Economic Survey Draws Attention to 10 New Economic Facts

Economic Survey Draws Attention to 10 New Economic Facts on Indian Economy 

The Economic Survey presented by the Union Finance Minister Shri Arun Jaitley in Parliament today has relied upon analysis of the new data to highlight ten new economic facts:

 

1.      Goods and Services Tax (GST) has given a new perceptive of the Indian economy and new data has emerged.  There has been a fifty percent increase in the number of indirect taxpayers. There has also been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises wanting to avail themselves of input tax credits.

 The Survey also stated that fears of major producing states that the shift to the new system would undermine their tax collections have been allayed as the distribution of the GST base among the states got closely linked to the size of their economies.

Similarly, there has been an addition of about 18 lakh in individual income tax filers since November 2016.

2.      India’s formal sector, especially formal non-farm payroll, is substantially greater than what it currently is believed to be. It became evident that when “formality” was defined in terms of social security provisions like EPFO/ESIC the formal sector payroll was found to be about 31 percent of the non-agricultural work force. When “formality” was defined in terms of being part of the GST net, such formal sector payroll share was found to be 53 percent.

3.      For the first time in India’s history, data on the international exports of states has been  dwelt in the Economic Survey.  Such data indicates a strong correlation between export performance and states’ standard of living.  States that export internationally and trade with other states were found to be richer.  Such correlation is stronger between prosperity and international trade.

4.      India’s exports are unusual in that the largest firms account for a much smaller share of exports than in other comparable countries. Top one percent of Indian firms account only for 38% of exports unlike in other countries where they account for substantially greater share – (72, 68, 67 and 55 percent in Brazil, Germany, Mexico and USA respectively).  Such tendencies were also found to be true for the top five or ten per cent of the Indian companies.

5.      It was pointed out that the Rebate of State Levies (ROSL) has increased exports of ready-made garments (man-made fibers) by about 16 per cent but not of others.

6.      The data highlighted another seemingly known fact that Indian society exhibits a strong desire for a male child.  It pointed out that most parents continued to have children until they get number of sons.  The survey gave details of various scenarios leading to skewed sex ratios and also gave a comparison on sex ratio by birth between India and Indonesia.

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7.      The survey pointed out that tax departments in India have gone in for contesting against in several tax disputes but also with a low success rate which is below 30 per cent. About 66 per cent of pending cases accounted for only 1.8 per cent of value at stake.   It further stated that 0.2 per cent of cases accounted for 56 per cent of the value at stake.

8.       Extrapolating the data the survey indicated that growth in savings did not bring economic growth but the growth in investment did.

9.      The survey mentions that collections of direct taxes by Indian states and other local governments, where they have powers to collect them is significantly lower than their counterparts in other federal countries. A comparison has been given between ratios of direct tax to total revenues of local governments in India, Brazil and Germany.

10.  The survey captures the footprints of climate change on the Indian territory and consequent adverse impact on agricultural yields.  Extreme temperature increases and deficiency in rainfall have been captured on the Indian map and the graphical changes in agricultural yields are brought out from such data.  The impact was found to be twice as large in un-irrigated areas as in irrigated ones.

– PIB Delhi, 29 JAN 2018

Indian economy projected to grow by 7.7% in FY 2017: UN report

Indian economy projected to grow by 7.7% in FY 2017: UN report

Indian economy is projected to grow by 7.7 per cent in 2017 fiscal year, remaining the fastest growing large developing economy, as it benefits from strong private consumption and gradual introduction of significant domestic reforms, a United Nations report said.

The United Nations World Economic Situation and Prospects (WESP) 2017 report said India’s economy is projected to grow by 7.7 per cent in fiscal year 2017 and 7.6 per cent in 2018, benefiting from strong private consumption.

Indian economyChina’s growth on the other hand is projected to remain stable at 6.5 per cent for fiscal years 2017 and 2018, supported by favorable domestic demand and accommodative fiscal measures, including off-budget fiscal support through policy banks and public-private partnerships.

However the implications of China’s ongoing economic rebalancing will inevitably be felt by the region in the medium and long-run through trade (including commodity prices) and financial channels, albeit to a varied extent across countries, the report added.

The report, UN’s flagship publication on expected trends in the global economy, comes just a day after the International Monetary Fund cut India’s growth rate for the current fiscal year to 6.6 per cent from its previous estimate of 7.6 per cent due to the “temporary negative consumption shock” of demonetization.

