Lok Sabha Question No. 627 (UNSTARRED), answered on 2016-02-26
Subject: Economic Growth
Ministry: FINANCE
Asked by: SHIVKUMAR CHANABASAPPA UDASI

- (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 therein;
- (c) whether the benefits of the economic growth are enjoyed by all the people, not by a specific class only and 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 JAYANT SINHA)

- (a) :  The  growth  rate  of  Gross  Domestic  Product  (GDP)  at  constant  (2011-12)  market  prices increased from 5.6 per cent in 2012-13 to 6.6 per cent in 2013-14 and further to 7.2 per cent in 2014-15, indicating that the growth rate of the economy has improved in the last three years. The decline in agricultural growth in 2014-15 was due to the below-normal monsoon rains. Sectorwise growth performance, along with the aggregate GDP growth rate, is given in the following table.
- (b): Assuming a normal monsoon for the year 2015-16, Economic Survey 2014-15, released in February 2015, projected a growth of 8.1 per cent to 8.5 per cent for the current year. Factoring in the potential effects of below-normal rainfall situation, the Mid-Year Economic Analysis of the Ministry of Finance, published in December 2015, observed that real GDP growth in 2015-16 would lie in the range of 7 per cent to 7.5 per cent. As per the advance estimates released by the Central Statistics Office (CSO), the growth rate of GDP at constant (2011-12) market prices is placed at 7.6 per cent in 2015-16. The government has not released any forecast for GDP growth for the subsequent years.
- (c) : Class-wise information on growth of income is not available with the Government. As per the CSO's estimates, the per capita income of the country at constant prices, which represents the average income per head, increased from Rs. 65664/- in 2012-13 to Rs. 68867/- in 2013-14 and further to Rs. 72889/- in 2014-15.  This is estimated to increase to Rs. 77431/- as per the advance  estimates  for  2015-16.  In  addition,  the  share  compensation  of  employees  (including

| Growth rate in GDP at Constant (2011-12) Market Prices (Per cent)   | Growth rate in GDP at Constant (2011-12) Market Prices (Per cent)   | Growth rate in GDP at Constant (2011-12) Market Prices (Per cent)   | Growth rate in GDP at Constant (2011-12) Market Prices (Per cent)   |
|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|---------------------------------------------------------------------|
| Sectors                                                             | 2012-13                                                             | 2013-14                                                             | 2014-15                                                             |
| Agriculture, forestry &fishing                                      | 1.5                                                                 | 4.2                                                                 | -0.2                                                                |
| Industry                                                            | 3.6                                                                 | 5.0                                                                 | 5.9                                                                 |
| Services                                                            | 8.1                                                                 | 7.8                                                                 | 10.3                                                                |
| GVA at basic prices                                                 | 5.4                                                                 | 6.3                                                                 | 7.1                                                                 |
| GDP                                                                 | 5.6                                                                 | 6.6                                                                 | 7.2                                                                 |
| Source: CSO.                                                        | Source: CSO.                                                        | Source: CSO.                                                        | Source: CSO.                                                        |

social contributions made by the employer) increased from about 37 per cent of the net value added at current prices in 2011-12 to about 38 per cent in 2014-15, indicating a robust growth of compensation of employees during the period. The corresponding share of operating surplus and the mixed income of the self-employed declined from about 63 per cent to about 62 per cent.

(d) : The Government of India has taken various initiatives to boost the growth of the economy which, inter  alia ,  include;  fillip  to  manufacturing  and  infrastructure  through  fiscal  incentives and concrete measures for transport, power, and other urban and rural infrastructure; reforms and liberalization  of  foreign  direct  investment  in  major  sectors;  measures  to  debottleneck  the supply of key raw materials; Skill India and Digital India initiatives; 'Make in India' initiative along with the attendant facilitatory measures for a more conducive environment for investment; Start-up India Initiative to boost entrepreneurship and  creation of jobs; and, various measures to improve clarity and transparency in economic policy-making. Apart from the above, there are many initiatives of the Government that aim at promoting equitable spread of economic growth across different sections of the society. Some such measures include; financial inclusion though 'Pradhan  Mantri  Jan  Dhan  Yojana'  which  also  helps  to  strengthen  banking  and  insurance services; launching of Micro Units Development and Refinance Agency Ltd. (MUDRA); 'Stand Up India Scheme' to promote entrepreneurship among SC/ST and women entrepreneurs; boost to agricultural sector with focus on micro irrigation, watershed development, soil conservation and credit;  major  initiatives  for  providing  social  security  to  the  disadvantaged  sections  of  the society; etc.

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