Economic Survey 2015


  • Macroeconomic fundamentals have dramatically improved in 2014-15
  • Inflation has declined by over 6 percentage points since late 2013
  • Current Account Deficit down from a peak of 6.7% of GDP (in Q3, 2012-13) to an estimated 1% in 2014-15
  • Foreign portfolio flows have stabilized the rupee
  • After a nearly 12-quarter phase of deceleration, real GDP has been growing at 7.2% since 2013-14, based on the new growth estimates of the
  • Foodgrain output in 2014-15 at 257.07 million tons will exceed the average production of last 5 years by 8.5 million tons.
  • Going forward inflation is likely to remain in the 5-5.5% range, creating space for easing of monetary conditions.
  • Using the new estimate for 2014-15 as the base, GDP growth at constant market prices is expected to accelerate to between 8.1 and 8.5% in 2015-16.
  • There is a case for reviving targeted public investment as an engine of growth in the short run to complement and crowd-in private investment
  • India faces an export challenge, reflected in the fact that the share of manufacturing and services exports in GDP has stagnated in the last five years.
  • India must adhere to the medium-term fiscal deficit target of 3 percent of GDP
  • India must move toward the golden rule of eliminating revenue deficits
  • Expenditure control with growth recovery and GST will ensure that medium-term targets are met
  • The direct fiscal cost of all the subsidies is roughly ₹ 378,000 crore or 4.2 percent of 2011-12 GDP.
  • 41% of PDS kerosene is lost as leakage and only 46% of the remaining 59% is consumed by poor
  • The JAM Number Trinity – Jan DhanYojana, Aadhaar, Mobile – can eliminate leakages and distortion
  • The stock of stalled projects stands at about 7% of GDP, accounted for mostly by the private sector. Manufacturing and infrastructure account for most of the stalled projects.
  • Expectation that the private sector will drive investment needs to be moderated
  • Public investment may need to step in to ramp up capital formation.
  • Indian banking balance sheet is suffering from ‘double financial repression’
  • Going forward, capital markets and bond-financing need to be given a boost.
  • Private sector banks did not partake in the biggest private-sector-fuelled growth episode in Indian history during 2005-2012
  • Econometric evidence suggests that the railways public investment multiplier — the effect of a ₹1 increase in public investment in the railways on overall output — is around 5. However, in the long run, the railways must be commercially viable and public support must be linked to railway reforms.
  • To boost farm and food sector, the Economic Survey prescribed huge investment in areas like research, irrigation and warehousing, besides calling for subsidy rationalization and setting up of a national common market for agri-produce.  The Survey also reminded readers of the advantages of foreign direct investment in retail, which would fill in the agricultural supply chain.
  • For 2014-15, the government has estimated a positive growth rate of 1.1% for agriculture despite lower rainfall. Foodgrains output is estimated at ₹257.07 million tonnes this year, down by 3% from in previous year.
  • On subsidy control, while accepting that direct benefit transfers were a laudable goal of policy, the Survey pleaded developing the state capacity to implement DBT “will take time”. Other ways to plug subsidy leakages, such as the ₹10,000 crore from kerosene, needed to be implemented first.

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