Economic Survey 2015-16

Economic Survey 2015-16 

 

Press Information Bureau
Government of India
Ministry of Finance
26-February-2016 12:29 IST

Economic Survey 2015-16 highlights need for more investment in Human Capital, expresses concern at declining educational outcomes, emphasizes importance of improving efficiency in delivery of services in the health sector.

TheEconomic Survey 2015-16, presented in the Parliament today by the Union Finance Minister Shri Arun Jaitley, states that the social infrastructure scenario in the country reflects gaps in access to education, health and housing amenities. Inclusive growth in India requires bridging gaps in educational outcomes and improved health attainments across the population.

As India capitalizes on the ‘demographic dividend,’ Economic Survey 2015-16 states that increasing investment in human capital is a key requirement to improve productivity of the population says the Economic Survey. The Economic Survey 2015-16 states that the total expenditure on Social Services including Education, Health, Social Security, Nutrition, Welfare of SC/ST/OBC etc. during 2014-15 (RE) was 7 % of GDP while it was 6.5% during 2013-14.

On the education front, the declining educational outcomes reflected in lower reading levels in both public and private sector schools are areas of concern. According to Annual Status of Education Report (ASER) 2014, there is sharp decline between 2007 to 2014 in the number of children in Standard V who can read a textbook of Standard II, in both government and private schools.

Economic Survey 2015-16 states that the Gender Parity Index (2013-14 Provisional) however, shows an improvement in girls’ education, with parity having been achieved between girls and boys at almost all levels of education. The Government has taken several steps to provide education to underprivileged, vulnerable and marginalized people such as SCs, STs, other Backward Classes (OBC) including Minorities and other Economically Backward Classes through various programmes of education. ‘Digital Gender Atlas for Advancing Girl’s Education in India’ was launched last year to help identify low-performing geographic pockets for girls, particularly from marginalized groups. A number of scholarship schemes to encourage enrolment and learning levels among different groups are in operation. National Scholarship Portal, a single window system for various types of scholarship schemes administered by different Ministries/Departments has been introduced under Direct Benefit Transfer (DBT) mode. During 2015-16, about 90 lakh Minority students are to be benefited under the Pre-matric, Post-matric and Merit-cum-Means scholarship schemes, while about 23.21 lakh SC students benefited under Pre-matric, 56.30 lakh under Post-matric and 3354 under the Rajiv Gandhi National Fellowship including the Top Class Education scholarship scheme are to be assisted.

Another aspect of human capital is the health attainments of the population. The expenditure on health as a percentage of total expenditure on social services increased from 18.6% in 2013-14 to 19.3% in 2014-15 (RE) and 19.5% in 2015-16 (BE).

The Economic Survey reports that the ‘under five mortality’ has declined from 126 in 1990 to 49 in 2013. As per NFHS-4, the percentage of children fully immunized in the age group (12-23 months) is above 80 per cent in Sikkim and West Bengal. All the 12 states surveyed have more than 50 per cent children fully immunized. Similarly under Mission Indradhanush, 352 districts of the country have been covered with 20.8 lakh children and 5.8 lakh pregnant women immunized in the first phase. 17.2 lakh children and 5.1 lakh pregnant women have been immunized in the second phase and 17 lakh children and 4.8 lakh pregnant women immunized in the third phase of the Mission Indradhanush.

Besides continuing support to existing interventions, initiatives such as Rashtriya Bal Swasthya Karyakram (RBSK) and Rashtriya Kishor Swasthya Karyakram’ (RKSK) have been launched in 2013 and 2014 respectively under the NHM to provide comprehensive health care. Considering the rising incidence of Non-Communicable Diseases (NCSs), the Government of India has initiated an integrated National Programme for Prevention and Control of Cancers, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) jointly by the Ministry of Health and Family Welfare and Ministry of AYUSH (Ayurveda, Yoga, Unani, Siddha and Homeopathy) on pilot basis in six districts.

Economic Survey 2015-16 states that the immunization coverage of children, health of pregnant women, declining role of public health delivery systems and the lack of adequate skilled personnel are the main challenges in the health sector at present. Health and access to sanitation/housing amenities are closely related issues which can improve the productivity and living environment of the population to a great extent. There are persistent regional disparities in access to housing and sanitation facilities with some States lagging behind with less than 25 per cent coverage in sanitation facilities.

The Way Forward

The Economic Survey 2015-16 points out the need to focus on the quality of education in both the public and private sectors. There is need for professionally qualified and trained teachers to improve educational outcomes. To strengthen the delivery of public health services and infrastructure facilities, both public investments and leveraging of private investments are necessary. The adoption of technology platforms and innovative models by leveraging Jan-Dhan-Aadhaar-Mobile (JAM) scheme can improve the efficiency in delivery of services.

 

7- 7.75% growth in 2016-17: Key Highlights of Economic Survey 2016

Ahead of the Union Budget 2016, the Hon’ble Finance Minister Shri Arun Jaitley tabled todayEconomic Survey Report 2016in the Parliament, outlining the broad direction of the Union Budget 2016 and the economic performance of the Country.

