Lok Sabha Question No. 221 (UNSTARRED), answered on 2018-02-02
Subject: Performance of the Economy
Ministry: FINANCE
Asked by: ADHIR RANJAN CHOWDHURY

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 221

TO BE ANSWERED ON FEBRUARY 02, 2018

## PERFORMANCE OF THE ECONOMY

## 221. SHRI ADHIR RANJAN CHOWDHURY:

Will the Minister of FINANCE be pleased to state:

- (a) the details of performance of the economy during each of the last three years along with the factors responsible for the slow down, sector-wise;
- (b) the details of the growth forecast for the current and subsequent years and the changes made;
- (c)  whether the economic growth has benefitted all sections of the society and if so, the details thereof and if not, the reasons therefor; and
- (d) the steps taken by the Government to boost the economic growth and to ensure that economic growth benefits all sections of society?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PON. RADHAKRISHNAN)

- (a)  As  per  the  First  Revised  Estimates  of  National  Income,  Consumption  Expenditure, savings and capital Formation for 2016-17released by Central Statistics Office (CSO) on January 31, 2018, the growth of Gross Domestic Product (GDP) at constant market prices was 8.2 per cent in 2015-16 and 7.1 per cent in 2016-17. As per the 1 st Advance Estimates released by CSO on January 5 th 2018, the growth rate of GDP at constant prices was 6.5 per  cent  in  2017-18.  The  decline  in  growth  in  2017-18  is  on  account  of  lower  growth  in agriculture & allied sector and industry sector.On the other hand, growth of services sector is  expected to accelerate in 2017-18 as compared to 2016-17.Economic Survey 2017-18 indicates that the lower industrial growth could be account of slow credit growth or probably due to problem of non-performing assets that might have led the banks to be more cautious on  lending.  However,  the  Economic  Survey  alsoindicated  that  certain  high  frequency indicators like growth of Index of Industrial Production, exports, etc.point towards recovery.
- (b)  Volume-I  of  Economic  Survey  2016-17  presented  in  January  2017  projected  a  real growth  of  6.75-7.5  per  cent  for  the  economy  in  year  2017-18.  Volume  2  of  Economic Survey  2016-17  released  in  August  2017  indicated  that  the  balance  of  risks  seemed  to have shifted to the downside in view of some new developments like real exchange rate appreciation,  increasing  stress  in  balance  sheets  in  power  and  telecommunication, transitional challenges from implementing GST, etc. Economic Survey 2017-18 brought out in January 2018 projects the real growth for year 2018-19 to be 7-7.5 per cent.
- (c) The details of distribution of economic growth across different sections of the society are not  available  from  the  National  Accounts  Statistics.  However,  per  capita  income  which

reflects the income of an average person, measured as per capita Net National Income at constant prices was Rs 86660 in the year 2017-18 (as per 1 st AE released by CSO), higher as compared to Rs.82229 in 2016-17 and Rs.77826 in 2015-16.

(d):  The  Government  of  India  has  taken  various  initiatives  to  boost  the  growth  of  the economy which, inter-alia, include; fillip to manufacturing, concrete measures for transport and power sectors as well as other urban and rural infrastructure, comprehensive reforms in the foreign direct investment policy and special package for textile industry. Government had also announced various measures in the Budget 2017-18 to promote growth in  the economy  which,  among  others,  include  push  to  infrastructure  development  by  giving infrastructure status to affordable housing, higher allocation to highway construction, and focus on coastal connectivity. For highways development the Bharatmala Pariyojana has been launched. The government has launched a phased program for bank recapitalization. This entails infusion of capital to the public sector banks, which is expected to encourage banks to enhance lending. The Insolvency and Bankruptcy Code was enacted to achieve insolvency  resolution  in  a  time  bound  manner.  To  implement  the  Code,  the  National Company Law Tribunal was established. The other growth promotion measures include: lower income tax for companies with annual turnover up to Rs 50 crore; further measures to  improve  the  ease  of  doing  business;  and,  a  major  push  to  digital  economy.  The introduction of the Goods and Services Tax (GST) has provided a significant opportunity to improve growth momentum by reducing barriers to trade, business and related economic activities.  Budget  2018-19  included  various  measures  to  provide  further  push  to  the economy, which among others, include major push to infrastructure via higher allocation to rail & road sector, reduced corporate tax rate of 25 per cent for companies with turnover up to Rs. 250 crorewhich is expected to help 99 per cent of MSMEs, etc.

The  agenda  of  inclusive  growth  has  been  given  utmost  priority  by  the  Government  by increasing  budgetary  allocations  for  poverty  alleviation,  social  infrastructure  and  public employment generation schemes. This is evident from the RBI data which show that the expenditure  of  social  services  by  the  General  Government  as  a  proportion  of  GDP  has moved up from 5.8 per cent in 2015-16 to 6.6 per cent 2017-18 (BE). The programmes/schemes  such  as  Mahatma  Gandhi  National  Rural  Employment  Guarantee Act  (MGNREGA),  Deendayal  Antyodaya  Yojana  -National  Rural  and  Urban  Livelihoods Mission, Swachh Bharat Mission, Pradhan Mantri Awas Yojana, Skill India, Make in India, MUDRA,  etc. are being implemented to provide direct and indirect employment opportunities  to  benefit  all  the  sections  of  society.  MGNREGA  is  one  of  the  important schemes  which  ensures  participation  by  women  in  the  economic  activity  by  stipulating minimum of 33 per cent participation by women. About 4.6 crore households were provided employment totaling 177.8 crore person days during 2017-18 as on 14th January, 2018. Out of this, 54 per cent were accounted for by women, 22 per cent by Schedule Castes and 17  per  cent  by  Schedule  Tribes.The  Budget  2018-19  aims  to  particularly  focus  on strengthening  agriculture  and  rural  economy  via  emphasis  on  rural  housing , keeping Minimum  Support  Prices  (MSP)  of  kharif  crops  of  at  least  one  and  half  times  of  their production  cost;improving  the  quality  of  education;provision  of  good  health  care to economically less privileged; taking care of senior citizens and emphasis on job creation.