State of the Economy and Prospects
1
CHAPTER
While India's recent slowdown is partly rooted in external causes, domestic causes are also important. The strong post-financial-crisis stimulus led to stronger growth in 2009-10 and 2010-11. However, the boost to consumption, coupled with supplyside constraints, led to higher inflation. Monetary policy was tightened, even as external headwinds to growth increased. The consequent slowdown, especially in 2012-13, has been across the board, with no sector of the economy unaffected. Falling savings without a commensurate fall in aggregate investment have led to a widening current account deficit (CAD). Wholesale price index (WPI) inflation has been coming down in recent months. However, food inflation, after a brief slowdown, continues to be higher than overall inflation. Given the higher weightage to food in consumer price indices (CPI), CPI inflation has remained close to double digits. Another consequence of the slowdown has been lower-than-targeted tax and non-tax revenues. With the subsidies bill, particularly that of petroleum products, increasing, the danger that fiscal targets would be breached substantially became very real in the current year. The situation warranted urgent steps to reduce government spending so as to contain inflation. Also required were steps to facilitate corporate and infrastructure investment so as to ease supply. Several measures announced in recent months are aimed at restoring the fiscal health of the government and shrinking the CAD as also improving the growth rate. With the global economy also likely to recover somewhat in 2013, these measures should help in improving the Indian economy's outlook for 2013-14.
GROWTH OF GDP AND MACRO AGGREGATES
OTHER
1.2 Following the slowdown induced by the global financial crisis in 2008-09, the Indian economy responded strongly to fiscal and monetary stimulus and achieved a growth rate of 8.6 per cent and 9.3 per cent respectively in 2009-10 and 2010-11 (Table 1.1). However, with the economy exhibiting inflationary tendencies, the Reserve Bank of India (RBI) started raising policy rates in March 2010. High rates as well as policy constraints adversely
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impacted investment, and in the subsequent two years viz. 2011-12 and 2012-13, the growth rate slowed to 6.2 per cent and 5.0 per cent respectively. Nevertheless, despite this slowdown, the compound annual growth rate (CAGR) for gross domestic product (GDP) at factor cost, over the decade ending 2012-13 is 7.9 per cent. 1.3 The moderation in growth is primarily attributable to weakness in industry (comprising the mining and quarrying, manufacturing, electricity, gas and water supply, and construction sectors),
2
Economic Survey 2012-13
0.1 KEY INDICATORS Data categories and components
Units
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
GDP (current market prices)
` Crore
4987090
5630063
6477827
77953132R
Growth Rate
%
16.1
12.9
15.1
20.3
15.1
11.7
GDP (factor cost 2004-05 prices)
` Crore
52435821R
5503476AE
Growth Rate
%
6.2
5.0
1. GDP and Related Indicators
3896636
4158676
4516071
49370062R
9.3
6.7
8.6
9.3
89749471R 100,28,118AE
Savings Rate
% of GDP
36.8
32.0
33.7
34.0
30.8
na
Capital Formation (rate)
% of GDP
38.1
34.3
36.5
36.8
35.0
na
`
35825
40775
46249
54151
61564
68747
Million tonnes
230.8
234.5
218.1
244.5
259.3
250.1a
%
15.5
2.5
5.3
8.2
2.9
0.7c
%
6.3
2.7
6.6
5.5
8.1
4.6c
Inflation (WPI) (average)
%change
4.7
8.1
3.8
9.6
8.9
7.6d
Inflation CPI (IW) (average)
%change
6.2
9.1
12.4
10.4
8.4
10.0d
Export Growth ( US$)
%change
29.0
13.6
-3.5
40.5
21.3
-4.9d
Import Growth (US$)
%change
35.5
20.7
-5.0
28.2
32.3
-0.0d
Current Account Balance (CAB)/GDP
%
-1.3
-2.3
-2.8
-2.8
-4.2
-4.6e
Foreign Exchange Reserves
US$ Bn.
309.7
252.0
279.1
304.8
294.4
295.5f
Average Exchange Rate
` /US$
40.26
45.99
47.44
45.56
47.92
54.47g
%change
21.4
19.3
16.8
16.0
15.6
11.2h
%change
22.3
17.5
16.9
21.5
15.9
15.1h
% of GDP
2.5
6.0
6.5
4.8
5.7 i
5.1 j 3.5 j
Per Capita Net National Income (factor cost at current prices) 2. Production Food grains Index of Industrial Production
b
(growth) Electricity Generation (growth) 3. Prices
4. External Sector
5. Money and Credit Broad Money (M3) (annual) Scheduled Commercial Bank Credit (growth) 6. Fiscal Indicators (Centre) Gross Fiscal Deficit Revenue Deficit
% of GDP
1.1
4.5
5.2
3.2
4.3 i
Primary Deficit
% of GDP
-0.9
2.6
3.2
1.8
2.6 i
1.9 j
1170
1210k
na
na
7. Population
Million
1138
1154
na: not available. 1R: 1st Revised Estimates, 2R: 2nd Revised Estimates, AE: Advance Estimates. a
Second advance estimates.
b
The Index of Industrial Production has been revised since 2005-06 on base (2004-05=100).
c
April-December 2012.
d
2012-13 (April-January).
e
CAB to GDP ratio for 2012-13 is for the period April-September 2012.
f
At end January, 2013.
g
Average exchange rate for 2012-13 (April 2012- January 2013).
h
Provisional (up to December 28, 2012).
i
Fiscal indicators for 2011-12 are based on the provisional actuals (unaudited).
j
Budget estimates.
k
Census 2011.
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State of the Economy and Prospects
3
Table 1.1 : Growth in GDP at Factor Cost at 2004-5 prices (per cent) 2005-06 2006-07 2007-08 2008-09 2009-103R 2010-112R 2011-121R 2012-13AE Agriculture, forestry & fishing Mining & quarrying Manufacturing Electricity, gas, & water supply Construction Trade, hotels, & restaurants, transport & communication Financing, insurance, real estate & business services
5.1
4.2
5.8
0.1
0.8
7.9
3.6
1.8
1.3 10.1 7.1 12.8
7.5 14.3 9.3 10.3
3.7 10.3 8.3 10.8
2.1 4.3 4.6 5.3
5.9 11.3 6.2 6.7
4.9 9.7 5.2 10.2
-0.6 2.7 6.5 5.6
0.4 1.9 4.9 5.9
12.0
11.6
10.9
7.5
10.4
12.3
7.0
5.2
12.6
14.0
12.0
12.0
9.7
10.1
11.7
8.6
Community, social & personal services
7.1
2.8
6.9
12.5
11.7
4.3
6.0
6.8
GDP at factor cost
9.5
9.6
9.3
6.7
8.6
9.3
6.2
5.0
Source : Central Statistics Office (CSO). Notes: 1R : First Revised Estimate, 2R: Second Revised Estimate, 3R: Third Revised Estimate, AE : Advance Estimate.
which registered a growth rate of only 3.5 per cent and 3.1 per cent in 2011-12 and 2012-13 respectively. The rate of growth of the manufacturing sector was even lower at 2.7 per cent and 1.9 per cent for these two years respectively. Growth in agriculture has also been weak in 2012-13, following lower-than-normal rainfall, especially in the initial phases (months of June and July) of the south-west monsoon. 1.4 After achieving double-digit growth continuously for five years and narrowly missing double digits in the sixth (between 2005-06 and 2010-11), the growth rate of the services sector also declined to 8.2 per cent in 2011-12 and 6.6 per cent in 2012-13. In 201112 the sector that particularly slowed within the services sector was Trade, Hotels, and Restaurants, Transport and Communications, and its growth further declined in 2012-13. Activities in this sector, being forms of derived demand, tend to grow at a slower rate with the slowdown of economic activity in the industry and agriculture sectors. 1.5 Why has the economy slowed down so rapidly despite recovering strongly from the global financial crisis? A number of factors are responsible. First, the boost to demand given by monetary and fiscal stimulus following the crisis was large. Final consumption grew at an average of over 8 per cent annually between 2009-10 and 2011-12. The result was strong inflation and a powerful monetary response that also slowed consumption demand. Second, starting in 2011-12, corporate and infrastructure investment started slowing both as a result of investment bottlenecks as well as the tighter monetary policy. Thirdly, even as the economy slowed, it was hit by two additional shocks: a slowing http://indiabudget.nic.in
global economy, weighed down by the crisis in the Euro area and uncertainties about fiscal policy in the United States, and a weak monsoon, at least in its initial phase. 1.6 As growth slowed and government revenues did not keep pace with spending, the fiscal deficit threatened to breach the target. With government savings falling, and private savings also shrinking, the CAD--which is the investment that cannot be financed by domestic savings and has to be financed from abroad--also widened. In the rest of this chapter, the statistical underpinnings of the macroeconomy are analysed followed by the rationale behind the government's policy for macroeconomic stabilization and restoring growth, in addition to the macroeconomic outlook and possible risks to the outlook. 1.7 The Economic Survey does not just analyse the economy; it is also a detailed record of major developments in the economy. So the macroeconomic analysis will be followed by a summary tour of the other chapters in the Survey.
ASPECTS
OF
GROWTH
1.8 In the last decade, growth has increasingly come from the services sector, whose contribution to overall growth of the economy has been 65 per cent, while that of the industry and agriculture sectors has been 27 per cent and 8 per cent respectively. Figure 1.1 shows the contributions of these sectors to the overall growth of the economy from 2003-04 to 2012-13.
4
Economic Survey 2012-13
Note : Data for 2012-13 is as per Advance Estimates released by CSO.
1.9 Figure 1.1 suggests that for achieving an annual growth rate of 9 per cent or higher, all the three major sectors of the economy have to perform well. Growth in agriculture, while small in overall contribution, does distinguish years of strong overall growth from years of more moderate growth. The two larger sectors are, of course, important to overall growth. In the high growth years of 2005-06 to 2007-08 as well as in 2009-10 and 2010-11, the rate of growth of both the industry and services sectors was over 9 per cent. Within the industry sector, the manufacturing sector in particular, outperformed most other sectors of the economy in these years. Its growth averaged 11.6 per cent between 2005-06 and 2007-08 and 10.5 per cent for the years 2009-10 and 2010-11. It is clear from the foregoing analysis that for growth to be strong, the contribution from the industry sector, and in particular from the manufacturing sector, has to increase in the years to come. This is also
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important from the point of view of absorbing surplus labour from the agriculture sector (see Chapter 2). 1.10 The general pattern over recent years has been that, in years of sharply higher growth, GDP growth at market prices exceeds GDP at factor cost and the reverse is true in years of slow growth (Figure 1.2). 1.11 GDP at factor cost is GDP at market prices less indirect taxes plus subsidies. Part of the reason for the differences in growth at factor costs and at market prices lies in the fact that the growth of indirect taxes tends to fall in a slowdown while the expenditure on subsidies often increases. This reduces the growth of net indirect taxes, which is the difference between the two items, in a slowdown. For example, the net indirect taxes to GDP ratio declined from an average of 8.1 per cent between 2003-04 and 2007-08 to an average of 5.7 per cent in 2008-09 and 2009-10, which is why GDP growth
5
State of the Economy and Prospects Table 1.2 : Growth in GDP at Constant Market Prices (per cent) 2005-06 2006-07 2007-08 2008-09 2009-10 1. Total final consumption expenditure 1.1 Private final consumption expenditure 1.2 Government final consumption expenditure
2010-112R 2011-121R 2012-13AE
8.7
7.7
9.4
7.7
8.4
8.1
8.1
4.1
8.6
8.5
9.4
7.2
7.4
8.6
8.0
4.1
8.9
3.8
9.6
10.4
13.9
5.9
8.6
4.1
2. Gross capital formation 2.1 Gross fixed capital formation 2.2 Changes in stocks 2.3 Valuables
16.2 16.2 26.7 -1.6
13.4 13.8 31.6 13.7
18.1 16.2 31.3 2.9
-5.2 3.5 -51.4 26.9
17.3 7.7 67.7 57.6
15.2 14.0 29.7 32.4
0.5 4.4 -30.6 6.6
3.9 2.5 47.6 -18.1
3. Exports
26.1
20.4
5.9
14.6
-4.7
19.7
15.3
5.1
4. Less imports
32.6
21.5
10.2
22.7
-2.1
15.8
21.5
5.7
9.3
9.3
9.8
3.9
8.5
10.5
6.3
3.3
Growth in GDP at 2004-05 market prices
Source : CSO. Notes: 1R: First Revised Estimate, 2R: Second Revised Estimate, AE: Advance Estimate. Totals may not tally due to adjustment for errors and omissions.
at factor cost was higher in 2008-09 than GDP growth at market prices.
generally been more stable than investment, except in 2012-13.
1.12 As per the Advance Estimates released by the CSO, the rate of growth in terms of GDP at market prices (at 2004-05 prices) is expected to be 3.3 per cent for 2012-13 as against 6.3 per cent in 2011-12 (Table 1.2). The growth rate declined significantly on account of the reduction in investment rate and lower growth of exports vis-Ă -vis that of imports. The rate of growth of consumption expenditure and particularly that of private final consumption expenditure has
QUARTERLY OF GDP
ESTIMATES
OF
GROWTH
1.13 Table 1.3 gives the quarterly growth rates of GDP at factor cost (at constant 2004-05 prices) in major sectors of the economy for 2010-11, 2011-12, and the first two quarters of 2012-13. The slowdown was broad-based in 2011-12 and has become more so in the first half of 2012-13.
Table 1.3 : Quarterly Estimate of GDP Growth (year-on-year in per cent) Sector 1. Agriculture, forestry & fishing Industry
Q1
Q2
3.1
4.9
2010-11 Q3
Q4
Q1
2011-12 Q2 Q3
Q4
2012-13 Q1 Q2
11.0
7.5
3.7
3.1
2.8
1.7
2.9
1.2
8.3
5.7
7.6
7.0
5.6
3.7
2.5
1.9
3.6
2.8
2. Mining & quarrying
6.9
7.3
6.1
0.6
-0.2
-5.4
-2.8
4.3
0.1
1.9
3. Manufacturing
9.1
6.1
7.8
7.3
7.3
2.9
0.6
-0.3
0.2
0.8
4. Electricity, gas & water supply
2.9
0.3
3.8
5.1
8.0
9.8
9.0
4.9
6.3
3.4
5. Construction
8.4
6.0
8.7
8.9
3.5
6.3
6.6
4.8
10.9
6.7
Services
10.0
9.1
7.7
10.6
10.2
8.8
8.9
7.9
6.9
7.2
12.6
10.6
9.7
11.6
13.8
9.5
10.0
7.0
4.0
5.5
10.0
10.4
11.2
10.0
9.4
9.9
9.1
10.0
10.8
9.4
8. Community, social, & personal services
4.4
4.5
-0.8
9.5
3.2
6.1
6.4
7.1
7.9
7.5
9. GDP at factor cost (total 1 to 8)
8.5
7.6
8.2
9.2
8.0
6.7
6.1
5.3
5.5
5.3
6. Trade, hotels, transport & communication 7. Financing, insurance, real estate, business services
Source : CSO.
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6
Economic Survey 2012-13
1.14 Quarterly GDP growth rate in India declined in each of the successive quarters between the fourth quarter of 2010-11 and the fourth quarter of 2011-12. Growth in H1 of the current year works out to 5.4 per cent, while the CSO's Advance Estimate for growth for 2012-13 is 5.0 per cent. Let us now analyse some of the key elements of aggregate demand to see why the economy has slowed.
PRIVATE FINAL CONSUMPTION EXPENDITURE 1.15 Private final consumption expenditure accounts for about three-fifths of GDP at market prices. An increase in people's disposable income tends to reduce the share of food in total consumption (the National Sample Survey Organization's [NSSO] Survey on Consumption Expenditure provides clear evidence of the downward trend in share of food in total consumption). Expectedly, therefore, the growth rate of expenditure on the food, beverages, and tobacco group is lower than that of total private final consumption expenditure, resulting in a reduction in its share from 40 per cent in 2004-05 to 31.2 per cent in 2011-12 (Table 1.4).
1.16 In the current year, private final consumption expenditure has slowed considerably, from 8 per cent in 2011-12 to 4.1 per cent in 2012-13 (Table 1.2). The rate of growth of production of a large number of consumer durables declined significantly, e.g. private vehicles from 23.2 per cent in April-November 2011 to - 5.6 per cent in April-November 2012. Similarly, the growth rate of production of consumer durables for mass consumption declined from 12.2 per cent in April-November 2011 to 3.3 per cent in AprilNovember 2012. 1.17 Part of the reason for the general slowdown in consumption could be that higher inflation tends to reduce real disposable incomes of households. Growth of durable goods consumption (under the assumption that growth of consumption for these items would not be significantly different from the growth in production) may have slowed even further recently, because high interest rates and resulting high monthly instalments restrained purchases. At the same time, the seasonally adjusted consumer non-durable index of industrial production (IIP), which is typically a smoother series than durable goods production, has been picking up since August 2012.
Table 1.4 : Private Final Consumption Expenditure : Annual Growth and Shares at 200405 prices 2004-05
Food, beverages, & tobacco Clothing & footwear Gross Rent, fuel, & power Furniture, furnishings, etc. Medical care & health services Transport & communication Recreation, education, & cultural services Miscellaneous goods & services Total private consumption expenditure Food, beverages, & tobacco 40.0 Clothing & footwear 6.6 Gross Rent, fuel, & power 13.8 Furniture, furnishings, etc. 3.4 Medical care & health services 5.0 Transport & communication 19.3 Recreation, education, & cultural services 3.0 Miscellaneous goods & services 8.9 Total private consumption expenditure 100.0
2006-07
2007-08
2008-09
2010-111R
2011-122R
3.4 23.3 3.8 17.1 8.7 9.1 8.4 21.1 8.7
Annual growth (per cent) 6.4 3.3 0.4 5.0 5.0 14.9 4.7 3.6 6.0 16.1 12.2 9.0 4.5 6.9 8.9 7.9 7.7 12.1 9.8 6.8 4.0 28.6 20.2 15.7 9.2 7.1 7.5
5.9 20.2 4.2 16.6 7.6 10.0 11.8 7.9 8.7
5.8 -3.9 6.2 6.2 6.2 9.8 8.1 19.1 7.9
37.3 8.3 12.6 3.9 5.0 18.9 3.0 11.0 100.0
Share in total (per cent) 36.3 35.0 32.7 8.0 7.8 8.4 12.1 11.7 11.5 4.1 4.3 4.4 4.8 4.8 4.8 18.7 18.8 19.6 3.0 3.0 2.9 13.0 14.6 15.7 100.0 100.0 100.0
31.8 9.3 11.1 4.7 4.8 19.8 3.0 15.6 100.0
31.2 8.2 10.9 4.6 4.7 20.2 3.0 17.2 100.0
Source: CSO. Notes: 1R: First Revised Estimate, 2R: Second Revised Estimate.
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2009-10
State of the Economy and Prospects
INVESTMENT 1.18 The growth rate of the economy since 200304 has been strongly correlated with investment rate. The investment rate averaged 34.5 per cent between 2003-04 and 2011-12, much higher rate than before. As can be seen from Tables 1.1 and 1.2, the real growth rate in the economy averaged 9.5 per cent per annum during 2005-06 to 2007-08, which were also the years when the growth rate of investment in real terms averaged around 16 per cent. Similarly, the average growth rate of the economy was close to 9 per cent per annum in 2009-10 and 2010-11, with the growth rate of investment averaging around 16.2 per cent in these two years. The rate of growth of GDP was lower in the years when growth rate of investment was low, as was the case in 2008-09 and 2011-12.
