The Economic Survey 2016-17 underscores the need to re-establish private investment and exports as the major drivers of growth and reduce reliance on government and private consumption. Addressing the over-indebted companies and bad-loan encumbered public sector banks will be vital.
Economic Survey: Street view
India’s benchmark Sensex has gained nine per cent so far this financial year and nearly 20 per cent since February 28, 2016, when the Economic Survey 2014-15 was presented in Parliament. Around the last Budget, the markets were at their 21-month low. Loose monetary stance by developed world central banks and improving earnings and economic outlook have supported gains in the domestic equities. However, improved growth outlook in the US and shocks caused by demonetisation have resulted in a decline, both in the markets and in investments by foreign institutional investors (FIIs).
Click on the image to enlarge Click on the image to enlarge FIIs have invested only Rs 10,700 crore ($1.7 billion) in domestic stocks so far in 2016-17. Contrary to last year, the benefit of low crude oil prices and other commodities is disappearing. The India basket for crude oil has gone up 71 per cent to $54.6 per barrel so far this Union Budget 2017 financial year. Metal prices, too, have seen an uptick with the MCX Metal Index gaining 11 per cent during the financial year so far.
Interesting facts about India
One innovation of the Economic Survey 2016-17 was eight infographics devoted to interesting facts about India. Arvind Subramanian, the chief economic advisor, even tweeted all these punchy charts from his personal handle. Among those was new evidence on weak targeting of social programmes.
Click on the image to enlarge Click on the image to enlarge A pair of charts showed, the districts with the most poor are the ones that suffer from the greatest shortfall of funds in social programmes. Another showed the rising spatial dispersion in income.