The World Bank too decelerated India’s GDP growth for 2016-17 fiscal to 7 per cent from its previous estimate of 7.6 per cent citing the impact of demonetization. The UN report does not make any mention of the withdrawal of the high-denomination 500 and 1000 currency notes by the Indian government nor its impact on the country’s economic growth.

The report said India has positioned itself as the most dynamic emerging economy among the largest countries and is expected to remain the fastest growing on the back of robust private consumption and significant domestic reforms gradually being implemented by the government. It estimated that in the 2016 fiscal, India grew by 7.6 per cent.

In India, “investment demand is expected to slightly pick up, helped by monetary easing, government efforts towards infrastructure investments and public-private partnerships, and the implementation of domestic reforms such as the introduction of the Goods and Services Tax (GST) Bill,” the report said.

It added that the GST reform constitutes a “major change” by establishing a new uniform tax rate.

The reform should promote investment in the medium term through lower transaction and logistic costs and efficiency gains. Its effective implementation requires adequate capacity building of the tax administration.

-The Economic Times, January 18, 2017

Indian economy to grow 6.8% in 2016-17, says Icra

7.1% GDP estimate erroneous, Indian economy to grow 6.8% in 2016-17, says Icra

7.1% GDP estimate erroneous, Indian economy to grow 6.8% in 2016-17, says Icra

These are testing times for the Modi government, though it is fighting against odds in curbing corruption and triggering growth engine of the economy.

The arsenal thrown at government this time has come from domestic rating agency Icra, and not from the Opposition camp.

IANS reported Icra’s claim that advance estimate of 7.1 percent GDP released by Central Statistical Organisation (CSO), will have major errors as it does not include the data for the months after demonetisation.

The agency on Friday pegged the expected growth for 2016-17 lower at 6.8 percent.

 “Given the impact of demonetisation on actual activity from mid-November 2016 onward, projecting GDP growth for the full year by extrapolating the trends up to October 2016 for several sectors, may introduce more errors than in earlier years. This would be particularly apt for cash intensive sectors such as construction,” Icra said in a statement.

The advance estimates released by the CSO of growth in FY2017 are unsurprising, as they draw heavily from the available data for the first half of this fiscal, it said.

“However, Icra expects GDP (gross domestic product) and GVA (gross value added, which excludes taxes and subsidies) growth for FY2017 at 6.8 per cent and 6.6 per cent respectively, appreciably lower than the advance estimates,” it said.

The CSO pegged the country`s gross domestic product at 7.1 per cent in 2016-17 compared with 7.6 per cent in 2015-16.

The anticipated growth of real GVA in 2016-17 is 7 per cent against 7.2 per cent in 2015-16, according to CSO estimates.

“The growth in deposits is an outlier, hence November data was not used for the financials,” India`s Chief Statistician T. C. A. Anant had said, implying that demonetisation is not a normal factor in the calculation of annual national income.

Icra said: “Given the unfolding trends, we expect actual FY2017 growth to be lower than the advance estimates for sub-sectors such as manufacturing, agriculture, electricity and construction.”

In contrast, the recent uptick in commodity prices may well result in a somewhat improved GVA performance of the mining sector in H2 FY2017 as compared to the year-on-year decline in the first six months of FY2017, the agency added.

“Moreover, the unavailability of corporate filings for third quarter of FY2017 and second advance estimates of rabi output (as opposed to the available data on sowing), are likely to constrain the accuracy of the advance estimates,” the statement said.

While rabi sowing has grown by a healthy 7 percent on a subdued base, activity and incomes related to non-crop agricultural sectors including horticulture and livestock may have been adversely impacted by the liquidity crunch, it added.

-January 7, 2017, New Delhi

 

Demonetisation is a Big Bang reform: Surjit Bhalla

Demonetisation is a Big Bang reform

By: Surjit Bhalla

One of the more endearing, and enlightening, acronym that the Indian upper class has come up with is PLUs—People Like Us. Both the Indian, and Western PLUs have been clamouring for Big Bang reforms for the last two and a half years. The demand had a lot of merit—for the first time in 25 years, there was a government with a clear majority in the Lok Sabha. While several economic reforms were initiated since May 2014, and by my calculation more than the cumulative set of reforms since (but not including 1991), the PLUs were not satisfied and bayed for more—yeh “liberal” maange more. Finally, when PM Modi delivered the Big Bang, the PLUs were so deafened that they refused to see the writing on the reform wall.

