted in recovery of 42.5% amount involved compared to 14.5% under SARFAESI Act.

Current Account Deficit (CAD)

• India’s Balance of Payments position improved from US$ 412.9 bn of forex reserves in end March, 2019 to US$ 433.7 bn in end September, 2019.
• Current account deficit (CAD) narrowed from 2.1% in 2018-19 to 1.5% of GDP in H1 of 2019-20.
• Foreign reserves stood at US$ 461.2 bn as on 10^th January, 2020.
• India’s merchandise trade balance improved from 2009-14 to 2014-19, although most of the improvement in the latter period was due to more than 50% decline in crude prices in 2016-17.
• India’s top five trading partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.
• 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.
• Top import items: Crude petroleum, gold, petroleum products, coal, coke & briquittes.
• India’s imports continue to be largest from China, followed by USA, UAE and Saudi Arabia.
• According to World Bank’s Logistics Performance Index, India ranks 44th in 2018 globally, up from 54th rank in 2014.
• Net FDI inflows continued to be buoyant in 2019-20 attracting US$ 24.4 bn in the first eight months, higher than the corresponding period of 2018-19.
• Net FPI in the first eight months of 2019-20 stood at US$ 12.6 bn.
• Net remittances from Indians employed overseas continued to increase, receiving US$ 38.4 billion in H1 of 2019-20 which is more than 50% of the previous year level.
• External debt: Remains low at 20.1% of GDP as at end September, 2019. After significant decline since 2014-15, India’s external liabilities (debt and equity) to GDP increased at the end of June, 2019 primarily by increase in FDI, portfolio flows and external commercial borrowings (ECBs

Industrial Sector

• The industrial sector as per Index of Industrial Production (IIP) registered a growth of 0.6 per cent in 2019-20 (April-November) as compared to 5.0 % during 2018-19 (April-November).
• Fertilizer sector achieved a growth of 4.0 % during 2019-20 (April-November) as compared to (-) 1.3 per cent during 2018-19 (April-November).
• Steel sector achieved a growth of 5.2 % during 2019-20 (April-November) as compared to 3.6 % during 2018-19 (April-November).
• Total telephone connections in India touched 119.43 crore as on September 30, 2019.
• The installed capacity of power generation has increased to 3, 64,960 MW as on October 31, 2019 from 3, 56,100 MW as on March 31, 2019.
• Report of the Task Force on National Infrastructure Pipeline released on 31.12.2019 has projected total infrastructure investment of Rs. 102 lakh crore during the period FY 2020 to 2025 in India.

Social Sector

• The expenditure on social services (health, education and others) by the Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 7.7 % in 2019-20 (BE).
• India’s ranking in Human Development Index improved to 129 in 2018 from 130 in 2017:
• Gross Enrolment Ratio at secondary, higher secondary and higher education level needs to be improved.
• The share of regular wage/salaried employees has increased by 5 percentage points from 18 % in 2011-12 to 23 % in 2017-18.
• A significant jump of around 2.62 crore new jobs with 1.21 crore in rural areas and 1.39 crore in urban areas in this category.
• Total formal employment in the economy increased from 8 % in 2011-12 to 9.98 % in 2017-18.
• Gender disparity in India’s labour market widened due to decline in female labour force participation especially in rural areas:
• Mission Indradhanush has vaccinated 3.39 crore children and 87.18 lakh pregnant women of 680 districts across the country.
• About 76.7 % of the households in the rural and about 96 % in the urban areas had houses of pucca structure.
• A 10 Year Rural Sanitation Strategy (2019-2029) launched to focus on sustaining the sanitation behavior change and increasing access to solid and liquid waste management.

Housing for all: The two Schemes, Pradhan Mantri Awaas Yojana- Gramin (PMAY-G) and Pradhan Mantri Awaas Yojana- Urban (PMAY-U), seek to achieve the target of housing for all by 2022. Under PMAY-G, the number of houses completed in a year increased by more than four times, from 11.95 lakh in 2014-15 to 47.33 lakh in 2018-19, states the Survey.

Drinking Water and Sanitation: Since the launch of Swachh Bharat Mission- Gramin (SBM-G) in 2014, over 10 crore toilets have been built in rural areas, says the Economic Survey. Further, over 5.9 lakh villages, 699 districts, and 35 States/UTs have declared themselves Open Defecation Free (ODF). Swachh Survekshan Gramin 2019, India’s largest rural sanitation survey, covered 17,450 villages in 698 districts across India, including 87,250 public places

Samagra Shiksha: The Government’s interventions in the education sector aim to achieve the Sustainable Development Goal (SDG)-4 of inclusive and equitable quality education for all by 2030, notes the Economic Survey. With this objective, Samagra Shiksha 2018-19 has been launched to envisage school education as a continuum from pre-school to senior secondary level. Other initiatives include the expansion of Navodaya Vidyalaya Scheme, Pradhan Mantri Innovative Learning Program (DHRUV), Digital Infrastructure for Knowledge Sharing (DIKSHA) platform and e-content sites like e-pathshala.

The Pre-Budget Survey also outlines initiatives taken for improving quality of learning and teaching in higher and technical education. These include setting up of Higher Education Financing Agency (HEFA), Schemes like National Educational Alliance for Technology (NEAT), Education Quality Upgradation and Inclusion Programme (EQUIP), PARAMARSH and mega online degree programme SWAYAM 2.0 among others.

Out of pocket expenditure: As per the latest National Health Accounts 2016-17, the out of pocket expenditure (OoPE) on health as a percentage of total health expenditure declined from 64.2 per cent in 2013-14 to 58.7 per cent in 2016-17, observes the Economic Survey. Various schemes have enabled this enhanced access to healthcare, including Free Drugs Service initiative, Free Diagnostics Service initiative, Pradhan Mantri Bharatiya Jan Aushadhi Pariyojana (PMVJP) and Pradhan Mantri National Dialysis Programme (PMNDP), as per the Economic Survey.

Agriculture Mechanization: Economic Survey pointed out that in India, mechanization is 40 percent compared to China (59.5 percent) and Brazil (75 percent).

India Ranks Third in Number of New Firms Created: The Survey stated that as per World Bank’s Data on Entrepreneurship, it is seen that India ranks third in number of new firms created. From about 70,000 new firms created in 2014, the number has grown by about 80 per cent to about 1,24,000 new firms in 2018.

$5 trillion economy: The Economic Survey 2019-20 says India’s aspiration to become a $5 trillion economy depends critically on promoting “pro-business” policy that unleashes the power of competitive markets to generate wealth, on the one hand, and weaning away from “pro-crony” policy that may favour specific private interests, especially powerful incumbents, on the other hand.

Make in India: Due to Make in India, India would create about 4 crore well-paid jobs by 2025 and about 8 crore by 2030, says the Economic Survey.