ECONOMIC SURVEY
It is a flag ship document laid before the parliment before the budjget sessions as it is part of annual union budjget .this flag ship document is prepared by the ministery of finance under the guidence of chief economic advisor .this annual flagship document reviews the development and major economic changesin past financial year.
The chief economic advisor directely reports to the to the ministry of finance He plays akey role in preparation of budjget this yaer economic survey say india is 5 largest economic country in the world after America,Japan,Germany,China with 2.9 trillion dollar economy .the government is trying to draw a road map to 5 trillion economy in the first half of the finincial year,it could recover to 6.6% in upcomming half of the year because the PMI[purchasing mangeral index] ,Industrial Index,GST revenues and Nifty India consumer Index this fctors was improving from last few months this results in increse in GDP in furter half of the year and this slown down was caused due to global crises and previous economic policies.
As part of economic survey study the unemplyoment was increasing over the last decades the government need to provide Emplyoment for the creation of wealth .Heace the Key sector is to provide emplyoment.
Food inflaton was increasing from last few moths this is due t0 yhe envirinmental issues and lack of out dated economic acts like Essential commodity Act [1955].this act is made to controll the prices and supply goods according to the demand of public the essential goods prices like Vegetables,Oils,Medicens and etc . this also prevents the black marketing of goods and heavy storages of foods for holding supply this out dated act have raising to problems like increasing the prices Eg;Onions in recent time this is caused due to floods in the major onion production areas.Since the government doest allow the storage of essential goods under this act.this caused the price hike of onions in recent days.
As per NSS[national sample survey] of india says that the higher education dropouts percentage is been incresing yearly upto 3.5%.this survey has claimed that the poor moving far from education due to fee regulation from last few years the government should look after the education under the essential commodity act because education is manditory for grownth of human being which leads to the growth of a country.their are 4 challenges to improve the graduatates percentage they are Affortable,Quality,Disturbtion and Infrastructure.
Enterprinureships and Business play a key role in the wealt creation of a country.those are nothing but startup compines Start up creat wealth,emplyoment and promotes innovations.As per ease of doing business inedex india as improved its position to 64 from 77 among the global 190 countries this attracts the forigen investors and new enteripunires to start business in India.
ROAD TO 5 TRILLION DOLLAR ECONOMY REAL; DREAM OR JUMLA
Global growth has strengthened in 2017 to 3.8%, with a notable rebound in global trade. It is projected at 3.9% in 2018 and 2019, supported by strong momentum and favorable market sentiments. At the domestic front, the macroeconomic situation is in positive trajectory with industrial growth rebounding and inflation still under control. The prospect for FY2018-19 seems promising. Further, normal monsoon behavior is auguring well for agricultural output and brightening market sentiments, going forward.
Various international organizations are optimistic on Indias growth story; World Bank projects India to grow at 7.3%. The IMF expects India to achieve 7.4% and 7.8% growth in FY2018-19 and FY2019-20 respectively on a gradual increase in growth as structural reforms undertaken in the recent past raises prospects for potential output. Also, RBI has forecasted GDP growth at 5 THIS HALF YEAR 2020-2021. Going ahead, there is immense scope for the Indian economy to become $5 trillion economy in the next few years.
Going ahead, the growth of rural economy would be crucial to the overall growth and inclusive development of the country. Indias rural economy has a huge footprint as it provides employment to about 53% of the workforce and supports 66% of the population residing in rural areas. In this regard, it is expected that the rural population will drive the growth rate of GDP in the coming times and help the Indian economy to become a US$ 5 trillion economy by 2025.
India has a vast potential of opportunities that lies in the rural markets which have not been explored to its full potential so far. As the global economic system is characterized by increased protectionism and trade wars, it is imperative to harness the potential of the rural economy of India for the industry to grow in the coming times.
India has emerged as the fastest growing economy in the world. The improvement in Indias economic fundamentals has accelerated in the current year with the combined impact of strong government reforms, RBI's inflation focus supported by rebound in global growth.
The Government of India has taken significant initiatives to strengthen the economic credentials of the country and make it one of the strongest economies in the world. India is becoming home to start-ups focused on high growth areas such as mobility, e-commerce and other vertical specific solutions - creating new markets and driving innovation.
