Economic Survey 2016-17: Eight Interesting Facts About India
The survey 2016-17 has put together eight interesting facts, which actually hint towards larger issues related to the country. These facts are as follows:
1. The work-related migration in India is increasing
The Railway passenger traffic data reveals that around 9 million people migrate for work within the country annually. This is double of what was suggested by 2011 census.
2. Rating agencies follow dubious practice in sovereign ratings
India’s rating by rating agencies such as “Standard & Poor’s” is questionable. Why? They have upgraded China’s rating since 2010 despite of a historic credit expansion and record credit-GDP ratio of that country. On the other hand, despite of dramatic improvement in growth and macro-economic stability since 2014 in India, the rating has been kept unmoved at BBB-. Thus, the survey slams the S&P for its double standard and not considering India for a ratings upgrade.
3. Welfare scheme in India suffer from acute misallocation
The poorest districts in the country have greatest shortfall of funds. The poorest districts in many states have received least / insufficient funds. The survey says that the districts accounting for the poorest 40% receive 29% of the total funding.
4. India is largely as tax non-compliant country
India has 7 taxpayers for every 100 voters ranking us 13th amongst 18 of our democratic G-20 peers. Thus, while we are a political democracy, we are far away from fiscal democracy.
5. India is fast approaching its demographic dividend peak
They survey points that India’s demographic dividend will peak by 2020; as the share of working age to non-working age population is to reach its max by that year. It also points out the peninsular states would be peaking sooner than the hinterland states.
6. India’s Trade-GDP Ratio is now greater than China
Since 2011, India’s trade-GDP ratio [aka openness] has overtaken that of China. This is interesting because so far, China is known for using trade as engine of growth.
7. Spatial dispersion in income is rising
The survey points out that spatial dispersion in income in the country is still rising, the poor becoming more poor and richer becoming richer. The forces of convergence are still elusive in the country
8. Property Tax Potential Unexploited
The survey says that governments in India have been not able to exploit the property tax. We note here that the previous economic surveys have also advocated higher property taxes in the country to improve “local government finances”.
