Highlights of Economic Survey 2013-14

New Delhi: A day before the Interim Budget 2014, Finance Minister Arun Jaitley tabled the Economic Survey for 2013-14 in Parliament on Wednesday.

According to the Economic Survey, India’s economy is expected to grow by between 5.4 percent and 5.9 percent in the current fiscal year.

Survey said the government should move towards low and stable inflation regime through fiscal consolidation.

This Economic Survey is the Finance Ministry's view on the annual economic development of the country.

Economic Survey reviews the developments in the Indian economy in the last 12 months, sums up the performance on major development programs and emphasize on the policy initiatives of the government and the prospects of the economy.

India's economic growth remained submissive at 4.7 percent in 2013-14 and at 4.6 percent in the fourth quarter of the financial year, largely due to a decline in manufacturing output.

The country's gross domestic product had expanded at 4.5 percent in 2012-13, the slowest pace in the past decade.

Highlights of Economic Survey 2013-14

• Estimates FY 15 GDP growth at 5.4-5.9 %
• Need new FRBM act with "Teeth"
• Inflation limits scope for RBI to cut rates
• Subsidy reforms essential to fiscal consolidation
• Need common market for market agricultural commodities
• Need to expand decentralized procurements for PDS
• Moderation in inflation to help ease monetary policy
• Inflation has eased, but still above comfort level
• Economy can look forward to better growth prospect in FY 15
• There are concerns over El Nino emergence this year
• Cap controls not supporting globalisation of economy
• FY 15 GDP likely to be on lower side of projection
• See improvement in manufacturing, balance of payment in FY 15
• Subsidy reforms essential to fiscal consolidation
• Need to review nutrient-based fertiliser subsidy
• Need to go for cash transfer of subsidy
• Raising tax GDP ratio key to fiscal consolidation
• Need formal monetary policy frame for targeting CPI inflation
• Need to improve market price of fuel products
• MNREGA has created labour shortage and hiked wages
• Need to move to market prices of fuel products
• Subsidy reforms essential to fiscal consolidation
• Economic growth has slowed down on domestic, external factors
• Monetary policy essential for long run inflation control
• High food inflation on structural, seasonal factors
• Downside risk to eco due to geopolitical tensions
• Downside risk to eco from poor monsoon, investment climate
• Fiscal consolidation remains imperative for economy
• Industrial growth likely to revive in next 2 yrs
• Economic Survey only shows gravity of eco situation
• Fiscal deficit needs to move downwards in next 2 yrs
• Need to bring down inflation in a caliberated manner
• Expect industrial recovery seen in April to continue
• Need to bring down inflation
• WPI inflation likely to moderate by 2014 end
• Central GST could be first step towards full gst
• Agricultural allied sector registered 4.7% growth in FY 14
• Inflation seen easing in FY 15 on softer global prices
• Must re-examine laws allowing government interference in market
• Improved twin deficit may lead to gradual growth
• Fiscal Consolidation, supply side steps to aid monetary management
• Expect room for monetary easing later this fiscal
• See global recovery improving in FY15
• Long term debt accounts for 78.2 percent of total external debt
• See RBI taking accommodative stance as inflation eases
• India's service sector CAGR at 9 percent in 2011-12
• Need mechanism to cope with capital fight
• FY 15 current account deficit may be limited to 2.1 percent of GDP
• Improvement in current account and fiscal deficits to spur higher growth in 2014-15
• Improvement in manufacturing, Balance of Payments (BoP) expected in 2014-15
• DTC required as clean and modern replacement for Income Tax laws
• Sharp fall in trade deficit, closes in by 27.8percent to $ 137.5 billion
• FY 2014-15 first quarter trade deficit declined by another 42.4percent
• Exports grew by 4.1percent over negative growth of 1.8percent in 2012-13
• Exports log double digit growth in May, 2014 after a gap of 6 months
• Imports drop by 8.3percent, after steep slowdown during the previous FY 2012-13
• Trend continues in April-May, 2014 as imports fell by 13.2percent
• Following government intervention, gold and silver imports fell by 40.1 percent to $33.4 billion in 2013-14

Agriculture Sector

• Record food grains production of 264.4 mt in the year 2013-14
• Record production of oilseeds of 32.4 mt in the year 2013-14
• Record production of pulses of 19.6 mt in the year 2013-14
• Groundnut shows the largest increase in productivity i.e., 73.17% in the year 2013-14.
• India ranks first in the world in productivity of grapes, banana, cassava, peas, and papaya
• Agriculture sector growth rate 4.7% in the year 2013-14
• Area under foodgrains increased by 4.47% to 126.2 million ha in the year 2013-14
• Area under oilseeds increased by 6.42% to 28.2 million ha in the year 2013-14
• Stocks of foodgrains in the Central Pool stood at 69.84 million tonnes as on June 1, 2014
• Net availability of foodgrains increased by 15% to 229.1 million tonnes in 2013
• Per capita net availability of foodgrains increased to 186.4 kg per year in 2013
• Agriculture exports grow by 5.1% in the year 2013-14
• Exports of marine products show a growth rate of 45% in the year 2013-14
• Milk production touches a record high of 132.43 mt in the year 2012-13
• Contribution of livestock sector to total GDP was 4.1% in the year 2012-13
• Year-on-year growth rate of milk production in India is 4.04% vis-a-vis world average of 2.2%
• Credit to agriculture sector exceeds target of Rs. 7,00,000 crore in the year 2013-14
• Share of agriculture and allied sectors in GDP declines to 13.9% in 2013-14
• Number of cultivators decline from 127.3 million in 2001 to 118.7 million in 2011

Industrial Performance

• Industry grew by just 1.0 percent in 2012-13 and slowed further in 2013-14, posting a modest increase of 0.4 percent.
• During 2013-14, FDI inflow (including equity inflows, reinvested earnings and other capital) was USD 36.4 billion.
• Overall gross bank credit flow to industry has increased by 14.9 percent in 2013-14.

Service Sector

• India ranked 12th in terms of services GDP among the world’s top 15 countries
• India has the second fastest growing services sector with its CAGR at 9.0 percent, just below China
• The growth rate of the combined category of trade, hotels, restaurants, transport, storage, and communications decelerated to 3.0 percent
• Financing, insurance, real estate, and business services grew robustly at 12.9 percent
• Services constitute a 57 percent share in GDP at factor cost in 2013-14
• India’s share in world inbound tourist arrivals increased to 0.63 percent in 2013
• The size of domestic tourism has also crossed an estimated 1.1 billion annual travel visits
• The IT–Business Process Management (BPM) sector grew by an estimated 10.3 percent, reaching US$ 105 billion in 2013-14
• Services like software and telecom were big ticket items that gave India a brand image in services

Fiscal Health

• Fiscal consolidations remains imperative for the economy, says the Economic Survey
• Economy Survey recommends fiscal consolidation through higher tax-GDP ratio then merely reducing the expenditure to GDP ratio
• Proactive policy action helped government remain in fiscal consolidation mode in 2013-14
• Fiscal deficit for 2013-14 contained at 4.5% of the GDP
• Total outstanding liabilities of the central and state governments decline as a proportion of GDP