7
1.19 As can be seen from Table 1.5, the private sector is the major source of investment in the country. Within the private sector there are two categories of investors, viz. the private corporate sector and household sector. Figure 1.3 gives the share of these sectors, along with the investment of the public sector and valuables, in total investment. 1.20 Since 2004-05, the year when the overall investment rate in the economy first exceeded 30 per cent, the share of public investment in total investment (excluding valuables) has remained fairly stable at around 24 per cent for all the years, except in 2008-09 and 2009-10 when it was 27.6 per cent and 26.5 per cent respectively. The increase in these years could be attributed to the fiscal stimulus provided by the government in order to overcome the slowdown in the economy in 2008-09 following the global slowdown.
Table 1.5 : Ratio of Investment to GDP (at current market prices per cent)
1.
2.
2004-05
2006-07
2007-08
2008-09
2009-10
2010-112R
2011-121R
32.8
35.7
38.1
34.3
36.5
36.8
35.0
Public sector
7.4
8.3
8.9
9.4
9.2
8.4
7.9
Private sector
23.8
26.4
28.1
24.8
25.4
26.5
24.9
Corporate sector
10.3
14.5
17.3
11.3
12.1
13.4
10.6
Household sector
13.4
11.9
10.8
13.5
13.2
13.1
14.3
Gross fixed capital formation
28.7
31.3
32.9
32.3
31.7
31.7
30.6
Stocks
2.5
3.4
4.0
1.9
2.8
3.1
2.1
Valuables
1.3
1.2
1.1
1.3
1.8
2.1
2.7
Gross capital formation (investment)
3.
Gross domestic savings
32.4
34.6
36.8
32.0
33.7
34.0
30.8
4.
Saving-investment gap (3-1)
-0.4
-1.1
-1.3
-2.3
-2.8
-2.8
-4.2
Source: CSO. Notes : 1R: First Revised Estimate, 2R: Second Revised Estimate. Totals may not tally due to adjustment for errors and omissions.
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8
Economic Survey 2012-13
1.21 As per the First Revised Estimates released by the CSO in January 2013, gross domestic capital formation as a ratio of GDP at current market prices (investment rate) is estimated to be 35.0 per cent in 2011-12 as against 36.8 per cent in 2010-11. Both public and private investment declined as a share of GDP. Within private investment, investment by the private corporate sector registered a sharper decline.
1.22 The reduction in private investment could be attributed to a number of factors. First is the increase in policy rates (to combat inflation and inflationary expectations). Between March 2010 and October 2011, the RBI raised the repo rate by 375 basis points (bps), thus raising the cost of borrowings in a bid to reduce demand. Another reason for lower private investment could be lower demand for Indian exports
Box 1.1 : Recent Investment Trends: A Case of Rising Stalled Projects and Falling Project Starts Two trends in investments stand out--rising stalled projects and falling project starts. To study these, we use data from the Capex database of the Centre for Monitoring Indian Economy (CMIE), which tracks investments at a project-specific level. Rising Stalled Projects: There has been a surge in projects where implementation has stalled. Both in value and volume terms, stalled projects have been rising since early 2009. As of December 2012, six sectors accounted for about 80 per cent of all stalled projects--electricity, roads, telecommunication services, steel, real estate, and mining.
Source: CMIE CapEx. Falling Project Starts: New investment projects have been drying up across sectors, partly as a consequence of rising stalled projects which reduce the ability of firms to start new ones. New projects of both private sector and government have been falling. Government projects peaked in March 2010 and private-sector projects peaked two quarters later. Ever since, privatesector investment levels have been lagging government investments by about six months. Causes of slowdown: Several factors are believed to have caused the stalling of investments and drying up of new investment. A CMIE study1 shows that in 2011-12, 20 projects accounted for almost 70 per cent of total cost of shelved projects. An analysis of these 20 individual projects suggests difficulties in land acquisition, coal linkages, and mining bans as major causes. Analysis of other stalled projects suggests that policy issues such as in telecom spectrum allocations have also played a role. Several sectors such as consumer non-durables, which are less subject to the type of permissions described above and are more driven by demand conditions and GDP growth, are also seeing a slowdown in new investments. For example, there is a slowdown in new investments in manufacturing food and agro-based products. Lack of growth and slowdown in investment are feeding into each other, with causation flowing both ways. High interest rates have contributed to the depressed investment climate as well. However, given the stability in the repo rate between April and December 2012, the latest quarterly data suggest that interest costs of companies have moderated slightly. Way forward: The government has taken some steps to kick-start investments. The Cabinet Committee on Investments (CCI) has been set up to fast-track projects more than ` 1,000 crore. The Land Acquisition and Rehabilitation and Resettlement (LARR) Bill, which has been cleared by the Cabinet, could bring greater clarity, reduce uncertainty, and thereby aid investments. Investments by cash-rich public-sector units (PSU) have the potential of crowding-in the private sector. Progress on the Delhi-Mumbai Industrial Corridor has the potential of providing a fillip to the investment climate of the country. Policy rate cuts by the RBI and improving business sentiments could also support a revival in investments. 1
“Sharp Increase in Projects Shelved�, CMIE, May 2012.
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State of the Economy and Prospects from the rest of the world, particularly the advanced countries. A third possible reason for lower corporate investment is policy bottlenecks (such as obtaining environmental permissions, fuel linkages, or carrying out land acquisition, see Box 1.1), which led to a number of large projects becoming stalled, which may in turn have discouraged new investment. In what follows, the recent trends in various components of investment are discussed to understand the decline in overall investment rate. 1.23 Between 2004-05 and 2011-12, on an average, the share of the household sector and the private corporate sector in total private investment has been more or less equal. However, there are large fluctuations from year to year, with the share of the private corporate sector being significantly higher in the high growth years of 2005-06 to 2007-08 and much lower in the years when growth was lower, particularly in 2008-09 and 2011-12. Investment by the private corporate sector, at current prices, was lower by nearly ` 90,000 crore in 2011-12 as compared to 2010-11. Consequently, the share of private corporate investment in total investment declined to 29.8 per cent in 2011-12 as against 36.1 per cent in 2010-11. Parenthetically, the magnitude of decline was much larger in 2008-09, when private corporate investment declined by nearly ` 2,25,000 crore as compared to 2007-08. 1.24 Further analysis of the data reveals that the reduction in investment by the private corporate sector in 2011-12 was on account of a drawdown of the stocks. Unlike in 2008-09, when the gross fixed investment in the private corporate sector declined by nearly ` 1,30,000 crore vis-Ă -vis 2007-08, the gross fixed capital formation by the private corporate sector registered a marginal increase in 2011-12 visĂ -vis 2010-11. Of course, in real terms as well as in terms of percentage of total investment, gross fixed investment of the private corporate sector also declined in 2011-12 as against 2010-11. Given that consumption grew strongly in 2009-12 even while productive investment slowed, it is not surprising that the economy has become increasingly supply constrained. 1.25 Investment in the form of valuables increased by nearly ` 80,000 crore in 2011-12 vis-Ă -vis that in 2010-11. Valuables include works of art, precious metals, and jewellery carved out of such metals and stones. At current prices, investment in the form of valuables registered a nearly 4.5-fold increase http://indiabudget.nic.in
9
between 2007-08 and 2011-12 and their share in total investment increased from 2.8 per cent in 2007-08 to 7.6 per cent in 2011-12. A part of the increase in this share can be explained by the surge in the prices of gold and other valuables. However, even at constant prices, the share of valuables increased from 2.9 per cent in 2007-08 to 6.2 per cent in 201112, thereby pointing to larger acquisition of valuables, including gold. Advance Estimates of CSO for 201213 suggest that acquisition of valuables may have declined in real terms. 1.26 To summarize, overall investment would have slowed further were it not for non-productive investment such as in valuables. Particularly worrisome is the sharp slowing of corporate investment, which is the source of future supply (needed to quell inflation) and of future growth potential. Policies to remove investment bottlenecks as well as structural reforms to encourage productive investment and its financing are essential, as is more accommodative monetary policy, as inflation abates.
NET EXPORTS 1.27 Growth in net exports can be an important source of demand. Unfortunately for India, net exports growth has been low because of global weakness. The World Economic Outlook (WEO) Update released by the IMF in January 2013 put the rate of growth of world output at 3.9 per cent in 2011 and 3.2 per cent in 2012, down from 5.1 per cent in 2010. For the advanced economies, the growth rate was much lower at 3 per cent, 1.6 per cent, and 1.3 per cent for 2010, 2011 and 2012 respectively. The growth rate in the faster growing emerging economies also fell over this period. Figure 1.4 gives growth rates for select advanced and emerging economies for 2010 and 2012 (based on information available from the WEO). 1.28 As a result of weak growth in trading partner countries, Indian exports also declined (see Box 7.1 in Chapter 7). In the first half of FY 2012-13 (AprilSeptember 2012), there was a steep decline in exports (Table 1.6). Imports did not decline as much in percentage point terms. Inelastic oil imports were the primary reason for the relatively smaller decline of imports. But gold imports, which have surged in recent years on the back of higher perceived returns on gold holdings, contributed significantly to imports, even though they declined in value over the previous year (Box 1.2). The net result was an increase in
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Economic Survey 2012-13
the trade deficit to 10.8 per cent of GDP in H1 of 2012-13 vis-Ă -vis 9.9 per cent of GDP in H1 of 2011-12. 1.29 The net invisibles balance (in which net service exports and remittances are prominent) usually offsets the trade deficit. However, it also declined in dollar terms in H1 of 2012-13 relative to H1 of 201112. The increased outflow of investment income to foreigners has also played a part in reducing net invisibles. As a result of the widening of the trade deficit and moderation in net invisibles surplus, the CAD worsened to 4.6 per cent of GDP during H1 of 2012-13 as compared to 4.0 per cent of GDP in H1 of 2011-12. 1.30 With investment, consumption, and net exports all slowing in 2012-13, only an increase in government spending could hold up economic growth. But the government deficit had already shot Table 1.6 : Current Account Balance Items
2011-12 H1(AprilSeptember 2011)
2012-13 H1(AprilSeptember 2012)
US$ billion Exports
158.2
146.5
Imports
247.7
237.2
89.5
90.7
Trade deficit Net invisibles
53.1
51.7
CAD
36.4
39.0
Memo items as per cent of GDP Trade deficit
9.9
10.8
Net invisibles
5.9
6.2
CAD
4.0
4.6
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up as a result of past expansionary policy to pull India out of the post global financial crisis slump. And it increased further as slow growth diminished revenues.
PUBLIC FINANCE 1.31 Following the global financial crisis and the slowdown in aggregate demand that followed, fiscal stimulus was injected in 2008-09 and 2009-10 and the fiscal deficit of the centre increased to 6.0 per cent and 6.5 per cent of GDP respectively. Fiscal consolidation resumed in 2010-11 with a partial withdrawal of the fiscal stimulus. With growth in GDP recovering sharply in 2010-11, the fiscal deficit of the centre declined to 4.8 per cent of GDP. A large part of this was on account of the growth in nominal GDP in excess of 20 per cent. 1.32 This momentum could not be sustained in 2011-12 as growth faltered. The fiscal deficit of the centre widened to 5.7 per cent of GDP in 2011-12 (as per the Provisional Actuals). The dynamic nature of the relationship between macroeconomic outcome and the fiscal outcome was manifest thus: the sharp slowdown in industrial output led to a slowdown in overall GDP growth affecting tax revenues, particularly corporate income tax--the hitherto most buoyant source; the persistence of inflation that necessitated a tight monetary policy stance to rein in demand also dampened investment; subdued financial markets that hampered the planned disinvestment programme, resulting in slippage over Budget Estimates (BE); and continued high levels of global prices of crude oil and fertilizers with
State of the Economy and Prospects
11
Box 1.2 : The Gold Rush1 1. Demand for gold has been rising worldwide : The global financial crisis, turned debt crisis, has seen a steep rise in commodity prices, especially gold. This, now in hindsight, rather unsurprising fact, has mostly been driven by the meteorically increasing demand for safe havens to park the world's savings. Global gold prices, as denominated in US$, have doubled since 2008, and increased three times as denominated in Indian rupees. 2. India has traditionally been a major absorber of world gold : The last three years have seen a substantial rise in gold imports (the value of gold imports increased nine times between January 2008 and October 2012), contributing significantly to the current account deficit along with oil (Figure 2). 3. Gold imports are positively correlated with inflation : High inflation reduces the return on other financial instruments. This is reflected in the negative correlation between rising imports and falling real rates (Figure 1). Even though real rates have started rising, they are barely in the positive territory.
Source : CEIC Data Company.
Source : CEIC Data Company.
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(Contd...)
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Economic Survey 2012-13
Box 1.2 : The Gold Rush1 (Contd...) 4. Reduce Gold Purchases to curb CAD : Given soaring energy and transportation needs, since there seems to be little we can do to temper oil imports, gold is the component that needs to be contained to bring the CAD back to a comfort zone. 5.
The demand for gold as an investment tool has been increasing over time : Gold has been a combination of investment tool and status symbol in India. With limited access to financial instruments, especially in the rural areas, gold and silver are popular savings instruments. The recent economic uncertainty has seen people across the board buy gold. Almost all of India's demand for raw gold is met through imports2. Figure 3 shows that the composition of gold has seen a steady movement towards non jewellery items. Anecdotally, this can be construed as a rising demand for pure investment, predominantly in the urban and semi-urban areas. In the last quarter, non-jewellery constituted 40 per cent of the total demand. This observation, in line with global trends, is easily explained by the declining real returns on the gamut of financial instruments available to the investor and soaring ones on gold (23.7 per cent annual average return between April 07 and March 2012 versus 7.3 per cent return on Nifty and 8.2 per cent on savings deposits, Sehgal et. al., 2012).
Source : World Gold Council. 6. The longer term way to address the rising demand for gold : The overarching motive underlying the gold rush is high inflation and the lack of financial instruments available to the average citizen, especially in the rural areas. The rising demand for gold is only a "symptom" of more fundamental problems in the economy. Curbing inflation, expanding financial inclusion, offering new products such as inflation indexed bonds, and improving saver access to financial products are all of paramount importance. 1. Prepared by Mr. Rohit Lamba and Dr. Prachi Mishra. We would like to thank Amresh Acharya at the World Gold Council, Suresh Phadnis at PMEAC, Sneha Arora and Arun Narendhranath at ISB for many discussions. 2. There are three active gold mines, which meet less than 1 per cent of domestic demand. References Sehgal, Sanjay Muneesh Kumar, Wasim Ahmad and Priyanshi Gupta, 2012, "The gold rush and policy options: An empirical study", Department of Financial Studies, University of Delhi.
inadequate pass through to domestic consumption led to higher-than-budgeted subsidy outgo. Thus, the slippage in fiscal deficit in 2011-12 resulted from slippage of 35 per cent in revenue receipts, 23 per cent in disinvestment receipts and recovery of loans, and 42 per cent in expenditure outgo. 1.33 These macroeconomic developments broadly continued through the first half of the current fiscal. http://indiabudget.nic.in
Concerns were raised in many quarters about the deterioration in the fiscal position for a second year in a row and the credibility of the fiscal policy stance. Recognizing that some of the assumptions made at the time of budget formulation needed to be reviewed and corrective policy measures put in place, the government appointed a committee headed by Dr Vijay Kelkar to chalk out a roadmap for fiscal consolidation.
State of the Economy and Prospects 1.34 Following its recommendations, the government unveiled a revised fiscal consolidation roadmap in October 2012. It targeted a fiscal deficit of 4.8 per cent of GDP for 2013-14 and through a correction of 0.6 percentage point each year thereafter, a fiscal deficit of 3.0 per cent of GDP in 2016-17. Controlling the expenditure on subsidies will be crucial. Domestic prices of petroleum products, particularly diesel and liquefied petroleum gas (LPG) need to be raised in line with the prices prevailing in international markets. A beginning has already been made with the decision in September 2012 to raise the price of diesel and again in January 2013 to allow oil marketing companies to increase prices in small increments at regular intervals. The number of subsidized gas cylinders has also been capped at nine. Efforts will also have to be made to contain subsidies through better targeting (see Box 1.3 on the rationale for capping gas cylinders), limit other expenditures, and raise revenues over time so as to take the revenue to GDP ratio to 2007-08 levels. The disinvestment process has also been speeded up. Taking all these measures into account, the MidYear Economic Analysis 2012-13 indicated a likely slippage in the fiscal deficit for the current fiscal by only 0.2 percentage point. 1.35 The Budget for 2012-13 estimated a fiscal deficit of ` 5,13,590 crore. As per the data on union government finances made available by the Controller General of Accounts, the fiscal deficit is placed at 78.8 per cent of BE, significantly below the five-year average of 85.9 per cent and last year's level of 92.3 per cent. Revenue deficit at the same time is placed at 85.1 per cent of BE, well below the level achieved in the recent past. This has largely been made possible by a moderation in growth of total expenditure in April-December 2012 to 10.6 per cent as against BE of 14.8 per cent for 2012-13 (over provisional actuals of 2011-12). This moderation in growth is in spite of the fact that subsidies have burgeoned in April-December 2012 to reach a figure of ` 1,66,824 crore (92.9 per cent of BE). The restraint in expenditure could largely offset the lower levels of non-debt receipts in April-December 2012. 1.36 Gross tax revenue was budgeted at ` 10,77,612 crore for 2012-13. As a proportion of BE, gross tax revenue in April-December 2012 was 63.2 per cent, lower than the last five-years' average of 69.0 per cent. The growth in gross tax revenue in April-December 2012 was 15.0 per cent, comprising a growth of 17.4 per cent in union excise duties; 6 http://indiabudget.nic.in
13
per cent in customs; 22.5 per cent in personal income tax; 33 per cent in service tax; and 10.6 per cent in corporate income tax. 1.37 In terms of the implied year-on-year growth envisaged by BE 2012-13 over provisional actuals of 2011-12, there is slippage in the first nine months of the current fiscal in corporate income tax by 4.9 percentage points, customs by 18.9 percentage points, and central excise by 16 percentage points. There is overperformance in service tax collection by 5.9 percentage points and personal income tax by 7.6 percentage points. In terms of overall gross tax revenue there is slippage of 6 percentage points in April-December 2012. Going forward, the realization in the fourth quarter will determine the extent of shortfall for the year over BE. 1.38 The outcome in terms of the fiscal deficit of the centre broadly indicates that the slippage will be limited to 0.2 percentage point on account of the expenditure measures that could help offset the shortfall in non-debt receipts. The crucial lesson that emerges from the fiscal outcome in 2011-12 and 2012-13 is that in times of heightened uncertainties, there is need for continued risk assessment through close monitoring and for taking appropriate measures for achieving better fiscal marksmanship. Openended commitments such as uncapped subsidies are particularly problematic for fiscal credibility because they expose fiscal marksmanship to the vagaries of prices. 1.39 It is better to achive fiscal consolidation partly through a higher tax-GDP ratio than merely through reduction in the expenditure to GDP ratio, in view of large unmet development needs. After reaching a peak of 11.9 per cent in 2007-08, the tax-GDP ratio had declined to 9.6 per cent in 2009-10 and was placed at 9.9 per cent in 2011-12. Therefore, raising the tax-GDP ratio to above the 11 per cent level is critical for sustaining the process of fiscal consolidation in the long run. Of course, it is much better to achieve a higher tax-GDP ratio by broadening the base which is taxed rather than increasing marginal tax rates significantly--higher and higher tax rates impinge more and more on incentives to undertake taxable activity, while encouraging tax evasion. 1.40 Finally, higher fiscal deficits usually lead to rising public debt. India's central government liabilities-GDP ratio has in fact come down since 2002-03 because high nominal GDP growth has
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Economic Survey 2012-13
Box 1.3 : Who Gets LPG Subsidies?* Subsidies should be well targeted at the poor. The reach of subsidies on LPG is highly unequal amongst the poor and rich in rural and urban areas. While there is a significant inequality in the proportion of subsidies received by the poorest and richest households in rural areas, the distribution is more equitable across urban households. However, in both cases, the proportion of subsidies that go to the poor is low.
