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Economic Survey seems to have its head in the sand under storm clouds

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Economic Survey seems to have its head in the sand under storm clouds

GDP growth projection of 7-7.5 percent probably seems too optimistic

The Economic Survey 2018 projects 7-7.5 per cent growth rate in 2018-19, up from 6.75 per cent in the current fiscal, making India once again the world’s fastest growing major economy.

The forecast, that comes within an environment of slow and jobless growth, says the economy will grow on the back of major reforms which would be strengthened further in the next financial year.

“A series of major reforms undertaken over the past year will allow real GDP growth to reach 6.75 per cent this fiscal and will rise to 7 to 7.5 per cent in 2018-19, thereby re- instating India as the world’s fastest growing major economy,” it says.

The survey points out that India can be rated as among the best performing economies in the world as the average growth during last three years is around 4 percentage points higher than global growth and nearly 3 percentage points higher than that of emerging market and developing economies.

It says that the GDP growth has averaged 7.3 per cent from 2014-15 to 2017-18, which is the highest among the major economies of the world.

“That this growth has been achieved in a milieu of lower inflation, improved current account balance and notable reduction in the fiscal deficit to GDP ratio makes it all the more creditable,” it says.

The survey says that after the preliminary analysis of Goods and Services Tax (GST) data, there has been a 50 per cent jump in the number of indirect taxpayers and a huge increase in voluntary registrations, particularly by small enterprises. The number of individual income tax filers increased by over 18 lakh since November 2016 the month when demonetisation was implemented.

As for the optimistic projections of growth rate, if the survey had taken into consideration of the sharply spiking fuel prices, then, possibly, a change of heart would have occurred. On the other hand, since petroleum is still beyond the scope of GST, higher collection from taxes remains a possibility despite shooting oil prices. That might hot, however, translate into higher GDP growth.

What will be difficult to achieve in this scenario would be fiscal discipline and the deficit could well travel beyond control. And, when the resource pool for buying oil grows, even a small appreciation in the value of the Rupee could have major adverse effects at home.

Much of the survey’s optimism stems from an expectation of higher export. That may be so, but if the Rupee has appreciated against the accepted basket of foreign currencies, it will cancel out the positivity and we could well be standing pretty much where we started.

Before going any further, we need to read the substance of the survey which states that growth is on track, revenue collection is on the rise – it has to be remembered that this is the first survey and first Union Budget after the implementation of GST – and fiscal deficit was under reasonable check.

The survey also sees growth in private investment, the hallmark of any growing economy in the next fiscal while also adding flesh to government initiatives in the education and agriculture.

Apart from the fact that this survey’s forecast runs in the face of the government’s own advance GDP data as was available this month – that expected the economy to grow at a four-year low of 6.5 percent in the current fiscal, mainly due to the poor performance of agriculture and manufacturing sector, against last fiscal’s 7.1 percent – it is possibly avoiding this confrontation, especially with jumping fuel prices barking at its feet.

The fiscal deficit target of the government for this fiscal was 3.2 percent of GDP against 3.5 percent in 2016-17, but it is well known that with the elections progressing and things not looking too good, finance minister Arun Jaitley may be forced to take a populist stance, in which case the fiscal deficit target can only be relaxed, with discipline given a go-by.

The projections here, therefore, would taste better with a pinch of salt.

India News

Amit Shah challenges Rahul Gandhi to debate SIR in Parliament

Amit Shah responded to Rahul Gandhi’s public debate challenge by inviting him to discuss the SIR exercise in Parliament. He also criticised the Congress over its demand for Chief Election Commissioner Gyanesh Kumar’s resignation.

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Union Home Minister Amit Shah has challenged Congress leader Rahul Gandhi to take up his demand for a public debate with Prime Minister Narendra Modi in Parliament, saying the government is ready to convene a special session to discuss the Special Intensive Revision (SIR) exercise.

Addressing a rally in Haryana’s Karnal, Shah directly responded to Gandhi’s challenge to the Prime Minister, asking the Congress leader to write to PM Modi if he wanted a discussion.

“I want to challenge Rahul Gandhi directly. You challenge PM Modi for a discussion? If you want a discussion, simply write a letter to PM Modi. We are ready to convene a special session of Parliament to discuss the SIR exercise… Come and debate in Parliament,” Shah said.

The remarks came two days after Rahul Gandhi issued another public debate challenge to the Prime Minister.

On November 3, Gandhi wrote in a post on X that PM Modi could choose any stage or venue for a discussion. He proposed debating allegations concerning who was anti-national and who had connections with foreign forces, adding that the media and the country’s youth should also be present.

Amit Shah targets Congress over SIR controversy

During his address, Shah also criticised the Congress over its demand for the resignation of Chief Election Commissioner Gyanesh Kumar.

Referring to the 2014, 2019 and 2024 Lok Sabha elections, the Home Minister argued that the Congress had lost despite no Special Intensive Revision exercise being conducted during those elections.

“Where was the SIR in 2014? You were completely wiped out even then. Where was SIR in 2019? You lost. There was no SIR in 2024 either, yet you lost again,” he said.

Shah also referred to the elections in Haryana and Maharashtra, claiming that there was no SIR exercise in either state when the Congress suffered electoral defeats.

He accused the Opposition of disrupting parliamentary proceedings and organising protests on the streets instead of allowing Parliament to function.

Shah criticises Rahul Gandhi over protests

The Home Minister further alleged that Rahul Gandhi and the Congress were creating disorder through street protests and parliamentary boycotts.

Shah said BJP workers would give a “fitting reply” if Gandhi continued to mobilise crowds on the streets.