Owing to higher infrastructure spending, increased fiscal devolution to states, and continued reforms in fiscal and monetary policy, the Indian economic outlook has strengthened. The Government of India is striving to move steadily to minimize structural and political bottlenecks, attract higher investment and improve economic performance
Goods and Services Tax (GST): The Game Changer - GST was implemented on July 1st, 2017. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. The introduction of GDT has simplified taxation system in the economy and increased tax collection significantly.
Demonetization: Historic move on curbing corruption and black money - In a historic move that recorded strength in the fight against corruption, black money, money laundering, and counterfeit notes. The Government of India had decided that the five hundred and one thousand rupee notes would no longer be legal tender from the midnight of 8th Nov 2016.
Make in India: Turning ambition into reality - Make in India Campaign, launched on 25th September 2014 globally is a major national initiative covering 25 sectors which focuses on making India a global manufacturing Hub. The campaign aims take the manufacturing growth to 10% on a sustainable basis by introducing a business friendly regulatory environment, enhancing the ease of doing business and improving manufacturing infrastructure, among others.
Digital India: Linking millions - The Digital India programme is a flagship programme of the Government of India with a vision to transform India into a digitally empowered society and knowledge economy.
Pradhan Mantri Jan Dhan Yojana: Large scale banking outreach - Pradhan Mantri Jan-DhanYojana (PMJDY) was launched on August 2014. Backed by the National Mission for Financial Inclusion, the PMJDY aimed to provide at least one bank account to every Indian household. It is meant to be the launch vehicle of economic streamlining, providing access to a host of financial services including bank deposit accounts, credit, and going forward even insurance and pension.
Start-Up India: Empowering fledgling businesses - Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and Startups in the country. This will drive sustainable economic growth and generate large scale employment opportunities.
Skill India: Developing Human Capital - Skill India campaign was launched to train people, to create opportunities, and scope for the development of the talents of the Indian youth and to develop sectors which comes under skill development and also to identify new sectors for skill development.
Emphasis need to be laid on skilling the youth in such a way that they get employment and also improve entrepreneurship. This scheme will provide training, support and guidance for all occupations that were of traditional type like carpenter, cobblers, tailors and weavers etc. More emphasis will be given on areas like rural estate, construction, transportation, tourism and other sectors where skill development is inadequate or nil. Skill development will create workforce for Make in India.
Micro Units Development and Refinance Agency Bank (MUDRA) - MUDRA bank was set up by the Government of India as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it. Pradhan Mantri Mudra Yojana under the Micro.
Units Development and Refinance Agency (MUDRA) Bank is a new institution being set up by Government of India for development and refinancing activities relating to micro units.
National Company Law Tribunal - The NCLT was established under the Companies Act 2013 and was constituted on 1 June 2016 by the government of India & is based on the recommendation of the justice Eradi committee on law relating to insolvency and winding up of companies.
Ease of Doing Business - The Ease of Doing Business (EODB) index is a ranking system established by the World Bank Group. In the EODB index, higher rankings (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights. Since 2014, the Government of India launched an ambitious program of regulatory reform aimed at making it easier to do business in India. The program represents a great deal of effort to create a more business-friendly environment.
Business Reforms Action Plan (BRAP) - DIPP launched an online portal in April 2016 to track implementation of reforms on a real-time basis. The online portal is aimed to provide the following:
Real time ranking and tracking of the States and UTs based on implementation of the recommendations Details of the good practices to learn and replicate Provide information on current policies and practices across States and UTs.
Change in MSME Definition - Definition on the basis of Annual Turnover; Micro enterprise- a unit where the annual turnover does not exceed five crore rupees; Small enterprise- a unit where the annual turnover is more than five crore rupees but does not exceed Rs 75 crore; and Medium enterprise- a unit where the annual turnover is more than seventy five crore rupees but does not exceed Rs 250 crore.
Real Estate Regulatory Authority - Is an act which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also acts as an adjudicating body for speedy dispute redressal.
One District One Product - The ambitious One District One Product Scheme was launched in the state of Uttar Pradesh. It aims to give boost to the traditional industries of in the state and enable the people to gain expertise in one product.
It will link the local craft skills with specialized products and create employment opportunities. The few objectives of the ODOP scheme are to improve the quality of the product, transforming the product through packaging and branding and to strengthen the initiative of ODOP to national and international level.
Infrastructure - Bharatmala - Bharatmala Project is the second largest highways construction project in the country since NHDP, under which almost 50,000 km or highway roads were targeted across the country. It will look to improve connectivity particularly on economic corridors, border areas and far flung areas with an aim of quicker movement of cargo and boosting exports.
