Economic Survey 2018 tabled in parliament

New Delhi: The Economic Survey of India (ESI) 2017-18 has been tabled in parliament today. Today is the first business of this year’s budget session. The survey pegged India’s GDP growth at 7-7.5 per cent in the 2018 fiscal.

The budget session of parliament started today with President Ram Nath Kovind’s joint address to both Houses of Parliament in the Central Hall. The session will end on February 9 followed by a recess so that the parliamentary standing committee’s can mull over the proposals made in the budget by the finance minister in his budget presentation on February 1. The budget session will reconvene on March 5 and then conclude on April 6.

-2018-19 GDP growth pegged at 7-7.5 per cent; current high oil prices a major concern

-There has been a fifty per cent increase in the number of indirect taxpayers; and a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises and want to avail themselves of input tax credits.

-The transformational Goods and Services Tax (GST) was launched in July 2017. With a policy change of such scale, scope, and complexity, the transition unsurprisingly encountered challenges of policy, law, and information technology systems, which especially affected the informal sector. Expeditious responses followed to rationalize and reduce rates, and simplify compliance burdens.

-GDP to expand by 6.75 per cent 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

-Post-demonetization and GST increase in new tax filers (over and above natural increase) of about 1.8 million and some boost to individual income tax collections

-Preliminary analysis of the Goods and Services Tax data reveals 50 per cent increase in the number of indirect taxpayers

-Economic Survey calls for “policy vigilance” in the coming year if high oil prices persist or stock prices correct sharply

-There is need to address pendency, delays and backlogs in the appellate and judicial arena

-Growth reviving after temporary decoupling, but nascent macro pressures (oil prices, fiscal)

Gujarat part of the report

• The state-wise  share  of   the  total  GST  base.  The  top  states   are  Maharashtra  (16  percent),  Tamil  Nadu  (10   percent),  Karnataka  (9  percent),  Uttar  Pradesh
  (7 percent), and Gujarat (6 percent).   Each  state’s  share  in  the  GST  base  is   almost perfectly correlated (coefficient of 0.95)  with its share in overall GSDP.  So the biggest tax  bases still seem to be in the biggest producing  states.
• The  share  of   Maharashtra’s   and Gujarat’s tax base under the GST is lower than  their share of manufacturing. But because  these two states also have a significant presence in  services,  their  tax  base  share  remains  in  line  with  their  share  of   GSDP.  Overall,  the  data  seem  to   suggest fairness and balance in the GST outcomes.
• For the first time in India’s history it is possible to know the state- wise distribution of international exports of goods and services. Five states—Maharashtra(22.3%), Gujarat(17.2%), Karnataka(12.7%), Tamil Nadu(11.5%), and Telangana(6.4%)—in that order account for 70% of India’s exports.
• The five largest exporting states are Maharashtra, Gujarat, Haryana, Tamil Nadu and Karnataka;
• The five largest importing states are Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka and Gujarat;
• The states with the largest internal trade surpluses are Gujarat, Haryana, Maharashtra, Odisha and Tamil Nadu.
• Maharashtra, UP, Tamil Nadu and Gujarat are the states with the greatest number of GST registrants. UP and West Bengal have seen large increases in the number of tax registrants compared to the old tax regime.
• The all-India average of land tax collection is boosted by the collections in States like West Bengal and Gujarat which are doing much better in this regard.
• Several   states—notably   Kerala,    Maharashtra,    Karnataka,    Gujarat    and    West     Bengal—are   consistently   improving   on   the   front of  the  share   of   revenues  assigned  to  local  governments  vis-à-vis  expenditure   assignments.
• The Indo-Gangetic plain, and parts of Gujarat and Madhya Pradesh are well irrigated. But parts of Karnataka, Maharashtra, Madhya
  Pradesh, Rajasthan, Chattisgarh and Jharkhand are still extremely vulnerable to climate change on account of not being well irrigated.
• Temperature increases have been particularly felt in the North-East, Kerala, Tamil Nadu, Kerala, Rajasthan and Gujarat. Parts of India, for example, Punjab, Odisha and Uttar Pradesh have been the least affected.