The Economic Survey, usually presented a day before the annual Union Budget, has been tabled at noon in Parliament by Finance Minister Nirmala Sitharaman on July 4. The Survey serves as the official economic report of the country.
GNPA ratio in public sector banks down by 1.4 percentage points
The Survey says: “The performance of the banking sector (domestic operations), Public Sector Banks (PSBs) in particular, improved in 2018- 19. The Gross Non-Performing Advances (GNPA) ratio of SCBs decreased from 11.5% to 10.1% between March 2018 and December 2018.”
However, NBFC have performed badly, says the Survey. “The GNPA ratio of NBFC sector deteriorated to 6.5% as in December 2018 from 6.1% in March 2018. The net NPA also increased marginally to 3.6% in December 2018 from 3.2% in March 2018.”
National TFR to be lower than replacement rate by 2021
The Survey predicts that the national Total Fertility Rate (TFR) will be lower than the replacement rate in 2021.
The TFR for India as a whole is 2.3, currently. Rural areas have a TFR of 2.5, while urban areas are lower, at 1.8.
India’s TFR rate.
The working age population is expected grow by roughly 9.7million per year during 2021-31, and 4.2 million per year during 2031-41.
The Survey expects a significant decline in elementary school-going children in the next two decades.
Survey suggests merging different datasets held by govt
The Survey, claiming that data is a public good, suggests merging distinct datasets held by the government.
The different datasets held by the government.
It does say that this would have to be within the legal framework of data privacy. “Currently, much of the data is dispersed across different registries maintained by different ministries. This is why every time a citizen has to access a new service, they are asked to collect all the documents to prove their identity and prove their claim on the process,” says the Survey.
Priority Sector Lending suggested for MSMEs
Firms with less than 100 workers account for more than 50% of all organised firms in manufacturing but contribute just 14% to employment and 14% to productivity. Larger firms account are only 15% by number, but account for 75% employment and close to 90% of productivity.
The Survey suggests that MSMEs receive a 10-year sunset clause, that labour laws be deregulated and the sector be given priority in lending.
This year’s Survey also focuses on sectors such as tourism, and other services.
Changes suggested in govt’s flagship scheme names
The Survey suggests that the government’s flagship schemes for social welfare and taxation be changed to more accurately reflect the Centre's agenda. The document suggests a behavioural economics approach to naming these schemes.
The changes, as suggested, are:
- From ‘Beti Bachao Beti Padhao’ to ‘BADLAV’ (Beti Aapki Dhan Lakshmi Aur Vijay Lakshmi)
- From ‘Swachh Bharat’ to ‘Sundar Bharat’
- From ‘Give It Up” for LPG subsidy to ‘Think about the Subsidy’
- From ‘tax evasion’ to ‘tax compliance’
Steps for sustained growth
Data as a public good, emphasising legal reforms, ensuring policy consistency, encouraging behavior change using behavioral economics, nourishing MSMEs, reducing cost of capital, reducing risk-return trade-off for investments, are some of the focuses of the Survey.
The Survey “departs from traditional Anglo-Saxon thinking by viewing the economy as being either in a virtuous or a vicious cycle, and thus never in equilibrium”.
The Survey also states that 8% GDP growth is required for India to achieve the Prime Minister’s vision of a $5 trillion economy.