DemonetisationBut why did the intelligentsia and mainstream media (domestic and especially foreign) did not see that demonetisation was (obviously) part of a BIG Bang reform? For one simple reason—the battle is ideological, and has precious little to do with the content of reform. And PLUs ideology dictates that whatever any non-Congress government does, has to be wrong, immoral, and illiberal. Soon after the May 2014 election, I suggested that the big story of the election was the forthcoming battle between the old elite, and the new, yet to be formed, elite. A battle between the established middle class, and the new middle class. A battle between the amoral naam-ke-waste liberal policies of the last 70 years, and a vision, and accompanying policies, for a transformed India.

Demonetisation 2016 only confirms that the battle of the elites is the one forecast I did get right. The old elite keeps stating three arguments in support of their defense that demonetisation has been a failure. The first, Rottweiler like, that demonetisation has failed because most of the old banned notes have been deposited in banks. The purpose of demonetisation, according to PLUs and their voting outlet, the Congress, was that a large chunk (possibly R2-4 lakh crore) of banned notes would not return to the system. The fact that money not returned is likely to be lower than the lowest estimate means that D-policy has failed. But who said that this was even a minor goal of demonetisation? The old elite, of course.

The second focus of the ideological view that D-policy has been a failure is the botched-up implementation. To repeat this as the reason to reject D-policy is myopia of the worst kind. Of course, implementation has been bad; even the government (and RBI) admits to it, as revealed by the much noted fact that the government has changed policy on a daily basis. Having noted this dog bites man fact, let us proceed. If the government had all the time in the world, of course the implementation would have been as perfect as the Kumbh Mela or the annual Republic Day parade. Secrecy was required, and there is a near certain likelihood that D-day was preponed because the secret was getting out. So, can one really call it a botch-up? If you are the old elite, then what other weapon have you got to disagree, complain, and question?

But there is a third option. Document and rightfully complain about the fact that people, especially poor people, have been inconvenienced—they have to stand in queues with no return (all puns intended). This is not surprising, even though it is revolting. The Left-liberal apologists for the rich have always shot-off the backs of the bottom half. This half has been hurt by D-policy in terms of jobs lost, and income not received. What is remarkable is that not only have they not complained about this genuine loss, but they have verbally, actively, and in the poll booth supported the Big Bang initiative.

The bottom 90% realises that those hurt by D-policy are the old elite, amongst whom are a large proportion of those gaming the system by laundering their black money via the other 90 %. A truly shocking fact just revealed by the government is that 6 million units (individuals, small firms and NGOs) have deposited a total of R7 lakh crore of the banned notes. That is an average of R11 lakh (or $15,000) per unit.

I would like to hear from the PLUs—how many elites do they know in the Western world who keep an average of $15,000 of cash at home? These very same elites had opposed demonetisation on the grounds that there was very little black cash in the economy because the bad rich were too smart to have any black cash. The fact that there was a lot of extra cash in the economy has two immediate implications. The government must continue with its policy of limiting cash withdrawals after December 30—no more than R1 lakh per individual and no more than R5 lakh per firm. Second, that no more than say R11 lakh crore of new cash (a comfortable excess of what is really required) of the banned R15.4 lakh crore should be printed. These are important steps to foil any attempts to keep the old order, and to encourage the ringing of the new.

India 2016 is very likely to go down in history as comparable to China 1978. Fifty days later after D-day is too soon to pass judgement. One hundred and fifty days later the transformative power of D will (hopefully) become obvious.

Courtesy: financialexpress.com,  December 31, 2016

http://www.financialexpress.com/opinion/demonetisation-is-a-big-bang-reform-surjit-bhalla/491906/

