India Economic Survey 2013 14 Key Highlights Conve

KPMGFLASHNEWS

KPMGinINDIA

IndianEconomicSurvey2013-14KeyHighlights

9July2014

22

21February2013

ThefinanceministerpresentedtheEconomicSurvey

Persistentuncertaintyintheglobaloutlook,caused

201314beforetheParliamenton9July,2014.This

bythecrisisintheEuro-areaandgeneral

flagshipannualdocumentoftheMinistryofFinance,

slowdownintheglobaleconomyimpactingthe

GovernmentofIndia,reviewsthedevelopmentsinthe

demandforexports,compoundedbydomestic

Indianeconomyinfinancialyear2013-14,summarises

structuralconstraintssuchaslowmanufacturing

theperformanceonmajordevelopmentprogrammes,

base,delaysinprojectapprovalsamongothers,

andhighlightsthepolicyinitiativesofthegovernment

andinflationarypressures,hasresultedina

andtheprospectsoftheeconomyintheshortto

protractedslowdown.

mediumterm.Followingarekeyhighlightsofthe

GDPperformancein201314fromtheproduction

survey:

side

(comprising

agriculture,

industry

and

services)

Chapter1Thestateoftheeconomy

IndiasGDP,during201314,grewandmarginally

Performanceduring201213and201314

improvedto4.7percentascomparedto4.5per

centin201213.

TheIndianeconomyhasbeengoingthrough

Thiswasduetohighgrowthinagricultureand

challengingtimesthatculminatedinlowerthan5

alliedsectors,whichgrewat4.7percentcompared

percentgrowthofGrossDomesticProduct(GDP)

totheirlong-runaverageof3percent(during

atfactorcost,atconstantprices,fortwoconsecutive

19992000and201213),owingtofavourable

years,i.e.201213and201314.

monsoons.

2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.

Concernsaroundindustrialgrowthpersistasslowdown

Outlookfor201415

intheindustrycontinuedduetodecelerationinmining

andquarrying,andadisappointingperformanceofthe

Withexpectationofbetterperformancein

manufacturingsector,withgrowthaveraging0.2percent

manufacturing,improvedbalanceofpayments

perannuminthepasttwoyears.Thus,industrialrevival

situationandmodestglobalgrowthrevival,the

iscentraltosustainedrevivalofoverallgrowth.

economyisexpectedtogrowintherangeof5.4

Theservicessectoralsorecordedslowgrowthdueto

5.9percentin201415.Thisisbecause

dismalperformanceoftrade,transport,andstorage.

investmentrevivalwillhappengradually;stillan

elevatedlevelofinflationlimitstheRBIsscopeto

GDPperformancein201314fromthedemandside

reducepolicyrates;alongwiththeexpectationofa

(comprisingconsumption,investmentandnetexports)

below-normalmonsoon.

Onthedemandside,growthofprivatefinalconsumption

Growthin2014-15isexpectedtoremainmoreon

declinedto4.8percent,in201314,from5percentin

thelowersideoftherangegiventheabove,forthe

201213.

followingreasons:(i)stepsundertakentorestart

Fixedinvestmentratedeclinedsteeplyin201314due

theinvestmentcycle(includingprojectclearances

toreductioningrossfixedcapitalformationby2.1per

andincentivesgiventoindustry)areperceivedto

cent,whichismainlyduetodeclineinprivatecorporate

beplayingoutonlygradually;(ii)thebenigngrowth

investment.Thisdeclineisbecauseofhighinterestrates

outlookinsomeAsianeconomies,particularly

andtightliquidityresultingfromcontractionarymonetary

China;(iii)stillelevatedlevelsofinflationthatlimit

policyfollowedtocontrolinflationandpreventrupee

thescopeoftheRBItoreducepolicyrates;and(iv)

fromdepreciating.

theexpectationofabelow-normalmonsoon.

Downsideriskalsoemergesfromprolongingof

Moderaterevivalofexports,coupledwithdeclinein

geo-politicaltensions.Ontheupside,suchfactors

imports,helpedimprovenetexports.Theshareof

asinstitutionalreformtoquickenimplementationof

exportsinGDPincreasedfrom24percentin201213

largeprojectsandastronger-than-expected

to24.8percentin201314,whiletheshareofimports

recoveryinmajoradvancedeconomieswouldhelp

declinedfrom30.7percentto28.4percent,resultingin

theIndianeconomyclockahigherrateofgrowth.

improvementinnetexportsby3.1percentpointsofthe

GDP.

Despitesomemeasuresundertakentoaddress

structuralconstraints,reversiontoagrowthrateof

Inflation,fiscaldeficitandCurrentAccountDeficit

around78percentcanoccuronlybeyondthe

(CAD)

ongoingandthenextfiscalyear.

Prioritiesforboostinggrowthincludereviving

AlthoughtheaverageWholesalePriceIndex(WPI)

investments,

strengthening

macro-economic

inflationdeclinedin201314to6percent,vis--vis8.9

stability,creatingnon-agriculturaljobs,developing

percentin201112and7.4percentin201213,itis

infrastructure

and

fostering

agricultural

stillabovecomfortlevelandcontinuestoposesignificant

development.

challenges.

Chapter2:Issuesandpriorities

Fiscaldeficitof4.5percentoftheGDPin201314,as

comparedtothebudgetedtargetof4.8percentofGDP,

A.Issues

isindicativeofcontinuedfocusonfiscalconsolidation.

Withashortfallintaxrevenuesanddisinvestment

Post2008,theeconomyhaswitnesseda

receipts,alongwithhigher-thanbudgetedsubsidiesand

interestandpensionpayments,fiscalconsolidationwas

worseningoftheeconomicoutlookanda

mainlyachievedthroughreductioninexpenditurefrom

downswingintheinvestmentcycle.Adverseglobal

thebudgetedlevels.

conditionswereundoubtedlyonereasonforthe

slowdowninbusinesscycleconditionsinIndia.

Raisingthetax-GDPratioandfurtheranceofsubsidy

However,itwouldbeuntruetosaythatdomestic

reformsareessentialforfiscalconsolidation.

factorssuchasinflationuncertainty,tightliquidity

CADreducedto1.7percentin201314from4.7per

conditionsanddifficultiesincontractingand

centin201213.Thiswasduetoimprovementinnet

financinginfrastructureprojectsdidnotcontribute

exportsbroughtaboutbyrestrictionsonnon-essential

tothemacro-economicoutcomeswitnessedfrom

importsanddemandslowdown.ImprovedCADalso

2006-07to2012-13.

broughtaboutimprovementinbalanceofpayments.


