coll. - Economic Survey of India 2016-17:Volume 02 : With discussion

Government of India

Economic Survey 2016-17

Volume 2

Government of India Ministry of Finance Department of Economic Affairs Economic Division August, 2017 CONTENTS Chapter Page Name of the Chapter No. No. 1 State of the Economy: An Analytical overview 1 Introduction 2 Section A - Analytical Review of Recent Developments 2 Historic Tax Reform: The Goods and Services Tax (GST) 6 Paradigm Shift to Low Inflation 11 Confidence/Exuberance: The Wedge between Asset Prices and Real Economy 12 Farm Loan Waivers: Macro-economic Impact 16 Agrarian Stress in times of Surfeit 19 Long-term Benefits and Short-term costs of Demonetization: An Update
31 Section B - Outlook and Policies for 2017-18
39 Section C - Review of Developments in 2016-17
2 Fiscal Developments 59 Central Government Finances 61 Revenue generation plans and outcomes 63 Expenditure trends 65 Devolution 66 Central Government Debt 67 State Finances 69 General Government 71 Fiscal Policy For 2017-18 And Beyond 80 Appendix 1: Major Tax measures taken during 2016-17 Sub-sections for Chapter 3
3 Monetary Management and Financial Intermediation 85 Monetary Developments during 2016-17 87 Liquidity Conditions and its Management 90 Banking Sector 90 Financial Inclusion 95 Non-Banking Financial Sector 96 Developments in Government Securities Market 97 Developments in Capital Market 99 Insurance and Pension Sector
4 Prices & Inflation 102 Paradigm Shift to Low Inflation? 105 Variability of Inflation across Item Groups and States 106 Current Trends in Inflation 116 Efforts to Contain Inflation 117 Conclusion
5 Climate Change, Sustainable Development and Energy 118 Introduction 120 India's GHG Emission Profile 120 Current Energy Mix 121 Future Electricity Transition Scenarios 122 India's Energy Security 125 Social Cost Analysis of Coal based power versus Renewables based power 128 India's actions on Sustainable Development and Climate Change 131 India's Adaptation Actions 132 Discussions in the G20 Forum 134 The Financial Sector and Green Initiatives 135 Outlook
6 External Sector 137 Global Economic Environment 139 Balance of Payments Developments 147 Composition of Trade 149 Direction of Trade 150 Trade Policy 153 Multilateral and Bilateral/Regional Negotiations and India 153 Foreign Exchange Reserves 155 Exchange Rate 158 External Debt
7 Agriculture and Food Management 164 Introduction 164 Overview of Agriculture and Allied sectors 165 Gross Capital Formation in Agriculture and Allied Sectors 167 Pattern of Agricultural Landholdings 168 Profile of Agricultural Households 169 Risks in Agriculture 178 Horticulture 180 Allied sectors: Animal Husbandry, Dairying and Fisheries 182 Food Management 185 The Way Ahead
8 Industry and Infrastructure 186 Trends in Industrial Sector 188 Performance of the Eight Core Industries 190 Corporate Sector Performance 190 Central Public Sector Enterprises 191 Sector-wise Issues and Initiatives 191 MSME Sector 192 Steel Sector 193 Clothing and Textiles Sector 194 Leather and Footwear Sector 194 Foreign Direct Investment 195 Implementation of GST and its impact on Industry 195 Key initiatives taken by the Government to boost industrial performance 196 Infrastructure Sector Performance-Issues and Initiatives 197 Road 198 Railways 200 Civil Aviation: Are Indian Air Carriers taking off? 205 Port and Shipping 207 Telecom Sector 209 Power Sector with a Special Focus on UDAY 216 Petroleum and Natural Gas Sector 217 Urban Infrastructure with a Note on Smart City Mission 9 Services Sector 231 International Comparison 232 India's Services Sector 234 Services GVA and Gross Capital Formation 234 State-wise Comparison of Services 236 FDI in India's Services Sector 237 India's Services Trade 238 Some Recent Developments in Services Trade Policies and Services Negotiations 240 Major Services: Overall Performance 242 Major Services: Sector-Wise Performance and Some Recent Policies 243 Tourism 246 IT-BPM Services 250 Real Estate and Housing 252 Satellite Mapping and Launching Services
10 Social Infrastructure, Employment and Human Development 255 Trends in Social Sector Expenditure 257 Challenges in Education 264 Employment & Skill Development 267 Towards a Healthy India 274 Human Development: International Comparisons 275 Gender Issues 277 The Way Forward