The proportion of LPG subsidies received by each quintile across rural and urban households To calculate the distribution of subsidies across households, we use the 64th Round of NSS data and categorize all rural (and urban) households into quintiles based on their per capita household expenditure. Furthermore, we use the reported household expenditure on LPG to calculate the share of each quintile in the total expenditure on LPG. The share in expenditure on LPG for any quintile therefore reflects the proportion of subsidies received by that quintile. From the above graph, we see a highly unequal distribution of subsidies across rural households. The proportion of subsidies that go to the poorest quintile is only 0.07 per cent as compared to 52.6 per cent for the richest quintile. In urban areas, though the proportion of subsidies that go to the poor is still low (around 8.2 per cent), there is a more equitable distribution across the remaining quintiles (19 per cent, 24 per cent, 25 per cent and 23 per cent respectively). *Prepared by Abhijit Banerjee and Gaurav Chiplunkar.
offset both the new borrowing as well as the nominal interest payments creditors have demanded. Put differently, India has been able to borrow at low real interest rates even while the government has run fiscal deficits. Such a sequence of events cannot be relied upon, which is yet another reason for bringing down the fiscal deficit. 1.41 Another way of looking at the slippage in public finances is to see it in the context of domestic savings, which is the safest way of financing investment. Large fiscal deficits may imply lower public savings, lower domestic savings, and given a level of investment, larger CADs. Of course, private http://indiabudget.nic.in
savings can increase to make up the shortfall in public savings. Unfortunately, after moving up in 2008-09 and 2009-10, private savings have declined sharply, compounding the decline in public savings.
DOMESTIC SAVINGS 1.42 The volume and composition of domestic savings in India have undergone significant changes over the years. The savings rate (gross domestic savings as percentage of gross domestic product at market prices) averaged 18.6 per cent in the 1980s and 23 per cent in the 1990s. The savings rate exceeded 30 per cent for the first time in 2004-05
State of the Economy and Prospects
15
and has remained above that level ever since. It peaked in 2007-08 at 36.8 per cent and reached an eight-year low of 30.8 per cent in 2011-12 (the latest period for which we have complete figures) (Table 1.7).
between 1980-81 and 2011-12. It has been progressively declining and during 2004-05 to 201112, public savings as a ratio of total savings averaged 6.7 per cent. Figure 1.5 shows the trends in contribution of the household, private corporate, and public sectors to total savings since 1980-81.
1.43 Savings come from three sources, viz. households, the private corporate sector, and the public sector. On average, households accounted for nearly three-fourths of gross domestic savings during the period 1980-81 to 2011-12. The share declined somewhat in recent years, and in the period from 2004-05 to 2011-12, it averaged 70.1 per cent of total savings. Savings of the private corporate sector accounted for 15 per cent of total savings on an average between 1980-81 and 2011-12. However, during the years 2004-05 to 2011-12, their share increased to 23.2 per cent. The public sector accounted for 10 per cent of total savings on average
1.44 Within households, the share of financial savings vis-Ă -vis physical savings has been declining in recent years. Financial savings take the form of bank deposits, life insurance funds, pension and provident funds, shares and debentures, etc. Financial savings accounted for around 55 per cent of total household savings during the 1990s. Their share declined to 47 per cent in the 2000-10 decade and it was 36 per cent in 2011-12. In fact, household financial savings were lower by nearly ` 90,000 crore in 2011-12 vis-Ă -vis 2010-11. Some possible explanations for the reduction in the share of financial savings are discussed in Box 1.4.
Table 1.7 : Ratio of Savings to GDP (at current market prices per cent) 2004-05
2006-07
2007-08
2008-09
2009-10
2010-112R
2011-121R
32.4
34.6
36.8
32.0
33.7
34.0
30.8
Public sector
2.3
3.6
5.0
1.0
0.2
2.6
1.3
Private sector
30.1
31.0
31.8
31.1
33.5
31.5
29.5
Household sector
23.6
23.2
22.4
23.6
25.2
23.5
22.3
Financial saving
10.1
11.3
11.6
10.1
12.0
10.4
8.0
Saving in physical assets
13.4
11.9
10.8
13.5
13.2
13.1
14.3
6.6
7.9
9.4
7.4
8.4
7.9
7.2
Gross domestic saving
Private corporate sector
Source : CSO. Notes : 1R : First Revised Estimate, 2R : Second Revised Estimate.
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16
Economic Survey 2012-13
Box 1. 4 : Reduction in Financial Savings Much of the financial savings of the household sector are in the form of bank deposits (around 30 per cent in the 2000s), life insurance funds (22 per cent in the 2000s as against 9.6 per cent in the 1980s), and pension and provident funds (16.5 per cent in the 2000s as against 23.6 per cent in the 1980s). There has been a decline in the proportion of pension and provident funds, particularly since the late 1990s. This trend continued till 2007-8. These were also the years when the real rate of interest was generally declining. There has been some upward movement in the share of pension and provident funds during 2008-9 and 2009-10, partly due to the increase in disposable income of government servants who are significant contributors to these funds, on account of higher pay and arrears arising from the implementation of the recommendations of the Sixth Pay Commission. Shares and debentures accounted for 8.3 per cent of total financial savings in the1980s; their share increased to nearly 13 per cent in the 1990s before declining to 4.8 per cent in the 2000s. The reasons for such a trend could be the behaviour of share prices, as reflected by the Bombay Stock Exchange (BSE) Sensex, and depicted in the following Table. 1980s
1990s
2000s
448
3120
8612
-
21.4
10.7
42.3
33.2
60.1
Average of BSE Sensex Return on BSE Sensex (%) CAGR Coefficient of Variation
Note : These have been calculated from the information available in the RBI’s Handbook of Statistics on Indian Economy.
The increase in the proportion of shares and debentures in total financial savings in the 1990s could be ascribed to higher returns (21.4 per cent per annum on an average for the decade) along with lower volatility as reflected by a lower coefficient of variation that declined from 42.3 in 1980s to 33.2 in the 1990s. The returns on the BSE Sensex halved to 10.7 per cent in the 2000s and volatility increased as can be seen from the higher value of the coefficient of variation at 60.1. Thus a combination of lower returns and higher volatility in the 2000s vis-à-vis the 1990s could have contributed to the reduced share of shares and debentures in total financial savings. This, coupled with high inflation, could also be one of the reasons why gold has become a ‘safe haven’ investment in recent times (see boxes 1.2 and 7.2). Acquisition of gold by the households in the country tends to have a negative impact on savings and on household financial investments.
1.45 One of the reasons for the increasing share of the private corporate sector in total savings could be that there has been an increase in the total profit to output ratio from 3.5 per cent for the 1980s to 5.4 per cent in the 1990s and further to 7.7 per cent in the 2000s in the factories sector (estimated from the information available from the Annual Survey of Industries). There has also been a reduction in certain costs, that is emoluments, interest payments, and fuels as a ratio of total value of output, as can be seen from Table 1.8. This reduction has contributed to profits and consequently higher savings of the corporate sector.
departmental commercial enterprises. The share of public savings in total savings progressively declined from over 20 per cent in the 1980s to 7.3 per cent in the 1990s and further to 3.3 per cent in the 2000s. Within public savings, the share of non-departmental PSUs on an average remained in the range of 12-13 per cent during each of the three sub-periods. The share of public authorities in total savings declined by nearly 16 percentage points from a positive contribution of 7.4 per cent in the 1980s to a negative contribution of 8.7 per cent in the 2000s. Public authorities have generally been dis-savers since 1987-88, with large dis-savings since 1998-99.
1.46 A slowdown in the industrial sector has an impact on private corporate savings, as was the case in 2008-09 and again in 2011-12, and the revival of this form of savings depends on how fast industry recovers.
1.48 Despite a long-term trend decline in savings by public authorities, there have been periods of improvement. On the back of strong growth in revenues and the Fiscal Responsibility and Budget Management Act of 2003, the combined fiscal deficit of both the central and state governments declined from 9.6 per cent of GDP in 2002-03 to 4 per cent of GDP in 2007-08. Public-sector savings as a ratio of GDP increased from - 0.3 per cent of GDP in 2002-03
1.47 Public-sector savings include savings by (a) public authorities comprising government administration and quasi-government bodies and departmental commercial enterprises and (b) nonhttp://indiabudget.nic.in
State of the Economy and Prospects Table 1.8 : Cost of certain inputs as a Ratio of Value of Output (per cent) 1980s
1990s
2000s
9.2
6.7
4.3
Total emoluments Fuel cost
8.3
7.4
6.7
Interest paid
5.1
5.5
2.6
60.8
59.4
62.2
Material consumed
Source : Based on Annual Survey of Industries, Factory Sector.
to 5 per cent in 2007-08, before declining following the fiscal stimulus in 2008-09. The significant improvement in domestic savings rate between 200304 and 2007-08 owed to a great extent to the increased public savings, stemming from fiscal consolidation. 1.49 As Table 1.5 suggests, gross fixed capital formation has fallen by over 2 percentage points between pre-crisis 2007-08 and 2011-12. However, gross domestic savings have fallen by about 6 percentage points over the same period. So even as we have to raise investment, especially corporate investment, raising domestic savings is the safest way of financing the increase without putting pressure on the current account balance. A large part of the future increase in savings will have to come from increased public savings. This will entail gradually reducing the central government's fiscal deficit from 5.8 per cent in 2011-12 to the 3 per cent projected for 2016-17 as per the fiscal roadmap (see previous section for details). 1.50 Household savings will also have to be raised. The financial savings of the household sector are likely to improve with lower inflation, especially as the real rate of return on financial savings rises. A greater variety of reliable financial savings opportunities (such as inflation-indexed bonds) and relative ease of access to them could also help in raising the share of financial savings in total savings, reducing the attractiveness of alternatives like gold. 1.51 Let us now turn to two important consequences of macroeconomic imbalances-prices and the balance of payments or external position.
PRICES AND MONETARY MANAGEMENT 1.52 Headline WPI inflation remained relatively sticky around 7 to 8 per cent in the current financial http://indiabudget.nic.in
17
year and moderated to a three-year low of 7.18 per cent in December 2012. Average headline WPI inflation in 2012 (April-December) moderated to 7.55 per cent from 9.35 per cent in the corresponding period of the previous year. The momentum based on seasonally adjusted annualized rate (SAAR) has also been showing a declining trend in the last couple of months for major subgroups of the WPI (Figure 1.6). The decline is mainly due to moderation in nonfood manufacturing inflation (core as defined by the RBI). Core inflation remains muted and declined to 4.24 per cent in December 2012 from its peak of 8.35 per cent in November 2011. Apart from monetary measures taken by the RBI, softening of international and domestic prices of metals, chemicals, and textiles products also contributed to the moderation of core inflation. 1.53 Elevated food inflation, however, remains an area of concern with inflation gradually inching upwards to double digits in December 2012. Unlike the previous year, when food inflation was mainly driven by higher protein food prices, this year the pressure has been coming mainly from cereals. Inflation in cereals has increased to 17.05 per cent in the third quarter of 2012-13 from 6.36 per cent in the first quarter mainly on account of an increase in prices of wheat, rice, and maize. Besides an increase in the minimum support price (MSP) for wheat and rice, inadequate open market availability relative to demand, particularly for wheat, has also resulted in a build-up of price pressure and hardening of inflation for cereals. The recent increase in onion prices in December 2012- January 2013 may also put some pressure on primary food articles inflation. However, milk and other protein items witnessed moderation in inflation in the second and third quarters of 2012-13. 1.54 Rising food inflation has also widened the gap between inflation measured in terms of CPIs and WPI to 3.91 percentage points in December 2012 from 1.55 percentage points in May 2012. However, global commodity prices have remained relatively benign with both energy and non-energy prices registering a decline until recently. As per the World Bank's Global Economic Prospects, except for metals, most global commodity prices are expected to decline further in 2013 and 2014, a silver lining in the tepid global recovery. The impact of benign inflationary expectations internationally will have a moderating impact on domestic prices.
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Economic Survey 2012-13
1.55 In the meantime though, the RBI has to weigh the costs of rapidly slowing growth against persistent CPI inflation. To the extent that the primary component of CPI inflation is food prices, elevated because of supply constraints, the textbook prescription is for the RBI to look through higher food prices even while setting rates to ensure that the 'second round effects' as reflected in core inflation are contained--in other words, set monetary policy based on the behaviour of core inflation. One worry with this more accommodative approach is that CPI inflation, which is what the public sees, is becoming entrenched in the public's expectations. A second worry is that high inflation may be causing anxious investors to shun fixed income investments such as deposits and even turn to gold as an inflation hedge, thus contributing to the CAD. Nevertheless, to the extent that monetary policy has limited influence over certain aspects of inflation such as food prices, it may be appropriate for monetary policy to set rates based on what it can influence, while keeping in mind that nominal interest rates affect many aspects of the economy other than growth and inflation. 1.56 From the government's perspective, a major contribution to the fight against inflation will be to reduce the fiscal impetus to demand. Also a focus on incentivizing food production through measures other than price supports, while facilitating storage and distribution, can help contain food inflation, which is hard for the RBI to control. Policy on price and procurement supports should be calibrated so as to not encourage more production of crops that are already abundantly supplied. Other measures to
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increase investment more broadly, and therefore supply, can also help over the medium term.
THE BALANCE OF PAYMENTS EXTERNAL POSITION
AND
1.57 The CAD in the first half of 2012-13 has been 4.6 per cent of GDP. Available indications do not seem to suggest any improvement in the current account balance in the second half. There is a case for discouraging imports of commodities like gold and making efforts to raise exports. While the government has 'thrown sand in the wheels' by raising the tariff on gold from 4 per cent to 6 per cent in order to discourage imports and tried to unlock passive gold holdings through gold loans, gold purchases are likely to come down primarily when households see attractive alternative investment avenues. Lower inflation will be the key. In the meantime, increasing exports at the present juncture is proving to be a more difficult task, given the slow global recovery. Greater competitiveness of exports through greater corporate productivity as well as better logistics infrastructure will help, as will diversification towards fast growing emerging and frontier markets--which is under way. But a return to strong export growth will depend on the revival of growth in industrial countries. 1.58 With net exports declining, India's balance of payments (BoP) has come under pressure. So far the CAD has been financed without drawing on reserves. Net capital flows declined to US$ 40.0 billion (4.8 per cent of GDP) in H1 of 2012-13 as against
State of the Economy and Prospects Table 1.9 : Performance of BoP Items
2011-12 H1(AprilSept 2011)
2012-13 H1(AprilSept 2012)
US$ billion CAD
36.4
39.0
Capital account
43.5
40.0
Net FDI
15.7
12.8
Net portfolio(including FIIs)
1.3
5.8
NRI deposits
3.9
9.4
ECB
8.4
1.7
5.9
9.5
Trade credit
Memo items as per cent of GDP CAD
4.0
4.6
Net capital flows
4.8
4.8
Note : ECB is external commercial borrowings.
US$ 43.5 billion (4.8 per cent of GDP) in H1 of 201112 (Table 1.9). Net foreign direct investment (FDI) to India decreased but net portfolio flows including foreign institutional investments (FII) increased, with early estimates suggesting an even larger inflow of US$ 9.9 billion in the third quarter as compared to US$ 5.8 billion in the second quarter. Non-resident Indian (NRI) deposits remained robust as did net flows of trade credit. Despite the large CAD, therefore, there was net accretion to reserves (on BoP basis) during H1 of 2012-13 at US$ 0.4 billion. This was, however, lower than the US$ 5.7 billion accretion in H1 of the previous year. 1.59 In the current fiscal, foreign exchange reserves have fluctuated between US$ 286.0 billion and US$ 295.6 billion. At end January 2013, reserves stood
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at US$ 295.5 billion, indicating a marginal increase from US$ 294.4 billion at end March 2012. The rupee, however, has been more volatile. Between April 2012 and January 2013, the monthly average value of the rupee per US dollar fluctuated significantly, touching an all-time low of ` 57.22 per US dollar on 27 June 2012, thus depreciating by 10.6 per cent from ` 51.16 per US dollar on 30 March 2012. In the subsequent months of July to September 2012, the rupee appreciated, touching ` 51.62 per US dollar on 5 October 2012. It began depreciating again thereafter and the monthly average exchange rate has since been in the range of ` 53.02 to ` 54.78 per US dollar during October 2012 to January 2013 (Figure 1.7). 1.60 The real effective exchange rate, which takes into account domestic inflation in India, and is an important determinant of the competitiveness of Indian exports, has depreciated by about 11 per cent since mid - 2011. 1.61 India's external debt stock stood at US$ 365.3 billion at end-September 2012, recording an increase of about US$ 20.0 billion (5.8 per cent) over the endMarch 2012 level. This increase has been primarily on account of higher NRI deposits, short-term debt, and ECBs. These three components together contributed 94.7 per cent of the total increase in the country's external debt. 1.62 The maturity profile of India's external debt continues to be dominated by long-term loans. At end-September 2012, long-term external debt at US$ 280.8 billion, accounted for 76.9 per cent of total external debt, while the remaining 23.1 per cent was short-term debt. Government (sovereign) external debt stood at US$ 81.5 billion, while non-government
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debt amounted to US$ 283.9 billion at endSeptember 2012. India's external debt has remained within manageable limits as indicated by the external debt-GDP ratio of 19.7 per cent and debt service ratio of 6.0 per cent in 2011-12. But the trends in size, source, maturity, and hedging of external debt bear careful monitoring. In particular, regulators will have to be careful about the tendency of some Indian corporations or entities without substantial foreign exchange earnings to leave foreign exchange borrowings un-hedged so as to get 'cheap' foreign financing. Low un-hedged foreign interest rates can be deceptively enticing, leaving the borrower exposed to significantly higher repayments if the rupee depreciates unexpectedly. 1.63 In this context, regulators have to maintain a balance between what is of public importance and what is prudential. Areas of public importance, such as infrastructure, do deserve substantial support. However, these areas of activity may also be risky. Support should be given by de-risking the areas (policy to speed up infrastructure projects and ease their completion), through financial development (creating new financing institutions, attracting new investors), or fiscal means (interest subventions, tax breaks) but not by relaxing prudential norms (lower capital requirements, allowing un-hedged foreign borrowing) or riskier capital structures (allowing greater debt ratios). Ultimately, riskier financing for projects of public importance builds up greater risk for the country because if these projects fail to take off, they impinge on both growth and the financial system at the same time, at a time when the government has fewer resources to cope.