Investmentactivitystartedfacingdifficultiesduetoglobal

II)Sustainablepublicfinance:

crisis.Asdemandsloweddown,someexistingprojects

becameunviable.Manylargeprojects,relatedto

Puttingpublicfinancesonasustainablepathhas

environment,forest,andlandacquisitionorraw

threeelements:

materialsrequiredforcompletionwereunabletoget

timelyclearances.Thisresultedinanumberofprojects

Accounting

practices

and

budgetary

gettingstalled.

management:anewFiscalResponsibilityand

BudgetManagement(FRBM)actwhichhas

Theinvestmentdownturnhasbeenexacerbatedby

consequencesifitisnotmet.

difficultiesintheavailabilityandcostoffinance.Thecost

ofborrowingindomesticmarketssufferedasudden

Taxreform:Thetaxregimemustbesimple,

increaseafter15July2013.Aftertheonsetofthegreat

predictable,andstable.Thisrequiresasingle-rate

recessionintheperiodaftertheglobalfinancialcrisis,

GoodsandServicesTax(GST),asimpleDirect

advanced

economies

introduced

unconventional

TaxCode(DTC),andatransformationofthetax

monetarypolicytools.

administration.TaxreforminIndiacanbyitself

improvetheeaseofdoingbusinessandpromote

TheDoingBusinessReport2014,preparedbytheWorld

efficiencyandproductivitygrowth.

Bank,showsthatIndiaranks134outof189countriesin

2014intheeaseofdoingbusinesscategory,andranks

Expenditurereform:isrequiredforthe

158outof189countriesundertheheadpayingtaxes.

governmenttoachievedesiredoutcomeswith

Indiascomplextaxsystemsuffersfromproblemsinboth

minimumcost.Thisrequiresachangeinthe

structuresandadministration.

budgetingprocessandaccountingpractices,

subsidyreform,afocusonpublicgoods,and

mechanismsforfeedbackandaccountability.Some

B.Reforms

keyareasinthisregardinclude:

Subsidy:Notallthemoneyputintosubsidy

ThedefiningchallengeinIndiatodayisthatof

schemesreachesthepoor.Itisincreasingly

generatingemploymentandgrowth.Jobsarecreatedby

feasibletoidentifyhouseholdsbelowthepoverty

industrywhentheindustryinvestsandgrows.Hence,it

lineandgivethemdirectbenefit.

isimportanttocreateanenvironmentthatisconducive

fortheindustrytoinvest.Therecentbusinesscycle

Education:Therehasbeenremarkable

downturnhasseenasharpdeclineininvestment.

expansion

of

expenditure

on

elementary

Revivinginvestment,istherefore,ontopofthe

educationinrecentyears;however,the

governmentspriorities.

outcomes

indicate

that

the

design

of

Investmentsaremadeonthebasisoflong-termgrowth

government

programmes

in

elementary

prospects.ThekeytorevivinginvestmentinIndialiesin

educationneedsrevisiting.

revivingthetrendgrowthrateoftheeconomy.Reforms

areneededonthreefronts:creatingaframeworkfor

Health:Thereisaneedtofocusonthelimited

sustainedlowandstableinflation,settingpublicfinances

budgetaryresourcesonpublicgoods.Themost

onasustainablepathbytaxandexpenditurereform,

powerfulinterventionsforimprovedhealthmay

andcreatingthelegalandregulatoryframeworkfora

lieintheareaofwaterandsanitation.

well-functioningmarketeconomy.

Epidemiological

interventions

such

as

vaccination

programmes,

and

control

of

I)Creatingaframeworkforlowandstableinflation:

diseases,havethecharacteristicsofpublic

First,thegovernmenthastoworktowardsalowand

goods.

stableinflationratethroughfiscalconsolidation,moving

towardsestablishingamonetarypolicyframework,and

Infrastructure:Theroleofthegovernmentin

creatingaconduciveenvironmentforacompetitive

infrastructurecanbeusefullydividedinto

nationalmarketforfood.Since2010,therehasbeenan

planning,contracting,andregulating.Manyof

upsurgeinfoodinflationwhichhasspilledovertonon-

thedifficultiesofthelastdecadeinthefieldof

foodandgeneralinflation.Thereisneedforaformal

infrastructuremaybeattributedtoinadequate

monetarypolicyframeworkthroughwhichtheReserve

statecapacityforprocuringandcontracting

BankofIndiaisgivenclarityofobjective(aCPIinflation

complexPPPprojects.Separationofthis

target),andoperationalautonomyinpursuitofthat

function

would

require

establishing

an

target.Alowandstableinflationratehelpsmaintainthe

independent

organisation

with

specialised

valueofthecurrency,bothdomesticallyandexternally.

expertiseincontracting.


III)Creatingthelegalandregulatoryframeworkfor

ThegrossTax-GDPratioisexpectedtobeat10

awell-functioningmarketeconomy

percentin2013-14(directtaxbeing5.6percent

andindirecttaxbeing4.4percent)ascomparedto

Indiacanincreaseitslong-termtrendgrowthby

10.2percentin2012-13(directtaxbeing5.5per

unleashingtheentrepreneurialspiritofmillionsacross

centandindirecttaxbeing4.7percent).

thecountry,bystrengtheningtheeconomicfreedomof

For2013-14,fiscal,effectiverevenueandprimary

thepeople.Thebiggestchallengetodayisimproving

deficitsareplacedat4.5percent,2percentand

statecapacitysuitableforamarket-basedeconomy.A

1.2percentofGDPrespectively.Theplan

long-term,carefulandsystematiceffortisrequiredfor

expenditurehasbeenestimatedatINR4,531

undertakinginstitutionalchange.Somekeyareasinthis

billion,equivalentto4percentoftheGDP.

regardinclude:

ExternaldebtoutstandingasapercentofGDPhas

Addressingmarketfailures:Thekeyinsightontherole

declinedandisplacedat1.6percentin2013-14,

ofthegovernmentinamarketeconomyistheideaofa

ascomparedto1.8percentin2012-13.Thetotal

marketfailure.Theconceptofamarketfailuregivesa

outstandingliabilitiesasapercentofGDPstandat

frameworkforguidingstateintervention.Beforeastate

49.4percentofGDPin2013-14,asagainst50.1

interventionisinitiated,itisimportanttodemonstrate

percentin2012-13.

thatthereisamarketfailure.Itshouldbeshownthatan

interventionwillsolvethemarketfailure.Further,the

Corporationtaxesconstituted3.5percentofGDP

coststosocietyasaresultofgovernmentintervention

in2013-14,similarto2012-13,whereaspersonal

shouldbeoutweighedbyitsbenefits.

incometaxstoodat2.1percentofGDPin2013-

14,asagainst1.9percentin2012-13.

