Economic Survey 2016 : Key Facts

As every year this year also economic survey was presented two days before union budget. It was prepared and presented by  Arvind Subramanian and his team. It seemed best economic survey and the suggestions given by them are really appreciable. The team believes our country India is in good position as compared to other countries of the world in this weak global trend.

Although from the growth perspectives it seems that Industrial Production, exports, corporates Sales, stock market, credit growth and agriculture are all in down pattern. But still Indian govt. expects 7.6% GDP in 2016-17, while economic survey sees it in the range of 7-7.75 in view of monsoon occurrence(worst possible only 7%). Government will face challenges due to 7th pay commission implementation as well as global economy slowdown expectations.

 But a major positive for government as this time is revenue collection, indirect taxes are received more that last few years and are expected to balance expenses in coming budget. Furthermore due to lower oil prices, India is highly benefited and is able to  lower down its current account deficit to only 1-1.5% of its GDP.

Also if we see insights of exports, our oil dependent finished products export has been reduced so otherwise all exports are not that much in negative as seen.

Here are few policies and insights given in economic survey led by Mr. Subramanian.

A much more revenue generating policy for government is the subsidy given in LPG, electricity, kerosene , gold etc. A new feature to this is PPF, this money which should have been a part of banking system but is not, enjoys 8.0-8.5% interest rate annually posing extra load on subsidy. And it is seen that although subsidies are given basically in favour of poor, but more than 90% is used only by rich families. If it is filtered then government revenues will see huge amount of about 1.25 lakh Crores every year.

A much more revenue generating thing for government is the subsidy given in LPG, electricity, kerosene , gold etc. A new feature to this is PPF, this money which should be a part of banking system but not, enjoys 8-8.5% interest rate annually posing extra load on subsidy. And it is seen that although subsidies are given basically in favour of poor, but more than 90% is used only by rich people. If it is filtered then government revenues will see huge amount of about 1.25 lakh Crores every year.

He believes that if we change our cropping pattern from cereal to pulses and oilseeds, then not only our farmers will get more money but these crops also require very less water as compared to cereals. Also the bulk amount of wheat grain which gets rotten and hence is destroyed every year can also be avoided.

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