Smart City Mission - Is an urban renewal and retrofitting program by the Government of India with the mission to develop 100 cities across the country making them citizen friendly and sustainable.
Affordable Housing - In 2015, Honble Prime Minister Shri. Narendra Modi ji announced Housing for All by 2022 scheme targeting two crore homes to be built across all urban locations over the next five years.
Contribution of Rural Economy in Indias Development
India is predominantly a rural country. As per the 2011 Census, 66% of countrys population and 53% of workforce resides the in rural areas. However, steady transition to urbanization over the years is leading to the decline in the rural share in population, workforce and GDP of the country. It is often said that there are two Indias — Bharat which exists in the villages and India which thrives in the urban areas. If our country has to have real progress and make its mark on the global stage, then these two Indias must converge. Prosperity will have to come to our villages, towns and cities. We have made good progress in the last few years.
The rural economy is an untapped source of jobs, growth and development. There is new hope and a new sense of energy that is driving rural India. As aspirations grow and consumption rises, rural hinterland is becoming the epicenter of our growth story.
Government Initiatives for Rural Development in India:
The various initiatives launched by the government of India for developing the rural India in a holistic manner are, National Food for Work Programme, Rurban (Mission launched to transform rural areas and develop them to reduce the gap between rural & urban), Gramoday (focusing on the development work done in villages), Ujjawala Yojana (for providing LPG cylinders in every household), Gram Swaraj Abhiyan (to promote social harmony, reach out to poor rural households, obtain feedback on ongoing programmes, enroll in new initiatives, focus on doubling farm)
Following are the sectors in which if progressive intervention is taken, then it will lead to the growth of the rural economy.
Agriculture Sector
India is largest country a in the agriculture were more then 40% people depend upon agriculture it is the one of the largest economic sector in india the government is spending opproxmetly 16 lakh cores on agriculture sector which is equal to half of the budjet this is good step by the government as it spends huge budjget it helps in increas the economy in the agriculture and it spends a lot on the farmers crope insurence of this is paid in tree terms to the farmers this money would help famers economicaly for good croping hence this is excellent scheme is optimistically
Rural economy has traditionally been associated with agriculture. India is primarily an agrarian society with 66% of its population living in rural areas. The performance of agriculture sector, therefore, plays a vital role in the economic growth of our country.
But over the years, there is a significant decrease in the contribution of agriculture to the national economy — from a high of around 44% of GDP at the time of Independence to around 15% at present. Still the overall growth of the Indian economy has depended much on the performance of agriculture because its one of the sector that provides employment to about 53% of the total population.
India is the largest producer of spices, pulses, milk, tea, cashew and jute and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.
Food Processing ;India is the largest producer of milk & 2nd largest producer of fruits & vegetables. The government expects the food processing to grow by 25% of the total produce by 2025.
The food processing industry is one of the largest industries in India and ranks 5th in terms of production, consumption and exports. As per the estimates for FY15, food processing sector stood at US$258 billion. During FY11—16, India's exports of processed food & related products (inclusive of animal products) grew at a CAGR of around 12%, reaching US$16.2 billion.
According to the budget announcement of 2018-19, allocation of Ministry of Food Processing will be doubled from Rs 715 crore (RE) in 2017-18 to Rs 1400 crore (BE) in 2018-19.in 2020 the government The government will also promote establishment of specialized agro-processing financial institutions in this sector.
Various policy initiatives have been taken by the government of India in order to promote food processing industry:
1. Exempting all the processed food items from the purview of licensing under the Industries (Development and Regulation) Act, 1951.
2. Automatic approval for foreign equity upto100% for most of the processed food items excepting alcohol and beer subject to certain conditions. 3. 100% Foreign Direct Investment under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India. 4. Reducing Excise Duty on food processing and packaging machinery from 10% to 6%.
This is an area that offers excellent opportunities for entrepreneurs, corporate- and modern-minded farmers to set up agribusiness and agro-industry. Employment generation potential is much higher in the food sector than any other sector.
Since 66% of the population resides in rural India, this population can be absorbed in the food processing sector effectively to facilitate higher growth of the sector in the coming times.