Reformingmarketsoffactorsofproductionsuchas

thoseforlabour,land,andcapital,however,remained

Collectionsfromcustomsdutiesreducedto1.5per

largelyunreformedandisanimmediatepriority.

centofGDPin2013-14,asagainst1.6percentin

2012-13.Collectionsfromunionexcisedutiesalso

Capitalcontrols:Thereisaneedtodrasticallysimplify

witnessedadeclineandstoodat1.5percentof

crossborderactivitiesasanelementofreducingthe

GDPin2013-14,asagainst1.7percentin2012-

costofdoingbusinessinIndia.Numerousemerging

13.Onthecontrary,collectionsfromservicetax

marketsaredoingbetterthanIndiaonthis.Forexample,

increasedat1.4percentofGDPin2013-14,as

asinglewindowforFDIcanbeeffectivelycreatedifall

against1.3percentin2012-13.

rulemakingunderFEMArestswithinadepartmentof

theGovernmentofIndia,andalltransactionsare

Fiscalconsolidationremainsimperativeforthe

permittedotherthanthoseintheexplicitnegativelist.

economy.While,itwouldbeachallengetostickto

thefiscalconsolidationroadmap,especiallyinlight

Liberalisingagriculture:StateAgriculturalProducts

oftheglobalanddomesticeconomicscenario,the

MarketCommittee(APMC)lawsareamajorhurdleto

introductionofgoodsandservicestax,rationalising

modernisationofthefoodeconomy.Alongsidethe

expenditure,improvementintaxbuoyancyand

removalofconventionalinterventionsinthefood

othertaxreformsshouldcontributetohigher

economy,thereisaneedtoplaceapriorityuponthe

growth.

threenational-levelpublicgoods:

Chapter4-Pricesandmonetarymanagement

Knowledgeofproduction

HeadlineWholesalePriceIndex(WPI)inflation,

Regulationsonfuturestrading

whichaveraged8.94percentin2011-12and7.35

percentin2012-13,moderatedto5.98percentin

Interventionstoaddressthemarketfailuresin

2013-14.Acrosscommoditygroups,theaverage

productionorwarehousing.

quarterlyinflationratewas9.43percentforfood

items,10.14percentforfuelandpower,and2.94

Chapter3-Publicfinance

percentfornon-foodmanufacturedproductsduring

2013-14.ConsumerPriceIndex(CPI)inflationalso

Thefiscaloutcomeofthecentralgovernmentin2013-14

moderatedto9.49percentin2013-14from10.21

wasinlinewiththefiscalconsolidationtargets,despite

percentin2012-13.TheRBIhastargetedbringing

macroeconomicchallengesofgrowthslowdown,high

downtheCPIinflationtoaround8percentby

globalcrudepricesandslowgrowthofinvestment.

January2015and6percentbyJanuary2016.


TheMonetaryPolicyoftheReserveBankofIndias

ThetotalnumberofNonBankingFinance

(RBI)remainedtightasthefocusremainedon

Companies(NBFCs)registeredwiththeRBI

controllinginflation.During2013-14,theRBIchanged

declinedfrom12,385,asatJune2012,to12,225

thereporate4fourtimeswithratestandingat8percent

ason30June2013.Whilst,thedeposittaking

asatendMarch2014,whichis50bpshigherthanthe

NBFCsdeclinedfrom271to254,thesystemically

reporatestandingasatendMarch2013.Thecash

importantnon-deposittakingNBFCsincreasedto

reserveratioandstatutoryliquidityratioremained

417from370duringthesameperiod.

unchangedduring2013-14.

Thecumulativeamountmobilisedthroughequity

Consideringthesofteningofglobalpricepressureson

publicissuesdeclinedby14.2percent.Themean

tradeablecommodities,andreductioninexchangerate

sizeoftheinitialpublicofferings(IPO)listedatthe

volatility,inflationisexpectedtobemoderateinthe

NationalStockExchange(NSE)andBombayStock

comingfiscalyear.Further,fiscalconsolidationandthe

Exchange(BSE),withameanIPOsizeofINR33

addressingofsupplysideconstraintsthatexacerbate

crores,sharplywentdownby83.33percent

foodinflationshouldalsocreateroomformonetary

comparedto2012-13.

easingin2014-15.

Duringthelastfinancialyear,variousregulatory

Chapter5-Financialintermediation

changeshavebeenmadetodevelop/stimulatethe

growthofthecorporatebondmarket.

Theyear-on-yeargrowthofaggregatedepositsofbanks,

Capitalmarketscontinuedwiththeupside

bankcreditsandinvestmentsinapprovedsecuritiesin

momentumandthebenchmarkindicesi.e.,the

2013-14,vis--vis2012-13,haschangedasfollows:

SensexandtheNiftyrose18.8percentand18.0

Aggregatedepositsmarginallyreducedto14.1per

percentrespectivelyinthefiscalyear2013-14.

centin2013-14,from14.2percentin2012-13.

Theturnoverincashsegmentoftheequitymarket

andequityderivativesegmentincreasedby2.59

Bankcreditshaveincreasedby13.9percentin

percentand22.92percentrespectively,compared

2013-14,asagainsttheincreaseof14.1percentin

totheturnoverin2012-13.

2012-13.

Themajorpolicyinitiativesundertakenduringthis

fiscalincludenotificationofForeignPortfolio

Therateofgrowthofinvestmentsinapproved

Investors(FPI)regulationson7January2014,and

securitieshasdecreasedfrom15.4percentto10.3

theenhancementofthelimitsforforeign

percent.

institutionalinvestorsinvestmentinthedomestic

debtmarketfromUSD66billiontoUSD81billion

ScheduledCommercialBanks(SCBs)reflecteda

(USD51billionforcorporatebondsandUSD30

declineinthegrowthofprofits.Thegrowthinthe

billionforgovernmentsecurities).

consolidatedbalancesheetin2012-13was15.1per

cent,asagainstthegrowthof15.8percentin2011-12.

During2013-14,thefirstyearpremiumunderwriting

bylifeinsurersregisteredagrowthof11.44per

Thecapitaladequacy(underBaselII)ofthebanksatthe

cent.Premiumunderwrittenbytheprivatesector

system-wideleveldeclinedto13.88percentasatend

declinedby4.01percent,whereas,theLife

March2013,ascomparedto14.24percentasatend

InsuranceCorporation(LIC)registeredagrowthof

March2012.

17.64percentinfirstpremiumunderwriting.

ThegrossNonPerformingAssets(NPAs)togross

During2013-14,premiumunderwritingbynon-life

advancesratioshotupto3.6percentin2012-13from

insurersregisteredagrowthof12.23percent,with

3.1percentin2011-12.ToaddresstherisingNPAs,the

privateandpublicinsurersregisteringthegrowthof

RBIhastakenvariousstepsincludingtheissueof

15.37percentand9.86percentrespectively.

guidelinesonearlywarningsystemdated30January

2014.

