Sun, Aug 20, 2017 | updated 02:11 PM IST

Economic Survey 2016-17 Volume-2: Rekindled optimism on structural reforms in Indian economy

Updated: Aug 11, 2017 15:59 IST      
Economic Survey 2016-17 Volume-2: Rekindled optimism on structural reforms in Indian economy

New Delhi [India], Aug.11 (ANI): There is a rekindled optimism on structural reforms in Indian economy due to various factors such as launch of the GST; Positive impacts of demonetization; decision in principle to privatize Air India; further rationalization of energy subsidies and Actions to address the Twin Balance Sheet (TBS) challenge notices the Economic Survey 2016-17 Volume 2 which was tabled in the Parliament on Friday for the first time after the financial year ended.

However the survey cautions that anxiety reigns because a series of deflationary impulses are weighing on an economy, yet to gather its full momentum and still away from its potential. These include: stressed farm revenues, as non-cereal food prices have declined; farm loan waivers and the fiscal tightening they will entail; and declining profitability in the power and telecommunication sectors, further exacerbating the TBS problem. It added that achieving the upper end of projections for economic growth at 6.75-7.5 per cent for FY18 may be difficult.

The document also adds that a growing confidence that macro-economic stability has become entrenched is evident because of a series of government and RBI actions and because of structural changes in the oil market have reduced the risk of sustained price increases.

Examining if India is undergoing a structural shift in the inflationary process toward low inflation, the Survey notes that the oil market is very different today than a few years ago in a way that imparts a downward bias to oil prices, or at least has capped the upside risks to oil prices. Also Farm loan waivers could reduce aggregate demand by as much as 0.7 percent of GDP, imparting a significant deflationary shock to an economy.

Spurt in New Tax Payers and Reported Income after Demonetization; 5.4 lakh New Tax Payers Post-Demonetization.

Demonetization's impact on the informal economy has increased demand for social insurance, particularly in less developed states. MGNREGS and its implementation by the Government have met the programme's stated role of being a social safety net during times of need.

It also adds that sustaining current growth trajectory will require action on more normal drivers of growth such as investment and exports and cleaning up of balance sheets to facilitate credit growth. The ratio of stressed companies in the power sector (defined as the share of debt owed by companies with interest coverage (IC) ratio of less than 1) has been steadily rising this year, reaching 70 percent, with an associated vulnerable debt of over Rs. 3.6 lakh crore.

The telecommunications sector has experienced its own version of the "renewables shock" in the form of a new entrant that has dramatically reduced prices for, and increased access to, data, thereby benefitting-at least in the short run- consumers; after launching of services by the new entrant in September 2016, the average revenue per user (ARPU) for the industry on aggregate has come down by 22 percent vis-a-vis the long term (December 2009-June 2016) ARPU, and by about 32 percent since September 2016.

As regards Outlook for Growth 2017-18, Survey (Volume I) had forecast a range for real GDP growth of 6.75 percent to 7.5 percent for FY 2018. For Outlook for Prices & Inflation 2017-18, the Survey notes the outlook for inflation in the near-term will be determined by a number of proximate factors, including:

The outlook for capital flows and exchange rate which in turn will be influenced by the outlook and policy in advanced economies, especially the US;

The document says that the fact that current inflation is running well below the 4 percent target, suggests that inflation by March 2018 is likely to be below the RBI's medium term target of 4 percent.

As regards Review of Economic Developments 2016-17, the Survey notes that

· Real economy grew by 7.1 per cent in 2016-17 compared with 8 percent the previous year. This performance was higher than the range predicted in the Economic Survey (Volume I) in February.

· This growth suggested that the economy was relatively resilient to the large liquidity shock of demonetization which reduced cash in circulation by 22.6 percent in the second half of 2016-17. The apparent resilience was even more marked in nominal growth magnitudes because both nominal GVA and GDP growth accelerated by over 1 percentage point in 2016-17 compared with 2015-16.

· Annual inflation averaged 5.9 per cent in 2014-15 and has since declined to 4.5 per cent in FY 2017. More dramatic have been developments during 2016-17- inflation declined sharply from 6.1 percent in July 2016 to 1.5 percent in June 2017.

· The sharp dip in WPI inflation in late FY 2015 and throughout FY 2016 owed to the deceleration in global commodities prices, especially crude oil prices. With global commodity prices recovering and the 'base effect' (low inflation in the previous year) giving an upward push, wholesale inflation perked up during FY 2017

· With the green shoots slowly becoming visible in merchandise trade, and robust capital flows, the external position appears robust, reflected inter alia in rising reserves and a strengthening exchange rate.

· The current account deficit narrowed in 2016-17 to 0.7 percent of GDP, down from 1.1 percent of GDP the previous year, led by the sharp contraction in trade deficit which more than outweighed the decline in net invisibles

(ANI)

RBI Governor urges time-bound resolution of stressed assets

Updated: Aug 19, 2017 15:45 IST     

New Delhi [India], Aug 19 (ANI): Reserve Bank of India (RBI) Governor Urjit Patel on Saturday noted that given the current position of public sector banks, time-bound resolution of stressed assets is crucial, in order to facilitate resolution of stressed assets and reallocate capital.

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New Delhi [India], Aug.19 (ANI): Baldeo Bhai Sharma, Chairman, National Book Trust (NBT), today underlined the importance of nurturing creativity and innovation in children at an early age for the economic and spiritual development of the nation.