ASSESSMENT
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POLICY MEASURES
1.64 The strong post-financial-crisis fiscal and monetary stimulus in India led to spectacular growth in the immediate aftermath of the crisis. But with corporate and infrastructural investment not keeping pace, and food production constrained, the boost to consumption eventually led to higher inflation. And falling savings, partly as a result of government spending and partly as a result of high inflation, have led to a widening CAD. Monetary policy has been tightened, even as global headwinds to growth have increased. India has been caught in a vicious circle of falling growth and stimulus withdrawal that could well exacerbate the decline. Of some concern is India's increased dependence on foreign borrowing even as growth has slowed. http://indiabudget.nic.in
1.65 Because of the slowdown and high levels of leverage, some industry and infrastructure sectors are experiencing an increase in non-performing assets (NPAs). Overall gross NPAs of the banking sector increased from 2.36 per cent of total credit advanced in March 2011 to 3.57 per cent of total credit advanced in September 2012. The increase is particularly sharp for the industry and infrastructure sectors. Sub-sectors particularly under stress include textiles, chemicals, iron and steel, food processing, construction, and telecommunications. The increase in gross NPAs is also significantly higher for publicsector banks, which are typically more exposed to the distressed sectors. 1.66 Some of the reasons for the increase in NPAs are technical (a switch to system-based identification by public-sector banks), but stress also stems from slow growth and project delays. A revival of growth will help contain NPAs, but going forward, more attention will have to be paid to whether projects are adequately capitalized up front given the risks, and to whether distress resolution systems work effectively in recapitalizing distressed assets and putting them back to work, while excising ineffective promoters from management and imposing losses on those who contracted to take the risk. 1.67 The way out, and the hope for starting a virtuous circle, lies in shifting national spending from consumption to investment, removing the bottlenecks to investment, growth, and job creation, in part through structural reforms, combating inflation both through monetary and supply-side measures, reducing the costs for borrowers of raising financing, and increasing the opportunities for savers to get strong real investment returns. 1.68 In practical terms for government policy, this translates into containing the fiscal deficit especially by shrinking wasteful and distortionary subsidies. It means working on reducing the impediments to investment such as delays in getting permissions, clarifying difficult and non-transparent processes for land acquisition, and increasing access to good infrastructure such as power and roads. It warrants reworking the regulatory and incentive structure that keeps small businesses tiny and prevents them from creating good productive jobs. It calls for reducing the barriers to entry in various areas of business and allowing FDI, even while ensuring domestic companies are not disadvantaged. It entails providing the incentives and means for the farmer to increase
State of the Economy and Prospects production, even while improving the management and the logistics of food procurement and distribution. And it necessitates continuing financialsector reform to increase the entry of new institutions, reduce transactions costs for investors, increase access for borrowers and savers to one another, and improve the quality of regulation. 1.69 The government has already taken some important steps in this direction, some of which we have already alluded to. In addition, two helpful potential developments are in sight, one on the revenue side and the other on the expenditure side. The goods and services tax (GST), if approved, would replace a number of state and central taxes, make India more of a national integrated market, and bring more producers into the tax net. By improving efficiency as well as revenues, it can add substantially to growth as well as helping government finances. On the expenditure side, the direct benefit transfer scheme that will allow the transfer of government benefits directly to targeted recipient bank accounts can help reduce transactions costs, prevent duplication, leakage, and fraud, and improve choices for the poor. By translating a number of subsidies into equivalent cash transfers, it can avoid price distortions and can target subsidies better to the truly deserving. This will help contain expenditure. 1.70 The government has also taken a number of steps to revive investment and growth. These comprise setting up the CCI headed by the Prime Minister to fast-track mega projects of over ` 1,000 crore; a scheme for restructuring the debts of state power distribution companies, which includes incentives for them to charge reasonable tariffs so that they do not get over-indebted again; movement towards a land acquisition bill that will clarify and make the process of land acquisition fairer; permitting FDI in a number of areas including multibrand retail, power exchanges, and civil aviation; increasing investment in irrigation, storage and cold storage networks; and undertaking programmes to improve the production of protein foods. 1.71 Steps have also been taken on financial-sector reform. The Banking Laws (Amendment) Act 2012 strengthens the regulatory powers of the RBI and paves the way for grant of new bank licences by the RBI. The Financial Sector Legislative Reforms Commission is examining the laws governing the financial sector with a remit to suggest ways of modernizing them. A number of steps have been taken by the government, together with the financialhttp://indiabudget.nic.in
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sector regulators, for easing savings and investment in the country, both for domestic and foreign investors. These are detailed in Chapter 5. 1.72 More generally, India's situation is difficult but steps have been taken to bring the macroeconomy back into balance and growth on track. What is important is to recognize that a lot needs to be done and the slowdown is a wake-up call for increasing the pace of actions and reforms.
PROSPECTS, SHORT TERM MEDIUM TERM
AND
1.73 The revival of growth in the advanced countries is expected to be slow and uncertain at least in the near future, despite the measures being taken on monetary and fiscal fronts. In Europe, in particular, this is also being accompanied by changes in the institutional framework. With the ongoing privatesector deleveraging and government fiscal consolidation, most analysts have projected only a very moderate global recovery in 2013, which could gather steam in 2014. At the same time, if the United States can deal with its fiscal overhang, the potential upside to global growth could be substantial, given the health of US corporations, continuing innovation, low energy costs, and the improving finances of households. Emerging markets can also compensate a little for tepid growth in industrial economies, and the changing direction of Indian exports towards emerging markets (see Chapter 7) can help their revival. 1.74 Nevertheless, it is unlikely that the support to Indian growth from the global economy will be significant. Indeed, there are two sources of downside risk. First, India is exposed to shifts in the risk tolerance of international investors. Second, India's import bill is strongly tied to the price of oil. Of course, one reason for rising oil prices would be improvements in the global economy, which would mean stronger exports. The more worrisome situation would be if the oil prices rise because of geopolitical risks, which would mean increasing investor anxiety and slow world growth. 1.75 The bottomline is that India cannot take the external environment for granted, and has to move quickly to restore domestic balance. The government is committed to fiscal consolidation. This along with demand compression and augmented agricultural production should lead to lower inflation, giving the RBI the requisite flexibility to reduce policy rates.
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Lower interest rates could provide an additional fillip to investment activity for the industry and services sectors, especially if some of the regulatory, bureaucratic, and financial impediments to investment are eased. 1.76 Given such a scenario, where all the three major sectors of the economy perform better in 201314 as compared to 2012-13, the overall economy is expected to grow in the range of 6.1 to 6.7 per cent in 2013-14. Of course, these projections assume a normal monsoon, further moderation in inflation as expected (to induce further relaxation of the tight monetary stance), and mild recovery of global growth as anticipated. Forecasting at potential turning points is difficult, hence the relatively wide range this time. 1.77 While the current environment is difficult, the future holds promise, provided we can answer the question that is probably foremost in the minds of India's young population: 'Where will my job come from?' In Chapter 2, we look at this question in some depth. India is creating jobs in industry but mainly in low productivity construction and not enough formal jobs in manufacturing, which typically are higher productivity. The high productivity service sector is also not creating enough jobs. As the number of people looking for jobs rises, both because of the population 'dividend' and because share of agriculture shrinks, these vulnerabilities will become important. Because good jobs are both the pathway to growth as well as the best form of inclusion, we have to think of ways of enabling their creation. Chapter 2 examines possible avenues. 1.78 Let us now turn to summary outlines of the chapters in the survey that focus on different sectors and aspects of the complex economy that India is.
AGRICULTURE AND FOOD MANAGEMENT 1.79 Indian agriculture has performed remarkably well in terms of output growth, despite weather and price shocks in the past few years. Although agriculture, including allied activities, accounted for only 14.1 per cent of the GDP in 2011-12, its role in the country's economy is much bigger with its share in total employment as high as 58.2 per cent according to the 2001 census. The declining share of the agriculture and allied sector in the country's GDP is consistent with the normal development trajectory of any fast growing economy (see
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Chapter 2), but fast agricultural growth remains vital for jobs, incomes, and food security. 1.80 Average annual growth of the agriculture and allied sector during the Eleventh Five Year Plan at 3.6 per cent fell short of the target of 4 per cent but was higher than the average annual growth of 2.5 and 2.4 per cent achieved during the Ninth and Tenth Plans respectively. An important reason for the dynamism of the agriculture sector has been a stepup in the gross capital formation (GCF) relative to GDP of this sector. Overall GCF in agriculture (including the allied sector), more than doubled in the last 10 years and registered an average annual growth of 8.1 per cent. During the Eleventh Plan period, foodgrains production witnessed an increasing trend, except in 2009-10. During 201112, total foodgrains production reached a record of 259.3 million tonnes. Better agricultural performance in the Eleventh Plan is a result of: a) farmers' response to better prices; b) continued technology gains; and c) appropriate and timely policies coming together, e.g. increased credit at concessional rates. However, the production of 2012-13 kharif crops is likely to be adversely affected by deficiency in the south-west monsoon and resultant acreage losses. The output for all the major crops is expected to decline. 1.81 Owing to good production of foodgrains in recent years and remunerative MSPs, even states that were traditionally not procuring sufficient foodgrains, e.g. Bihar, Madhya Pradesh, Bihar, Chhattisgarh, and West Bengal showed significant increase. In recent years, the policy impetus provided by the government has also provided much required stability to agricultural exports. 1.82 India does not fare well, however, in terms of agricultural yields or productivity. Improvement in yields holds the key for India to remain self-sufficient in foodgrains. Another challenge is how to maximize agricultural income while adopting a more sustainable agricultural strategy. The concerns here are land and water degradation due to soil erosion, soil salinity, waterlogging, excessive application of nutrients, and overexploitation of water resources in some parts of the country. Better management practices for rehabilitation of degraded land and water resources hold the key. Expenditure on agricultural research also needs to be raised in the Twelfth Five Year Plan.
State of the Economy and Prospects 1.83 A notable feature of the Indian agricultural sector is the domination of small farmers with small landholdings. This poses a challenge for the adoption of farm mechanization and generating productive incomes from farm operations. Land-related issues and implementation of land reforms require to be attended to on priority basis to revitalize the agriculture sector. Declining per capita availability of foodgrains is another major concern in India. For ensuring nutritional security, it is not only important to increase per capita availability of foodgrains but also to ensure the right amounts of food items in the food basket of the common man. A thrust on horticulture products and protein-rich items is required for ensuring nutritional security. 1.84 Another critical issue is supply-chain management in agricultural marketing in India. It is necessary to evolve mechanisms for linking wholesale processing, logistics, and retailing with farm-production activities so as to generate enhanced efficiency, better farm prices, etc. Recently the government allowed FDI in retail, which can pave the way for investment in new technology and marketing of agricultural produce in India. 1.85 There is need for stable and consistent policies where markets play an appropriate role, private investment in infrastructure is stepped up, the public distribution system (PDS) is revamped, food price and food stock management improves, and a predictable trade policy is adopted for agriculture. These initiatives need to be coupled with skill development and better research and development (R&D) along with improved delivery of credit, seeds, etc.
INDUSTRY
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INFRASTRUCTURE
1.86 The capital goods sector remained weak for the second consecutive year. Negative growth was not only experienced across the sub-sectors of the capital goods segment but was also more persistent with only two months in the last twelve months recording positive growth. The production of key capital goods such as machinery and equipment , electrical machinery, and transport segments contracted owing to deceleration in investment, a decline in new projects, and import competition. High interest rates and slower growth in household or retail credit resulted in slower growth in consumer durables.
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1.87 Sluggish industrial performance also affected corporate performance. The rate of growth of sales of the listed manufacturing companies in the private sector declined from an average of 28.8 per cent in the first quarter of 2010-11 to 11.4 per cent in the second quarter of 2012-13. Interest expenditure increased significantly. Together with a deceleration in the rate of growth of sales, the ratio of net profit to sales also declined. 1.88 The aggregate resource flow to industry, including credit disbursed by the banks and money raised in domestic and overseas market through other instruments, however, has been showing some signs for optimism. The total flow of financial resources to the commercial sector in the current financial year so far (up to 11 January 2013) has been higher compared to the corresponding period of the previous year. 1.89 The eight core infrastructure industries registered a growth of 3.3 per cent during AprilDecember 2012 compared to 4.8 per cent during the same period of the previous year. The decline in growth in the current year so far is mainly on account of negative growth witnessed in the production of coal, natural gas, and fertilizers. Among infrastructure services, freight traffic by railways has been comparatively higher during the first eight months of the current year. In the road sector the National Highways Authority of India (NHAI) achieved 17.3 per cent growth in widening and strengthening of highways during April-November 2012. 1.90 A large number of major central-sector projects costing ` 150 crore and more are delayed with respect to their latest scheduled dates of completion. Delays in land acquisition, municipal permission, supply of materials, award of work, operational issues, etc. continue to bog down project implementation.
SERVICES SECTOR 1.91 The services sector is the dominant sector in most developed economies of the world and in some developing economies such as India. The CAGR of the services sector GDP was 10 per cent for the period 2004-05 to 2011-12. It has clearly outgrown both the industry and agriculture sectors. In 201112 and 2012-13, in tune with the general moderation in the economy, the growth rate of the services sector also declined. The services sector is providing
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employment to more people, but employment growth is probably below the desired pace, given how productive service jobs are (see Chapter 2). 1.92 The slowdown in the rate of growth of services in 2011-12, and particularly in 2012-13, from the double-digit growth of the previous six years, contributed significantly to slowdown in the overall growth of the economy. While some slowdown could be attributed to the lower growth in agriculture and industrial activities, given the backward and forward linkages with services, lower demand from the rest of the world could also have played a part.
FINANCIAL INTERMEDIATION 1.93 The existence of well-developed and efficient financial markets is critical for achieving real economic growth. The country now has a vibrant and transparent financial market in terms of market efficiency, transparency, and price discovery process. 1.94 As far as the banking sector is concerned, the focus continues to be on reform initiatives which will facilitate the flow of credit to critical sectors of the economy including agriculture, infrastructure, micro, small and medium enterprises, housing, and export. Financial inclusion and improved accessibility of banking infrastructure remain high on the list of priorities of the government. The performance of Indian banks during 2011-12 was conditioned to a large extent by the fragile recovery of the global financial markets as well as a challenging operational environment on the domestic front, with persistent high inflation and muted growth performance. Net profit growth of banks slowed down. Though Indian banks remained well-capitalized, concerns regarding growing NPAs persisted. 1.95 In the overall context of the evolving macroeconomic situation in the country and global financial developments, the government in close collaboration with the RBI and Securities and Exchange Board of India (SEBI) has recently taken a number of initiatives to meet the growing capital needs of the Indian economy. Some of the initiatives taken in this regard are launching of the Rajiv Gandhi Equity Savings Scheme (RGESS) and SME exchange / platform, expansion of the Qualified Foreign Investors (QFIs ) Scheme to facilitate their access to the Indian capital market, progressive enhancement in the quantitative limits for FIIs'
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investments in various debt categories, allowing refinancing rupee loans through ECB route for Indian companies in the power sector, reduction in the withholding tax on interest payments on ECBs, and introducing a new ECB scheme for companies in the manufacturing and infrastructure sector. 1.96 Investment sentiment started improving in the last few months with foreign investors reposing more confidence in the Indian economy in general and markets in particular. During the current financial year (up to 31 December 2012), the rise in the indices stood at 11.62 per cent for the Sensex and 11.51 per cent for Nifty. The economic and political developments in the Euro-zone area and United States had an impact on markets around the world including India. The temporary resolution of the 'fiscal cliff' in the US had a positive impact on the markets. Further, the reform measures initiated by the government recently have been received well by the markets.
HUMAN DEVELOPMENT 1.97 Economic growth though important cannot be an end in itself. The Twelfth Five Year Plan, with its focus on 'Faster, More Inclusive and Sustainable Growth', puts the growth debate in the right perspective. The government's targeted policies for the poor, with the prospect of fewer leakages, can help better translate outlays into outcomes. 1.98 Expenditure on social services by the general government (centre and states combined) has increased in recent years reflecting the higher priority given to this sector. Expenditure on social services increased considerably in the Twelfth Plan, with the education sector accounting for the largest share, followed by health. As a proportion of GDP, expenditure on social services increased from 5.9 per cent in 2007-08 to 6.8 per cent in 2010-11 and further to 7.1 per cent in 2012-13(BE). Nevertheless, India's expenditure on health as a per cent of GDP is lower than in many other emerging and developed countries and the share of the public sector still lower. 1.99 Poverty has declined in the country, though precisely how poverty is measured is currently being examined. Based on the methodology suggested by the Tendulkar Committee, the percentage of people living below the poverty line in the country declined from 37.2 per cent in 2004-
State of the Economy and Prospects 05 to 29.8 per cent in 2009-10. Even in absolute terms, the number of poor people declined by 52.4 million during this period. Of this, 48.1 million are rural poor and 4.3 million urban poor. Thus poverty has declined on an average by 1.5 percentage points per year between 2004-05 and 2009-10. The annual average rate of decline during the period 2004-05 to 2009-10 is twice the rate of decline during the period 1993-94 to 2004-05. 1.100 In the last few years public expenditure on social programmes increased dramatically. In the Eleventh Plan period nearly ` 7 lakh crore has been spent on the 15 major flagship programmes. A number of legislative steps have also been taken to secure the rights of people, like the Right to Information Act, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the Forest Rights Act, and the Right to Education (RTE). However, there are also pressing governance issues like programme leakages and funds not reaching the targeted beneficiaries that need to be addressed. Direct benefit transfer (DBT) with the help of the Unique Identification (UID) number can help plug some of these leakages.
SUSTAINABLE DEVELOPMENT CLIMATE CHANGE
AND
1.101 Though multilateral efforts on sustainable development and climate change have led to several positive outcomes, there are still areas of concern
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where further work is needed to safeguard the interests of developing countries. The key question to be addressed is equity in the evolving arrangements. It has to be ensured that domestic goals continue to be nationally determined even as we contribute to the global efforts according to the principle of common but differentiated responsibilities (CBDR). More importantly, equity, fair burden sharing, and equitable access to global atmospheric resources have to be protected and addressed more adequately. 1.102 With the Twelfth Plan's focus on 'environmental sustainability', India is on the right track. However, the challenge for India is to make the key drivers and enablers of growth – be it infrastructure, the transportation sector, housing, or sustainable agriculture – grow sustainably. This leads us to the most vital issue: of raising additional resources for meeting the need for economic growth with greater environmental sustainability. More often, it is the resource crunch which is the stumbling block for developing countries like India. While it makes efforts to efficiently and expeditiously bring price signals and other policy instruments into play, India could do much more if new and additional finance and technology were made available through the multilateral processes. There is a case for greater cooperation, action, and innovation, provision of finance and technology for developing countries, and institutions and mechanisms for capacity building.
