Chapter-1: An Overview of India’s Economic Performance in 2017-18

What are the notable trends in GVA Growth in 2016-17?

• One of the salient features of GVA growth in 2016-17 has been that two sectors viz. ‘Agriculture & Allied’, and ‘Public administration, defence & other services, contributed nearly one-third of the total growth of the economy.
• These sectors on an average contributed to about one-sixth of the GVA growth in the period 2012-13 to 2015-16. The higher contribution of these sectors in 2016-17, mainly owed to higher growth in both of these sectors.
• Services (excluding public administration, defence, etc.) accounted for nearly 57 per cent of the total GVA growth between 2012-13 and 2015-16. It declined to 41 per cent in 2016-17, mainly on account of lower growth in ‘Financial, real estate & professional services’ sector. The contribution of ‘Public administration, defence & other services to total growth during 2016-17 was nearly twice its average contribution to growth between 2012-13 and 2015-16. However, growth of ‘Public administration, defence & other services’ sector is expected to decline in 2017-18.
• On the other hand, the contribution of ‘Financial services, real estate and professional services’ to GVA growth progressively declined since 2013-14. It declined from an average of 32.7 per cent of GVA growth during 2012-13 to 2015-16 to 18.8 per cent in 2016-17.

What is expected real per capita income & nominal per capita income for 2017-18?

• The real per capita income (measured in terms of per capita net national income at constant (2011-12) prices is one of the important indicators representing the welfare of people of a country.
• It is expected to increase from Rs. 77,803 in 2015-16 to Rs. 86,660 in 2017-18, growing at an annual average rate of 5.5 per cent.
• In nominal terms it increased by an average of 9.0 per cent per annum from Rs. 94,130 in 2015-16 to Rs. 111,782 in 2017-18.

What is the share of consumption expenditure in total GDP growth?

• Consumption expenditure has been the major driver, accounting for nearly sixty per cent of the total GDP growth between 2012-13 and 2015-16. This contribution increased to over 95 per cent in 2016-17, which is attributed to higher growth of both Private Final Consumption Expenditure (PFCE) and Government Final Consumption Expenditure (GFCE), particularly the latter.
• Government Final Consumption Expenditure (GFCE), particularly the latter. Growth of GFCE was nearly 21 per cent in 2016-17, against an average growth of 3.5 per cent during 2012-13 to 2015-16. This owed mainly to the payment of higher wages and salaries to the government staff that followed the implementation of the recommendations of the Seventh Pay Commission. The growth of both PFCE and GFCE is expected to be lower in 2017-18 as compared to 2016-17.

What is the Share of fixed investment in GDP in 2016-17?

• The share of investment, and in particular that of fixed investment in the GDP continuously declined between 2011-12 and 2016-17,
• While fixed investment was 34.3 per cent of GDP in 2011-12, it declined to 27.1 per cent in 2016-17. Although fixed investment is expected to grow at a faster rate in 2017-18 than in 2016- 17 (thus pointing to some recovery in investment), it is still not high enough to prevent a further reduction in the share of fixed investment in GDP.

What is Engel’s elasticity?

• One of the ways to analyse the consumer’s behaviour is through Engel’s elasticity. It states that As a household’s income increases, the percentage of income spent on food decreases while the proportion spent on other goods (such as luxury goods) increases.

What is the contribution of savings of household sector as a ratio of GDP?

• Savings in an economy originate from households, private corporate sector and public sector (including general government).
• In line with overall savings of the economy, the savings of household sector as a ratio of GDP have declined from 23.6 per cent in 2011-12 to 19.2 per cent in 2015-16, while that of private corporate sector have increased.
• With the general government savings showing an improvement, (although it continued to be in negative territory), the reduction in the public savings up to 2014-15 can be ascribed to lower level of savings of public sector undertakings.

What is the share of Household sector, Public and private corporations in savings?

• Household sector accounts for the bulk of the savings. However, the share of household savings in total savings declined from around 68 per cent in 2011-12 to 59 per cent in 2015-16. Within the households’ savings, there has been a substitution away from physical to financial assets, with the share of former declining by over 10 percentage points. Financial savings by the households are held mainly in currency, bank deposits, life insurance funds, provident and pension funds and of late in the form of shares and debentures.
• Public savings that declined from 1.5 per cent of GDP in 2011-12 to 0.9 per cent in 2014-15, however, increased again in 2015-16. This could be partly explained by higher collection of union excise duties, particularly from petroleum products and reduced level of petroleum subsidy bill of the central government.
• The share of private corporate sector in the total savings increased from 9.5 per cent of GDP in 2011-12 to about 12 per cent of GDP in 2015-16.

What is the share of fixed investment in total investment?