Lifeandnon-lifeinsurancepenetrationcumulatively

hasgrownfrom2.3percentin2000to3.96per

Towardsthefinancialinclusionfront,publicsectorbanks

centin2012.

opened7,840branchesin2013-14ascomparedto

4,432in2012-13,andtheyhad96,853automatedteller

Keychallengesamongstothersincludeilliquidityin

machinesbyJanuary2014asagainst69,652attheend

thefinancialmarkets,developmentofthebond-

of2012-13.

currencyderivativenexustoequitymarketquality

levels,

financial

inclusion

and

infrastructure

financing.

2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternational

Cooperative(KPMGInternational),aSwissentity.Allrightsreserved.

Chapter6-Balanceofpayments

In2013-14,therupeestartedtodepreciateona

month-on-monthbasisstartingMay2013.This

IndiasBalanceofPayment(BoP)positionhasimproved

processwasmorepronouncedinJune2013and

significantlyin2013-14,particularlyinthelastthree

August2013whenitdepreciatedinexcessof5per

quarters.Thiswasmainlyduetodecreaseinimportof

centonamonth-on-monthbasis.Theaverage

goldandsilver.Further,measurestoaugmentcapital

exchangerateoftherupeereachedapeakin

flowsthroughquasi-sovereignbondsandliberalisationof

September2013atINR63.75perUSD.Thereafter,

externalcommercialborrowingsalsohelped.TheRBI

onthestrengthofthemeasurestakenbythe

alsoputinplaceaspecialswapwindowforforeign

governmenttoreducetheCAD,andtheRBIand

currencynon-residentdeposit(banks)andbanks

thegovernmenttoboostcapitalflows,therupee

overseasborrowingsthroughwhichUSD34billionwas

reboundedtoreachanaveragelevelofINR61.62

mobilised.

perUSDinthemonthofOctober2013.Therupee

Therewaspick-upinexportsandmoderationofimports

hassubsequentlybeenrangeboundandstablein

intheperiod2013-14.Thisledtocontractioninthetrade

2013-14.

deficit.Overalltheexportsfortheperiod2013-14

Indiasexternaldebtcontinuestobepredominantly

amountedtoUSD318.6billion,asagainstUSD306.6

consistingoflong-termborrowings.Long-term

billionin2012-13.Theimportsfortheperiod2013-14

externaldebtatUSD333.3billion,attheendof

reducedtoUSD466.2billionfromUSD502.2billionin

December2013,accountedfor78.2percentofthe

2012-13.ThetradedeficitwasUSD147.6billionwhich

totalexternaldebt,theremaining21.8percent

waslowerbyUSD48billionfromthe2012-13level.Asa

beingconstitutedofshort-termdebt.

proportionofGDP,tradedeficitonBoPbasiswas7.9

percentofGDPin2013-14,asagainst10.5percentin

BoPimprovedduringtheperiod2013-14mainlyon

2012-13.

accountoftherestrictiononnon-essentialimports

andotherincentivesforcapitalflowduringthe

TheCurrentAccountDeficit(CAD)moderatedsharplyto

period2013-14.However,sustainingthesamein

USD32.4billionin2013-14,asagainstUSD88.2billion

themedium-termisachallengeassomeofthe

in2012-13.TheCADat1.7percentofGDPin2013-14

restrictionsandincentivesmayhavetoberolled

comparesfavourablywiththelevelsinthepre-2008

back.Withclosemonitoringandpolicies,itislikely

crisisyears.

thattheCADmaybelimitedtoaroundUSD45

Thenetcapitalinflowfortheperiod2013-14amounted

billion(2.1percentofGDP)in2014-15,whichis

toUSD47.9billion,asagainstUSD92.0billioninthe

likelytobefinancedbystablesourcesof

previousyear.WhilenetFDIwasplacedatUSD21.6

capital/financialflows,leadingtoastableexchange

billion,portfolioinvestment(mainlyFII)atUSD4.8billion,

rateenvironmentwithouttheneedforanymajor

ECBsatUSD11.8billion,andNRIdepositsatUSD38.9

interventioninthisregard.

billion,thereweresignificantoutflowsonaccountof

short-termcreditatUSD5.0billion,bankingcapital

Chapter7-Internationaltrade

assetsatUSD6.6billion,andothercapitalatUSD10.8

billion.Thenetcapitalinflowsintandemwiththelevelof

Globaleconomicuncertaintycoupledwith

CADledtoareserveaccretionofUSD15.5billionon

subsequentslowdown,thoughofapassingnature,

BoPbasisin2013-14.

continuetocasttheirshadowsonthetradegrowth

ofemerginganddevelopingeconomies(EDEs)

Althoughtheforeignexchangereserveincreasedby

includingIndia.Thisisreflectedinthegrowthtrend

USD15.5billiononBoPbasis,innominaltermsit

ofexportswhichfellfromanastoundinggrowth

increasedonlybyUSD12.2billion.Thiswasonaccount

rateof30.1percentin2003-2007to16percent

ofvaluationlossinthenon-USdollarassetsheldowing

during2009-2013.Whiletheoutlookseemstobe

tocross-currencymovementsandthedeclineingold

improving,thesituationstillremainsfragileforboth

prices.Foreignexchangereserveswereplacedat

theworldandIndiantrade.

USD304.2billionatendMarch2014,asagainstalevel

ofUSD292.0billionatendMarch2013.

Merchandiseexportshaveregisteredagrowthin

absolutetermsof4.1in2013-14percentas

Thevulnerabilityofrupeeandcurrenciesofother

againsttocontractionin2012-13.Thishasresulted

emergingmarketanddevelopingeconomiescametothe

inanincreaseintheshareofworldexportsfrom

foreinMay2013asaresultoftheannouncementbythe

0.7percentin2000to1.7percentin2013.In

U.S.Fedabouttaperingofitsassetpurchases.The

2013,Indiawaspositionedonthe19thrankas

rupeewasalsoaffectedonaccountoftheelevatedCAD

against31st,in2000,inthetopmerchandise

andlargewithdrawalfromtheFIIdebtsegment.

exporterslistintheworld.



Exportsgrewin2013-14primarilyduetocommendable

Chapter8-Agricultureandfoodmanagement

performancebythelabourintensiveexportsectors.

Whiletextileexportsgrewby14.6percentin2013-14,

Asaconcomitantofgrowth,theshareofagriculture

exportsinleatherandleathermanufacturerssector

andalliedsectoringrossdomesticproduct(GDP)

soaredby16.7percent,andofhandicraftsincluding

declinedto15.2percentduringtheEleventhPlan,

carpetswerealsoindoubledigitsat10.9percent.

andfurtherto13.9percentin2013-14(provisional

estimates(PE)).Whilethesectorstillaccountsfor

India'smerchandiseimportsatdeceleratedfrom0.3per

about54.6percentofthetotalemployment

centin2012-13toanegativeof8.3percentin2013-14.

