economic survey presentation
TRANSCRIPT
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News corner : Economic survey
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Basic Terminologies
Planned expenditure
India has adopted economic planning as a strategy foreconomic development.
The expenditure incurred on the items relating to five
year plans is termed as plan expenditure. Estimated after discussions between each of the
ministries concerned and the Planning Commission.
Non-plan Expenditure
The expenditure provided in the budget for routinenormal activities of the government is called non-planexpenditure
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Contd.
Interest payments, subsidies (mainly on food and
fertilisers), wage and salary payments to governmentemployees, grants to States and Union Territoriesgovernments, pensions, police, economic services invarious sectors, other general services such as taxcollection, social services, and grants to foreigngovernments
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Revenue Deficit
When the net amount received (revenues lessexpenditures) falls short of the projected net amount tobe received.
This occurs when the actual amount of revenue receivedand/or the actual amount of expenditures do not
correspond with predicted revenue and expenditurefigures
Fiscal Deficit
When a government's total expenditures exceed therevenue that it generates (excluding money from
borrowings). Deficit differs from debt, which is anaccumulation of yearly deficits.
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Budget Deficit
The term "budget deficit" is most commonly used to
refer to government spending rather than business orindividual spending. When it refers to governmentspending, a budget deficit is also known as the "nationaldebt."
The net sum of all past Fiscal deficit/surplus beforefiscal year
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Every Rupee expenditure split-
up
paying interests - 18 paise
Central Plans expense - 21 paise
Non-Plan Expenditure - 11 paise
Subsidies - 12 paise
Defence - 10 paise
Plan Assistance to States 7 paise
and Union Territories
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Income
Borrowings and other Liability 27 paise
Corporate Tax - 21 paise
Income Tax - 12 paise
Service Tax and Others - 9 paise
Union Excise Duties - 11 paise
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Markets bounce back onpositive economic outlookThe Bombay Stock Exchange (BSE) 30-sharesensitive index (Sensex) regained 137.27 points toclose at 19152.41.
The Government raised the growth projection to 6.1-
6.7 per cent for 2013-14.
The capital goods sector led the rally with a gain of2.4 per cent followed by realty (2.12 per cent), oiland gas (1.17 per cent) and metal (1.11 per cent).However, the BSEs information technology, tech and
healthcare sectors ended in the red.
Among other broad based indices, the BSE 100gained 0.79 per cent, BSE 200 was up by 0.77 percent and BSE 500 closed up by 0.72 per cent.
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LPG subsidy reaching thepoor is less
The Survey categorised both rural and urban householdsinto quintiles based on their per capita householdexpenditure.
In rural areas, the Survey found the proportion ofsubsidies that went to the poorest quintile was a mere0.07 per cent as compared to 52.6 per cent for therichest quintile.
Though the proportion of the subsidies that reached thepoor in urban areas is also low (around 8.2 per cent),there was more equitable distribution across the
remaining quintiles 19 per cent, 24 per cent, 25 percent and 23 per cent, respectively.
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Economic Survey claimsdownturn is over, economy
looking upThe Survey projected a cautiously optimistic growth rate of6.1-6.7 per cent for 2013-14 while conceding that the GDP(gross domestic product) growth for the current fiscal waslikely to slip to the decades low of five per cent
compared to the estimates by the CSO (Central StatisticsOffice) of 6.2 per cent for 2011-12 and 9.3 per cent theyear before.
The government had pegged the fiscal deficit at 5.1 per
cent for the GDP for 2012-13, which the Finance Ministerlater revised to 5.3 in view of the rising expenditure andsubdued revenue collection. For the new fiscal, Mr.Chidambaram has committed to bring it down to 4.8 percent.
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Global easing of monetarypolicy can fuel inflation
Inflation has eased in almost all major advanced andemerging market economies in the current year, theSurvey said and went on to add that as far as India is
concerned, the average wholesale prices-based inflation in2012 (April-December) moderated to 7.55 per cent from9.35 per cent in the corresponding period of the previousyear and further eased to a three-year low at 6.62 per centin January this year as compared to 7.23 per cent in thesame month last year.
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inflation for energy and non-energy commodities 2.6 percent and 2.0 per cent.
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Survey optimistic on IIPgrowth trend
IIP (Index of Industrial Production), witnessed a smartrecovery with a robust 8.3 per cent expansion inOctober, 2012.
The cumulative growth trend has been downward as theoverall industrial performance continued to moderate
since the first quarter of 2011-12 and turned negativeduring the first quarter of the current fiscal beforemoving to positive territory with a growth of 2.1 per centin the third quarter (October-December) of 2012-13.
IIP basket which indicates that the number of products
with negative growth has declined from 182 in thefourth quarter of 2011-12 to 160 in October-November2012.
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The IIP growth trend remains vulnerable to severaldomestic factors and external shocks, the Survey said:
Infrastructure and energy constraints, decline indemand for Indias exports, and fragile recovery ininvestment are the risk factors.
the Survey went on to highlight the fact that India hasnot improved significantly in terms of the ease of doingbusiness and ranks very low in comparison to otherindustrial peers.
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Savings at 8-year low
the savings rate in the country reached an eight-yearlow of 30.8 per cent in 2011-12, the share of financialsavings as against physical savings in householdsdeclined to 36 per cent in 2011-12 from a high of 55 percent during the 1990s.
In fact, household financial savings were lower by nearlyRs. 90,000 crore in 2011-12 vis--vis 2010-11, theSurvey said. Financial savings take the form of bankdeposits, life insurance funds, pension and providentfunds and shares and debentures.
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The reason for this can be attributed to the low returns
on the BSE Sensex, coming down from nearly 21.4 percent per annum to 10 per cent, and higher volatility.
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Particulars Rs. Bn 2009-10 2010-11 2011-12 2012-13BE
2012-13
RE2013-14 %
ChangeA. Revenue Receipts 5728.11 7884.71 7669.89 9356.85 8718.28 10563.31 21.16%
Tax Revenue (net to
centre)4565.36 5698.69 6422.52 7710.71 7421.15 8840.78 19.13%
Non-tax Revenue 1162.75 2186.02 1247.37 1646.14 1297.13 1722.52 32.79%
B. Capital Receipts 4516.76 4088.57 5517.3 5552.41 5589.98 6089.67 8.94%
Total Receipts (A+B) 10244.87 11973.28 13187.2 14909.25 14308.26 16652.98 16.39%
C. Non-plan Expenditure 7210.96 8182.99 8921.16 9699 10016.38 11099.75 10.82%
D.Plan Expenditure 3033.91 3790.29 4266.04 5210.25 4291.87 5553.22 29.39%
Total Expenditure (C+D) 10244.87 11973.28 13187.2 14909.25 14308.25 16652.97 16.39%
Revenue Expenditure 9118.09 10407.23 11619.4 12861.09 12630.72 14361.69 13.70%
Capital Expenditure 1126.78 1566.05 1567.8 2048.16 1677.53 2291.29 36.59%
Revenue Deficit 3389.98 2522.52 3949.51 3504.24 3912.45 3798.38
as a % of GDP -5.2 -3.3 -4.4 -3.4 -3.9 -3.3
Fiscal Deficit 4184.82 3735.91 5219.8 5135.9 5209.25 5424.99
as a % of GDP -6.4 -4.9 -5.9 -5.1 -5.2 -4.8
GDP 65387.81 76243 89121.79 101598.84 100281.18 113718.9
Economic Survey 2013:
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Economic Survey 2013:There's room for RBI to cutrates, spur growth The total net FII flows to
India stood at $31.01 billion in
2012, with investment in equity
accounting for the bulk (80%) of
these flows.
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