Highlights of Economic Survey 2013-14
CHAPTER 1: STATE OF THE ECONOMY AND PROSPECTS
Economy to grow in
the range of 5.4 – 5.9 per cent in 2014-15 overcoming sub-5 percent growth.
Growth slowdown
was broad based, affecting in particular the industry sector.
Aided by favourable
monsoons, agricultural and allied sector registered a growth of 4.7 per cent in
2013-14.
Industry and Service sectors also witnessed slowdown.
CHAPTER 2: ISSUES AND PRIORITIES
Reforms needed for long
term-growth prospects on 3 fronts- low and stable inflation regime, tax and
expenditure reform and regulatory framework.
Survey suggests removal of restriction on farmers to buy, sell and store their produce to
customers across the country and the world.
Rationalisation
of subsidies on inputs such as fertilizer and food is essential.
Government
needs to eventually move towards income support for farmers and poor households.
CHAPTER 3: PUBLIC FINANCE
The fiscal
policy for 2013-14 was calibrated with two-fold objectives; first, to aid
growth revival; and second, to reach the FD level targeted for 2013-14.
The Budget for
2013-14 followed the policy of revenue augmentation and expenditure
rationalization to contain government spending within sustainable limits.
The fiscal
outcome of the central government in 2013-14 was achieved despite the macroeconomic
challenges of growth slowdown, elevated levels of global crude oil prices, and
slow growth of investment.
CHAPTER 4: PRICES AND MONETARY MANAGEMENT
High
inflation, particularly food inflation, was the result of structural as well as
seasonal factors.
IMF projects most
global commodity prices are expected to remain flat during 2014-15.
The RBI with a
view to restoring stability to the foreign exchange market, hiked short term
interest rate in July and compressed domestic money market liquidity.
CHAPTER 5: FINANCIAL INTERMEDIATION
RBI has identified
five sectors -- infrastructure, iron and steel, textiles, aviation and mining
as the stressed sectors.
Public sector
banks (PSBs) have high exposures to the ‘industry’ sector in general and to
such ‘stressed’ sectors in particular.
The New
Pension System (NPS), now National Pension System, introduced for the new
recruits who join government service on or after January 2004, represents a
major reform of Indian pension arrangements.
CHAPTER 6: BALANCE OF PAYMENTS
The India’s
balance-of-payments position improved dramatically in 2013-14 with current
account deficit at US $ 32.4 billion as against US$ 88.2 billion in 2012-13.
India’s foreign exchange
reserves increased from US$ 292.0 billion at end March 2013 to US$ 304.2
billion at end march 2014.
India’s external
debt has remained within manageable limits due to the external debt management
policy with prudential restrictions on debt varieties of capital inflows.
CHAPTER 7: INTERNATIONAL TRADE
World trade
World trade volume which decelerated to
2.8 per cent in 2012 has shown signs of recovery in 2013, albeit slow with a
3.0 per cent growth.
The sharp fall
in imports and moderate export growth in 2013-14 resulted in a sharp fall in
India's trade deficit by 27.8 per cent.
In April-May
2014, trade deficit declined by 42.4 per cent.
CHAPTER 8: AGRICULTURE AND FOOD MANAGEMENT
Record food grains
and oilseeds production of 264.4 million tonnes (MT) and 32.4 MT is estimated in 2013-14.
Horticulture production
estimated at 265 MT in 2012-13 has exceeded the production of food
grains and oilseeds for the first time.
Due to higher
procurement, stocks of food grains in the Central Pool have increased to 69.84
million tonnes as on June 1, 2014.
The net
availability of food grains increased to 229.1 million tonnes and that of
edible oils to 12.7 kg per year in 2013.
CHAPTER 9: INDUSTRIAL PERFORMANCE
The latest gross domestic product (GDP)
estimates show that industry grew by just 1.0 per cent in 2012-13 and slowed
further in 2013-14, posting a modest increase of 0.4 per cent.
CHAPTER 10: SERVICES SECTOR
India ranked
12th in terms of services GDP in 2012 among the world’s top 15
countries in terms of GDP (at current prices).
India has the
second fastest growing services sector with its CAGR at 9.0 per cent, just
below China’s 10.9 per cent, during 2001 to 2012.
In
2013-14, FDI inflows to the services sector (top five sectors including
construction) declined sharply by 37.6 per cent to US$ 6.4 billion compared to
an overall growth in FDI inflows at 6.1 per cent resulting in the share of the
top five services in total FDI falling to nearly one-sixth.
CHAPTER 11: ENERGY, INFRASTRUCTURE AND
COMMUNICATIONS
Major sector-wise
performance of core industries and infrastructure services during 2013-14 shows
a mixed trend. While the growth in production of power and fertilizers was
comparatively higher than in 2012-13, coal, steel, cement, and refinery
production posted comparatively lower growth. Crude oil and natural gas
production declined during 2013-14.
The performance of the
coal sector in the first two years of the Twelfth Plan has been subdued with
domestic production at 556 MT in 2012-13 and 566 MT in 2013-14.
A total length of 21,787
km of national highways has been completed till March 2014 under various phases of the NHDP. In
spite of several constraints due to the economic downturn, the NHAI constructed
2844 km length in 2012-13, its highest ever annual achievement. During 2013-14
a total of 1901 km of road construction was completed.
From the infrastructure
development perspective, while important issues like delays in regulatory
approvals, problems in land acquisition & rehabilitation, environmental
clearances, etc. need immediate attention, time overruns in the implementation
of projects continue to be one of the main reasons for underachievement in many
of the infrastructure sectors.
CHAPTER 12: SUSTAINABLE DEVELOPMENT & CLIMATE
CHANGE
Human- induced Greenhouse
gas (GHG) emissions are growing and are chiefly responsible for climate change.
The world is not on track
for limiting increase in global average temperature to below 2◦C,
above pre-industrial levels. GHG emissions grew on average 2.2 per cent per
year between 2000 and 2010, compared to 1.3 per cent per year between 1970 and
2000.
There is immense pressure
on governments to act through two new agreements on climate change and
sustainable development, both of which will be global frameworks for action to
be finalized next year.
The cumulative costs of
India’s low carbon strategies have been estimated at around USD 834 billion at
2011 prices, between 2010 and 2030.
CHAPTER 13: HUMAN DEVELOPMENT
India’s Human Development Rank and performance
According to
HDR 2013, India has slipped down in HDI with its overall global ranking at 136
(out of the 186 countries) as against 134 (out of 187 countries) as per HDR
2012. It is still in the medium human development category.
The poverty
ratio (based on the MPCE of ` 816 for rural areas and `1000 for urban areas in
2011-12 at all India level), has declined from 37.2 per cent in 2004-05 to
21.9 per cent in 2011-12.
In
absolute terms, the number of poor declined from 407.1 million in 2004-05 to
269.3 million in 2011-12 with an average annual decline of 2.2 percentage
points during 2004-05 to 2011-12.
During
2004-05 to 2011-12, employment growth [CAGR] was only 0.5 per cent, compared to
2.8 per cent during 1999-2000 to 2004-05 as per usual status.
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