Economy on ‘upward curve’, monsoon, GST to push growth: Jaitley

Economy on ‘upward curve’, monsoon, GST to push growth: Jaitley 

With India retaining the fastest growing large economy tag post latest GDP numbers, Finance Minister Arun Jaitley today said the country is on an “upward curve” and a good monsoon, GST passage and increased infra and rural spending will further accelerate the growth.
With pro-growth policies helping gross domestic product grow a faster-than-expected 7.9 per cent in January-March quarter and 7.6 per cent in the entire 2015-16 fiscal, he asserted that these are not “stray figures” and an analysis of the pattern shows inherent strength in the economy.
Also aiding was the growth in output of eight core sectors growing 8.5 per cent in April on the back of pick up in output of refinery products, fertilisers, steel, cement and electricity.
“Last two years, a number of factors were loaded against us – there was a global slowdown and we had two consecutive below normal monsoon rainfalls,” he said, adding that people are surprised how India has managed to grow at the fastest pace in the world.
Going forward, “reform process is going to continue. Hopefully, Goods and Services Tax (GST) bill is passed (in ensuing monsoon session of Parliament), which has the potential to add to GDP growth. Also, our infrastructure and rural spending will add to that,” he said commenting on the latest GDP numbers.
On the forecast of a good monsoon this year, Jaitley said it “would mean an increase in agriculture production, more purchasing power and rural demand.”
On the growth clocked in 2015-16, Jaitley — who is on a six-day investor wooing tour of Japan — said, there was improvement in the agriculture as well as the services sector. “More importantly, there is a consumer demand and there is increased consumer spending,” he added.
The GDP expansion in January-March period bettered 7.2 per cent of December quarter and helped extend the lead over China, which grew 6.7 per cent in the March quarter – the slowest in the world’s second largest economy in seven years.
Earlier speaking at a meeting organised by Japan-India Business Cooperation Committee, he said investors looking for higher returns should park funds in India’s infrastructure and manufacturing sectors.
“As growth would return to the world, consumer spending would pick up, hopefully the monsoons would be better, this trend which has been set in India itself could be improved upon. That we are on an upward curve seems evident,” he said.
-01 June 2016 | PTI | Tokyo

India has its hands full in implementing key reforms: Jaitley

India has its hands full in implementing key reforms: Jaitley

 

India has its “hands full” in bringing about structural changes and implementing key reforms to boost economic growth, Finance Minister Arun Jaitley has said and hoped that the country will be able to improve its growth this year from the 7.6 per cent achieved last fiscal.

Outlining the direction forward for the Indian economy in his address at the Asia Society here yesterday, Jaitley said the country still requires a lot of structural changes and the government has taken steps to ease processes, make the business environment easier and bring in greater transparency into the system.

Jaitley expressed hope that the bankruptcy law would be approved over the next few weeks and said the government “is in the final stages” of passing a law that deals with commercial indebtedness.

The government has also changed arbitration laws, amended some of the “onerous provisions” of the Companies Act and will bring down corporate tax to 25 per cent over the next couple of years.

On indirect taxes, he said India is in the “last stages” before the Goods and Services Tax (GST) is approved by the Parliament and then with supporting legislations, it actually gets into implementation.

“I think we have all our hands full, the next couple of years bringing about each one of these structural changes. In addition to this, two significant directions which I have followed are increased expenditure in infrastructure and in rural India.

“These are the two areas which were lacking and these appear to be the focus area. That probably will be the direction of the economy in the next few years,” Jaitley said.

He said the world at the moment still faces serious challenges and India cannot “immune” itself from most of the challenges.

He however expressed hope that the country will be able to register improved economic growth this year as compared to the previous fiscals.

“Notwithstanding that we have consistently even in the slowdown environment grown by about 7 per cent, 7.2 per last year, 7.6 this fiscal which ended a few days ago and hopefully this year we could improve on that data,” he said in his address on ‘Make in India- the New Deal’ hosted by CII and the Asia Society Policy Institute.

Jaitley underscored that while India has done fairly well in an environment of global economic challenges, it has the potential to grow even faster.

“I have always believed that given by global standards in a slowdown environment, India is doing significantly well. But given by our own standards and our expectations of being able to grow faster, eradicate poverty and transform into a developed country, we probably can do a little better,” he said, adding that steps that are being taken in this regard to help India register faster economic growth.

“Each one of these steps is now bringing structural changes, bringing in more investment, better amenities in the rural areas, more infrastructure, creating the groundwork for the Indian economy itself to now concentrate on manufacturing,” Jaitley said.

He said legislations like the Goods and Services Tax (GST) are capable of adding to the India’s growth story and the fact that a good monsoon has been predicted after two bad ones “itself has a very positive impact as far as the economy is concerned.

“A good monsoon in turn will also improve upon domestic demand. And if a series of these factors within the country takes place, notwithstanding the slowdown of exports which is essentially on account of global slowdown, we are capable of improving upon our present growth figures which last year seems to have been at around 7.6 per cent,” he said.

