Volume 2


The volume 2 of the economic survey covers issues of topics like electricity sector, public finance, MUDRA yojana, petroleum sector, road sector and service sector.

Electricity sector:

1.      U.D.A.Y [Ujwal discom assurance Yojana]: state shall take over 75% of outstanding debts of discoms. Reduce AT&C losses to 15%. Increased supply of domestic coal to substitute for imported coal. States shall take over future losses of discoms in a phased manner.banks not to advance short term loans to discoms to finance losses.

2.   Deen dayal Upadhyay gram Jyoti Yojana: metering all unmetered connections. Supply electricity to all villages. Separating agriculture feeders from others to ensure sufficient supply for both. Improvement of sub transmission and distribution network.

3.      Open access policy allows any consumer with requirement above 1 MW to procure directly from electricity market. Thus this shall lead to a one country one market for electricity.

Note: 830 billion units of power were generated in 2014-15 out of which 700 bu from thermal, 102 bu from hydroelectric and 27 bu from nuclear.

Public Finance:

1.      Gross tax revenues are composed of direct taxes 54% and indirect taxes 46%.

2.      Corporate tax> income tax> excise duty> service tax> customs duty

3.      Non plan expenditure was higher than plan expenditure and its composed of Interest payments > subsidies > defense > pensions > non plan grants to states > police.

4.      Among subsidies, food > fertilizer > fuel.

5.      Amongst outflows interest payments is 48% of GDP and out of this the internal debt is 46% and external debt is 1.5%.

6.      In banks the time deposits [fixed and recurring deposits ] are more than demand deposits [savings and current account]

7.      Insurance penetration [ premium volume to GDP] was 3.3% [2014] and insurance density [per capita insurance] was $55 in 2014. Global levels are 3.4% and $368.  

8.      Global economic prospects, Doing Business Rankings, World Development Report and Ease of doing business report is published by World Bank and International Monetary Fund publishes Global / World Economic Outlook report, Global competitiveness index of World Economic Forum and Global employment and social outlook by International Labor Org.

M.S.M.E Sector

MUDRA Yojana [micro units development refinance agency]:

To refinance last mile lenders. It seeks to refinance products having a loan requirement up to 10 lakh and support to micro finance units by way of refinance.  The loans are of three categories based on amount and stage of the micro business unit:

  1. Shishu [< Rs. 50000]
  2. Kishore [Rs. 50000 – Rs. 5 lakh]
  3. Tarun [ Rs. 5 lakh – Rs.10 lakh]

Note: 3 crore M.S.M.E units employ more than 8 crore people and contribute 37% to the GDP.

9.     Trade of India: petroleum products, gems and jewellery, textiles, chemicals, agriculture and allied products, transport equipments, base metals and machinery are the top exports of india.

10.  Petroleum, crude oil, chemicals, gold, electronic and machinery are the top imports of India.

11.  Asia has highest share of Indian exports [45%], Europe and USA [23%], Africa [6%] and then Commonwealth of independent nations and Baltic’s [1%].

12.  USA, UAE and Hong Kong are top three export destinations

13.  China, Saudi Arabia, UAE, US are top import destinations.

14.  FDI inflows to India are maximum from Singapore and Mauritius due to the double taxation avoidance agreement with India. These are followed by Netherlands and USA. Delhi, Maharashtra and Karnataka were the top investment destinations.

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Petroleum Sector issues:

1.      Since there is no global benchmark for gas prices a formula was suggested for gas pricing which would balance interests of both producers and consumers. However a market determined arms length price with an efficient regulator is the only solution to the pricing problem.

2.      Cess on petroleum products must be used to construct gas pipelines which would take this resource to crucial parts of the country. The petroleum and LPG or CNG / LNG should be included in GST.

3.      Import of LNG for the power sector has no customs duty but for other sectors there is a duty. This should be removed to create parity.

Transport Sector:

1.      India has a road network of 52 lakh km which is 2nd largest in the world. Out of which highways are 1 lakh km and carry 40% of the traffic.

2.      Action plan is being implemented to increase share of waterways in transport to 10% by 2019-20. Development of lighthouses as tourism destinations is being promoted. In addition to the 5 existing inland waterways, 106 additional waterways were declared as national waterways for inland transport.

3.      BharatNet / National fiber optic network to connect 2.5 lakh villages to internet.

Service sector:

1.      53% of India's GDP is from the service sector with financial service having the largest share.

2.      India became the 8th largest service exporter of the world. Total service exports were $150 billion with computer services having largest share. $80 billion was the share of services import.

3.      Tamil Nadu is the top state in terms of domestic tourist arrivals in India. France is the highest in terms of international visitor’s arrival and USA earns highest in terms of revenue from international tourists.

4.      95% by volume and 68% by value of Indian trade is by sea.

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