Non Farm sector: Transforming Rural India One of the celebrated laws in the area of development studies is that an indicator of growth and development is the sectoral composition of the economy. As an economy grows, the agricultural sector's share will come down and the shares of the manufacturing and service sectors will go up. Traditionally, Indian rural areas also have some manufacturing activities like handloom weaving, oil pressing, bidi manufacturing and so on.
Further, the growing demand for milk, meat and eggs has resulted in the increased importance of livestock in the rural economy of India. Another employment and income generator in the rural areas is the small scale and cottage industries next to textiles industry.
Small and Cottage Industries A major occupation in Indian villages other than agriculture in India is the cottage industry. This industry has emerged as a major source of employment in Indian villages over the period of time. Large portion of the rural population of India acting as one of the major source of its economy is supported by Small and Cottage Industries.
Village and small industries (VSI) sector comprises both traditional and modern small industries. India is one of the most populated countries in the world with almost a billion people, cottage and small scale industries are of great importance to the Indian economy and its rural counterpart.
Khadi and Village Industry Khadi has been a source of livelihood for more than ten lakh rural persons in 2016-17, both directly and indirectly which includes spinners, weavers and other artisans spread across the country. In such time when employment generation has become the most important prerogative for the policy makers, Khadi can play a game changing role in upliftment of rural growth, going forward.
Similarly, village industries programmes have also shown a significant progess by registering production of Rs 41110.26 crores which provided employment to 131.84 lakhs persons in 2016-17. Altogether, Khadi and Village Industries
Sector provided cumulative employment to 136.40 lakh persons. Khadi Village and Industries Commission (KVIC), through its 38 training centres, is imparting skill based training to the entrepreneurs of the micro Village Industries units in India.
Regeneration of traditional industries Some of Indias traditional industries, namely coir, handloom, handicrafts, sericulture, leather, pottery and other cottage industries not only contain great potential for growth and exports, but are integral for the people to shift from low productivity agriculture jobs to other sectors and to provide them with means of livelihood and improved standards of livings.
With the increased participation of rural sector in these areas, the rural sector will grow significantly thereby fueling economic growth, going forward. At this juncture, the initiative taken by the Government to double the farmers income by 2022 will have direct positive impact on the growth of agriculture production.
Focusing on food processing industry of the rural market can be a good strategy which has the potential to increase the nations presence in the international food processing industry and thus benefit the farmers in terms of their increased income levels.
Forecast of size of Indias Economy As the pace of economic activities is continuously growing across the world, the International Monetary Fund forecasted the global growth to grow by 3.9% during 2019
The IMF has projected Indias economic growth to accelerate in the current and next fiscal years at 7.4% in FY2018-19 and 7.8% in FY2019-20 in contrast to 6.7% during FY2017-18 lifted by strong private consumption as well as fading transitory effects of demonetization and implementation of the national goods and services tax. Graph 1 shows size of Indias GDP from FY2019 to FY2030. PHD Research Bureau anticipates that India is poised to remain the fastest growing large economy in the world and is expected to reach US$10 trillion by 2030 by leveraging on digitization, globalization, favorable demographics and structural reforms.
In the first 40 years of independence, the country hardly grew at 4% and today a 7-8% growth is the norm which is very much achievable. Going ahead, with the tireless efforts of our government, the rural sector will participate with full vigor in the economic system thereby facilitating the economy to become US$5 trillion economy by 2025 further increasing to around US$ 10 trillion by 2030. The significant reform measures undertaken by the Government of India in the agricultural and rural sector will strengthen the economic credentials of the country and make it one of the strongest economies in the world, going forward.
YOUNG ENTREPRENURESHIP
India is home to the worlds largest number of youth, the employable population in millions which joins the workforce every year. While the government of Indias flagship campaigns such as Make in India and Digital India revolutionized the ecosystem for young entrepreneurs in the country in the past few years, the economys slowdown in the recent past has resulted in job losses. As the finance minister is set to present the Union Budget amid the economic downtrend, lets take a look at the expectations of the young entrepreneurs from Budget 2020.
While it is expected that the Budgets focus is going to be on measures that can revive the struggling economy, despite the slump and job losses India is still expected to remain a software development centre stage which calls for a focus on more investment in information technology. Cybersecurity is a critical concern when Digital India and new technology have made public engagement a matter of a click on a handheld smartphone even on important entities of government such as healthcare, finance and education. As our country is gearing up more towards artificial intelligence (AI)-based systems, cybersecurity as a talent-specific sector can open up new avenues for job creation. As India is slated to become a trillion-dollar-economy with AI-enabled ecosystem, its low allotment of budget to this sector in the past years is something that requires a re-look. Apart from this, young entrepreneurs of the nation expect the following measures from the Union Budget 2020:
Exemptions for start-ups and cut in income tax: Young entrepreneurs are looking for income tax relief that can be brought by modifications in the tax rates. More money in the hands of people will solve the liquidity crunch and push economy forward as more goods and services will be exchanged.
