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Economic Survey 2018 Part 1
Why is this article relevant for IBPS / SBI Bank PO, RRB and Other Bank Exam Aspirants?
Almost all exams including IBPS PO, IBPS RRB, SBI PO evaluate students on their knowledge of Banking General Knowledge and Current Affairs. This section is not only high scoring but also has high cut-offs. To ensure that you do well in this section, you need to ensure that you are regularly in touch with the latest news in the banking world and the economy.
Also read: Economic Survey 2018 Part 2
What is Economic Survey?
- The Economic Survey, an annual publication of the Finance Ministry, is presented in both houses of Parliament during the Budget Session.
- The Economic Survey is a review of the developments in the country's economy over the previous one year. It presents a summary of the performance of the government's major development programmes undertaken during that period. It also details the main policy initiatives of the government.
- The budget session will initiate on the 29th January, 2018 with the tabling of the Economic Survey of India in both Lok Sabha and Rajya Sabha. Budget Session commenced with President Ram Nath Kovind's address to joint sitting of Parliament.
- On February 1st, 2018 Finance Minister Jaitley will present Budget 2018, his last full budget before 2019 general elections. Significantly, this is the first post-GST budget.
- In 2018, the Budget session is from January 29 to April 6. Phase 1 is from January 29 to February 9. Phase 2 is scheduled from March 5 to April 6.
Economic Survey 2018 and D-street expectations:
- Fiscal deficit, GDP growth forecasts:
Consultancy firm Deloitte noted that with recent disinvestment announcements, the economic survey may not expect any fiscal slippage for this year at all. This may help the government meet its fiscal deficit target of 3.2 per cent for the ongoing financial year (FY18).
- Growth pulses of the economy:
The survey this time may also touch upon environmental factors that are influencing cost of production and impacting GDP growth. Recently India was ranked at the 62nd place among emerging economies on an Inclusive Development Index. The index takes into account the living standards, environmental sustainability and protection of future generations from further indebtedness, the WEF said.
- Sluggish exports growth:
The economic survey is likely to deal lower-than-expected growth in exports even as the global economy is looking up. Data released for December showed trade deficit climbed to 15 billion from $14 billion in November.
- Impact on spike in crude oil price:
Crude oil prices are back above $70 a barrel level mark. While the survey may not give much importance to the recent short-term spike in crude prices, it may surely talk about the likely long-term trend in the commodity market and its likely impact on our economic growth.
- Direct transfers to agri-sectors:
While there could be some information on universal basic income (UBI), the Economic Survey may talk in length on direct transfers, says consultancy firm Deloitte. The auditing firm noted that the survey may try to address the problem of overproduction in the agri sector.
President Kovind's observations, Opening of Budget Session 2018:
- Government has increased the minimum wage of workers by more than 40 per cent. The number of registers for compliance of Labour laws has also been reduced from 56 to 5. All returns are now filed online on the Shram Suvidha Portal.
- The President saluted the soldiers and offered condolences to those who lost their lives in action.
- To end corruption the government has revoked the registration of 350,000 suspicious companies.
- The government implemented GST in 2017 and has managed to reduce the fiscal deficit and current account deficit.
- With help of Aadhaar, facilities are reaching poor beneficiaries directly without involvement of middlemen. Digital transactions are being done for over 400 policies of present govt. This has saved over Rs 57,000 Crore from going into wrong hands.
- The membership of Australia Group and Wassenaar Arrangement is an important achievement of the government.
- The government is prioritising education, health services and water supply for the development of north eastern states of India.
- It’s a matter of pride for India that UNESCO recognised Kumbh Mela as ‘Intangible Cultural Heritage of Humanity’. UNESCO also designated Ahmedabad as ‘Heritage City’. Chennai was included in the list of Creative Cities by UNESCO.
- More than 28 crore of LED bulbs have been distributed to reduce electricity bills by more than Rs 40,000 crore under Ujala scheme.
- Udaan scheme and Bharatmala project launched by the government have helped in increasing connectivity and create new avenues of employment.
- The push towards digitisation of records and taking steps in electronic technology in transfer of funds has helped in creating transparency and isolating the brokers in the process.
- To bring everyone closer to development, work under ‘Pradhanmantri Gram Sadak Yojana’ is being done speedily. In 2014 only 56% villages were connected to roads, today more than 82% villages have road connectivity with the majority being in remote areas.
- The President talked about the numerous initiatives including startup India, Skill India by the government for empowering the youth.
- The government has made a new national health policy to provide easy and affordable healthcare to all.
- The President mentioned the government approval for the Muslim woman above 45 years of age to go on Haj without a male guardian. Triple Talaq bill will help in the upliftment of Muslim women.
- 2.70 Lakh Common Service Centers have been set up across the nation. These Centers provide digital service at low rates for various services even in the far off remote areas.
- The government is committed to double the income of farmers by the year 2022. To provide food supplies to everyone, the government under National Food Security Act is providing food supplies at minimal rates to the poor.
- The government is working for the upliftment of poor and four crore electricity connections have been given under Saubhagya scheme.
- There is a mention about Clean India Mission where when India celebrates Mahatma Gandhi’s 150th birth anniversary in 2019 we can pay tribute to him by making our country completely clean.
- A mention about the achievements of Mudra Yojna, Jan Dhan Yojna, Ujjawala Yojna which has benefitted the common populace of India.
- 2018 will be crucial year for the development of New India and urges the parliamentarians to work together on clearing the bill.
10 new facts in the Economic Survey 2018:
- 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.
- 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.
- 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.
- 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.
- It was pointed out that the Rebate of State Levies (ROSL) has increased exports of readymade garments (man-made fibers) by about 16 per cent but not of others.
- The data highlighted another seemingly known fact that Indian society exhibits a strong desire for a male child.
- 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.
- Extrapolating the data the survey indicated that growth in savings did not bring economic growth but the growth in investment did.
- The survey mentions that 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
- 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.