New Delhi: The government has tabled the economic survey for 2017-18 in the Parliament. Growth forecast for 2018-19 is projected at 7 – 7.5%.
Finance Minister Arun Jaitley tabled the Economic Survey 2017-18 laid in the Lok Sabha.
Economic Survey projects 2018-19 GDP growth at 7-7.5 pc and says current high oil prices a major concern.
As per the Economic Survey 2017-18, GDP to expand by 6.75% in 2017-18, re-instating India as world’s fastest growing major economy.
“Economy accelerated in second half of current fiscal due to GST, bank recapitalisation, liberalisation of FDI and higher exports. The Gross Value Added (GVA) expected to grow by 6.1 per cent in 2017-18 as compared to 6.6 per cent in 2016-17. Preliminary analysis of the Goods and Services Tax data reveals 50% increase in the number of indirect taxpayers,” according to the Economic Survey tabled in Parliament.
Economic Survey also said there is need to address pendency, delays and backlogs in the appellate and judicial arenas.
Union Minister of Finance and Corporate Affairs Arun Jaitley said that as on December 2017, there were 9.8 million unique GST registrants slightly more than the total Indirect Tax registrants under the old system (where many taxpayers were registered under several taxes). Therefore, adjusting the base for double and triple counting, the GST has increased the number of unique indirect taxpayers by more than 50 percent -a substantial 3.4 million.
1) Goods and Services Tax has given a new perceptive of the Indian economy and new data has emerged. There has been a fifty percent increase in the number of indirect taxpayers. There has also been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises wanting to avail themselves of input tax credits. The Survey also stated that fears of major producing states that the shift to the new system would undermine their tax collections have been allayed as the distribution of the GST base among the states got closely linked to the size of their economies. Similarly, there has been an addition of about 18 lakh in individual income tax filers since November 2016.
2) India’s formal sector, especially formal non-farm payroll, is substantially greater than what it currently is believed to be. It became evident that when ―formality‖ was defined in terms of social security provisions like EPFO/ESIC the formal sector payroll was found to be about 31 percent of the non-agricultural workforce. When ―formality was defined in terms of being part of the GST net, such formal sector payroll share was found to be 53 percent.
3) For the first time in India’s history, data on the international exports of states has dwelled in the Economic Survey. Such data indicates a strong correlation between export performance and states’ standard of living. States that export internationally and trade with other states were found to be richer. Such correlation is stronger between prosperity and international trade.
4) India’s exports are unusual in that the largest firms account for a much smaller share of exports than in other comparable countries. Top one percent of Indian firms account only for 38% of exports unlike in other countries where they account for substantially greater share – (72, 68, 67 and 55 percent in Brazil, Germany, Mexico and USA respectively). Such tendencies were also found to be true for the top five or ten per cent of the Indian companies.
5) It was pointed out that the Rebate of State Levies (ROSL) has increased exports of readymade garments (man-made fibres) by about 16 per cent but not of others.
6)The data highlighted another seemingly known fact that Indian society exhibits a strong desire for a male child. It pointed out that most parents continued to have children until they get number of sons. The survey gave details of various scenarios leading to skewed sex ratios and also gave a comparison on sex ratio by birth between India and Indonesia.
7) The survey pointed out that tax departments in India have gone in for contesting against in several tax disputes but also with a low success rate which is below 30 per cent. About 66 per cent of pending cases accounted for only 1.8 per cent of value at stake. It further stated that 0.2 per cent of cases accounted for 56 per cent of the value at stake.
8) Extrapolating the data the survey indicated that growth in savings did not bring economic growth but the growth in investment did.
9) The survey mentions that collections of direct taxes by Indian states and other local governments, where they have powers to collect them is significantly lower than their counterparts in other federal countries. A comparison has been given between ratios of direct tax to total revenues of local governments in India, Brazil and Germany.
10) The survey captures the footprints of climate change on the Indian territory and consequent adverse impact on agricultural yields. Extreme temperature increases and deficiency in rainfall have been captured on the Indian map and the graphical changes in agricultural yields are brought out from such data. The impact was found to be twice as large in un-irrigated areas as in irrigated ones.