The Economic Survey 2015-16 was tabled in Parliament by the
Union Finance Minister Shri Arun Jaitley. Survey expects Indian economy to
perform well dispute the gloomy picture of international economic environment.
Survey says India stands as a haven of stability and an outpost of opportunity.
Survey says Indian economy will doing well because of mainly two reasons; the
government’s commitment to fiscal consolidation and low inflation. The Survey
also praised reorientation of government spending toward needed public
infrastructure. Describing these achievements as remarkable, the Survey
emphasizes that the task is now to sustain them in an even more difficult global
The Survey further states that the country’s performance
reflects the implementation of number of meaningful reforms. Economic
environment in country has been helped by the government’s commitment towards
reducing corruption, which is imminent in auctioning the assets. Survey also
praised the government’s initiative to liberalise the FDI across the board and
vigorous efforts have been undertaken to ease the cost of doing business.
Survey said agriculture being the important section of Indian economy.
Government’s initiative of a major crop insurance programme will help this
sector. The Survey has highlighted creation of bank accounts for over 200
million people under Pradhan Mantri Jan Dhan Yojana (PMJDY), the world’s largest
direct benefit transfer programme in case of LPG with about 151 million
beneficiaries receiving Rs. 29,000 crore in their bank accounts has been praised
by Suvey. However, the Survey has expressed concern over approval of GST Bill
being elusive so far, the disinvestment programme falling short of targets and
the next stage of subsidy rationalization being a work-in-progress. It adds that
corporate and bank balance sheets remain stressed affecting the prospects for
reviving private investments. It further says that perhaps the underlying
anxiety is that the Indian economy is not realizing its full potential.
Like previous year Survey again states that the country’s
long run potential growth rate is still around 8-10%. For that to achieve
government needs to work on three important fields, India being pro-industry
must evolve into being genuinely pro-competition. Similarly, skepticism about
the state must translate into making it leaner. Secondly, the Survey calls for
major investments in health and education of people to exploit India’s
demographic dividend to optimal extent. Third, survey says government needs to
put major emphasis on the Agriculture. On the education front, the declining
educational outcomes reflected in lower reading levels in both public and
private sector schools are areas of concern.
According to Annual Status of Education Report (ASER) 2014,
there is sharp decline between 2007 to 2014 in the number of children in
Standard V who can read a textbook of Standard II, in both government and
private schools. Economic Survey 2015-16 states that the Gender Parity Index
(2013-14 Provisional) however, shows an improvement in girls’ education, with
parity having been achieved between girls and boys at almost all levels of
education. The Government has taken several steps to provide education to
underprivileged, vulnerable and marginalized people such as SCs, STs, other
Backward Classes (OBC) including Minorities and other Economically Backward
Classes through various programmes of education. ‘Digital Gender Atlas for
Advancing Girl’s Education in India’ was launched last year to help identify
low-performing geographic pockets for girls, particularly from marginalized
A number of scholarship schemes to encourage enrolment and
learning levels among different groups are in operation. National Scholarship
Portal, a single window system for various types of scholarship schemes
administered by different Ministries/Departments has been introduced under
Direct Benefit Transfer (DBT) mode. During 2015-16, about 90 lakh Minority
students are to be benefited under the Pre-matric, Post-matric and
Merit-cum-Means scholarship schemes, while about 23.21 lakh SC students
benefited under Pre-matric, 56.30 lakh under Post-matric and 3354 under the
Rajiv Gandhi National Fellowship including the Top Class Education scholarship
scheme are to be assisted.
The Survey accepts that external environment remains
unusually challenging and weak, government policy needs to be designed to
counter that. Major currency re-adjustment in the wake of Chinese de-valuation
is a major risk for India according to survey. Another external risk is capital
controls taken to respond to curb outflows from large emerging market countries.
The Survey says that in either case, foreign demand is likely to be weak which
requires to find and activate domestic sources of demand to prevent the growth
momentum from weakening.
In the economic outlook, real GDP growth for 2016-17 is
expected to be in the 7% to 7.75% range. However, it cautions that if the world
economy remains weak, India’s growth will face considerable headwinds. On the
domestic side, two factors can boost consumption, increased spending from higher
wages and allowances of government workers if the seventh pay commission is
implemented and return of normal monsoon. At the same time, the Survey
enumerates three down side risks – turmoil in global economy could worsen the
outlook of exports, contrary to expectations oil prices rise would increase the
drag from consumption and the most serious risk is combination of the above two
Another challenging are for the Indian economy is the twin
balance sheet problem – the impaired financial positions of the Public Sector
Banks (PSBs) and some corporate houses. The twin balance sheet challenge is
restraining full-fledged economic recovery and it also reduces the private
investment in the Indian economy. Survey provides four steps to resolve the
problem of twin balance sheet.
- Resolution and