Jaitley said there has been “significant transformation” in India and the country is “better off” than it was a few years ago.

“What was being referred to as policy paralysis is now referred to as the bright spot,” he said, adding that the government took decisions in its initial years to open up FDI in segments like defence, railways, real estate and food processing and simplified procedures so that investments become more attractive.

He said another “important advantage” that has taken place is “decisiveness” despite the noise of democracy.

“When the decisions by the executive are required, India has now recently shown a tendency to decide quickly. Decisions don’t hang around for a long period of time,” he said.

Describing the other “great transformation” that has taken place in the country, Jaitley said there was a “great stigma” that decision-making was not transparent in India and “where there could be some decisions taken for collateral reasons.

“That is all something that belongs to the past now. Government discretion in allocation of resources have virtually been completely eliminated and replaced by a market mechanism. That has also added to the credibility of the decision making process in India,” he said.

He said another challenge for the government was how to bring administration and the tax levels in India down to global levels.

“This was another area where India had earned a significantly bad name, that it was a very difficult jurisdiction to deal with. Taxation policy was unpredictable and this concerned both domestic and international investors.

“It was extremely important in the initial years for the government to put these fears (to rest) of retrospective taxes and arbitrary changes in the taxation policy, because investors always prefers consistency and stability and don’t want to be taken by surprise by a future decision,” he said.

He said direct taxes are being brought down to 25 per cent and while “some initial baby steps have been taken”, over the next 1-2 years as exemptions get phased out, more significant steps will be taken.

Highlighting the infrastructure development that has taken place, Jaitley said 233 national highways are under construction and expenditure on rural roads now is three times than what India was spending earlier.

In railways also, the target is to develop 400 railways stations in India over the next 2-3 years and emphasis is being given on developing regional airports. In rural areas also, focus is being given to irrigation and electrification programmes.

He said the government is focussed on expanding manufacturing activity in a very large number of areas and its target of increasing the manufacturing share in the Indian economy “is reasonably realisable”.

“The process of reforms when added to these existing opportunities open up the economy for investment, allows people to invest in sectors like the railways, defence, food processing that otherwise had not been encouraged in the past provides a great opportunity,” he said.

When asked about climate change, he said India, notwithstanding its development need, is completely committed to protecting the climate.

“The level of development we have reached is far, still the hard reality is we have a lot of distance to cover. We need more housing, power, toilets, roads  and factories. Therefore our requirements of fuel is certainly going to increase. Notwithstanding that our own standards of protecting the environment are very rigid.

“There is a method in each one of the steps we are taking,” like taxing oil, cess on coal and emphasis on alternative renewable energy.

“We are conscious of our responsibilities,” he said.

-19 April 2016 | PTI | New York

FDI inflows rise 40% on Make in India initiative: Economic Survey

FDI inflows rise 40% on Make in India initiative: Economic Survey

Foreign direct investment in India has received a dramatic boost from the launch of the Make in India initiative, according to the latest Economic Survey

Foreign direct investment (FDI) in India has received a dramatic boost from the launch of the Make in India initiative, according to the latest Economic Survey.

After the September 2014 launch of the initiative, which seeks to promote manufacturing and attract foreign investment, there was an almost 40% increase in FDI inflows from October 2014 to June 2015 over the year-ago period.

Under the programme, the government has awarded 56 defence manufacturing permits to private sector entities in the past one year, after allowing 49% FDI in the defence sector in August 2014, compared with 47 granted in the preceding three years.The major objectives behind the Make in India initiative are job creation and skill enhancement in 25 sectors of the economy. Photo: AP

Entities from several countries such as Japan, China, France and South Korea announced their intention to invest in India in various industrial and infrastructure projects.

“The concept of Make in India has really succeeded as it added more employment. With this, India has now become a vibrant market for manufacturers. For the products that are made out of the initiative, we have a strong domestic market with increasing demand. I believe that infrastructure sector is where foreign investments can come in a big way,” said Dipankar Dasgupta, former professor of economics at the Indian Statistical Institute.

The major objectives behind the Make in India initiative are job creation and skill enhancement in 25 sectors of the economy, including automobiles, aviation, biotechnology, chemicals, construction, defence manufacturing, electrical machinery, electronic systems and mining.

According to the Department of Industrial Policy and Promotion, FDI inflows under the approval route (which requires prior government permission) increased by 87% during 2014-15 with an inflow of $2.22 billion. More than 90% of FDI was through the automatic route.