Seizing the Demographic Dividend
2
CHAPTER
P
olicymakers are usually focused on short-run economic management issues. But the short run has to be a bridge to the long run. The central long-run question facing India is where will good jobs come from? Productive jobs are vital for growth. And a good job is the best form of inclusion. More than half our population depends on agriculture, but the experience of other countries suggests that the number of people dependent on agriculture will have to shrink if per capita incomes in agriculture are to go up substantially. While industry is creating jobs, too many such jobs are lowproductivity non-contractual jobs in the unorganized sector, offering low incomes, little protection, and no benefits. Service jobs are relatively high productivity, but employment growth in services has been slow in recent years. India's challenge is to create the conditions for faster growth of productive jobs outside of agriculture, especially in organized manufacturing and in services, even while improving productivity in agriculture. The benefit of rising to the challenge is decades of strong inclusive growth. 2.1 Growth optimists are confident in India's demographic dividend--the fact that India's dependency ratio, as measured by the share of the young and the elderly as a fraction of the population, will come down more sharply in the coming decades (see Figure 2.1). More working age people will mean more workers, especially
in the productive age groups, more incomes, more savings, more capital per worker, and more growth. Also, because demographic change is associated with fertility declines, the transition period may be accompanied by greater female participation in the labour force (Bailey, 2006).
Sources : World Bank (2012) and authors' calculations. Note : Population dependency ratio is defined as 100-[Population ages 15-64 (% of total)]. This definition follows IMF (2006).
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Seizing the Demographic Dividend 2.2 Every fast-growing Asian economy in recent years has accelerated as it underwent a demographic transition (see Figure 2.2). In India itself, Aiyar and Mody (2011) document that the high growth states (Tamil Nadu, Karnataka, and Gujarat) in the period 1991-2001 had a dependency ratio which was 8.7 percentage points lower than that of the low growth states (Bihar, Madhya Pradesh, and Uttar Pradesh) and an average annual growth rate that was 4.3 percentage points higher. Looking ahead, they argue, the low growth states will benefit more from the demographic dividend, as higher incomes and lower fertility alter demographics. Indeed, over the period 2001-11, the hitherto laggard states have grown at an average of around 5 per cent annually. The difference between their growth and the growth of the leaders in the period 2001-11 is just 1.5 percentage points. So demographic transition seems to be correlated with growth, with some reasons to believe that causality flows both ways--lower dependency ratios increase growth and higher growth reduces fertility and consequently dependency ratios. 2.3 Growth optimists point to another reason for cheer. Cross-country evidence suggests that productivity is an increasing function of age, with the age group 40-49 being the most productive because of work experience (Feyrer 2007). Nearly half the additions to the Indian labour force over the period 2011-30 will be in the age group 30-49, even while the share of this group in China, Korea, and
27
the United States will be declining. That India will be expanding its most productive cohorts even while most developed countries and some developing countries like China will be contracting theirs in the coming decades can be another source of advantage. 2.4 Growth pessimists are not convinced. A larger workforce translates into more workers only if there are productive jobs for it. Will there be enough productive jobs? One way to make progress in answering this question is to understand the commonalities as well as the differences between India's growth path and that of other populous fastgrowing Asian economies. By comparing where India is today, with where those countries were at similar stages in their development, as well as by looking at what they did next, we might get a better perspective on what India might need to do. Of course, any such analysis has to be accompanied by two important caveats. First, countries differ and do not necessarily follow similar trajectories. Second, the global environment has changed. The opportunities India faces now are different from those that previous fast growers faced when they were at a similar stage of development. Blindly replicating their trajectory may be unwise.
COMPARATIVE GROWTH
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TRADE
2.5 In what follows, we start by analysing various economic outcomes for selected Asian countries around their dates of initial 'takeoff' into periods of
Sources : World Bank (2012) and authors' calculations. Notes : Population dependency ratio is defined as 100-[Population ages 15-64 (% of total)]. Per capita income is measured by Gross Domestic Product (GDP) per capita in 2000 US dollars. The scatter plot drops observations with negative per capita income growth. Selected Asian economies include China, India, Indonesia, and Korea.
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high growth. We identify the year of takeoff for comparator Asian countries based on IMF (2006)1. The dates are 1979, 1973, and 1967 for China, Indonesia, and Korea respectively. For India, we define the year of takeoff as 1991, when major economic reforms began. Figures 2.3-2.4 weave together the following narrative:
ď Ź Figure 2.3a shows that India was growing at similar rates as other Asian economies before takeoff. After takeoff, it kept pace with Indonesia, but China and Korea grew faster. ď Ź In Figure 2.3b, we set date 0 as the year the country's per capita GDP in 2000 US dollars
Sources : World Bank (2012) and authors' calculations. Notes : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively. Per capita income is measured by GDP per capita in 2000 US dollars.
Sources : World Bank (2012) and authors' calculations. Notes : Takeoff year 0 is defined as the year the country's per capita income crossed $500. The takeoff years are defined as 1993, 2003, 1988, and 1951 for China, India, Indonesia, and Korea respectively. Per capita income is measured by GDP per capita in 2000 US dollars.
1
IMF (2006) defines the takeoff date for China as the year when major economic reforms began. For Newly Industrialized Economies (which includes Korea) and for ASEAN-4 (which includes Indonesia), the date is defined as the year when the 3-year moving average of constant price export growth first exceeded 10 per cent.
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Seizing the Demographic Dividend crossed $500; in Figure 2.3c, the year that the country's dependency ratio fell below 40 per cent. China's growth is more robust under both these alternatives, while India's matches that of Indonesia. Korea's trajectory is similar to India's in the initial years after takeoff, though after 10 years the slope of its trajectory increases steeply. ď Ź In Figure 2.4, we plot an index of a country's share of world trade, with year 0 based on our first takeoff definition (1979, 1973, 1967, and 1991 for China, Indonesia, Korea, and India respectively). Interestingly, India's growth in
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its share of world trade is similar to China's and greater than Indonesia's at similar periods after takeoff. India's openness is also evidenced by the trade to GDP ratio, which exceeded 55 per cent in 2011. By contrast, this ratio is only 31 per cent for the United States. 2.6 The takeaway from the evidence we have examined thus far is that India's growth performance has been similar to that of some fast-growing Asian economies at similar stages after takeoff, but not as spectacular as China's. Interestingly, despite being seen as a trade laggard, India has grown more open to trade at about China's pace.
Sources : World Bank (2012) and authors' calculations. Notes : Takeoff year 0 is defined as the year the country's dependency ratio fell below 40 per cent. The takeoff years are defined as 1981, 1996, 1990, and 1977 for China, India, Indonesia, and Korea respectively. Per capita income is measured by GDP per capita in 2000 US dollars.
Sources : IMF (2011) and authors' calculations. Notes : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively. Share in world trade is measured by the sum of a country's exports and imports of goods and services as a ratio of world trade (measured by the average of world exports and imports).
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Sources of Growth 2.7 What have been the sources of growth in India, and how does it compare with other fast growing Asian economies? Growth in per capita income is driven by growth in labour productivity (what the average worker produces), growth in working age population (fewer the people who are in the dependent age group in the population, greater the output), growth in the fraction of those who can work that actually look for work ( labour force participation rate), and growth in those looking for work who actually find it (employment rate). Because accurate employment data are hard to find for developing countries, studies typically ignore the employment rate in decomposing the sources of growth. 2.8 A decomposition of per capita income growth during the 20 years after takeoff (see Figure 2.5) suggests that across countries, much of the increase in per capita income comes from greater labour productivity. Interestingly, except for Korea, labour force participation (LFP) has fallen on an average annual basis, so it subtracts from growth. Finally, the increase in the share of working age population (WAP) seems to add only a little to growth. Since the increase in working age population is what we call the demographic dividend, the fact that it contributes so little to growth (on average, 0.5 percentage points for India in the 20 years since 1991) may seem a puzzle. 2.9 The resolution to the puzzle is quite simple. The increase in the fraction of people working is probably not the main consequence of the
demographic dividend. Instead, the effects of the demographic dividend are channelled through the increase in labour productivity, which comes from more physical capital employed per worker (in turn resulting from greater saving and investment), more human capital per worker (which comes from more education as smaller families lead to greater spending on education per child), and greater total factor productivity (TFP). TFP measures how productive the job intrinsically is, capturing aspects such as the technology used, efficiency with which the work is carried out, and use of hard-to-measure aspects of work such as tacit knowledge, organizational capabilities, and trust. 2.10 It is therefore useful to see how much each of these factors contributed to labour productivity. As Figure 2.6 suggests, better human capital accounts for only a small part of the growth in labour productivity for Asian fast growers. Instead, the two biggest contributors are the growth in capital deployed per worker and growth in TFP. Indonesia and Korea relied much more on capital deepening. India did not have as much growth in capital per worker as these countries but had stronger growth in TFP. Finally, China grew both because of more capital deployed as well as strong increases in TFP. 2.11 Interestingly, as Figure 2.7 suggests, in the years beyond the 20th year after takeoff which India is now entering, capital deepening slowed for both Indonesia and Korea but it increased for China. More interestingly, TFP slipped considerably for Indonesia and was not large for Korea to begin with. However, it increased for China.
Source : Authors'calculations. Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
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Sources : Authors' calculations from a standard growth decomposition exercise. Capital stock data are from Nehru and Dhareswar (1993) extended using perpetual inventory method and a depreciation rate of 5 per cent. Labour share is assumed to be 0.65. Human capital is related to average years of schooling assuming 7per cent returns to schooling (following Bosworth and Collins 2003). Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
Sources : Authors' calculations from a standard growth decomposition exercise. Capital stock data are from Nehru and Dhareswar (1993) extended using perpetual inventory method and a depreciation rate of 5 per cent. Labour share is assumed to be 0.65. Human capital is related to average years of schooling assuming 7per cent returns to schooling (following Bosworth and Collins 2003). Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
2.12 In sum, the underpinnings for continued strong Chinese growth in the years beyond the second decade after takeoff are a robust investment rate as well as substantial increases in the intrinsic productivity of jobs. If India were to follow a similar path, it would need to increase savings and investment, both of which will follow from the demographic transformation. But it will also have to increase the intrinsic productivity of jobs, that is TFP. http://indiabudget.nic.in
Increasing Labour Productivity and Sectoral Reallocation 2.13 IMF (2006) suggests that a significant portion of China's increase in TFP has come as workers migrate from low-productivity sectors like agriculture to high-productivity sectors like manufacturing. What lies ahead for India? To see how TFP in India can be increased, consider Figure 2.8 from Hasan et al.
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Source : Hasan et al. (2012). Notes : UNREG: Unregistered manufacturing, CONST: Construction, CSP: Community, social and personal services, WRT: Wholesale—retail trade and restaurants—hotels, TSC: Transport, storage and communications, GOV: Government services, MIN: Mining and quarrying, REGMFG: Registered manufacturing, PU: Public utilities, FIRE: Finance, insurance and real estate.
(2012). Eleven sectors of the Indian economy are arranged by labour productivity in 2009. The height of the rectangle indicates the productivity of the sector, while the width indicates the share of the labour force it employs. Agriculture is very low productivity but employs over half the labour force. In contrast, financial and brokerage services are the most productive sector in the economy, but employ a tiny share of the labour force. 2.14 That so many continue to be dependent on agriculture is one reason that the government has focused on improving productivity in agriculture, even while attempting to support incomes of both farmers and workers through various programmes. Agricultural productivity remains low probably because too many agricultural workers work with relatively fixed and limited amounts of productive assets--land and capital (irrigation, technology, tractors, machinery, and the like). One way to increase labour productivity, therefore, is to increase investment (and thus capital per employee) across all sectors, including agriculture. 2.15 An equally effective way of increasing labor productivity might be to increase TFP--by moving some of those dependent on low-productivity agriculture to higher-productivity jobs in industry or services. This would also allow those who remain in
2
agriculture to farm larger, more viable plots, employing more mechanized equipment to improve labour productivity. Clearly, more investment in worker-receiving sectors will be needed to keep up the capital per employee, but the typically greater TFP in those sectors will also mean much greater output per capita. Continuing reallocation of workers out of low-productivity sectors into higher-productivity sectors is akin to increasing TFP and can therefore be a growth engine2. 2.16 How has India done on reallocating workers? We plot sectoral shares of employment and shares of value added in the years since takeoff. First take agriculture. India certainly has a bigger share of employment in agriculture today than the other Asian countries, but perhaps only because it has not had as many years since takeoff. Figures 2.9a and 2.9b suggest employment share and value added share in agriculture in India is coming down at a similar pace as in the other Asian economies (though Korea seems to have a lower share of people in agriculture from the time we have data). Extrapolating into the future, if India followed China's or Indonesia's path, about a 10 percentage point share of overall employment would move out of agriculture in the next 10 years, bringing the share of employment in agriculture down to about 40 per cent.
While this section focuses on the experience of Asian countries since takeoff, another interesting example from Africa is that of the Mauritian miracle, where clear sectoral shifts fuelled high growth (Box 2.6).
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Sources : World Bank (2012) and authors' calculations. Note :Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
Sources : World Bank (2012) and authors' calculations. Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
2.17 Turning next to industry, we see greater differences (see Figures 2.10 a and 2.10 b). While the growth in India's share of employment in industry seems to be on par with the growth of other Asian economies at similar stages (with the exception of Korea), the surprising fact is that India's share of value added in industry has not grown to keep pace with its share of employment--it has in fact recently fallen. Contrast this picture with China's where the share of value added in industry has always been very high relative to its share of employment, or
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Indonesia's and Korea's where the share of value added has kept increasing as the share of employment has increased (e.g. for Indonesia) or even decreased (e.g for Korea). The alarming conclusion is that while workers are being added to industry in India, the productivity of the jobs they are going into has not been high. In part, this is because the data we work with treats low-productivity construction as a part of industry, and the booming construction sector has accounted for a large share of the jobs created in industry. However, an additional
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Sources : World Bank (2012) and authors' calculations. Note ; Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
Sources : World Bank (2012) and authors' calculations. Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
problem is that few of the jobs in industry are formal or being created by the comparatively more productive large firms (see discussion below).
in India's larger services share is that services started out at the time of take-off with a much larger share, but growth has also been strong.
2.18 Finally, consider services in Figures 2.11 a and 2.11 b. Here the picture for India is mixed. While the share of employment in services has been growing very slowly, the share of value added is significantly higher than in other Asian economies. Indeed, China has a similar share of employment in services at a similar time from takeoff even though its share of value added is much lower. A big factor
2.19 These sectoral pictures across countries suggest several important messages:
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ď Ź
Unlike the conventional wisdom, India does not have more people in agriculture than other Asian countries at similar stages of development. The share of workers dependent on agriculture has been shrinking at a similar pace.
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Sources : World Bank (2012) and authors' calculations. Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
Sources : World Bank (2012) and authors' calculations. Note : Takeoff year 0 is defined as 1979, 1991, 1973, and 1967 for China, India, Indonesia, and Korea respectively.
However, the pace of shrinkage is set to increase if India is to follow the trajectory of these other countries.
One problem is that while industry is creating jobs, these have been relatively low-productivity jobs. As a result, per capita income in India has not benefited as much from inter-sectoral migration of workers out of agriculture as other Asian countries have.
A second problem is that the high-productivity services sector is not able to create employment commensurate with its growth in value added. http://indiabudget.nic.in
How many jobs will be missing? 2.20 Clearly, there is a coming transition of workers out of agriculture if we follow the path of other Asian countries. In addition, the demographic dividend will ensure more workers joining the labour force. How many workers will industry and services have to absorb in the next decade? How many will they absorb if they continue creating jobs as they have in the past? Could the demographic dividend turn into a demographic curse as some have argued? 2.21 In order to answer this question, we build a few simple scenarios using data from the World
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Table 2.1 : How Many Jobs Will be Missing? Alternative Scenarios 2000
2010
2020 [II]
[III]
Baseline
High Labor Force Participation
Low Unemployment Rate
40
40
40
56 1,010 561 541 96 217 165 154
58 1,010 586 565 96 226 165 154
56 1,010 561 552 98 221 165 154
2.8
16.7
11.8
[I]
Share of employment in agriculture (%) Share of employment in industry (%) Share of employment in services (%) Labor force participation rate (%) Population (15+) (in millions) Labor force (in millions) Employment (in millions) Employment/labor force (in %) Employment in agriculture (in millions) Employment in industry (in millions) Employment in services (in millions)
60 16 24 60 688 409 392 96 234 63 94
51 22 27 56 850 473 456 96 233 102 121
Missing jobs (in millions) Sources : World Development Indicators, UN Population Division Notes : LFP rate in WDI defined as labor force /population 15+
Development Indicators (WDI) and UN Population Division. In the baseline (Table 2.1, column I), we assume that employment in industry and services will grow during 2010-20 at the same rate as during the previous decade. The share of employment in agriculture will fall to 40 per cent by 2020 (the same level as that of China in 2010). Population in the working age group will grow based on projections by the UN Population Division. We assume the labour force participation rate and the unemployment rate to be unchanged at 2010 levels. Under this baseline scenario, 2.8 million jobs will be missing by 2020. To put this in perspective, this will only be 0.5 per cent of the labour force. While any shortfall in jobs is problematic, there does not seem an immediate cause for alarm. 2.22 A large number of assumptions go into this estimate. For instance, labour force participation is pegged at the 56 per cent rate, the same as in 2010. If instead more women enter the labour force, reversing the declining trend since 2000, the labour force participation rate could plausibly increase to 58 per cent by 2020. This is lower than the 60 per cent rate in 2000, but even with this conservative assumption, the number of missing jobs increases to 16.7 million (see Table 2.1, Column II), roughly six times that in the baseline scenario, and 3.7 per cent of overall employment in 2010. Finally, if the official unemployment is projected to decrease, say by 2 percentage points, over the next decade, again http://indiabudget.nic.in
that would imply the need to employ a larger number of workers (see Table 2.1, Column III). The number of missing jobs in 2020 under this higher expected employment scenario is estimated at 11.8 million or four times that in the baseline scenario. 2.23 The back-of-the-envelope calculations just done should be taken as just that--a starting point for more careful investigation. While a simple extrapolation of existing trends suggests India can absorb the labour exiting agriculture even if exits increase to the level experienced by China, there is no room for complacency. Minor changes in assumptions lead to tens of millions of additional jobs needed. So even while policymakers focus on making jobs more productive, India also needs more jobs than suggested by current trends so as to have a sufficient buffer.
WHY IS BUSINESS NOT CREATING MORE PRODUCTIVE JOBS? 2.24 In India, too many small firms stay small and unproductive and are not allowed to die gracefully. Too many large profitable firms prefer relying on temporary contract labour and machines than on training workers for longer-term jobs. This section has two parts--in the first, we will examine the impediments to the formalization and growth of small businesses. In the second, we will examine the situation of labour, and why large formal businesses
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Sources : Fourth All India Census of Micro, Small and Medium Enterprises, 2006-07: Registered Sector; Planning Commission, 12th Five Year Plan Draft.
may be so averse to hiring. We use the term 'business' advisedly because similar problems may exist in construction, manufacturing, and services, though to differing degrees.
Impediments to the emergence and growth of business 2.25 As a group, it is estimated that micro, small, and medium enterprises (MSMEs)3 employ 81 million people in 36 million units across the country4. Yet, many of these firms are unable to grow and/or even shut down. Hsieh and Klenow (2011) indicate that as compared to surviving small firms in the United States, which grow spectacularly, surviving small firms in Mexico grow moderately, while surviving small firms in India shrink. Productivity is commensurately lower in India. Indeed, within the MSME group, there is a strong concentration of small enterprises and near non-existence of medium enterprises (see Figure 2.12). And that is the real challenge of the MSME sector--to be able to not just start up, but also continue to grow, thereby becoming a source of sustainable jobs and value creation. 2.26 Too many firms in India stay small, unregistered, unincorporated, largely informal, or in the unorganized sector because they can avoid regulations and taxes. These firms have little incentive to invest in upgrading skills of largely temporary workers or in investing in capital equipment 3
that could bring them into the tax net, so their productivity stays low. Low productivity gives them little incentive to grow, completing the vicious circle. Figure 2.13 indicates some of the key challenges faced by these firms while starting up and at every level of growth.
