Lok Sabha Question No. 3134 (UNSTARRED), answered on 2015-08-07
Subject: Raising of GDP Rate
Ministry: FINANCE
Asked by: NISHIKANT  DUBEY, PASHUPATI NATH SINGH

- (a) the current rate of GDP in the country;
- (b) whether the Government has identified the factors affecting economic development/growth across the country;
- (c) if so, the details thereof and the action taken by the Government in this regard; and
- (d) the extent to which the rate of GDP  could  be  raised  through developing infrastructure, if so, the details thereof and the steps taken by the Government in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- (a) :  As  per  the  provisional  estimates  released  by  the  Central  Statistics  Office,  the growth rate of Gross Domestic Product (GDP) at constant (2011-12) market prices is placed at 7.3 per cent in 2014-15.
- (b) & (c) : According to the Economic Survey 2014-15, the growth in the Indian economy can be expected to improve in 2015-16 on account of factors like the possible growthpromoting  effect  of  recent  reforms,  decline  in  oil  prices,  decline  in  inflation  and  the forecast  for  a  normal  monsoon.  In  order  to  accelerate  growth,  the  Economic  Survey 2014-15 and the Union Budget 2015-16 have ,  inter  alia, stressed:  the  need for fiscal consolidation  with  focus  on  expenditure  control,  public  investment  and  elimination  of leakages in the provision of subsidies; the framework for a modern indirect tax system, including  GST;  the  need  to  develop  infrastructure,  encourage  private  investment, promote domestic manufacturing and address governance related issues; and, the need to raise economy-wide skills.

The Government of India has taken various initiatives to address the aforesaid issues and to improve the growth rate of the economy which, inter alia , include; liberalization of foreign direct investment in selected sectors; Skill India initiative and the unveiling of the National  Policy  for  Skill  Development  and  Entrepreneurship,  2015;  measures  to  debottleneck the supply of key raw-materials like coal which would help manufacturing and infrastructure sectors; various facilitatory measures for a more conducive environment for  investment;  financial  inclusion  though  Pradhan  Mantri  Jan  Dhan  Yojana  (PMJDY) which  also  helps  to  strengthen  banking  and  insurance  services;  extension  of  direct benefit transfer and focus on elimination of leakages; boost to agricultural sector with focus  on  micro  irrigation,  watershed  development,  soil  conservation  and  credit,  and, various measures to improve clarity and transparency in economic policy-making. Fiscal reforms with a clear roadmap on consolidation, expenditure reforms and rationalization of tax structure, including initiatives on Goods and Services Tax, are also expected to contribute to higher growth.

(d) Acceleration of GDP growth is dependent on many factors that, inter-alia , include the rate of capital formation and  savings, utilization of technology, development  of infrastructure,  efficiency  of  resource  allocation,  quality  of  institutions,  governance  and the  policy  framework  in  place.  It  is  difficult  to  precisely  estimate  the  impact  of development of infrastructure on the rate of growth of GDP. The Government's intent to promote  infrastructure  is  reflected  in  the  fillip  given  to  infrastructure  sectors  through measures for investment facilitation as well as concrete measures for transport, power, and other urban and rural infrastructure. Some specific measures include; increase in the  outlays  of  roads  and  railways;  efforts  to  revitalize  the  public-private  model  of infrastructure  development;  and  the  plan  to  enhance  electricity  generation  capacity considerably though creation  of Ultra Mega Power Projects.

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