He also questioned Gandhi’s claim to have mobilised large numbers of people for a rally in Delhi, alleging that the venue had a capacity of 70,000 and was still half empty despite an appeal to bring 10 lakh people.

“The people of the country have consistently defeated Rahul Gandhi and the Congress party. The people of the country are not with you or the Opposition alliance,” Shah said.

Amit Shah raises questions over Rahul Gandhi’s foreign visits

Shah also sought details about Rahul Gandhi’s foreign visits, arguing that people had a right to know about them.

“You’re Leader of Opposition… People have the right to know,” the Home Minister said.

His remarks came amid the continuing political confrontation between the BJP and Congress over the SIR exercise, electoral processes and the Opposition’s criticism of the Election Commission.

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Women’s cash schemes in Chhattisgarh ease inflation, not entrepreneurship

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By Neeraj Mishra

As Chhattisgarh celebrated its 26th Foundation Day with Home Minister Amit Shah as chief guest, there are worries about the cash programmes for women.

With the payment of the 33rd consecutive monthly installment of Mahtari Vandan Yojana to more than 67 lakh beneficiaries, Chhattisgarh has created a record of sorts. The 67 lakh women are supposed to have received a monthly cash dole of Rs 1000 per head in their accounts totaling to a mammoth Rs 21,350 crore. It translates into a very neat Rs 33000 per head for each married woman over the age of 21 so far.

And all these women are KYC- checked and receive the direct benefit transfer. If there are an average of  three married women in a joint family, then the amount totals to better than the average rise in paddy prices. That’s not all, there are six other women’s schemes which provide easy loans and rent free shops in good locations. These schemes pump in a further Rs 11,000 crore into each household every year. Further, the renamed MNREGA has another Rs 16,200 crore reserved for the state every year.

So far so good and it reads like a state government PR pamphlet. Now for the bad news. The cash dole has so far been absorbed by the family itself because of the inordinate rise in fuel prices. By all accounts only 23 per cent of the households who receive gas cylinders are able to continue buying it. Only 15 per cent of those who received loans for various trades including e-rickshaws have been able to sustain it. This is roughly about 41,000 women so far.

The state had also invested in physical infrastructure like sheds and shops for trades like mushroom farming, goat farming and small size hatcheries. Some shops were given rent free on prime locations in Raipur, Durg and Bilaspur etc. Most of these facilities have been abandoned as the self-help groups (SHGs) formed for the purpose haven’t been able to convert it into a profitable venture. In fact, each SHG, which usually has 11 women, is given a monthly encouragement amount of Rs 15,000 which is now being split amongst the group with nothing to show for it.  Most sheds have either broken down or have become illegally occupied. Better still, the shops have been handed over to businessmen to recover some of the cost.

“The main reason these schemes have not had the desired effect is lack of training and a general apathy on part of the entrepreneurs because of easy cash,” said an official. And that best sums it up.

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Sharad Pawar admitted to Mumbai hospital hours after Pune discharge

NCP (SP) chief Sharad Pawar was admitted to Mumbai’s Breach Candy Hospital hours after being discharged from Pune’s Ruby Hall Clinic, where he had been undergoing medical observation following complaints of cough and chest pain.

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Sharad Pawar

Nationalist Congress Party (Sharadchandra Pawar) chief Sharad Pawar was admitted to Mumbai’s Breach Candy Hospital on Wednesday, just hours after being discharged from Pune’s Ruby Hall Clinic. His daughter and Baramati MP Supriya Sule confirmed the development in a social media post, saying that the veteran politician was being admitted for further medical tests.

The 85-year-old leader had been discharged from Ruby Hall Clinic earlier on Wednesday after being admitted on November 2 following complaints of cough and pleuritic chest pain.

Confirming his admission to the Mumbai hospital, Supriya Sule said, “We are admitting Baba to Breach Candy Hospital for further tests. Thank you all for your concern and good wishes.”

Pawar’s latest hospitalisation came after he had undergone medical tests and observation during his stay at the Pune facility. Sule had earlier said that his health parameters were stable.

Why was Sharad Pawar admitted to hospital?

Sharad Pawar was initially admitted to Pune’s Ruby Hall Clinic on November 2 after experiencing complaints of cough and pleuritic pain, a form of chest pain that generally becomes worse while breathing, coughing or sneezing.

Dr Purvez K Grant, chief cardiologist, chairman and managing trustee of Ruby Hall Clinic, had said that Pawar was admitted for a general health check-up and medical observation following complaints of pleuritic pain.

During his hospital stay, Supriya Sule had informed that Pawar was undergoing medical tests and that his health parameters remained stable.

He was subsequently discharged from the Pune hospital on Wednesday. However, hours later, his family decided to admit him to Mumbai’s Breach Candy Hospital for further medical examinations.

PM Modi calls Sharad Pawar, advises complete rest

Prime Minister Narendra Modi also spoke to Sharad Pawar over the phone on Wednesday morning to enquire about his health.

According to Pawar’s aide Vitthal Maniyar, the Prime Minister spoke to the NCP (SP) chief and advised him to take complete rest.

Maniyar said Modi told Pawar that his daughter Supriya Sule and others were ready to take care of the country, and that the veteran politician should focus on his health.

Pawar thanked the Prime Minister for enquiring about his well-being, the aide said.

Maniyar also said that Pawar told Modi that he was resting and had no worries about the country, as others were there to take care of things.

The latest hospital admission was confirmed by Supriya Sule, who said her father was being taken to Breach Candy Hospital for further tests.

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