Under Section 80 C of the Income-tax Act, 1961, investing can help one claim INR 1.5 lakh deduction in taxable income. A very large number of youth enter workforce every year, hence a rise in the deduction limit for tax is a valid expectation from the young business persons.
Reduced GST: Young entrepreneurs would like the finance ministry to consider reducing rate of Goods and Services Tax (GST) on FMCG and personal-hygiene based consumer durable products and groceries. GST must also be lowered on electronic products. In addition, more and more companies and SMEs will be able to de-risk their valuable infrastructure and data if there is a relief on GST for cybersecurity audit. Cybersecurity practically is the key to GSTs success.
The government must also consider lowering costs of public transportation. It would also be a good measure towards increasing quality of life of lower-income groups.
LTA exemption for foreign travels: With Make in India campaign, a number of innovative start-ups with original Indian offerings can put India as a leading country on the world map of innovations. Travelling helps in enriching learnings and adding more value to products and services. Young Indian entrepreneurs aspire to grow globally and have international standards incorporated in the quality of their offerings. This can in turn help Indias economy grow manifold. The government should consider LTA for international trips as well. It shall be instrumental in creating more knowledgeable base of human-resource in all aspects in the country.
Bring back exemption on LTCG: If the finance minister announces re-introduction of exemption on long-term capital gains (LTCG), there will be a growth in investments in mutual funds. This can prove to be a booster shot for the market. Taxing the dividend income at the investor's end rather than the company is another measure that can turn the market economy around.
Better loan policy for education and businesses: At present, section 80 E offers deduction on the interest component for education loans. Youth of India expects better policies towards taxable loan for higher education. Better education loan policies will help students and their families in contributing more to the growing economy of India. Also, tax rates must be brought down for important tools for education such as laptops and pen drives to make the governments Digital India initiative write greater success stories.
Increase allocation in rural schemes: More allocation must be granted to schemes targeted at rural populations such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Deendayal Antyodaya Yojana - National Rural Livelihoods Mission, Deen Dayal Upadhyay - Gramin Kaushalya Yojana, Pradhan Mantri Awaas Yojana - Gramin and Pradhan Mantri Kisan Samman Nidhi for better quality of life in rural areas. With the recent announcements by the finance minister on the National Infrastructure Pipeline, better allotment for infrastructure development in the rural areas out of the INR 102 trillion must be announced to put the country on a roadmap to faster development and revival of economy.
Market regulations towards clean energy and sustainable livingIndian capital region and other metropolitan cities saw unprecedented air pollution last year. As per reports, the pollution has been causing premature deaths of 2 million Indians every year. Young entrepreneurs are sustainable-living conscious and aware of the dangers of environmental pollution. Regulations that can make renewable energy viable for manufacturing units must be brought in the system. While the previous budget focused on electric vehicles and an increased budget for the ministry of environment, specific announcements must be made for the budget plans on cleaner rivers and air in this years Union Budget.
Under the National Clean Air Programme, budget plans for major Indian cities with large populations must be launched to tackle waste and dust management and industrial emission management.Increased focus on tribals: While an increased budget for tribal affairs ministry was announced last year for focus on infrastructure projects in tribal regions of India, the National Commission for the Scheduled Tribes had reported that there was an acute lack of funds which hampered processes that followed up on tribals rights and cases. Tribal issues must be brought to fore and poor implementation of Forest Rights Act, 2006 must be improved with better allocation of funds.
India's gross domestic product (GDP) growth which is currently estimated to be at around $2.8 trillion, dipped to an 11-year low due to poor show by manufacturing and construction sectors, as per government data. Young entrepreneurs expectations from Union Budget 2020 are goal-oriented and realistic. They are the keenest lot when it comes to aspiring for India to achieve its targets for $5 trillion GDP by 2024 as envisioned by INDIN GOVERNMENT We hope that the upcoming budget is as optimistic as the young entrepreneurs insights EXPECTED MORE ....