(Census2011),therehasbeenadeclineinthe

Thiswasprimarilyduetothedeclineintheimportof

absolute

number

of

cultivators,

which

is

goldandcapitalgoods.Goldimportsfellsharplyin

unprecedented,from127.3million(Census2001)

2013-14onthebackofseveralmeasurestakenbythe

to118.7million(Census2011).Thisisindicativeof

government.Intermsofvalue,goldandsilverimports

ashiftfromfarmtonon-farmemployment,causing

fellby40.1percenttoUSD33.4billionin2013-14.

realfarmwagestorisebyover7percentannually

inrecentyears.

TradedeficitforApril2013toJanuary2014atUSD137.5

billionwas27.8percentlowerthanUSD190.3billionin

AsperthePEfor2013-14,growthrateofthe

April2012toJanuary2013.

agricultureandalliedsectorsGDPwas1.4per

centand4.7percentrespectivelyduringthefirst

Moderateexportgrowth,coupledwithdeclineinimports,

twoyearsoftheTwelfthPlanperiod.Havingsaid

helpedimprovethenetexports.Measurestakenbythe

this,astructuralchangeinthecompositionof

governmentandtheRBIhaveresultedinadeclinein

Indiastradedeficit

agriculture,showingdiversificationintohorticulture,

,contributingtoalowerCADof1.7

livestock,andfisheries,isnoticeable.

percentofGDP.

OverallGrossCapitalFormation(GCF),bothpublic

InIndia,growthinservicesexportsbecameerraticinthe

andprivate,inagriculturalandalliedsectorhas

postglobalcrisisperiod.Reflectingtheimpactof

increasedfrom16.1percentofitsGDP,in2007-

uncertaintyintheglobaleconomyandweakgrowthin

08,to21.2percentin2012-13(2004-05prices).

advancedeconomies,servicesexportswitnesseda

AsapercentageofthissectorsGDP,private

growthof4percent,asagainstalowergrowthof2.4

investmenthasbeenrisingandwas18.1percent

percentinthecorrespondingperiodof2012-13.

in2012-13,indicatingthatmorethan85percentof

Importofserviceswhichgrewby3.2percentin2012-13

investmentinthissectorisbytheprivatesector.

declinedtoanegativeof2.8percentin2013-14,withall

AlthoughIndiaisoneofthetopcountriesin

majorcategoriesregisteringnegativegrowth.

agriculturalproduction,thecurrentleveloffarm

SurplusonaccountofIndia'sservicesexportshasbeen

mechanisation,

which

varies

across

states,

acushioningfactorforfinancingalargepartofthe

averagesaround25percentasagainstmorethan

merchandisetradedeficitinrecentyears.Withmoderate

90percentindevelopedcountries.

growthinservicesexportsandfallinserviceimports,the

Agriexports(includingmarine)grewby5.1per

surplusatUSD28-29billionperquarterresultingin

centin2013-14over2012-13,toUSD37,292

overallnetsurplusofUSD115.2billionin2013-14

million,ofwhichexportsofmarineproductsalone

financed49.4percentoftradedeficit.Withhigher

increasedby44.8percentoverthesameperiod.

exportsandlowerimportsthetradedeficitreducedto

Further,exportofricehasincreasedfrom

7.9percentin2013-14,asagainst10.5percentin

USD2575millionin2010-11toUSD7742millionin

2012-13.

2013-14,andexportsoftotaldairy,poultry,meat,

ThechallengesforIndiaonthetradefrontaremany.

andmarineproductshavedoubledtheirsharein

WhileIndiahassuccessfullydiversifieditsexportbasket,

agriexportsbetween2008-09and2013-14.

moreneedstobedoneontheproductdiversification

TheNationFoodSecurityAct(NFSA)wasnotified

front.Italsohastorepositionitselfinitsareaslikegems

on10September2013,withtheobjectiveof

andjewelleryandelectronicgoodswhereithaslost

providingfoodandnutritionalsecuritybyensuring

considerableground.

accesstoadequatequantityofqualityfoodat

Therearemanymicroandsector-specificissuesthat

affordableprices.Itprovidesforcoverageofupto

needurgentattention.Theseprimarilyarerelatedto

75percentoftheruralpopulationandupto50per

infrastructure,tradefacilitation,taxandtariffs,andcredit.

centoftheurbanpopulation.Theestimatedannual

Addressingtheseissuescanexponentiallypromote

foodsubsidyforimplementationoftheActat2014-

India'sexportgrowthby30percenttoachievea

15costsisaboutINR1,31,066crore.

respectableballparkfigureofatleast4percentsharein

theworldexportsinthenextfiveyears.


Inordertoaddresstheissueofsupplychain

During2013-14,totalFDIinflowswereUSD36.4

managementinagriculturalmarketing,itisnecessaryto

billion.FDIequityinflowswereUSD24.30billion,

removemarketdistortionsincreatingacommonmarket

showinganincreaseof8percentascomparedto

topromoteefficiencyandgrowth,andfacilitatethe

thepreviousyear.CumulativeFDIinflowsfrom

creationofanationalagriculturalmarket.

April2000toMarch2014stoodatUSD323.9

billion.NetFDIinflowswereUSD21.6billionduring

Onapositivenote,thereappearstobenocausefor

2013-14.Further,inthepast,sectorslikeservices,

alarmontheElNiofrontasIndiaiswellplacedonfood

construction,

telecommunications,

computer

grainsavailability,withrecorddomesticproductionand

software

and

hardware,

drugs

and

hugestocksinthecentralpool.TheFoodand

pharmaceuticals,

automobile

industry,

power,

AgricultureOrganisation(FAO),initsCerealSupplyand

DemandBriefofJune2014,hasalsoforecast

metallurgicalindustries,andhotelsandtourism

a

haveattractedmaximumFDIinflows.

comfortableglobalscenariofor2014-15withhigh

stocks-to-useratiosofcerealsandstableprices.

Inviewoftheongoingindustrialslowdown,the

policyfocusneedstotargetkeygrowthdriversin

Chapter9-Industrialperformance

theshortterm.Oneofthecrucialdriverscanbethe

ThelatestGDPestimatesindicatethatindustrygrewby

revivalofprivatecorporatesectorinvestment,

ameagre1.0percentin2012-13andsloweddown

buildingaconduciveinvestmentclimateand

furtherin2013-14,postingamodestincreaseof0.4per

upliftingtheoverallbusinesssentiment,FDIin

cent.Industrialperformancein2013-14remained

varioussectors,conduciveexchangeratespolicies,

lacklustreforthesecondsuccessiveyear.

allowingFDIindefence,removalofrestrictionsin

SEZsandNationalInvestmentandManufacturing

ThemanufacturingandminingsectorGDPdeclinedby

Zones(NIMZs).Further,promotionofindustrial

0.7percentand1.4percentrespectivelyin2013-14.

clustersfordifferentsectorsindifferentregions

Keyreasonsforthepoorperformancehavebeen

wouldalsoattractinvestmentbecauseclusters

contractioninminingactivitiesanddecelerationin

havetheadvantageoflowerlogisticscosts,better

manufacturingoutput.Further,declineininvestment,

supply-chainlinkages,andeasyaccesstolabour

particularlybytheprivatecorporatesectorduring2011-

andtechnology.

