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.
are key highlights of the report:
1. Growth: GDP
growth seen at
5.4 – 5.9 percent in

 – Economic
growth of
7-8 percent not seen
before 2016/17
2. Fiscal
 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
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)

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
first in the world in productivity
of grapes,
banana, cassava, peas, and papaya

– Agriculture
sector growth rate 4.7% in
the year

– 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
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