Also in 2014-15, foreign institutional investment rose by an unprecedented 717% to $40.92 billion.

A state-wise analysis of FDI inflows by the economic survey shows that Delhi, Haryana, Maharashtra, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh together attracted more than 70% of total FDI inflows to India during the last 15 years.

States with vast natural resources like Jharkhand, Bihar, Madhya Pradesh, Chhattisgarh and Odisha have lagged behind.

“To make the recently launched Make in India initiative a success, the states will have a critical role in facilitating FDI in different sectors,” the survey said.

Singapore, Mauritius, the Netherlands and the US account for the major share of FDI inflows into India. Out of FDI equity inflows of $24.8 billion during 2015-16 (April-November), more than 60% came from two geographically small countries—Singapore and Mauritius.

“These inflows need perhaps to be examined more closely to determine whether they constitute actual investment or are diversions from other sources to avail of tax benefits under the Double Tax Avoidance Agreement that these countries have with India,” the economic survey said.

– Shine Jacob, Feb 27 2016

Courtesy- http://www.livemint.com/

IT highest-paying sector in India: Study

IT highest-paying sector in India: Study

NEW DELHI: Information Technology sector employees get the highest pay in India with a median gross hourly salary of Rs 346.42, while those in the manufacturing sector get paid the least at Rs 254.04, says a report.

According to Monster Salary Index (MSI), the IT sector is the highest paying sector in India, but only 57.4% are satisfied with their salary.

BFSI sector comes in second with a median salary of Rs 300.23. The relatively higher remuneration reflects the high level education of workers with 16-17 years of schooling, the report noted.

“The IT and BFSI sectors have always been among the highly paid in India but it is surprising that over 50% of employees in both these sectors are least satisfied with their salaries,” Sanjay Modi, Managing Director of Monster.com India said.

Notwithstanding, the government’s focus towards the sector through its Make in India initiative, manufacturing sector is paid the least, as employees in this segment are paid about 9% lesser than the median salary for the entire Indian economy taken together at Rs 279.

PTI | Feb 15, 2016, 03.17 PM IST

 

 

 

India only economy not affected by global economic crisis: PM

India only economy not affected by global economic crisis: PM

India is the only economy which has not been affected by the global economic crisis which has hit the world, primarily due to the policies being implemented by the government, Prime Minister Narendra Modi said today.

“Everyone is saying this… The World Bank, the IMF. The world is going through an economic crisis, but it is India alone that is progressing at a rapid pace. This is a unique situation when the whole world is slipping and India is growing,” Modi said at a function organised to mark the 140th birth anniversary of social reformer Dayanand Saraswati.

“People across the world are saying that the steps taken by the government (have led to) India becoming the fastest growing economy among the larger economies of the world,” he said.

“One thing can free us from our problems, from poverty, from lack of education and that is development,” Modi said, while referring to his government’s socio-economic programmes like Mudra and Skill Development.

“Over two crore people have benefitted through MUDRA Yojana and over Rs one lakh crore has been disbursed to them. Financial support has been given to people and we have faith in them,” Modi said.

Noting that 60 per cent of India’s population was below 35 years of age, he said India was the “youngest nation in the world.

“The government’s focus is on how to convert the power of the youth which can used for development of the nation. Therefore, we not only launched a skill development programme for the youth but also created a new ministry, with its own budget and a set of officers to take the programme forward,” the Prime Minister said.

By 2030, when the population of many countries will grow old and when they require work force, India can power these nations with skilled and technically qualified manpower, he said.

“Apart from having certificates in their hands, our youth must be skilled,” he said and exhorted the youth to “pick up any one idea and work on it…Let India’s strength at the world stage increase through that idea you pick.”

Observing that many people have said that 21st century would be India’s century, the Prime Minister said this century is the “era of knowledge” and India has always led the world in knowledge.

He called upon the youth to take a pledge to enhance India’s prestige in the world fora through their skills and knowledge.

“There is the public sector and the private sector. We want to introduce another sector – the personal sector. We want the people to be self-sufficient and self-employed to be become job creators and not job seekers,” Modi said.

Maintaining that his government had introduced schemes to make the youth and the people self-sufficient, he spoke of the Jan Dhan Yojana and said over Rs 30,000 crore were deposited in the accounts through this scheme.