2012and2012-2013haveaddedtothewoesofthis

sector.

Chapter10-Servicessector

Theconsumerdurablessegmentindexcontractedby

ServicesconstituteamajorportionofIndiasGDP

12.2percentin2013-14,asagainstagrowthof2.0per

witha57percentshareinGDPatfactorcost(at

centduringthepreviousyear.Thisisprimarilydueto

currentprices)in2013-14.Besidesbeingthe

severaldomesticandexternalfactorssuchashigher

dominantsectorinIndiasGDP,ithasalso

interest,infrastructurebottlenecks,inflationarypressure

contributedsubstantiallytoforeigninvestment

leadingtorisinginputcosts,dropindomesticand

flows,exports,andemployment.

externaldemandforsomesectors,whichhavetogether

Indiasservicessectorthatremainedresilienteven

contributedtolowgrowthinthemanufacturingsector.

duringandimmediatelyaftertheglobalfinancial

GrossCapitalFormation(GCF)intheindustrialsector

crisisbuckledunderthepressureofcontinued

comprisingofmining,manufacturing,electricityand

globalanddomesticslowdown,resultinginsub-

constructionhasdeclinedfrom31.8in2011-12to28.3in

normalgrowthinthelasttwoyears.However,early

2013-14.EventhoughdetailedestimatesofGFCFare

shootsofrevivalarevisiblein2014-15,withsigns

notavailablefor2013-14,theoveralldeclineingrowth

ofimprovementinworldGDPgrowthandtrade

ratesoffixedinvestmenthintsatfurtherdecelerationin

alsoreflectedinthepick-upinsomekeyservices

investmentinkeysegmentsofindustryduringtheyear.

likeIT,aviation,transportlogistics,andretail

trading.In2013-14thegrowthrateoftheservices

Overallrateofgrowthofcreditflowtoindustryincreased

sectorat6.8percentismarginallylowerthanin

by14.9percentin2013-14,lowerincomparisonwith

2012-13.Thisisduetodecelerationinthegrowth

the20.9percentgrowthachievedin2011-12and17.8

rateofthecombinedcategoryoftrade,hotels,and

percentin2012-13.

restaurants,

and

transport,

storage,

and

Postglobalfinancialcrisis,whiletheIIP-basedgrowth

communicationsto3.0percentfrom5.1percentin

rateofthecapitalgoodssectorwasrobustat14.8per

2012-13,despiterobustgrowthoffinancing,

centin2010-11,itfellby6percentin2012-13and

insurance,realestate,andbusinessservicesat

furtherby3.6percentin2013-14primarilyduetosteady

12.9percent.Construction,aborderlineservices

decelerationinfixedinvestmentinthepastthreeyears.

inclusion,whichhasnotbeenperformingwellsince

Theslowpaceofmegaprojectsimplementationanda

2012-13,grewbyonly1.6percentin2013-14.

declineinthenumberofnewprojectshasadversely

impactedthecapitalgoodssegment.



ThecombinedFDIshareoffinancialandnon-financial

ThetotalForeignDirectInvestment(FDI)inflows

services,

construction

development,

intomajorinfrastructureregisteredagrowthof22.8

telecommunications,computerhardwareandsoftware,

percentin2013-14ascomparedtoacontradiction

andhotelsandtourism,canbetakenasarough

of60.9percentduring2012-13,withpositive

estimateoftheFDIshareofservices,thoughitcould

growthrecordedinrailway-relatedcomponents,

includesomenon-serviceelements.In2013-14,FDI

telecommunications,airtransport,andpower.Bank

inflowstotheservicessector(topfivesectorsincluding

creditfortheinfrastructuresectormoderatedfrom

construction)declinedsharplyby37.6percentto

anaverageof44.8percentin2011-12to17.7per

USD6.4billion,comparedtoanoverallgrowthinFDI

centin2013-14.

inflowsat6.1percent.Asaresulttheshareofthetop

fiveservicesintotalFDIfelltonearlyone-sixth.

Thegrowthinpowergenerationwas6percent

duringApril-March2014,ascomparedto4percent

Whileexportsofsoftwareservices,accountingfor46per

inthecorrespondingpreviousperiod.Thecapacity

centofIndiastotalservicesexports,deceleratedto5.4

additiontargetfor2013-14wassetat18,432.3MW

percentin2013-14from5.9percentin2012-13,travel,

andcapacityadditiontargetforTwelfthFiveYear

accountingforanearly12percentshare,witnessed

planissetat88,537Megawatt(MW).Thepower

negativegrowthof0.4percent.However,movingin

generationfromadditionalcapacitytobegenerated

tandemwithglobalexportsoffinancialservices,Indias

duringtheTwelfthPlancriticallydependson

exportsoffinancialservicesregisteredahighgrowthof

ensuringfuelsupply(coalaswellasgas),

34.4percentin2013-14.

improvingthefinancialhealthofthestateelectricity

boards,makingpowerpurchaseagreementsof

Someserviceslikesoftwareandtelecomwerebigticket

itemsthatgaveIndiaabrandimageinservices.While

independentpowerproducerseconomicallyviable.

furtherfocusontheseservicesisneededtoretainand

Thegapbetweencoaldemandandsupplyhas

furtherourlead,thetimehascometofocusonsome

consistentlybeenincreasing,whichwasabout100

otherhighpotentialbigticketitems(identifiedastourism

MTattheendoftheEleventhFiveYearPlanand

and

hospitality

sector;

port

services;

shipping,

nowincreasedto145to150MT.Tofillthegap

shipbuildingandshiprepair;andrailways)thathavehigh

betweendomesticdemandandsupply,thecountry

manufacturing-sectorandemploymentlinkages.

importedabout146MTofcoalatacostof

Chapter

11

-

Energy,

infrastructure

and

INR92,538croreduring2012-13,andabout169

MTatacostofINR95,175croreduring2013-14

communications

(provisional).