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E-Commerce industry risk review by Alea Consulting

Updated: Aug 19, 2017 15:05 IST     

New Delhi [India], August 19 (ANI-NewsVoir): In India, eCommerce accounts for 1.5 percent of India's GDP, and is likely to reach 2.5 percent by 2030. In 2016 the sector grew by 55 percent to USD 16 billion. With the increase in internet users, Indian e-Commerce industry is poised to surpass the United States and become second largest in the world, after China, by 2034.

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Adarsh Credit Co-operative Society ties up with Oppo Mobiles

Updated: Aug 19, 2017 14:46 IST     

New Delhi [India], August 19 (ANI-NewsVoir): Adarsh Credit Co-operative Society Ltd. tied up with OPPO mobile company for providing financial services for its advisors which will help them in providing better services through Adarsh mobile money application. The tie-up of this kind is for the first time in the co-operative sector which will help in accelerating financial inclusion in the country.

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Kutchina Foundation celebrates Annual Day

Updated: Aug 19, 2017 14:45 IST     

New Delhi [India], August 19 (ANI-NewsVoir): Kutchina Foundation celebrated its annual day to commemorate the outstanding contributions and efforts by the existing Krritikas in bringing about a social impact and change in the society and to introduce the new Krritikas who have been identified to be offered fellowship for their respective projects under Kutchina Krritika - an initiative to identify woman change-makers and support them. The women identified under this initiative are called 'Krritikas' as it stands for a group of stars (female Nakshatras) also known as the "Stars of Fire" and is related to a commander, foster mother, luster, glow of power, physical and creative force.

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New Delhi [India], Aug.19 (ANI): The Global Business Travel Association (GBTA),the voice of the global business travel industry, kicked off GBTA Conference 2017 New Delhi on Friday as part of its India Conference Series 2017.

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New Delhi [India], Aug 18 (ANI): The Ministry of Finance on Friday released a clarification regarding the number of taxpayers that have been added after demonetization.

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New Delhi [India], Aug 18 (ANI): Celebrating the occasion of world Entrepreneurship Day, ASSOCHAM (Associated Chambers of Commerce and Industry of India) on Friday bestowed Mobikwik co-founder Upasana Taku with the 'Best Woman Entrepreneur Award 2017' in the national capital.

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RBI introduces new Rs. 50 notes in Mahatma Gandhi series

Updated: Aug 18, 2017 19:14 IST     

New Delhi [India], Aug 18 (ANI): The Reserve Bank of India (RBI) on Friday announced circulation of new currency denomination of Rs. 50 banknotes in the Mahatma Gandhi (New) Series.

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New Delhi [India], Aug 18 (ANI-NewsVoir): Eminent artist, philanthropist and award winning sculptor Rouble Nagi is looking forward to welcoming and hosting international Bahraini artist from Bahrain over an evening at a multi-cultural arty affair connecting creative enthusiasts from India and Bahrain through an unparalleled programme of artist interventions.

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New Delhi [India], Aug 18 (ANI): An urge to share lives beyond fashion and lifestyle by the users of India's leading fashion social network, 'Roposo - TV by the People' has emerged as the home grown digital platform to explore homemade videos and photos, hands-free and full-screen browsing experience.

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New Delhi [India], Aug 18 (ANI): CMO Asia, an organization of Asia's top marketing executives and professionals, through their network, generate high level thought leadership and peer networking amongst decision makers across Asia. CMO Asia's National Award For Marketing Excellence was awarded to Parijat Industries on 6thJuly in Mumbai this year.

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New Delhi [India] August 18 (ANI): Union Minister Arun Jaitley in a letter to the State Chief Ministers, Finance Ministers written earlier today highlighted the concerns raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products.

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Panaji (Goa) [India], Aug 18 (ANI): Le Meridien has announced hiring of Norton Pereira as the General Manager for its Goa's Calangute property.

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The story of Zaara Tugs at Family Ties Strings

Updated: Aug 18, 2017 15:38 IST     

New Delhi [India], Aug 18 (ANI-BusinessWireIndia): In every child, there is a story, a story never told or heard. New research has found that three out of four parents have a best loved child. Even if they do not, mere perception of bias can affect a child's emotional well-being.

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New Delhi [India], Aug 18 (ANI): Vishal Sikka, who resigned as the Managing Director and Chief Executive Officer of Infosys Ltd., on Friday cited that the continuous stream of distractions and disruptions are among the main reasons behind his dec

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New Delhi [India], Aug 18 (ANI): True Balance, India's leading mobile balance management service app unveiled interesting features on its new version which enables users to manage, recharge and earn their rewards all in one go.

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New Delhi [India], Aug 18 (ANI): The latest OLA film 'Farak Padta Hai' campaign explores the youth of today who are more concerned about the future of the country, and want to work towards solving real issues like growing congestion and pollution in our cities.

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New Delhi [India], Aug 18 (ANI-NewsVoir): Home buying journey today is not as cumbersome as it was a decade ago. Homeseekers were completely dependent on brokers and personal connect, however with evolved needs and technological advancements, one can now access information at the touch of their fingertips. With the introduction of mobile apps like Magicbricks - the process has become much simpler.

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Kerala Tourism organizes a roadshow in Gurugram

Updated: Aug 18, 2017 13:54 IST     

New Delhi [India], Aug 18 (ANI-NewsVoir): Kerala Tourism, with its year-long marketing activity campaign which commences with the summer campaign that lures summer travellers from the month of April to September, reached out to the tourism industry players in Gurugram on Thursday, 17th August, with its revamped fare on showcase which includes a selection of new tourism products.

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