• Fixed investment accounts for around 90 per cent of total investment. Fixed investment is in various assets including dwellings, machinery & equipment and intellectual property products (IPP), along with small contribution coming from cultivated biological resources.
• Dwellings account for around 57-58 per cent of fixed investment and this share has remained fairly stable between 2011-12 and 2015- 16.

What is the expected growth rate of global economy & World trade volume growth  in 2018?

• The global economy has been gathering pace and is expected to accelerate from 3.2 per cent in 2016 to 3.7 per cent in 2018. World trade volume growth is projected to increase from 2.4 per cent in 2016 to 4.2 per cent and 4.0 per cent respectively in 2017 and 2018

What is India’s current Account deficit in terms of GDP?

• India’s Current account deficit (CAD) was 1.8 per cent of GDP,

What is the main reason for increase in long term debt of India?

• The increase in long term debt was primarily due to the increase in foreign portfolio investment included under commercial borrowings.

What is the expected global growth rate for the year 2018 as per IMF’s World Economic Outlook?

• On the positive side, as per IMF’s World Economic Outlook released in October 2017, the global growth is expected to accelerate to 7 per cent in 2018 from 3.6 per cent in 2017.

What is the share of agriculture in GVA for the year 2017-18?

• The share of agriculture and allied sectors in GVA declined from 18.2 per cent in 2012-13 to 16.4 per cent in 2017-18

Production of various crops in 2017-18:

• The total production of rice during 2017-18 is estimated at 94.5 million tones. The production of pulses during 2017-18 is estimated at 8.7 million tones:
• Sugarcane At 337.7 Million Tonnes,
• Oilseeds At 20.7 Million Tonnes And
• Cotton at 32.3 million bales of 170 kgs each.

What is the rank of India in terms of net crop land area?

• India ranks first, with 9.6 per cent (179.8 Mha) of the global net cropland area according to United States Geological Survey, 2017.

What are survey notes on Crops Diversification Programme?

• India ranks first, with 9.6 per cent (179.8 Mha) of the global net cropland area according to United States Geological Survey, 2017. Hence, India has tremendous potential for crop diversification and to make farming a sustainable and profitable economic activity. However, the pattern of cropping is determined by various factors like agro-climatic conditions, farm size, prices, profitability and government policies.
• Towards achieving a more diversified cropping pattern, the government is implementing the Crops Diversification Programme in original green revolution states viz. Punjab, Haryana and in Western UP, to diversify paddy area towards less water requiring crops. It will also help in mitigating the risks faced by farmers in terms of price shocks and production/harvest losses.

What are survey notes on PMKSY?

• Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) is being implemented in mission mode with the help of Command Area Development to complete 99 major and medium irrigation projects covering 76.0 lakh hectares in a phased manner by December 2019 to increase the coverage of irrigated area and thereby agricultural productivity.

What are survey notes on PMFBY?

• Pradhan Mantri Fasal Bima Yojana (PMFBY) which is a yield index based crop insurance scheme was launched in 2016. It has made substantisal progress with more ground coverage compared to erstwhile schemes.

What is the weight of eight core industries in IIP?

• The eight Core infrastructure supportive industries, viz. coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity have a total weight of nearly 40 per cent in the IIP.

What is the rating of India in Moody’s Investors Service?

• Moody’s Investors Service has raised India’s rating from the lowest investment grade of Baa3 to Baa2

What are survey notes on UDAY and Saubhagya?

• The Ujjawal DISCOM Assurance Yojana (UDAY) has focused on enhancing the financial health of DISCOMs by reducing interest burden, cost of power and aggregated technical and commercial losses.
• A new scheme, Saubhagya (Pradhan Mantri Sahaj Bijli Har Ghar Yojana), was launched in September 2017 to ensure electrification of all remaining willing households in the country in rural and urban areas.

What is the share service sector in GVA?

• With a share of 55.2 per cent in India’s GVA, the services sector continued to be the key driver of India’s economic growth, and is expected to contribute almost 72.5 per cent of GVA growth in 2017-18. While the growth of this sector in 2017-18 is expected to be at 8.3 per cent
• Out of the 32 States and Union Territories (UTs) for which data are released for new base (2011-12 series) by CSO, the services sector is the dominant sector contributing to more than half of the gross state value added (GSVA) in 15 states and UTs. Among these 32 states and UTs, Delhi and Chandigarh are at the top with over 80 per cent and Sikkim is at the bottom with 31.7 per cent, in terms of services sector GVA share.
• India remained the eighth largest exporter of commercial services in the world in 2016 (WTO, 2017) with a share of 3.4 per cent, which is double the share of India’s merchandise exports in the world.

What is the share of real-estate in India’s overall GVA?

• The share of real estate sector which includes ownership of dwellings accounted for 7.7 per cent in India’s overall GVA in 2015-16.

What are survey notes on Innovation?

