The
Economic Survey presented by the Union Finance Minister Shri Arun Jaitley in Parliament today
has relied upon analysis of the new data to highlight ten new economic facts:
1.
Goods
and Services Tax (GST) has given a new perceptive of the Indian economy and new
data has emerged. There has been a fifty percent increase in the number
of indirect taxpayers. There has also been a large increase in voluntary registrations,
especially by small enterprises that buy from large enterprises wanting to
avail themselves of input tax credits.
The Survey also stated that fears of
major producing states that the shift to the new system would undermine their tax
collections have been allayed as the distribution of the GST base among the
states got closely linked to the size of their economies.
Similarly, there has been an addition of
about 18 lakh in individual income tax filers since
November 2016.
2.
India’s
formal sector, especially formal non-farm payroll, is substantially greater
than what it currently is believed to be. It became evident that when
“formality” was defined in terms of social security provisions like EPFO/ESIC
the formal sector payroll was found to be about 31 percent of the
non-agricultural work force. When “formality” was defined in terms of being
part of the GST net, such formal sector payroll share was found to be 53
percent.
3.
For
the first time in India’s history, data on the international exports of states
has been dwelt in the Economic Survey.
Such data indicates a strong correlation between export performance and states’
standard of living. States that export internationally and trade with
other states were found to be richer. Such correlation is stronger
between prosperity and international trade.
4.
India’s
exports are unusual in that the largest firms account for a much smaller share
of exports than in other comparable countries. Top one percent of Indian firms
account only for 38% of exports unlike in other countries where they account
for substantially greater share – (72, 68, 67 and 55 percent in Brazil,
Germany, Mexico and USA respectively). Such tendencies were also found to
be true for the top five or ten per cent of the Indian companies.
5.
It
was pointed out that the Rebate of State Levies (ROSL) has increased exports of
ready-made garments (man-made fibers) by about 16 per cent but not of
others.
6.
The
data highlighted another seemingly known fact that Indian society exhibits a
strong desire for a male child. It pointed out that most parents
continued to have children until they get number of sons. The survey gave
details of various scenarios leading to skewed sex ratios and also gave a
comparison on sex ratio by birth between India and Indonesia.
7.
The
survey pointed out that tax departments in India have gone in for contesting
against in several tax disputes but also with a low success rate which is below
30 per cent. About 66 per cent of pending cases accounted for only 1.8 per cent
of value at stake. It further stated that 0.2 per cent of cases accounted
for 56 per cent of the value at stake.
8.
Extrapolating
the data the survey indicated that growth in savings did not bring economic
growth but the growth in investment did.
9.
The
survey mentions that collections of direct taxes by
Indian states and other local governments, where they have powers to collect
them is significantly lower than their counterparts in other federal countries.
A comparison has been given between ratios of direct tax to total revenues of
local governments in India, Brazil and Germany.
10.
The
survey captures the footprints of climate change on the Indian territory and consequent adverse impact on agricultural
yields. Extreme temperature increases and deficiency in rainfall have
been captured on the Indian map and the graphical changes in agricultural
yields are brought out from such data. The impact was found to be twice
as large in un-irrigated areas as in irrigated
ones.
DSM/OK/RM/KSP/PCS