Regulations 2.27 The regulatory environment plays an important role in the lifecycle--birth, growth, and death--of MSMEs. According to the World Bank's Doing Business 2013 data, India ranks 132 out of 185 countries in ease of doing business. Starting a business where India ranks 173, takes about 12 procedures, 27 days, and a paid up capital of 140 per cent of per capita income. By contrast, it takes only 7 procedures, 19 days, and 18 per cent of per capita income on average for our neighbours in South Asia. 2.28 After getting done with the initial procedures, entrepreneurs have to obtain a number of clearances when applying for building/occupancy permits and utility connections. These require separate visits to various authorities whose employees often inspect the site. It takes as long as 1.5 months to obtain an electricity connection in 7 out of the 17 benchmarked Indian cities. Many processes especially at state level remain complex, forcing companies to hire a consultant, thereby adding to the costs.
The criterion of investment in plant and machinery is used to categorize MSMEs—micro enterprises have investment ceiling of 25 lakh, small enterprises of 5 crore, and medium enterprises of 10 crore. 4 These data are from the Ministry of Micro, Small, and Medium Enterprises and include registered and unregistered units across manufacturing and services (including wholesale/retail trade, legal, educational, and social services, hotels and restaurants, transport, and storage and warehousing).
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2.29 The MSME ecosystem needs an easier process of exit, where the claims of workers and financiers are quickly resolved and the assets of the failed firm put to better use. According to World Bank (2009), across 17 Indian cities, the insolvency process takes on average 7.9 years, costs 8.6 per cent of the estate value (mostly due to attorney fees, newspaper publication costs, liquidator's fees, and preservation costs), and the recovery rate is only
Source : Ministry of Micro, Small, and Medium Enterprises
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13.7 per cent. The process is slower even than in other South Asian countries where, in the same year, it took on average five years and creditors could expect to recover on average 19.9 per cent. Low asset recovery in failed firms feeds into lower levels of financing for Indian MSMEs. 2.30 The government has tried to compensate for some of these impediments by offering MSMEs
Seizing the Demographic Dividend incentives and concessions. But schemes and interventions based on tightly defined classifications create an incentive structure that might prevent firms from growing. Service tax exemptions for firms with less than Rs 10 lakh revenue and exemption from central excise duty for firms with an annual turnover of less than Rs 1.5 crore are examples of these schemes. The jump from 'small' to 'medium' enterprise especially entails loss of several perks (see Figure 2.14). 2.31 There are, however, also many good practices and enabling regulations strewn over different cities of India, which, if standardized and adopted across the country, can improve the business climate enormously. Indeed, World Bank (2009) has shown that if a hypothetical city called 'Indiana' were to adopt best practices found in several benchmarked cities (e.g. lowering number of procedures to start business to Patna levels, days to start a business to Mumbai levels, procedures around construction permits to Ahmedabad levels, days to enforce a contract to Guwahati levels, and recovery rate for closing a business to Hyderabad levels), it would rank a much improved 67 out of the 181 economies measured by Doing Business 2009.
Getting funding 2.32 Banks and other financial institutions are wary of lending to MSMEs because they lack adequate credit histories or collateral. A cluster-centric approach is one way of addressing this because it reduces transactions costs for the lender, while repeated interactions for a lender with cluster members increases the scope for building trust. While there have been efforts to facilitate these, their coverage is still small. Schemes such as credit guarantees by the Small Industry Development Board of India (SIDBI) have been useful, but there are gaps. 2.33 Angel investors, venture capital funds, and impact investors are still at a nascent stage and small compared to global peers. Most of these investments are biased towards services, especially technology and e-commerce. Government funds (through grants and seed funding programmes such as Technopreneur Promotion Programme and Technology Development Board) are often available after extensive paperwork and slow processing. Moreover, the experience from other countries is that new venture finance is often an activity better left to the private sector, with the government facilitating the way or piggy-backing on private funding rather than actually taking the lead. http://indiabudget.nic.in
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2.34 Large banks with remote central offices tend to have bureaucratic procedures for loan approvals, and limit discretionary authority for branch officers. As a result, small and medium enterprises, which tend to have short and largely informal track records, find it hard to fulfil the norms for obtaining credit (see Berger et al., 2005). Moreover, conversations with bankers and business people suggest that large banks exert less effort in trying to help a small troubled firm than they would a larger client. As a result, in countries with more varied banking systems, small firms tend to migrate to smaller banks for assistance (see Berger et al., 2005). More small local banks in India could help MSMEs. 2.35 Finally, a vibrant corporate bond market could also help. Even though the MSMEs will typically not be able to issue bonds, the fact that large firms and infrastructure projects will be able to access (typically cheaper) bond financing for their long-term needs, will free up space on bank balance sheets for MSME loans.
Getting access to quality infrastructure 2.36 The absence of quality infrastructure—roads, utilities, real estate, logistics—increases transaction costs disproportionately for MSMEs which typically cannot create customized alternatives such as access roads and captive power plants which larger firms can. Lack of this supporting infrastructure causes greater cash burn and distraction of management from core business operations. One constraint in creating infrastructure or setting up businesses is land acquisition. A number of reforms are needed or on the anvil (see Box 2.1) to ensure that land is less of an impediment to growth. 2.37 Going forward there is hope that massive infrastructure projects like the Delhi-Mumbai Industrial Corridor (DMIC) (Box 2.2) will provide relatively light regulation, and heavy infrastructure, where businesses have easy access to the land they need and workers can live in a safe healthy township. 2.38 We have described the major non-labour impediments for a small business to become formal and grow large, as well as some steps the government is taking. There is evidence that these constraints affect industrial performance. Classifying industries according to their intensity of use of infrastructure, or dependence on external finance, Gupta et al. (2008) find that post delicensing, industries more dependent on infrastructure grew less as compared
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Box 2.1 : Land Reforms Land is probably the single most valuable asset in the country today. Not only could greater liquidity for land allow more resources to be redeployed efficiently in agriculture, it could ease the way for land-utilizing businesses to set up. Perhaps as important, it could allow land to serve as collateral for credit. Three important needed steps are: to map land carefully and assign conclusive title, to facilitate land leasing, and to create a fair but speedy process of land acquisition for public purposes. The National Land Records Modernization Programme (NLRMP) which started in 2008 aims at updating and digitizing land records by the end of the Twelfth Plan. Eventually the intent is to move from presumptive title—where registration of a title does not imply the owner’s title is legally valid—to conclusive title, where it does. Digitization will help enormously in lowering the costs of land transactions, while conclusive title will eliminate legal uncertainty and the need to use the government as an intermediary for acquiring land so as to ‘cleanse’ title. Given the importance of this programme, its rollout in various states needs to be accelerated. Easier and quicker land transactions will especially help small and medium enterprises that do not have the legal support or the management capacity that large enterprises have. Widespread prohibition of land leasing raises the cost to rural-urban migration as villagers are unable to lease their land, and often have to leave the land untilled or leave a family member behind to work the land. Lifting these restrictions can help the landless (or more efficient landowners) get land from those who migrate, even while it will allow landowners with education and skills to move to industry or services. Compulsory registration of leaseholds and of the owner’s title would provide tenants and landowners protection. Of course, for such a leasing market to take off, owners should be confident that longterm tenancy would not lead to their losing ownership. With a vibrant leasing market, and clear title, there should be little reason for not strengthening ownership rights. For large projects with a public purpose—such as the proposed National Industrial and Manufacturing Zones, which will facilitate the setting up of small and medium enterprises—large-scale land acquisition may be necessary. Given that the people currently living on the identified land will suffer significant costs including the loss of property and livelihoods, a balance has to be drawn between the need for economic growth and the costs imposed on the displaced. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2011, currently before Parliament, attempts to draw such a balance. As experience is gained with large-scale land acquisition, the institutions set up by the bill can be fine-tuned to achieve its aims. Finally, encouragement needs to be given to land readjustment schemes, where when an area is identified for development, owners participate by giving up some of their land for infrastructure creation, but get back the rest, with the benefit that its value is enhanced by the infrastructure. Small and medium enterprise clusters can benefit especially from such schemes. Given that large-scale land acquisition is still at a nascent stage, central schemes should allow room for states to experiment and should be modified in light of state experiences.
Box 2.2 : The DMIC: An Integrated Approach to Industrial Growth and Development* The DMIC is being developed by the Government of India with a view to using the high-capacity western Dedicated Freight Corridor as a backbone for creating a global manufacturing and investment destination. The project seeks to develop a series of futuristic infrastructure-endowed smart industrial cities that can compete with the best international manufacturing and industrial regions. The master plan has a vision for 24 manufacturing cities. Potential production sectors include general manufacturing, IT/ITES components, electronics, agro and food processing, heavy engineering, pharmaceuticals, biotechnology, and services. Investment is pegged at $90 billion. The DMIC was conceived by the Ministry of Economy, Trade, and Industry (METI) of Japan and the Ministry of Commerce and Industry (MoCI) of India. Possible socio-economic impact: The DMIC Project Influence Area of 436,486 sq. km is about 13.8 per cent of India’s geographical area. It extends over seven states and two union territories, viz. Delhi, Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Daman and Diu, and Dadra and Nagar Haveli. Around 17 per cent of the country’s total population will be affected. The project goals are to double employment potential in 7 years, triple industrial output in 9 years, quadruple exports from the region in 8-9 years, and target 13-14 per cent growth per annum for the manufacturing sector on a sustained basis over next three years. Urban governance: The innovative urban governance framework corporatizes the urbanization process. The central government will create a corpus fund, the DMIC Project Implementation Revolving Fund, as a trust administered by a board of trustees. The fund will contribute debt and equity to the special purpose vehicles (SPVs) on a case-by-case basis. The state government will make land available. The city SPVs will be vested with the responsibilities of planning and development and the power to levy user fees. The SPVs are to be companies under the Companies Act. The valuation increases from urbanization and development will accrue to the city-level SPVs, and will be reinvested in the cities. The initial construction of the cities will be done through project managers with global experience, who will control, monitor, review, and supervise the detailed engineering. Financing: The basic provision of trunk infrastructure is unlikely to be commercially viable. This would require government funding. Such internal infrastructure projects include land improvement, road works, earthworks, sewerage, storm water drainage, flood management, and solid waste management. Once such infrastructure is in place, the subsequent additions to the cities will be commercially viable and can be implemented through public private partnerships (PPPs). For major (Contd....)
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Box 2.2 : The DMIC: An Integrated Approach to Industrial Growth and Development* (Contd...) Delhi-Mumbai Industrial Corridor and its influence area
Source: Delhi-Mumbai Industrial Corridor Development Corporation Limited infrastructure activities such as power plants, integrated townships, and highways, PPP projects are planned. Various sources of finance including multilateral, bilateral, and domestic government funding are planned. Physical infrastructure: At the heart of the infrastructure is the Multi-modal High Axle Load Dedicated Freight Corridor (DFC), a high-capacity railway system. It will cover 1483 km and will have nine junction stations along which other railroad networks will connect allowing the system to extend its reach across a wide swathe. Other infrastructure plans include logistic hubs, feeder roads, power generation facilities, up-gradation of existing ports and airports, developing greenfield ports, environment protection mechanisms, and social infrastructure. Industrial infrastructure: The project seeks to upgrade existing industrial clusters and also develop new industrial facilities. These will be developed on the concept of node-based development based on Investment Regions (IRs) and Industrial Areas (IAs). These are proposed as self-sustaining industrial townships with world-class infrastructure including domestic/international air connectivity, reliable power, and competitive business environment. IRs will have a minimum area of 200 sq. km and IAs 100 sq. km. In all 24 manufacturing cities (IRs and IAs) are planned. Seven major manufacturing cities are being planned for the first phase. These will serve as the key nodes for overall growth and development. Skill development: The skill-building strategy underlying the DMIC is based on a hub-and-spoke model. There will be one Skill Development Centre in every state with subsidiary institutions linked to it. Curricula will be based on the types of industries located in the region and identified regional strengths. Land acquisition: Land acquisition appears to be a major challenge. Different state governments are adopting diverse approaches for dealing with the issue. Gujarat has a land-pooling model whereby 50 per cent of the land is acquired while the remaining 50per cent is left with the original owners giving them a stake in the upsides generated by land monetization. Maharashtra allows for negotiated purchase involving various stakeholders. In Haryana and Rajasthan, trunk and industrial infrastructure are created by the state governments but private developers directly participate in the other activities. The value increase is captured by the states through development fees. Furthermore, in the initial DMIC master-planning process, the attempt was made to identify large, easy-to-acquire land parcels that were either barren or government owned. Environmental clearances: The master-planning process has been applied for a general Terms of Reference clearance, which has already been obtained. This has reduced the compliance load for individual project clearances. The individual projects will now need to get their draft impact assessments cleared by the respective state pollution control authorities. Power infrastructure: Power for the industrial and residential zones is an essential requirement. The provision of world class power infrastructure will require 24X7 good quality supply. The major power inputs will come from six gas-based projects of around 1000-1200MW each. Other power options include the use of renewable energy sources integrated through a smart grid. Water management: The DMIC passes through relatively arid parts of the country. The various industrial hubs are to have integrated water resource management plans drawing upon lessons from countries such as Singapore. It is proposed to make each manufacturing city self-reliant and sustainable in terms of its water requirements. Recycling is a major strategy in all the industrial nodes. Prepared by Supriyo De. Thanks are due to Amitabh Kant, Chief Executive Officer and Managing Director and Abhishek Chaudhary, Vice-President, Delhi-Mumbai Industrial Corridor Development Corporation Limited for valuable insights. *
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to industries which are not as dependent on infrastructure; and the gain in manufacturing-sector output in these industries has been especially small in states with inferior infrastructure. They further show that industries more dependent on external finance have witnessed slower growth as opposed to those less dependent on external finance, and have fared much worse in terms of new factories, employment generation, as well as new investment. There is therefore need to take steps for improving infrastructure, access to finance, as well as the overall business environment. Box 2.3 summarizes steps that could be taken to improve the business environment.
Labour Practices as Possible Impediments to Growth 2.39 Thus far we have not examined labour practices directly. India has a number of labour practices that, economists have argued, further impede the creation of productive jobs in the large-
scale organized sector. There exists considerable variation in hiring practices across firms of different sizes in India. Dougherty (2008) uses a methodology similar to Davis et al. (1998) and data up to 2004 to estimate the employment dynamics in the organized manufacturing sector in India. The study finds that the job creation rate is much bigger for small firms than for large ones; on the other hand the job destruction rate is higher in large firms, with the result that the net employment rate in large firms is negative and strikingly smaller than in small firms. 2.40 Similarly, organized industry creates few jobs compared to unorganized industry (which is dominated by small firms) (see Figure 2.15). Growth in unorganized industry jobs in 2009-10 is primarily explained by a dramatic growth in construction. Based on data from National Sample Survey Organization (NSSO) surveys, employment in construction increased by 70 per cent between 2004 and 2009. One recent development is also the
Box 2.3 : The Nuts and Bolts of Improving Business Climate for Small Businesses* There are several regulatory changes that can be made to improve the business climate for MSMEs. Formulate a common policy on business development and regulation: There are a vast number of business regulations that often overlap and sometimes contradict each other. A common policy and an institutional architecture overseeing all business regulations will help consolidate and enact changes. Help business facilitation: Establish independent facilitation and coordination agencies as PPP service companies with mandate from the state government, staffed with specialists and responsible for getting work done through various departments for starting up and running of businesses. These agencies will also help arrange services such as financing, finding raw material suppliers, and marketing products. They will charge a fee for some of the services provided, and be financially selfsufficient. Simplify registrations for starting up: Create a one-stop online registration system for time-bound registrations for starting a business. The applicant will need to file a single application on the website, with the required information being picked up by each government department. Over time, this process can be extended to other activities such as trading across borders and paying taxes. This will require detailed mapping exercises and setting up of a ‘best practices’ framework. Ease burden of compliance as the firm grows: Enable compliance ratings of MSMEs (through ISO-like common standards) and allow easier compliance norms to firms with higher ratings. Easier norms can take the form of simpler procedures (such as self-certification) across government departments. For instance, a company with a good history of tax compliance should be treated as a good citizen when it deals with the pollution control board. Over time, high compliance ratings could also act as a signal to financiers and enable easier access to credit. Allow for easy exits: The arduous process of exit for unsuccessful companies needs to be made simpler, faster, and cheaper. Transform employment exchanges to enable effective job matching: Transform the 1,000-odd employment exchanges across states into career centres offering counselling, assessments, apprenticeships, training, and jobs. Improve value/benefits from statutory pre-emptions: Currently for low wage workers in formal employment, the plethora of statutory pre-emptions, especially for provident fund and health insurance, can lead to very low net salary and act as disincentive to formal employment. The value and benefits received from these pre-emptions can be improved by encouraging competition between different pension and health schemes. Reduce attractiveness of staying small: Growing bigger is unattractive because some of the benefits targeted at MSMEs are withdrawn even while new regulations and obligations kick in. Innovative approaches are needed for giving MSMEs the incentive to grow. For instance, new regulations could be kept in abeyance for a period after the MSME crosses the size threshold that would require it to meet the regulation. *
Prepared by Pranjul Bhandari.
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Source : Economic Survey (various years); Employment and Unemployment Situation in India (various years), NSSO, Ministry of Statistics and Programme Implementation (MOSPI); Census of India. Notes : Industry includes manufacturing, construction, mining, and utilities. Organized-sector employment is obtained from the Economic Survey. The organized sector consists of non-agricultural establishments in the private sector that have 10 workers or more, and all establishments irrespective of size in the public sector. For the other subsectors within industry, the organized sector essentially refers to all companies and government administrations. Unorganized-sector employment is estimated by deducting estimates of organized employment from total employed workforce. Total employment is generated by multiplying the worker population ratio (from the NSSO Employment-Unemployment Surveys) by the estimated population of India as per Census sources.
significant pickup in growth in organized industrysector jobs in 2009-10. However, two points may be of note. First, this growth is characterized by adding mostly to 'informal' jobs within the formal sector with little increase in productivity (see Box 2.5 for details). Second, despite the recent pickup in organized-sector job growth, unorganized-sector employment still constitutes more than 95 per cent of overall industry employment; specifically within manufacturing, unorganized-sector employment comprises 70 per cent of overall employment (see Box 2.4 for details). 2.41 Why is large organized manufacturing not creating more jobs? There are several possible explanations. First, strict labour laws may have hindered the growth of organized large-scale manufacturing (see the evidence in Box 2.4 suggesting labour regulations may be key impediments to manufacturing growth). The labour laws India has on the books are more rigid than in most countries--the employment protection legislation (EPL) laws are stricter than in all but two OECD countries. However, very few workers are actually covered by these laws. Indeed, India may suffer the consequences of strong worker protection (low flexibility for employers and strong reluctance to offer workers formal jobs) without giving most workers the benefits. Although the direct impact of India's labour regulations has been a subject of intense debate, there is a substantial body of evidence described in http://indiabudget.nic.in
Box 2.4, using variation across states' stance on regulations, which suggests that rigid labour regulations have played a significant role in explaining low organized manufacturing output and employment and high informal manufacturing output. 2.42 Some economists however, dispute the evidence that establishes the importance of labour regulations in determining economic outcomes. In the case of India, for example, one of the first and most frequently cited studies on the topic, Besley and Burgess (2004), has come under criticism, most extensively from Bhattacharjea (2006). While more work has been done that addresses some of these criticisms, the evidence on the effects of labour regulations outside of India is also mixed. According to World Bank (2013), ‘A careful review of the actual effects of labor policies in developing countries yields a mixed picture. Most studies find that impacts are modest— certainly more modest than the intensity of the debate would suggest.’ 2.43 If indeed labour laws constrain firms, they would respond in predictable ways, (i) relying more on capital instead of labour, (ii) resorting to informal arrangements / limiting their scale in order to remain outside of the formal sector altogether, and/or (iii) hiring contractual labor. The increased use of capitalintensive techniques is reflected in a steeply rising capital/labour ratio for the organized economy
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Box 2.4 : Labour Regulations : Impediment to Growth and Size of Indian firms in Manufacturing* A rapid expansion of the manufacturing sector has been a key element of the growth experience of successful developing countries, especially labour-abundant ones. In this context, the Indian manufacturing sector exhibits many peculiarities: first, as also documented earlier in the chapter, it contributes a rather small and stagnant share to GDP; second, its composition is more skewed towards skill- and capital-intensive activities compared to countries at similar levels of development;1 third, only a small share of employment in manufacturing is in organized manufacturing (the unorganized manufacturing sector accounted for almost 70 per cent of total manufacturing employment in 2009-102); and fourth, employment is heavily concentrated in small firms (Figure 1). The degree of concentration is much higher than in other Asian countries. For example, the share of micro and small enterprises in manufacturing employment is 84 per cent for India versus 27.5 per cent for Malaysia and 24.8 per cent for China.