The

initiatives

identified

for

Thetotalinvestmentininfrastructuresectorduringthe

acceleratingcoalproductionintheshortterm

TwelfthFiveYearPlan(2012-17)isestimatedatUSD1

includes(i)buildingcriticalfeederroutesforcoal,

trillion,halfofwhichisexpectedtocomefromtheprivate

(ii)clearingpendingenvironmentandforest

sector.TheTwelfthFiveYearPlanhaslaidspecial

clearancesandrehabilitationissues,(iii)permitting

emphasisoninfrastructuredevelopmentasquality

commercialcoalminingbytheprivatesector,(iv),

infrastructureisimportantnotonlyforsustaininghigh

restructuringofCoalIndiaLimited(CIL).

growth,butalsoforensuringthatthegrowthisinclusive.

Atotallengthof21,787kmofnationalhighways

Sectorwiseperformanceofcoreindustriesand

hasbeencompletedtillMarch2014undervarious

infrastructureservicesshowedamixedtrend.Areaslike

phasesoftheNationalHighwaysDevelopment

powerandfertilisers,railways,civilaviationandcargo

Project

(NHDP).

In

spite

of

several

traffic(exceptimportcargo)showedpositivegrowth,

constraintsduetotheeconomicdownturn,the

whereassectorslikecoal,steel,cement,refinery,crude

NHAIconstructed2844kmofroadlengthin

oilandnaturalgasproductionwitnessedlower/negative

2012-13,itshighesteverannualachievement.

growth.

During

2013-14,

a

total

of

1901

km

of

road

construction

was

completed.

The

Delayintheexecutionofprojectsonaccountofissues

governmenthasformulatedvariousinitiativesto

likeregulatoryapprovals,problemsinlandacquisition

expediteprojectsunderNHDPwhichinclude

andrehabilitation,timeoverruns,etc.continuestobe

project

preparation,

streamlining

of

land

oneofthemainreasonsforunderachievementinmany

acquisition/environmental

clearances,

dispute

infrastructuresectors.AsperthereportforFebruary

resolution,exitforequityinvestors,co-ordination

2014,totaloriginalcostofimplementationofdelayed

withotherministries,etc.

projectswasaboutINR7,39,882crore,andtheir

anticipatedcompletioncostislikelytobeINR8,97,684

crore,implyinganoverallcostoverrunofINR1,57,802

crore(i.e.21.3percentoftheoriginalcost).


During2013-14,productionofcrudeoilremained

theallocationofspectrumisdelinkedfromthe

stagnantat37.8millionmetrictonnes(MMT),asagainst

licenceandhastobeobtainedseparatelyasper

37.9MMTin2012-13,whichisamarginaldecreaseof

prescribedprocedure,i.e.biddingprocess.

0.20percent.Theaveragenaturalgasproductionfor

2013-14wasabout35.4billioncubicmeters(BCM),as

Fromamacroeconomicperspective,theneedfor

against40.7BCMfor2012-13showingdeclineof13per

infrastructure

development

for

economic

cent.Atotalof254ProductionSharingContracts(PSCs)

prosperityandglobalintegrationcannotbe

havesofarbeensignedundernineroundsoftheNew

overemphasised.Thechallengeistoensure

ExplorationLicensingPolicy(NELP)bidding,ofwhich

strong,sustainable,andbalanceddevelopment

148blocksarecurrentlyoperationalandtheremaining

through

integration

of

economies

with

106havebeenrelinquishedbythecontractors.Under

environmentally

sustainable

development

of

CoalBeadMethane(CBM)policy,33explorationblocks

infrastructure.Concernsforstalledinfrastructure

havebeenawarded.Shalegasisconsideredtobean

projectslikesteppingupinfrastructureinvestment,

importantnewsourceofenergy,withamulti-

improvingproductivityandqualityofinfrastructure

organisationalteam(MOT)ofthevariouspublicsector

spending,andremovingproceduralbottlenecks

oilandgascompanieshavingbeenformedtoexamine

needtobeaddressedtoensureacceleratedand

theexistingdatasetandsuggestamethodologyfor

betterinfrastructuredevelopment.

shalegasdevelopmentinIndia.

Chapter12-Sustainabledevelopmentandclimate

Thefreightloading(excludingloadingbyKonkan

change

Railways)byIndianRailway(IR)during2012-13was

placedat1008.09milliontonnes,asagainst969.05

Therehasbeenasubstantialimprovementonthe

milliontonnesin2011-12,registeringanincreaseof4.03

developmentfrontwithmanycountriesachieving

percent.ThebroadobjectiveofIRistodevelopa

varioustargetssetaspertheMillennium

strategytobeapartofaneffectivemulti-modaltransport

DevelopmentGoals(MDG);energyintensityhas

systemandtoensureanenvironment-friendlyand

declined,globalpovertyhasbeenhalved,

economicallyefficienttransportmovement.

sanitationtargetsandavailabilityofdrinkingwater

DomesticpassengertraffichandledatIndianairports

hasbeenachievedinafewcountries.Indiahas

reached122.43millionduringApriltoMarch2013-14.

madesignificantprogressinmeetingthetargets

Thisisanincreaseof5.2percentoverthedomestic

setoutbyMDG.

passengertrafficthroughputof116.37millionforthe

Theglobalcommunity,followingtheRio+20

sameperiodduring2012-13.Internationalpassenger

mandate,isdevelopingasetofsustainable

traffichandledatIndianairportswasplacedat46.62

developmentgoals(SDGs).Thesegoalsmaybe

millionduring2013-14,asagainst43.03millionduring

integratedwiththeunfinishedMDGswhenthey

thecorrespondingperiodofthepreviousyear,thereby

endin2015.Themajorfocusareasidentifiedfor

recordingagrowthrateof8.34percent.International

theSDGsarepovertyeradication,foodsecurity

cargothroughputatIndianairportsduring2013-14was

andnutrition,healthandpopulationdynamics,

1.44MMT,ascomparedto1.41MMTduringthe

education,

gender

equality

and

women

previousyear.Duringthereferenceperiod,domestic

empowerment,waterandsanitation,energy,

cargothroughputstoodat0.84MMTasagainst0.78

sustainable

cities

and

human

settlement,

MMT,therebyrecordinganincreaseof7.7percent.

sustainableproductionandconsumption,andthe

During2013-14,majorandnon-majorportsinIndia

meansofimplementation.

accomplishedatotalcargothroughputof980.49million

Thegovernmentexpenditureonsocialservicesas

tonnesreflectinganincreaseofonly5percentoverthe

proportionofGDPincreasedfrom5.49percentin

sameperiodof2012-13.Themajorportscontributedto

2005-06to7.09percentin2012-13.ThePresident

anincreaseof1.8percent,whereasthenon-major

andthePrimeMinisterhaveannouncedthelaunch

portstrafficgrewat9.6percent,ascomparedtothe

ofSwachhBharatMissionforensuringhygiene,

correspondingperiodof2012-13.

wastemanagementandsanitationacrossIndia.

