Finance Minister Arun Jaitley on Wednesday tabled the Economic Survey 2017 in the parliament. The report was authored by the Chief Economic Advisor Arvind Subramanian and provided a succinct summary of the economy, discussed policy measures and highlighted the economy’s outlook for the future. For the first time, the Economic Survey highlighted seven interesting facts about India. Read on to find out.
1) Indians on the move
New estimates based on railway passenger traffic data reveal annual work-related migration. While the annual number of new migrants saw a major outflux in 2013-14, it consistently fell thereafter in the upcoming years. The economic survey stated, “New estimates based on railway passenger traffic data reveal annual work-related migration of about 9 million people, almost double what the 2011 Census suggests.”
2) Biases in perception
A credit rating is an evaluation of the credit risk of a potential debtor (here, our government) and it predicts their ability to pay back the debt. It is an implicit forecast of the likelihood of the debtor defaulting. While China’s credit rating was upgraded from an upper medium grade of A+ to a higher grade AA- in December, India’s rating has remain unchanged at the lower medium grade level of BBB-. From 2009 to 2015, China’s credit-to-GDP soared from about 142% to 205% while its growth decelerated. In contrast, even though India’s GDP growth has increased since 2012, its credit growth remains low.
3) New evidence on weak targeting of social programs
The Survey says that welfare spending in India suffers from misallocation. Districts with the most poor (in red on the left) are the ones that suffer from the greatest shortfall of funds (in red on the right) in social programs. The districts accounting for the poorest 40% receive only 29% of the total funding thus indicating the weak targeting of the government’s social programs.
4) Narrow tax base
India has seven taxpayers for every 100 voters, ranking us 13th amongst 18 of our democratic G-20 peers. Despite being the second most populous country, these figures indicate the wide disparity in India’s economic strata as the number of tax payers are too less in comparison to the entire population of the country.
5) India trades more than China and a lot within itself
As of 2011, India’s openness – measured as the ratio of trade in goods and services to GDP – has far overtaken China’s. India’s internal trade is also comparable to that of other large countries. As the image indicates, even though its volume of trade as fallen in the past two years, India surpassed that of China’s. Furthermore, even though the amount of trade that takes place within India itself is significantly less in comparison to that of USA, Brazil and China; India ranks ahead of Canada, European Union and Indonesia.
6) Income divergence within India
During the last decade (2004-14), spatial dispersion in income has been on the rise in India, unlike the rest of the world and even China. That is, despite more porous borders within India than between countries internationally, the geographical graph of per capita income is skewed. As seen in the graph, while China and the rest of the world have witnessed a fall in income disparity, India has seen a consistent rise in this indicator.
7) India’s distinctive demographic dividend
India’s share of working age to non-working age population will peak later and at a lower level than that for other countries but last longer. The peak of the growth boost due to the demographic dividend is fast approaching, with peninsular states already peaking soon and the hinterland states peaking much later. Within India itself, West Bengal is showing a promising labour potential with the highest working age to non-working age population, followed by Andhra Pradesh and Karnataka.