Acknowledgements

The Economic Survey is a result of teamwork and collaboration. Contributors to the Survey from the Economic Division and Office of CEA include: ArchanaS Mathur, H.A.C. Prasad, Sanjeev Sanyal, A. S. Sachdeva, Vijay Kumar, Rohit KumarParmar, G.S. Negi, Arun Kumar, Rajasree Ray, Antony Cyriac, R. Sathish, P.K. Abdul Kareem, Ashwini Lal, Nikhila Menon,AshutoshRaravikar, Rangeet Ghosh, Abhishek Acharya, Mrityunjay Jha, Rabi Ranjan, Vijay Kumar, M. Rahul, Aakanksha Arora, Gaurav Kumar Jha, Dipak Kumar Das, Kanika Wadhawan, Abhishek Anand, Sonal Ramesh, Subhash Chand, Riyaz Ahmad Khan, Shobeendra Akkayi, Salam Shyamsunder Singh, Md. AftabAlam, Pradyut Kumar Pyne, Narendra Jena, Sanjay Kumar Das, Vijay Kumar Mann, Parveen Jain, Rajesh Sharma, Amit Kumar Kesarwani, Mritunjay Kumar, Gayathri Ganesh, Josh Felman, Tejaswi Velayudhan, Rohit Lamba, Siddharth Eapen George, Sutirtha Roy, Shoumitro Chatterjee, Sid Ravinutala, Amrit Amirapu, M R Sharan, Parth Khare, Boban Paul, Dev Patel, Justin Sandefur, Ananya Kotia, Navneeraj Sharma, Kapil Patidar, and Syed Zubair Husain Noqvi. The Survey has greatly benefitted from the comments and insights of the Hon'ble Finance Minister Shri Arun Jaitley and the Ministers of State for Finance - Shri Santosh Kumar Gangwar and Shri Arjun Ram Meghwal. The Survey has also benefitted from the comments and inputs from officials, specifically Arvind Panagariya, Nripendra Misra, P K Mishra, P K Sinha, Urjit Patel, Ashok Lavasa, Hasmukh Adhia, Subhash C. Garg, Anjuly Chib Duggal, Neeraj Gupta, Amitabh Kant, Sushil Chandra, Vanaja N Sarna, Shaktikant Das, Bibek Debroy, Amarjeet Sinha, Nagesh Singh, T V Somanathan, Tarun Bajaj, Brajendra Navnit, Anurag Jain, Alok Shukla, Amitabh Kumar, AnandJha, Ajay Bhushan Pandey, A P Hota, Viral Acharya, Ramesh Krishnamurthy, Pankaj Batra, Prashant Goyal, Dr. Saurabh Garg, Dr. M.S. Sahoo, Ranjeeta Dubey, Anindita, Dr. Alka Bhargava, Sudha P. Rao, T Rajeswari, David Rasquinha, S. Prahalathan Iyer, Ashish Kumar, Sreejith K B, Rupali Ghanekar, Bishakha Bhattacharya, Nirmala Balakrishnan, Ritu Prakash Singh, Chetna Shukla, Indranil Bhattacharyya, Amit Agrawal, H.K. Srivastava, Saurabh Shukla, R. Vyasan,Vivek Chaudhary, Anand Jha, Naveen Kumar, Prakash Kumar and GSTN team, Bijay Prusty, Somit Dasgupta, Vandana Aggarwal, Ritu Maheshwari, Mayur Maheshwari, P.C. Cyriac, Rahul Aggarwal, Navin Kumar Vidyarthi, Dipak Kumar and a number of external collaborators including Dr. Prodipto Ghosh, Dipak Dasgupta, Swati Agarwal, Deepak Kumar, Pranjul Bhandari, Sajjid Chinoy, Pankaj Batra, Devesh Kapur, Harish Damodaran, PratapBhanu Mehta, Ashish Gupta, Kush Shah, Shishir Baijal, Samantak Das, Mayank Shekhar, Akhilesh Awasthy, Kshitij Batra, Reuben Abraham, Vaidehi Tandel, Jessica Seddon, Pritika Hingorani, Sagar Gawade, Rajamohan, Jyoti Tirokdar, Sharad Shingade, Suman Kumar and Priam Pillai, Rajeev Malhotra, Ranen Banerjee, Manoranjan Pattanayak, Mehul Gupta,Amitabh Khosla, J D Giri, Komal Chouhan, Abhilasha Arora, Gokul Arunkumar, Shivang Dongra, Punith, Puneet Kumar and Tirthankar Mukherjee. Apart from the above, RBI, various ministries, departments and organisations of the Government of India made contributions in their respective sectors. Able administrative support was given by S. Selvakumar, R P Puri, R K Sinha, N Srinivasan, R Vijaya Kumari, V K Premkumaran, Gurmeet Bhardwaj, Pradeep Rana, Sadhna Sharma, Jyoti Bahl, Sushil Sharma, Manish Panwar, Sushma, MunaSah, Suresh Kumar, Aniket Singh, Jodh Singh, Puneet, Ombir, R R Meena, Subash Chand, Raj Kumar and other staff and members of the Economic Division and the Office of CEA. R B Aniyeri, SuwarchaVasudev and their team of translators along with Prof. B.S. Bagla and Santosh Kumar carried out the Hindi translation. Hindi typing was done by Pankaj Kumar, Y.S. Rathor, Meena Pant, K.K. Wadhawan. The cover page for the Survey was designed by Jacob George of George Design, Kochi, assisted by Vineeth Kumar. Viba Press Pvt. Ltd., Okhla undertook the printing of the English and Hindi version of the Survey. Special thanks to the people who kept us caffeinated throughout - Sitaram and Aditya for coffee and Satish jee for tea. Finally, the Economic Survey owes a huge debt of gratitude to the families of all those involved in its preparation for being ever so patient and understanding and for extending their unflinching support and encouragement throughout its preparation. Arvind Subramanian (Chief Economic Adviser) Ministry of Finance Government of India