“When we launched Jan Dhan Yojana and told people that they can open zero balance accounts, it was my desire that poorest of the poorer should have an account in the bank. 60 per cent people were without bank accounts. We decided on the zero balance account, but people volunteered and put Rs 5 to Rs 10 in these accounts and now Rs 30,000 crore has been deposited in the accounts through the Jan Dhan scheme,” he said, adding “this shows the richness of our poor people.”

Through such schemes, the poor can come out of the clutches of the rural money-lenders, he said.

Speaking about the formation of Arya Samaj in 1875 by Dayanand Saraswati, Modi said it had its roots in India’s First War of Independence.

“1857 saw the first War of Independence. After centuries of slavery, there was a new zeal and that too not a small one. It did not restrict to 2000 to 5000 freedom fighters, but the entire country stood up.”

“However, the desired results were not achieved. When you see that background, you will then realise why Arya Samaj was established then,” the Prime Minister said.

On the Clean Ganga initiative, Modi said several governments in the past had tried to clean the river, but were not successful. However, “if people make up their mind, the mission can be easily achieved.”

“Many governments came and went while carrying out cleaning of Ganga, but could not complete the task of cleaning Ganga. If we decide not to allow degradation of Ganga then no power in the world can do it,” he said.

-14 February 2016 | PTI | New Delhi

Indian economy likely to grow 7.6% in FY16

Indian economy likely to grow 7.6% in FY16

India’s economy is forecast to grow by 7.6% in 2015-16, marginally higher than the finance ministry’s estimate, making it the fastest growing major economy in the world.

Data released by the Central Statistics Office (CSO) on Monday showed the economy grew 7.3% in the October-December quarter, slower than the previous quarter’s upwardly revised 7.7% expansion.

Growth for the July-September quarter was revised to 7.7% from the previously reported 7.4%. April-June quarter was revised upwards to 7.6% from 7% earlier. Full growth for 2015-16 was more or less in line with estimates and higher than the 7.2% expansion in the previous year.

While the economy slowed a little in the December quarter, growth was faster than China’s 6.8% expansion in the third quarter. The finance ministry expects the economy to grow by 7.1-7.5% in the current financial year and then accelerate in the years ahead.

Several multilateral agencies expect growth in the 7-7.6% range for the current financial year. The Indian economy, Asia’s third largest, is seen as a bright spot against the backdrop of a gloomy global economy and the latest numbers will give some comfort to the authorities, who are battling to revive growth and create jobs.

Policymakers said the data showed that the economy was turning around. “The economy was doing well and today’s data confirms that it is doing well against the backdrop of slowing growth globally. The second quarter number has also been revised upwards,” Jayant Sinha, minister of state for finance, told TOI.

The government changed the way it measures the economy last year, saying it was in line with global practices. While the government and the Reserve Bank of India have stood by the numbers, several agencies and private economists have raised doubts about the methodology.

They say the robust numbers are out of sync with other data such as exports, credit offtake, industrial output growth, which show that the economy still remains sluggish. Exports have contracted for 13 consecutive months, while two successive years of patchy monsoon rains have also dented rural demand, a strong pillar for overall economic growth.Low inflation translates into a nominal GDP growth of 8.6% for the current fiscal, compared to an expansion of 10.8% in 2014-15. A lower nominal GDP growth is expected to make it tougher for the government to meet the fiscal deficit target of 3.9% of GDP set for the current fiscal.

The farm sector is expected to grow 1.1% in 2015-16 compared to a contraction of 0.2% in 2014-15. The manufacturing sector is expected to grow 9.5% in 2015-16. In the third quarter the sector grew 12.6% compared to the previous quarter’s 9% expansion. The farm sector contracted 1% during the third quarter compared to a growth of 2% in the previous quarter.

“The surprisingly robust pick-up in manufacturing growth in Q3FY16 relative to Q2FY16 belies the trends available from various high frequency volume based indicators, including the IIP prints for October- November 2015,” said Aditi Nayar, senior economist at ratings agency ICRA.

She said despite the robust expansion in the Union Government’s capital expenditure, growth of gross fixed capital Formation slowed considerably to a five-quarter low 2.8% in the third quarter, highlighting the muted trend in private sector investments. Private consumption expenditure remained the key engine of growth in the third quarter, despite the sluggish rural sentiment. “With the considerable slowdown in investment growth and pickup in expansion of both private and government consumption expenditure, the composition of GDP growth was unfavourable in Q3FY16,” she said.
-TNN | Feb 9, 2016