Thetelecomsectorhasbeenoneofthefastestgrowing

Indiaismakingprogressinimplementingnational

sectorsinrecentyearsbeingthesecondlargest

plansforclimatechange.Ithasimprovedthe

telephonenetworkintheworld,afteronlyChina.The

efficiencyofitseconomyandreducedtheCO2

totalamountofINR61,162croreobtainedthrough

emissionsperunitofGDPby20percentbetween

auctionofspectrumunderNationalTelecomPolicy,

1990to2011.Therenewablepowercapacityhas

2012,whichwasmorethanthevalueofthespectrumon

increasedandaccountsfor12percentofthetotal

offeratreserveprice.TheDepartmentofTelecomhas

powercapacityinthecountry.

finalisedguidelinesonunifiedlicense,pursuanttowhich

.


Ason31May2014,44projectsworthINR160.35million

TheNationalVocationalEducationQualification

havebeenrecommendedtobefundedthroughthe

Framework(NVEQF)hasbeenalignedtothe

NationalCleanEnergyFund(NCEF).TheGovernment

NationalSkillQualificationFramework(NSQF)to

ofIndiahasinitiatedaconsultationprocesstodiscuss

standardiseskilllearningoutcomesandprovide

theinstitutionalinfrastructureneededtoaccessGlobal

mobility.

During

2013-14,

National

Skill

ClimateFinanceresources.Furthervariousdomestic

DevelopmentCouncil(NSDC)partnerstrained

plansandschemesarebeingimplementedaspartofthe

10,05,074peopleacrossawidearrayofsectors

nationalactionplanonclimatechange.Innovative

rangingfromhealthcare,manufacturing,electronics

schemesliketheJawaharLalNehruNationalSolar

andhardware,tourism,hospitalityandtravelto

Missionsinstallationofsolarphotovoltaiclights,power

banking,financialservices,retail,information

plants,etc.areeligibleforfundingthroughNCEF.In

technology,andtextilesin366districts.Skill

2013,Indiahasregistered115CleanDevelopment

developmentisvitalnotonlyfortakingadvantage

Mission(CDM)projects,thehighestbyanycountry.

ofthedemographicdividend,butalsoformore

inclusivegrowth.

AsopposedtotheKyotoprotocolandtheMDGs,two

newagreementsonclimatechangeandsustainable

Expenditureonhealthisjust1.4percentofIndias

developmentapplicabletoallwillbetheglobal

GDP.In2013-14,therewasanincreaseinoutlay

frameworksforactionstobefinalisednextyear.The

forthehealthsectorby7.44percentoverthe

issueofhowdevelopedanddevelopingcountrieswillbe

previousyear,toINR327.45billion.Thecombined

treatedinthesenewglobalagreementswillbecrucial.

revenueandcapitalexpenditureofthecentreand

Theagreementsneedtoensurethatthedeveloping

statesonmedicalandpublichealth,familywelfare,

countriesaregiventheirfairshareofcarbonand

andwatersupplyandsanitationhasincreasedfrom

developmentspace.

INR535.57billionin2006-07toINR1,362.96billion

in2012-13(BE).Alotmoreneedstobedoneto

Chapter13-Humandevelopment

furtherimprovethehealthindicatorstoprovide

qualityandaffordablehealthcareforthelarge

AccordingtotheHumanDevelopmentReport(HDR)

Indianpopulation.

2013,IndiawithaHumanDevelopmentIndex(HDI)of

0.554in2012hasslippeddownafewnotcheswithits

Womenandchildrenconstitutingabout70percent

overallglobalrankingat136(outofthe186countries),

ofthetotalpopulationofthecountryarevulnerable

asagainst134(outof187countries)asperHDR2012.

andlaggingintermsofmanyeconomicandsocial

Demographicdividend(theaverageageofthe125

parameters.Theshareofthegenderbudgethas

billion-strongIndianpopulationwillbe29yearsin2020)

increasedfrom2.79percentin2005-06to5.83per

willbenefitIndiaifitspopulationiseducated,healthy,

cent(INR97,133.70billion)ofthegrossbudgetary

andadequatelyskilled.

supportin2013-14.Greaterinclusionofwomen

involvesnotjustagreatershareforthegender

During2004-05to2011-12,employmentgrowth

budgetbutalsogreatershareofwomeninthe

(compoundannualgrowthrate[CAGR])wasonly0.5per

decisionmakingprocess.

cent,comparedto2.8percentduring1999-2000to

2004-05,asperusualstatus.Thereissteepreductionin

Timelyactionforequippingtheyoungpopulation

unemploymentrateunderCurrentDailyStatus(CDS),

withhighexpectationswithhealth,education,

from8.2percentin2004-05to5.6percentin2011-12.

adequateskillsandsecurityisofparamount

Thefallinunemployment,despitemarginalgrowthin

importance.Forthis,massiveeffortsareneededin

employmentin2009-10and2011-12,couldalsobeon

theformofinvestmentinsocialinfrastructure,skill

accountofthedemographicdividend,asanincreasing

development,andempowermentofwomen.

proportionoftheyoungpopulationoptsforeducation

Leveragingmoderntechnologyforefficientdelivery

ratherthanparticipatinginthelabourmarket.

ofprogrammes,removingthemultiplelayersof

AsapercentageofGDP,expenditureoneducationhas

governance,simplifyingprocedures,andgreater

goneupfrom2.9percentin2008-09to3.3percentin

participatoryrolebythebeneficiariescanhelpin

2013-14(BE).Thereisneednotonlytoincreaseit

creatingabetterdeliverymechanism.

further,butalsotoaddressqualityissues.

WhileIndiahassomeofthebestinstitutionstheworld,in

termsofqualityofeducation,alotmoreneedstobe

done.Inthisdirectionrecentinitiativesareundertakenin

theareaofhigherandvocationaleducationwhichwill

focusonaccess,equity,quality,andinnovationthrough

creation;expansionandconsolidationofinstitutions,

research,andinnovationhavingnorm-basedfunding,

havebeenlaunchedforstrengtheningandreforming

highereducation.


www.kpmg.com/in

Ahmedabad

Hyderabad

CommerceHouseV,9thFloor,

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902&903,NearVodafoneHouse,

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Tel:+911723935777/781

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Chennai

No.10,MahatmaGandhiRoad

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Mahalaxmi,Mumbai400011

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Theinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavourtoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactonsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.


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Chapter 2: Issues and prioritiesChapter 3 - Public financeChapter 5 - Financial intermediationChapter 6 - Balance of paymentsChapter 7 - International tradeChapter 9 - Industrial performanceChapter 10 - Services sectorChapterChapter 13-Human development

Documents

India Economic Survey 2013 14 Key Highlights Conve