• India currently ranks 60th out of 127 on the Global Innovation Index (GII) 2017, improving from 66th rank in 2016.
• According to the Global Competitiveness Report 2017-18, India’s capacity for innovation has been lower than that of many countries like the USA, the UK, South Korea, but it is better than that of China.
• However, in terms of patent applications per million population, India significantly lags behind other BRICS countries and in terms of company spending on R&D, India ranks marginally below China.

What is India’s share in global satellite launch services revenue?

• India’s share in global satellite launch services revenue has increased to 1 per cent in 2015-16 from 0.3 per cent in 2014-15.

What is the share of all India expenditure on social services as a percentage of GDP?

• The all India expenditure on social services as a percentage of GDP had remained in the range of 6 per cent during 2012-13 to 2014-15; and has increased from 5.8 per cent in 2015-16 to 6.6 per cent in 2017-18 (BE). The expenditure on social services as a percentage of GSDP for 29 States during the three years (i.e. from 2014-15 to 2016-17(BE)) indicates an upward trend from 6 per cent to 6.9 per cent.

What are survey notes on India: Health of the Nation’s States’, 2017-Report?

• The report ‘India: Health of the Nation’s States’, 2017 has for the first time provided comprehensive set of findings on the distribution of diseases and risk factors across all States of the country from 1990 to 2016.
  • Malnutrition still remains the most important risk factor (14.6 per cent) that results in disease burden in the country, though dropping substantially since 1990.
  • Of the total disease burden in India, 33 per cent was due to communicable, maternal, neonatal, and nutritional diseases (termed infectious and associated diseases) in 2016.
  • The contribution of non-communicable diseases has increased from 30 per cent of the total disease burden in 1990 to 55 per cent in 2016.

What are survey notes on Swachh Bharat Mission-Gramin ?

• Several studies have pointed out that there are health and economic gains from being Open Defecation Free (ODF) areas. According to the World Bank estimates, the lack of sanitation facilities costs India over 6 per cent of GDP.
• Taking cognizance of the role of cleanliness in healthy living, and to accelerate the efforts to achieve universal sanitation coverage, Government launched the Swachh Bharat Mission on 2nd October, 2014.

What are survey notes on Labour Reforms?

• The employment sector in India poses great challenge in terms of its structure which is dominated by informal workers, high levels of under employment, skill shortages and labour markets with rigid labour laws and institutions.
• In this context, the Government is in the process of rationalization of the 38 Labour Acts by framing relevant provisions of existing laws into 4 labour codes viz Code on Wages, Code on Industrial Relations, Code on Social Security & Welfare, and Code on Safety & Working conditions.

What are survey notes on India & Sustainable Development Goals?

• The UN Sustainable Development Goals (SDGs) adopted by the international community in September 2015 comprehensively cover social, economic and environmental dimensions and build on the Millennium Development Goals (MDGs). There are 17 SDGs which have 169 targets to be achieved by 2030.
• India presented its first Voluntary National Review (VNR) on the implementation of SDGs on 19th July, 2017 at the High Level Political Forum on Sustainable Development (HLPF) at United Nations, New York.
• The VNR report is based on an analysis of progress under various programmes and initiatives in the country. The VNR report focused on 7 SDGs:
• SDGs 1 (No Poverty); 2 (Zero Hunger); 3 (Good Health and Well-Being); 5 (Gender Equality); 9 (Industry, Innovation and Infrastructure), 14 (Life below Water) and 17 (Partnerships for the Goals)

What are survey notes on Pradhan Mantri Ujjwala Yojana?

• “Pradhan Mantri Ujjwala Yojana” (PMUY) in May, 2016 and upgraded it to provide 80 million LPG connections by 2020 to BPL households. Complementing the above scheme, Government has come out with other initiatives namely “Ujjawala Plus” which will address the cooking needs of deprived people who are not covered under the Socio-Economic Caste Census

What are survey notes on International Solar Alliance & India?

• International Solar Alliance (ISA), which was launched by Shri Narendra Modi, Hon’ble Prime Minister of India and Mr. François Hollande, former President of France on November 30, 2015 in Paris, entered into force on December 6, 2017.
• ISA is a coalition of solar resource rich countries lying fully or partially between the Tropics of Cancer and Capricorn and aims to specifically address energy needs by harnessing solar energy. ISA is also the first International inter-governmental treaty-based organization headquartered in India.
• Currently, 46 countries have signed and out of these, 19 countries have ratified the ISA Framework Agreement.

What are survey notes on National Action Plan on Climate Change?

• India is implementing the National Action Plan on Climate Change (NAPCC), which includes eight national missions covering solar, energy efficiency, agriculture, water, sustainable habitat, forestry, Himalayan eco system and knowledge, apart from various other initiatives. These actions reflect its commitment to address climate change.