Lok Sabha Question No. 986 (UNSTARRED), answered on 2019-02-08
Subject: Benefits of Economic Growth
Ministry: FINANCE
Asked by: SHIVKUMAR CHANABASAPPA UDASI

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 986

TO BE ANSWERED ON FEBRUARY 08, 2019

## BENEFITS OF ECONOMIC GROWTH

986. SHRI SHIVKUMAR UDASI:

Will the Minister of FINANCE be pleased to state:

- (a) the details of performance of the economy during each of the last four years, sector-wise along with the factors responsible for the slow down;
- (b) the details of the growth forecast for the current and subsequent years along with the changes made;
- (c) whether the benefits of the economic growth are enjoyed by all the people and not by a specific class only, if so, the details thereof; and
- (d) the steps taken by the Government to boost the economic growth and to ensure equal benefits of such growth to all classes of society?

## ANSWER

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

- (a)  The  growth  rates  of  Gross  Domestic  Product  (GDP)  at  constant  prices  and  sector-wise  growth rates  of  Gross  Value Added (GVA) at constant prices during last four years are given in  the table below.

| Table : Growth of GDP and GVA at Constant (2011-12) prices (per cent)   | Table : Growth of GDP and GVA at Constant (2011-12) prices (per cent)   | Table : Growth of GDP and GVA at Constant (2011-12) prices (per cent)   | Table : Growth of GDP and GVA at Constant (2011-12) prices (per cent)   | Table : Growth of GDP and GVA at Constant (2011-12) prices (per cent)   |
|-------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------|
|                                                                         | 2014-15                                                                 | 2015-16 (3 rd RE)                                                       | 2016-17 (2 nd RE)                                                       | 2017-18 (1 st RE)                                                       |
| GDP                                                                     | 7.4                                                                     | 8.0                                                                     | 8.2                                                                     | 7.2                                                                     |
| GVA                                                                     | 7.2                                                                     | 8.0                                                                     | 7.9                                                                     | 6.9                                                                     |
| Agriculture, forestry & fishing                                         | -0.2                                                                    | 0.6                                                                     | 6.3                                                                     | 5.0                                                                     |
| Industry                                                                | 7.0                                                                     | 9.6                                                                     | 7.7                                                                     | 5.9                                                                     |
| ( of which ) Manufacturing                                              | 7.9                                                                     | 13.1                                                                    | 7.9                                                                     | 5.9                                                                     |
| Services                                                                | 9.8                                                                     | 9.4                                                                     | 8.4                                                                     | 8.1                                                                     |

Source:

Based on data released by CSO on 31 st January 2019;

Note: 3 rd RE: Third Revised Estimate; 2 nd RE: Second Revised Estimate; 1 st RE: First Revised Estimate.

Despite a decline in GDP growth rate in 2017-18 over 2016-17, the economy grew by an average of 7.7 per cent in last four years (2014-15 to 2017-18), which is highest among the major economies in the  world.  The  decline  in  growth  in  2017-18  is  mainly  on  account  of  lower  growth  in  agriculture  & allied; manufacturing; and financial, real estate & professional services sector.

- (b) Economic Survey 2017-18 had projected real GDP growth for 2018-19 to be in the range of 7 to 7.5 per cent. As per the first advance estimates released by Central Statics Office (CSO), the growth

of GDP at constant prices is estimated to be 7.2 per cent in 2018-19. The nominal GDP estimate used for Interim Budget 2019-2020 considered a nominal growth of 11.5 per cent for the year 2019-20 over the estimated GDP for 2018-19. There are no subsequent projections made by the Government.

(c) There is no indicator available to measure the benefits of economic growth for different sections of population.

(d) Government has taken various steps to boost economic growth. These, among others, include; fillip  to  manufacturing  sector  via  schemes  like  Make  in  India;  concrete  measures  for  transport, railways, renewable energy sectors, urban and rural infrastructure; and comprehensive reforms in the foreign direct investment policy. 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. There has been an increase in the Minimum Support Prices (MSPs) for all 22  crops  at  minimum  50  per  cent  more  than  the  cost,  in  order  to  provide  major  boost  to  farmer's income.  The  Government  launched  a  support  and  outreach  program  for  helping  the  growth, expansion and facilitation  Micro,  Small  and  Medium  Enterprises  (MSME)  sector.    The  government initiated a phased program for bank recapitalization entailing infusion of capital to the public sector banks, to the tune of about Rs. 2.6 lakh crore. The Insolvency and Bankruptcy Code was enacted to achieve insolvency resolution in a time bound manner. Interim Budget 2019-20 also included various measures to provide a push to the economy. These measures include, providing affordable loans to farmers, direct income support to farmers, promotion of renewable energy to reduce the dependence on crude oil and natural gas, reduction in GST rate from 18 per cent to 6 per cent for small service providers (with turnover upto Rs. 50 Lakhs) and reduction of the tax burden on middle class by giving full tax rebate to individual taxpayers having taxable annual income up to Rs. 5 lakhs.

The utmost priority of the Government is to ensure the proper distribution of the benefits of higher economic growth to all sections of population.  The  Government has implemented several programmes/schemes for strengthening social infrastructure creating better employment opportunities, and providing basic amenities like water, electricity, roads, sanitation and housing for covering all sections of population. Various schemes initiated by the Government, inter-alia ,  include Mahatma  Gandhi  National  Rural  Employment  Guarantee  Act  for  wage  employment;  Deendayal Antyodaya  Yojana-National Rural Livelihoods Mission for livelihoods promotion through selfemployment; Pradhan Mantri Awaas Yojana for rural housing; Pradhan Mantri Gram Sadak Yojana for rural roads; Ayushman Bharat - Pradhan Mantri Jan Aarogya Yojana for access to secondary and tertiary  quality  health  services;  PM-KISAN  Yojana  for  direct  income  support  of  small  and  marginal farmers; Pradhan Mantri Shram Yogi Maandhan scheme to ensure fixed monthly pension to 10 crore unorganized sector workers; Pradhan Mantri Jan Dhan Yojana for financial inclusion; Swacch Bharat Mission;  National  Rurban  Mission  to  stimulate  local  economic  development;  and  enhance  basic services.