Indian economy to expand 5.4-5.9 per cent this fiscal: Economic Survey

The Economic Survey for 2013-14 tabled
in Parliament by Finance Minister Arun Jaitley on Wednesday – prepared by
senior economic advisor Ila Patnaik – on the state of Asia’s third-largest economy
a day before Modi’s new government presents its first budget.
Following
are key highlights of the report:
1. Growth: GDP
growth seen at
5.4 – 5.9 percent in
2014/15




 – Economic
growth of
7-8 percent not seen
before 2016/17
2. Fiscal
Health: 
 Fiscal deficit for 2013-14 contained
at 4.5% of the GDP
3. Inflation:


– Government
needs to move towards low and stable inflation through fiscal consolidation

– Wholesale
Price Index (WPI) inflation expected to moderate by end-2014

– Consumer
Price Index (CPI) inflation showing signs of moderation
4. Current Account Deficit: 2014/15 current account deficit may be
contained to around $45 billion or
to
2.1 percent of GDP
5. Balance of PaymentsImprovement
in balance of payments position during late 2013-14 was swift thanks to import restrictions and economic slowdown



– Need to adjust to advanced economies’ eventual
exit from accommodative monetary policy stance
5. Taxation: Government
needs to move towards simple tax regime, fewer tax exemptions and single rate
of goods and services tax (GST)



– GST
to play vital role in indirect tax reform



– Direct
Taxes Code (DTC) required to replace existing income tax laws; will reduce compliance costs and boost tax collection
6. Agriculture: India
ranks
first in the world in productivity
of grapes,
banana, cassava, peas, and papaya


– Agriculture
sector growth rate 4.7% in
the year
2013-14



– Agriculture
exports grow by 5.1% in the year 2013-14



–  Exports
of marine products show a growth rate of 45% in the year 2013-14
7. Industrial
Performance
 Industry
grew by just 1.0 percent in 2012-13 and slowed further in 2013-14, posting a
modest increase of 0.4 percent.



–  During
2013-14, FDI inflow (including equity inflows, reinvested earnings and other
capital) was USD 36.4 billion.



– Overall
gross bank credit flow to industry has increased by 14.9 percent in 2013-14.
8. Services:  India ranked 12th in terms of services GDP among the
world’s top 15 countries



– India
has the second fastest growing services sector with its CAGR at 9.0 percent,
just below China



– The
growth rate of the combined category of trade, hotels, restaurants, transport,
storage, and communications decelerated to 3.0 percent



– Financing,
insurance, real estate, and business services grew robustly at 12.9 percent



– Services constitute a 57 percent share in GDP at factor cost in
2013-14