Source: ADB (2009). Key Indicators of Asia and the Pacific.
These characteristics of Indian manufacturing are quite puzzling in that product market reforms since the early 1990s— including dramatic trade liberalization and virtual abolishment of the industrial licensing regime—have been primarily focused on removing various constraints on the manufacturing sector. How then does one explain the peculiarities of the Indian manufacturing sector? Several theories have been put forward to explain this puzzle, ranging from strict labour laws that have hindered growth, especially of labour-intensive industries, infrastructure bottlenecks that have prevented industries from taking advantage of reforms, and credit constraints due to weaknesses in the financial sector which may be holding back small and medium sized firms from expanding. India’s labour regulations have been criticized on many grounds including sheer size and scope , their complexity, and inconsistencies across regulations. There are 45 different national- and state-level labour legislations in India (Panagariya 2008). The labour laws apply only to the organized sector. As the size of a factory grows, it increasingly becomes subject to more legislation. A few specific pieces of the legislation are particularly constraining. According to Chapter VB of the Industrial Disputes Act (IDA), it is necessary for firms employing more than 100 workers to obtain the permission of state governments in order to retrench or lay off workers. While the IDA does not prohibit retrenchment, states have often been unwilling to grant permission. Section 9A of the IDA lays out the procedures that must be followed by employers before changing the terms and conditions of work, which introduces additional rigidities for firms in using their existing workers effectively.3 In particular, worker consent is required in order to modify job descriptions or move workers from one plant to another in response to changing market conditions. How do these regulations affect the manufacturing sector quantitatively? Besley and Burgess (2004) find that industrial performance has been weaker in states with pro-worker labour laws. There have also been several recent studies that establish the importance of labour regulations.4 Estimates using plant-level data suggest that firms in labour intensive industries and in states with flexible labour laws have 14 per cent higher TFP than their counterparts in states with more stringent labour laws. Moreover, the impact of delicensing has been highly uneven across industries within India’s organized manufacturing sector. In particular, labour-intensive industries have experienced smaller gains from reforms. In addition, states with relatively inflexible labour regulations have experienced slower growth of labour-intensive industries and employment (Figure 2). Further, the difference in the performance of labour-intensive industries in states with flexible labour laws and states with inflexible labour laws has increased over time. Labour laws may also be an important factor responsible for the skewed distribution of size in Indian industries (Figure 3). Firms in states with more inflexible labour regulations tend to be smaller, especially in the labour-intensive subsectors of manufacturing. A contrarian view is that Indian businesses have learnt to get around the laws by hiring contractual labour, outsourcing noncore activities, etc.; it is thus argued that labour regulations are not a binding constraint to industrial performance and employment growth. Indeed, in surveys of firms, businesses do not list labour laws among the top constraining factors. One (Contd....)
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Box 2.4 : Labour Regulations : Impediment to Growth and Size of Indian firms in Manufacturing* way of reconciling this response with the systematic empirical evidence discussed here is that firms have learned to adapt to the labour laws—by either not hiring permanent workers or by staying below the threshold of these laws—and therefore they do not see them as a constraint. As pointed out in Krueger (2007), the counterfactual of whether labour laws would constrain firms that would emerge in the absence of strict labour laws cannot be captured in the surveys. Moreover, the adverse consequences of the labour laws can be inferred from the low rate of job creation in the formal sector, low productivity in the informal sector, and small firm size, especially in labour-intensive industries and states with more inflexible labour laws.
*
1 2 3
4
Prepared by Poonam Gupta and Rana Hasan. The Box draws heavily on Gupta and Kumar (2011), and Hasan and Jandoc (2012). See for example Panagariya (2004), Kochhar et al. (2006), and Hasan et al. (2012). Report of the Working Group on Employment, Planning and Policy for the Twelfth Five Year Plan. An employer must give a notice of three weeks in writing to the workers of any change in the working conditions including change in shift work, grade classification, rules of discipline, technological change that may affect the demand for labour, and changes in process or department. See Datta-Chaudhuri (1996) and Debroy (2010) for details. See for example, Dougherty et al. (2011) and Gupta et al. (2009).
(Figure 2.16). This raises the obvious question whether it is justifiable for a relatively labour abundant country like India with low wages to be increasingly resorting to more capital-intensive technology. Of
Source: Mishra (2013).
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course, as we have argued earlier, countries would use more capital per worker as they get richer, but the capital intensity is higher and has increased at a much faster rate for large firms than for small firms
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in India, even while they have created fewer jobs (Dougherty 2008).
cent of non-agriculture wage workers work without a contract.
2.44 As argued earlier, firms would also resort to informality if labour laws were overly constraining. The extent of informality in India stands out relative to countries at similar levels of development (see Box 2.5 on the extent, causes, and consequences of informal employment in India). Roughly 85 per cent of the workforce in India is engaged in the informal sector (all unincorporated enterprises operated on a proprietary or partnership basis and with less than 10 employees). The prevalence of informal employment (workers in either the informal sector or in the formal sector but lacking employment or social security benefits) is even higher; 95 per cent of jobs are informal and 80 per
2.45 Before suggesting the way forward, it is important to emphasize the advantage of formal employment via contracts for worker training and learning, especially if contracts have a significant probability of being rolled over into the long term. Experience is important for skill development. With a paucity of technical/vocational training institutions (say like the German model) in India, on-the-job learning is one of the easiest and most viable models of human capital accumulation. Employment that is likely to endure provides incentives to the firm for nurturing skill building and to the worker for developing skills. These contracts necessitate backloading of pay and incentives--compensation increases with
Box 2.5 : Informality of Employment in India: Stylized Facts and Policy Implications* Extent of Informality Despite impressive economic growth over the past 20 years, the vast majority of Indian workers continue to toil in informal employment. Roughly 85 per cent of the workforce is engaged in the informal sector.1 Even after excluding the agricultural sector, the share of the workforce in the informal sector remains at 70 per cent. The prevalence of informal employment – workers in either the informal or formal sector who lack employment or social security benefits—is even higher. While precise estimates of the extent of informal work arrangements are hard to come by, a detailed study by the National Statistical Commission reveals that as of 2004-5, 95 per cent of jobs are informal and these are not limited to the informal sector (Figure 1). Even in the public sector, a third of all jobs in India are informal (Kolli and Sinharay, 2011).2 Among wage employees outside of agriculture, more than three-quarters have no written contract, 70 per cent are not eligible for any paid leave, and 74 per cent are not covered by social security benefits. Along all of these measures of informality, India saw an uptick over time.3
While high levels of informality are not uncommon in South Asia (Figure 2), India (along with the rest of the region) stands out from an international perspective. Using lack of pension coverage as a proxy for informal employment, 91 per cent of the labour force in South Asia is informal, surpassed only by Africa (Nayar et. al. 2012). Compared to countries at a similar level of development, India’s very low usage of written contracts for its non-agricultural employees, 80 per cent of whom work without a contract, also stands out (Figure 3). This figure is higher than for, for example, China, Pakistan, Ghana, and South Africa. This is despite the fact that India’s share of employment in the informal sector is roughly in line with that of its peers (Figure 4) and confirms the significant prevalence of informal arrangements within the formal sector.
(Contd....)
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Box 2.5 : Informality of Employment in India: Stylized Facts and Policy Implications* (Contd...)
Source : Authors’ calculations, based on World Bank data. Causes of Informality Informal employment results both from workers being excluded from formal jobs and from workers or firms voluntarily opting out of formal employment. The ‘exclusion’ view of informality emphasizes the dual nature of labour markets, in which a highly productive formal sector coexists with a subsistence informal sector, which absorbs excess labour. Constraints to the expansion of the formal sector (such as insufficient capital accumulation and natural resources as in the Lewis [1954] model, or overly burdensome costs of registering as in De Soto [1989] lead to persistent informal employment. According to the ‘voluntary’ view, firms and workers decide on whether to become formal by comparing the perceived costs of being formal with its perceived benefits. In this setting, labour institutions, taxation, and regulations primarily explain the prevalence of informal employment, by effectively increasing the costs of formality. At a cross-country level, countries with more burdensome entry regulations have larger informal sectors (Djankov et al. 2002). India’s labour laws may also lead firms to resort to informal arrangements, rely more on capital instead of labour, or limit their scale in order to remain outside of the formal sector altogether (see Box 2.4 on labour regulations in India). Consequences of Informality India’s high rate of informality is a drag on its economic development and a source of considerable inequity. Productivity differences between workers in the formal and informal sectors are large (Figure 5, Panel A), suggesting that moving a worker from an informal to a formal firm would bring about sizeable gains from improved allocation of resources. In fact, rough
Source : World Bank (2012) More and Better Jobs in South Asia,’ Chapter 1, Overview, Figure 1.13, p. 13 for Panel A and authors’ calculations based on National Statistical Commission (2012) for Panel B. (Contd....)
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Box 2.5 : Informality of Employment in India: Stylized Facts and Policy Implications* (Contd...) estimates suggest that an informal job in the formal sector has double the value added than an informal job in the informal sector. And importantly, the value added per worker in a formal job within the formal sector is almost ten times that in an informal job in the formal sector (Figure 5, Panel B). Therefore, loosely speaking, the benefits of moving into contracts within the formal sector are likely to be substantial and significantly higher than the gains from moving an informal-sector worker into an informal job within the formal sector.4 Besides earning less, informal workers are also more vulnerable to violations of basic human rights such as reasonable working conditions and safety at work. With little job security and limited access to safety nets, most of the informally employed remain extremely vulnerable to shocks such as illnesses and loss of income. Not surprisingly, a strong correlation exists between informality and poverty in India (NCEUS 2009). From the point of view of firms, informal work arrangements bring benefits: lower price and greater flexibility in adjusting the quantity of labour in response to fluctuating demand. Yet, these benefits are partly offset by costs, such as low worker loyalty and inadequate incentive to invest in worker skill building. Moreover, any net benefits need to be weighed against the social costs to the workers and the economy as a whole. Finally, persistently high levels of informality come at a significant fiscal cost in terms of forgone fiscal revenue (Levy 2008). In 2004-5, the unorganized sector contributed roughly half of India’s GDP (National Statistical Commission 2012, p. 30), implying a significant expansion of the tax base if the informal sector were to join the formal economy. The high prevalence of informality also hampers the ability of economic policies to have direct and quick impact on the economy. *
Prepared by Prachi Mishra, David Newhouse, and Petia Topalova. As of 2009-10. The informal sector is defined by the National Commission for Enterprises in the Unorganized Sector as all unincorporated enterprises operated on a proprietary or partnership basis and with less than 10 employees. 2 The incidence of informal jobs in the formal sector is highest among the non-informal household sector, where Kolli and Sinharay (2011) estimate 95 per cent of jobs to be informal. 3 Estimates are from National Sample Survey (2012). 1
4
These rough estimates provide an upper bound of the difference in value added across formal and informal jobs, since informal workers may not be as productive as formal-sector workers for reasons unrelated to their employment status, such as lack of education or skills. The causality could also go the other way if firms that are less productive are more likely to employ informal workers.
experience--so that workers do not avail of the training and leave. In contrast, informal and temporary contracts are in fact flat and sometimes even frontloaded, absolutely the inverse of the desired architecture. Long-lasting employment does not mean tenure for life, which is the other extreme of the contract space commonly found in India. Permanent employment not only limits firm flexibility, it also reduces some workers' incentives to learn or exercise effort. An intermediate structure that exists in most countries is contracts that allow termination in situations of firm distress or for poor worker performance, but with carefully designed and effective redressal mechanisms if the employee is fired without cause, as well as compensation for severance and unemployment benefits. 2.46 Regardless of what one believes about causes, the fact is that India is not creating enough productive jobs. Moreover, India has the dubious distinction of having some of the most comprehensive labour laws in the world, even while having one of the largest fractions of the working population unprotected. Not only do informal workers have lower productivity and earn less, but they are also more http://indiabudget.nic.in
vulnerable to violations of basic workers' rights such as reasonable working conditions and safety at work. Paradoxically, Boxes 2.4 and 2.5 suggest that it may be the stringent protection that is afforded by existing regulations that is responsible for both the paucity of good jobs as well as the inadequate protection that most workers have. In India reforms are typically implemented only after they have been subject to a lot of debate and after some sort of political consensus is reached on them. It is therefore imperative that consensus building on labour market reforms should start soon. India needs many more firms in the formal sector, especially firms that continue growing and creating productive jobs. Box 2.6 presents the case of Mauritius and discusses how this country undertook reforms that improved employment. 2.47 It may take time to build political consensus for fundamental reforms. In the meantime, states could be allowed more flexibility to experiment without coming into conflict with central statutes. As best practices evolve, success in job growth will resolve theoretical debates more easily than a thousand papers. If indeed rigid labour laws are determined to
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Box 2.6 : The Mauritian Miracle* As Mauritius was assuming self-rule from the British, two noted intellectuals (and to be Nobel laureates), James Meade (economics) and V.S. Naipaul (literature) prophesied a bleak future for this small island. In the 1960s, Mauritius was heavily dependent on one crop—sugar, was prone to terms-of-trade shocks, and was undergoing rapid increase in population. What followed though was counter to their predictions. Between 1977 and 2006, real GDP grew by an average of 5.2 per cent per annum. Per capita GDP growth averaged 4.2 per cent versus 0.7 per cent for the rest of Africa. From 1970 to 2008, life expectancy increased from 62 to 73 and infant mortality dropped from 64 per 1000 births to 15. What explains this performance? A leading factor in the first two decades of turnaround is the creation and efficient management of EPZs. Some major characteristics of the Mauritius EPZ were: 1. It was not a geographical zone. Any firm could opt into the regulatory scheme. 2. As Romer (1992) notes, the main policies were ease of inputs and materials imports, no restriction on repatriation of profits, a 10-year income tax holiday for foreign investors, a policy of centralized wage setting, and an implicit assurance that labour unrest would be minimized and wage increases moderate. 3. It allowed firms to constantly adjust labour force through layoffs and realistic compensation packages and allowed greater flexibility in work hours. 4. It had relaxed laws so that women could participate to a greater extent. Figure 1 below delineates the effect of these on structural transition. The first stage was motivated by a productive structural shift and ensuring full employment. By 1990, about one-third of the labour force on the island, 90,000 people, was employed in the EPZs. Jobs added in the EPZs accounted for two-thirds of the total increase in employment between 1970 and 1990. Increased per capita incomes from this transition eventually fuelled more human capital build-up, allowing further diversification into services.
*
Prepared by Rohit Lamba
be the key constraining factor in the creation of productive jobs, win-win reforms are easily available. Existing permanent workers can continue till retirement with their privileges left untouched. The remaining workers could be encouraged to move into contractual employment that can be terminated, but which gives the worker some protections including severance pay, unemployment insurance, and the right to reverse unfair dismissal through appeal. 2.48 In the meantime, the government should continue to create a minimum safety net for informal workers (in the informal sector and in informal work
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arrangements in the formal sector) by, for example, extending the reach of national-level schemes such as the Rashtriya Swasthya Bima Yojana and the New Pension Scheme and introducing unemployment insurance schemes (e.g. Supplementary Unemployment Benefits Fund to be created by automotive companies).
WHY ARE SERVICES NOT CREATING JOBS? 2.49 As has been discussed earlier, while the share of employment in services was relatively high at take-
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off, its growth has since then been slow. At the same time, the share in value added, which was high at take-off, has continued to rise quickly. This implies that while productivity in the sector has been high, the services sector is not creating many jobs--the opposite of the problem with industry. 2.50 Some impediments to business creation such as regulatory hurdles and access to funding and infrastructure may be common between services and industry. Labour regulations are also likely to constrain creation of jobs in services. For example, 27 per cent of retail stores in India report labour regulations as a problem for their businesses (Amin 2008)5. But what stands out for the services sector is the importance of education and skilling. Suitable higher education is important for high-end services such as information technology, software development, and finance. Mid-level services such as retail trade, hotels, and restaurant services also require adequate skilling of the labour force.
2.51 Schemes such as the formal apprenticeship programme of the government, which places employers at the heart of education, can play a powerful role in imparting job-relevant skills and also retraining, preparing, and upgrading the labour force. In its current form, the Act and the rules governing apprenticeships are outdated and rigid from both the perspective of employers and employees. Box 2.7 discusses the current Act/rules and suggests changes that need to be made. 2.52 The challenge is to address both quality and quantity issues in skill development and training so as to correct the mismatch between employers who do not get people with requisite skills and millions of job seekers who do not get employment. To this end, the National Skill Development Mission aims to impart employment-oriented vocational training to 8 crore people over the next five years by working with state governments/State Skill Missions and incorporating
Box 2.7 : Formal Apprenticeships: An Idea Whose Time Has Come* Why is Apprenticeship important? Equipping the labor force with productive skills lies at the heart of tapping the demographic dividend. Apprenticeships are an effective way of ensuring that entry-level workers have the skills required to join the formal workforce by ‘learning on the job’ and even ‘earning while learning’. It has been amongst the oldest social institutions in India. However, it needs to be formalized and scaled up. In the current environment, India’s educational system is overburdened by sheer demand for quality education. According to TeamLease (2012), 80 per cent of India’s higher education system of 2030 is yet to be built and is grappling with the threefold problem of cost, quality, and scale. This is compounded by the inability of much of the current education system to produce ‘work-ready’ labour. In fact, the disconnect between the formal educational system and requirements of the employers becomes even more acute in times of rapid structural and technological change. In this environment, company-led apprenticeship programmes, that place employers at the heart of education, can play a powerful role in imparting job-relevant skills and also repairing, preparing, and upgrading the labour force. They can aid five important transitions that the labour force is currently making--from agriculture to non-agriculture, from rural to urban, from the unorganized sector to the organized, from school to work, and from subsistence self-employment to wage employment. Several countries have benefited greatly from focused programmes on skilling the workforce on the job, including Japan, US, UK, and Germany. Germany, in particular, has a well-known dual education system that combines classroom/online courses at a vocational school with workplace experience at a company. School authorities are responsible for the former while the company is responsible for the latter. More than 75 per cent of Germans below the age of 22 have attended an apprenticeship programme. Training apprentices also benefits corporates. A 2005 Task Force Report on Apprentices in the UK, demonstrated that the benefits of apprenticeships were numerous, including increased productivity, lower net costs of training (versus training non apprentices), greater staff retention, and a more highly motivated workforce. What does India already have? Apprenticeship programmes in India are governed by The Apprentice Act 1961 and the Apprenticeship Rules 1992. The organizational structure and rules and regulations overseeing it are complex and burdensome. The Ministry of Labour and Employment oversees ‘trade apprentices’ through six regional offices. The Ministry of Human Resource Development oversees ‘graduate, technician, and technician (vocational) apprentices’ through four boards located in different cities. There are strict norms on permissions, trades permitted, training duration, stipend levels, apprentice/employee ratio, and training facilities. It is onerous to create new apprenticeship positions, and there are several vacancies even in positions that have already been created. As a consequence, India only has under 3,00,000 formal apprentices. (Contd....)