A flagship annual document of the Ministry of Finance, Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programmes, and highlights the policy initiatives of the Government and the prospects of the economy in the short to medium term.

Economic Survey 2016 termed external environment as challenging but projected a 7-7.5% GDP growth rate in the next fiscal which could accelerate to 8% in a couple of years.

“One of the most critical short term challenges confronting the Indian economy is the twin balance sheet problem — the impaired financial positions of the public sector banks and some corporate houses. The twin balance sheet challenge is the major impediment to private investment and a full-fledged economic recovery,” the Survey said.

The Economic Survey 2016 has also expressed concern over approval of Goods and Services Tax Bill being elusive so far.

We are sharing with you the key highlights of the Economic Survey 2016:

Economic Outlook, Prospects and Policy Challenges: With reforms in key areas, there is reduction in Macro-Vulnerability today

• Rates of 8% or Higher Expected in the next couple of years as there is Macro-Economic Stability now;

• India must plan for major currency readjustment in Asia;

• Expecting continued good performance by Industrial, Corporate & Infrastructure Sectors due to recent reforms;

• Indian equity market relatively resilient compared to other major emerging market economies;

• Better off taking the benefit of subsidies; recommends interventions and rectification;

• Spread JAM (Jan Dhan Yojana, Aadhaar, Mobile) across economy to improve lives of poor;

• Making investments in maternal nutrition and sanitation and changing social norms to enhance their effectiveness can help to exploit the country’s demographic dividend;

• Economy will continue to weather global sluggishness with resilience; outlook of multilateral institutions positive for India.

Fiscal Deficit

• 2016-17 expected to be challenging from fiscal point of view; time is right for a review of medium-term fiscal framework;

• 2015-16 fiscal deficit, seen at 3.9% of GDP, seems achievable;

• Credibility and optimality argue for adhering to 3.5% of GDP fiscal deficit target.

Inflation

• CPI inflation seen around 4.5 to 5% in 2016-17;

• Low inflation has taken hold, confidence in price stability has improved;

• Expect RBI to meet 5% inflation target by March 2017;

• Prospect of lower oil prices over medium term likely to dampen inflationary expectations

• 7th pay commission recommendations not likely to destabilise prices; to have little impact on inflation.

Current Account Deficit

• 2016/17 current account deficit seen around 1-1.5% of GDP.

Currency

• Rupee’s value must be fair, avoid strengthening; fair value can be achieved through monetary relaxation

• India needs to prepare itself for a major currency readjustment in Asia in wake of a similar adjustment in China;

• Rupee’s gradual depreciation can be allowed if capital inflows are weak.

Taxes

• Tax revenue expected to be higher than budgeted levels in 2015-16;

• Proposes widening tax net from 5.5% of earning individuals to more than 20%;

• Survey says that the promise to reduce corporate tax to 25% from 30% should be recalled

• Favours review and phasing out of tax exemptions; easiest way to widen the tax base not to raise exemption thresholds;

• GST rollout to mark an unprecedented reforms measure in the modern global tax history.

Banking & Corporate sector

• Estimated capital requirement for banks likely around 1.8 trilion rupees by 2018-19;

• Corporate, bank balance sheets remain stretched, affecting prospects for reviving private investments;

• Underlying stressed assets in corporate sector must be sold or rehabilitated;

• Government could sell off certain non-financial companies to infuse capital in State-run banks;

• Government proposes to make available 700 billion rupees via budgetary allocations during current and succeeding years in banks.

Agriculture and food management

• India ranks first in Milk production, accounting for 18.5% of world production;

• India recording a growth of 6.26 % whereas World Milk production increases by 3.1%;

• Egg and fish production has also registered an increasing trend over the years;

• Fertiliser subsidy should shift to direct cash transfer;

• Agriculture sector needs a transformation to ensure sustainable livelihoods for the farmers and food security;

• Percentage share of horticulture output in agriculture is more than 33%.

Services sector

• Services sector remains the Key Driver of Economic Growth contributing almost 66.1% in 2015-16;

• Growth in the services sector moderated slightly, but still remains robust.

• Emphasized the importance of improving efficiency in delivery of services in the health sector;

• Need for more investment in human capital, concerned over declining educational outcomes;

• There has been a rising trend in FDI equity inflows to the services sector in the first seven months of 2015-16 with FDI inflows growing by 74.7%.

Power sector

• Impressive strides made in the power sector in the last two years;

• 2014-15 marked the highest ever increase in generation capacity: 26.5 GW, much higher than the average annual addition of around 19 GW over the previous five years;

• Capacity enhancements have brought down the peak electricity deficit to its lowest ever level of 2.4%;

• Renewables have received a major policy push. Targets have been revised from 32 Gigawatts to 175 Gigawatts by 2022;

• Time is ripe to allow industries with higher power demands to absorb excess generation capacity through “Open Access” to energize “Make in India”;

A progressive tariff structure can reduce costs for the poor without unduly burdening the rich.

 

Click the following link to read the full text of Economic Survey 2015-16

http://indiabudget.nic.in/#sthash.7rJinOct.dpuf

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