5
Labour regulations for India’s retail sector are contained in the Shops and Establishment Act (SEA), which includes minimum wages, regulation of hours of work, and rules for employment and termination of service.
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Box 2.7 : Formal Apprenticeships: An Idea Whose Time Has Come* (Contd...) One of the reasons for tightly regulating apprenticeships was to prevent companies from hiring cheap labour under the guise of an apprenticeship programme. A simpler set of provisions to streamline regulation and incentivize corporates while protecting the interest and well-being of apprentices may now be needed. How can it be made to work? The rules and regulations overseeing apprenticeships need to be changed such that employers and prospective apprentices can choose each other freely by just requiring information on what will be learnt on the job and a minimum wage. Some recommendations including those from the 2009 Planning Commission taskforce are described below: 1. Simpler regulation: A single window mechanism is needed to clear company applications for pan-India apprenticeship programmes. Currently, companies need to approach each state apprenticeship adviser separately. Partnerships between companies and industry federations should be facilitated by giving timely permissions. 2. Wider reach: Apprentices are only allowed in specified trades. Majority of graduates are not currently covered under formal Apprenticeships. In addition, the procedure to include new trades especially services, which are largely excluded, is complex and can take many months. A fully deregulated list is needed for apprenticeships to remain dynamic and in line with the changing needs of the workplace. 3. Flexibility to companies: Currently many schemes are required to be unnecessarily long (up to four years), and have rigid requirements on worker to apprentice ratio. Moreover, the penal provisions for companies, even for small violations of the rules, are very severe. Certain relaxation of rules can help give flexibility to companies. For example, the duration of apprenticeship training can be allowed to vary across trades and companies. Short-duration programmes (less than 12 months) can be freed from much of the oversight provided they pay minimum wages. Relaxing the rigid requirements on the ratio of apprentices to workers could also accelerate capacity creation. 4. Dual system of training: Partnerships between companies and educational institutions should be encouraged. Like the German model, corporates can be allowed to outsource theoretical training, and educational institutions can be allowed to outsource practical training. 5. Active exchanges: There should be active exchanges and portals, matching prospective apprentices to employers. *
Prepared by Pranjul Bhandari.
the private sector (through PPPs and for-profit vocational training) and NGOs. Basic education is also an important input for enhancing human capital.
Recent government initiatives to expand access to quality primary education are important; however, more needs to be done (see Box 2.8).
Box 2.8 : Using Evidence for Better Policy:The Case of Primary Education in India* Investments in education both contribute to aggregate economic growth as well as enable citizens to broadly participate in the growth process through improved productivity, employment, and wages, and are therefore a critical component of the ;inclusive growth' agenda of the Government of India. The past decade has seen substantial increases in education investments under the Sarva Shiksha Abhiyan (SSA), and this additional spending has led to considerable progress in improving primary school access, infrastructure, pupil-teacher ratios, teacher salaries, and student enrollment. Nevertheless, student learning levels and trajectories are disturbingly low, with nationally representative studies showing that over 60 per cent of children aged 6-14 are unable to read at second-grade level. Further, these figures have shown no sign of improving over time (and may even be deteriorating--see ASER study discussed in Box 13.4). The past decade has also seen a number of high-quality empirical studies on the causes and correlates of better learning outcomes based on large samples of data and careful attention paid to identification of causal relationships. This research has identified interventions/inputs that do not appear to contribute meaningfully to improved education outcomes, as well as interventions that are highly effective. In particular, the research over the past decade suggests that increasing inputs to primary education in a 'business-as-usual' way is unlikely to improve student learning meaningfully unless accompanied by significant changes in pedagogy and/or improvements in school governance. It is therefore imperative that education policy shifts its emphasis from simply providing more school inputs in a 'business-as-usual' way and focuses on improving education outcomes. School Inputs Analysis of both administrative and survey data shows considerable improvements in most input-based measures of schooling quality. But there is very little impact of these improvements in school facilities on learning outcomes. This is not to suggest that school infrastructure does not matter for improving learning outcomes (they may be necessary but not sufficient), but the results highlight that infrastructure by itself is unlikely to have a significant impact on improving learning levels and trajectories. Similarly, while there may be good social and humanitarian reasons for mid-day meal programmes (including nutrition and child welfare), there is no evidence to suggest that they improve learning outcomes. (Contd....)
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Box 2.8 : Using Evidence for Better Policy:The Case of Primary Education in India* (Contd...) Even more striking is the fact that no credible study on education in India has found any significant positive relationship between teachers possessing formal teacher training credentials and their effectiveness for improving student learning. Similarly, there is no correlation between teacher salary and its effectiveness for improving student learning, and at best there are very modest positive effects of reducing pupil-teacher ratios on learning outcomes. As discussed further, these very stark findings most likely reflect weaknesses in pedagogy and governance which are key barriers in translating increased spending into better outcomes. The results summarized so far can be quite discouraging. Fortunately, the news is not all bad, because the evidence of the past decade also points consistently to interventions that have been highly effective for improving learning outcomes, and are able to do so in much more cost-effective ways than the status-quo patterns of spending. Pedagogy A key determinant of how schooling inputs translate into learning outcomes is the structure of pedagogy and classroom instruction. Getting aspects of instruction right is particularly challenging in a context such as that of India where several millions of first-generation learners have joined a rapidly expanding national schooling system. In particular, standard curricula, textbooks, and teaching practices that may have been designed for a time when access to education was more limited may not fare as well under the new circumstances, since the default pedagogy is one of 'completing the textbook', which increasingly does not reflect the learning levels of children in the classroom, who are considerably further behind where the textbook expects them to be. Evidence that 'business-as-usual' pedagogy can be improved is found in several randomized evaluations finding large positive impacts of supplemental remedial instruction in early grades that are targeted to the child's current level of learning (as opposed to simply following the textbook). These positive results have been found consistently in programmes run by non-profit organizations in several locations (including UP, Bihar, Uttaranchal, Gujarat, Maharashtra, and Andhra Pradesh). Second, the estimated impact from these interventions (whose instructional time is typically only a small fraction of the duration of the scheduled school year) is considerable--often exceeding the learning gains from a full year of schooling. Third, these interventions are typically delivered by modestly paid community teachers, who mostly do not have formal teacher training credentials. Finally, these supplemental remedial instruction programmes are highly cost effective and deliver significant learning gains at much lower costs than the large investments in standard inputs. Governance Beyond pedagogy, another explanation for the low correlation between increases in spending on educational inputs and improved learning outcomes may be the weak governance of the education system and limited effort on the part of teachers and administrators to improve student learning levels. The most striking symptom of weak governance is the high rate of teacher absence in government-run schools. While teacher absence rates were over 25 per cent across India in 2003, an allIndia panel survey that covered the same villages surveyed in 2003 found that teacher absence in rural India was still around 24 per cent in rural India in 2010. The fiscal cost of teacher absence was estimated at around Rs 7,500 crore per year suggesting that governance challenges remain paramount. There is evidence that even modest improvements in governance can yield significant returns. Improving monitoring and supervision of schools is significantly correlated with reductions in teacher absence, and investing in improved governance by increasing the frequency of monitoring could yield an eight- to tenfold return on investment in terms of reducing the fiscal cost of teacher absence. The evidence also points to the importance of motivating teachers by rewarding good performance. Rigorous evaluations of carefully designed systems of teacher performance pay in Andhra Pradesh show substantial improvements in student learning in response to even very modest amounts of performance-linked pay for teachers (that was typically not more than 3 per cent of annual pay). Evidence from a long-term follow up shows that teacher performance pay was 15 to 20 more times more effective for raising student learning than reductions in pupil-teacher ratios. More broadly, these results suggest that the performance of front-line government employees depends less on the level of pay and more on its structure. From Evidence to Policy Three immediate policy implications of this body of research are summarized below1. 1)
Make learning outcomes an explicit goal of primary education policy and invest in regular and independent high-quality measurement of learning outcomes: While independently measuring and administratively focusing on learning outcomes will not by itself lead to improvement, it will serve to focus the energies of the education system on the outcome that actually matters to millions of first-generation learners, which is functional literacy and numeracy.
2)
Launch a national campaign of supplemental instruction targeted to the current level of learning of children (as opposed to teaching to the textbook) delivered by locally hired teacher assistants, with a goal of reaching minimum absolute standards of learning for all children: There is urgent need for a mission-like focus on delivering universal functional literacy and numeracy that allow children to 'read to learn'. The evidence strongly supports scaling up supplemental instruction programmes using locally hired short-term teaching assistants that are targeted to the level of learning of the child, and the cost-effectiveness of this intervention also makes it easily scalable. (Contd....)
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Seizing the Demographic Dividend
53
Box 2.8 : Using Evidence for Better Policy:The Case of Primary Education in India* (Contd...) 3)
Pay urgent attention to issues of teacher governance including better monitoring and supervision as well as teacher performance measurement and management: A basic principle of effective management of organizations is to have clear goals and to reward employees for contributing towards meeting those goals. The extent to which the status quo does not do this effectively is highlighted in the large positive impacts found from even very modest improvements in the alignment of employee rewards with organizational goals. There can be potentially large returns of implementing these ideas in education and beyond.
The next ten years will see the largest ever number of citizens in the school system at any point in Indian history (or future), and it is critical that this generation that represents the demographic dividend be equipped with the literacy, numeracy, and skills needed to participate fully in a rapidly modernizing world. In a fiscally constrained environment, it is also imperative to use evidence to implement cost-effective policies that maximize the social returns on any given level of public investment. The growing body of high-quality research on primary education in the past decade provides opportunity for putting this principle into practice. * Prepared by Karthik Muralidharan. 1 See Muralidharan (2012) for a more detailed discussion and for references to the studies summarized here.
CONSEQUENCES
AND
CONCLUSION
2.53 Recent economic history is replete with examples of economies that were supposed to have great potential but ultimately did not achieve rapid economic growth and improvements in standards of living. At the same time, we have instances of economies classified as basket cases that achieved rapid turnarounds. India's achievement in the postreform period and South Korea's rapid transformation surely fall in this latter category. But India's continuing on a rapid growth path is not preordained. Besides favourable circumstances, it requires deft policymaking and a broad vision of the future, possible risks, and opportunities. We stand at a crossroads where we need to develop a clear strategy for continued inclusive growth. Let us consider what might happen under different scenarios. These are hypothetical scenarios, and based on informed estimates, but reflect the forces that will be at play. Business as usual: Some improvement in infrastructure but only slow improvement in education, and no change in institutional structure such as business regulation and labour laws. Some movement from agriculture to low skill services such as construction and household work, as well as to informal manufacturing, but too few quality jobs. GDP growth settles into a comfortable 6-7 per cent, the new "normal". There is growing presence of unprotected workers in manufacturing and the possibility of rising labour frictions. There is immense pressure on education to make students job-worthy, but with organized manufacturing playing little role in training workers and imparting skills on the job, http://indiabudget.nic.in
there is a continuing mismatch between employer needs and worker capabilities. Growth is slower than it could be and inequality higher than it ought to be. Reforms: Vast improvements in infrastructure, education, as well as in business regulation and labour laws. As fewer workers depend on agriculture, larger holdings and more investment in capital and technology create a much healthier agricultural sector, with significant rural entrepreneurship surrounding activities like horticulture, dairy products, and meat. The manufacturing sector becomes a training ground for workers, absorbing more students with a middle or high school education. India moves into niches vacated by China such as semi-skilled manufacturing, even while enhancing its advantage in skilled manufacturing and services. India experiences faster and more equitable growth. Social frictions are minimized as both agriculture and manufacturing create better livelihoods. Decline: No improvement in infrastructure, education, or institutions: As fewer jobs are created outside of agriculture, more stay in agriculture, increasing the pressure on land and lowering incomes. Small agricultural plots do not provide enough income, nor can they be leased out. More families break up, with males seeking work elsewhere, and labour participation increases. There is large-scale migration to overburdened cities. More supports are given to agriculture and transfers are made to rural areas so as to prevent further migration. The strain on government finances increases. Income inequality between good service jobs in cities and marginal
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Economic Survey 2012-13
agricultural jobs in rural areas increases tremendously. Social strains grow. 2.54 These scenarios are clearly caricatures and should be seen as indicative rather than conclusive in any way. The key policy message from this chapter is that India has to focus on an agenda to create productive jobs outside of agriculture, which will help us reap the demographic dividend and also improve livelihoods in agriculture. We need to
examine carefully whether regulations constrain businesses excessively and, if so, strip away the excess regulation while ensuring adequate protection and minimum safety nets for workers. Building infrastructure and expanding access to finance will also help. While the government is clearly engaged in this process, some further steps need greater debate and action. Hopefully, this chapter will help inform that debate.
References Amin, Mohammad (2008), 'Labor Regulation and Employment in India's Retail Stores', Social Protection and Labor Discussion Paper Number 0816, World Bank.
Dougherty, S. (2008), 'Labor Regulation and Employment Dynamics at the State Level in India', OECD Economics Department Working papers No. 624.
Asian Development Bank (2009), Key Indicators 2009: Enterprises in Asia: Fostering Dynamism in SMEs, Manila.
Dougherty, S., V. C. Frisancho Robles, and K. Krishna (2011), 'Employment Protection Legislation and Plant-Level Productivity in India', NBER Working Paper No. 17693.
Aiyar, S. and A. Mody (2011), 'The Demographic Dividend: Evidence from the Indian States', IMF Working Paper. Bailey, M.J. (2006), 'More Power to the Pill: The Impact of Contraceptive Freedom on Women's Life Cycle Labor Supply', Quarterly Journal of Economics, 121:289-320. Berger, Allen, Nathan Miller, Mitchell Petersen, Rajan, Raghuram, and Jeremy Stein (2005), 'Does Function Follow Organisational Form? Evidence from the Lending Practices of Large and Small Banks' Journal of Financial Economics,76: 237-69. Besley, T. and R. Burgess (2004), 'Can Regulation Hinder Economic Performance? Evidence from India.' Quarterly Journal of Economics, 119 (1): 91-134 Bhattacharjea, A (2006), ‘Labour market regulation and industrial performance in India: A critical review of the empirical evidence.’ Indian Journal of Labour Economics 49 (2): 211–232. Bosworth, M. and S. M. Collins (2003), 'The Empirics of Growth: An Update', Brookings Papers on Economic Activity. Datta-Chaudhuri, M. (1996). 'Labor markets as social institutions in India', IRIS-India Working Paper No. 10, University of MarylandCollege Park. Davis, Steve, John C. Haltiwanger, and Scott Schuhh (1998), Job Creation and Destruction, MIT Press, Cambridge. Debroy, B. (2010), 'Segmentation and Unification in the People's Republic of China's Labor Market: Lessons for India' in K. Gerhaeusser, Y. Iwasaki, and V. B. Tulasidhar (eds.), Resurging Asian Giants: Lessons from the People's Republic of China and India. Manila: Asian Development Bank, pp. 167-200. De Soto, H. (1989), The Other Path, Harper and Row Publishers, New York. Djankov, S., R. La Porta, F. Lopez-de-Silanes, and A. Schleifer (2002), 'The Regulation of Entry', Quarterly Journal of Economics, 117(1):1-37.
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Feyrer, J. (2007), 'Demographics and Productivity, Review of Economics and Statistics, 89 (1): 100-9. Gupta, P. and U. Kumar (2011), 'Explaining the Growth of Manufacturing in India: Role of Labor Regulations and Infrastructure', Handbook on Indian Economy, Oxford University Press, Delhi. Gupta, P., R. Hasan, and U. Kumar (2008), 'Big Reforms but Small Payoffs: Explaining the Weak Record of Growth in Indian Manufacturing', In S. Bery, B. Bosworth, and A. Panagariya (eds.), India Policy Forum, vol. 5, Sage, Delhi: 59-108. Hasan, R., K. Robert, and L. Jandoc (2012), 'Labor Regulations and the Firm Size Distribution in Indian Manufacturing', Columbia Program on Indian Economic Policies, Working Paper No. 20123. Hasan, R., D. Mitra, and A. Sundaram (2012), 'What Explains the High Capital Intensity of Indian Manufacturing?' Indian Growth and Development Review. Hasan, R., S. Lamba, and A. Sen Gupta (2012), 'Growth, Structural Change, and Poverty Reduction in India', Working Paper, India Resident Mission, Asian Development Bank. Hsieh, C. and P. J. Klenow (2011), 'The Life Cycle of Plants in India and Mexico', Chicago Booth Research Working Paper No. 11-38. IMF, World Economic Outlook (2006), 'Asia Rising: Patterns of Economic Development and Growth', Chapter 3. IMF, World Economic Outlook Database (2011), September 2011. Kochhar, K., U. Kumar, R. Rajan, A. Subramanian, and I. Tokatlidis (2006), "India's Pattern of Development: What Happened, What Follows?', Journal of Monetary Economics 53: 981-1019. Kolli, R. and A. Sinharay( 2011), 'Share of Informal Sector and Informal Employment in GDP and Employment', Journal of Income
Seizing the Demographic Dividend and Wealth, 33(2), July-December 2011. Krueger, A. O. (2007), 'The Missing Middle', Stanford Center for International Development Working Paper No. 343. Lewis, A. (1954), 'Economic Development with Unlimited Supplies of Labour', The Manchester School of Economic and Social Studies, May.
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National Commission for Enterprises in the Unorganised Sectors, (2009), The Challenge of Employment in India: An Informal Economy Perspective, New Delhi. Nehru, V. and A. Dhareswar (1993), 'A New Database on Physical Capital Stock: Sources, Methodology and Results', Revisita de AnalisisEconomico, 8 (1): 37-59. Panagariya, A. (2008), India: The Emerging Giant, New York:
Levy, S. (2008), Good Intentions, Bad Outcomes: Social Policy, Informality and Economic Growth in Mexico, Washington: Brookings Institution Press.
Oxford University Press.
Ministry of Labour and Employment, Government of India (2002), Second National Commission on Labour, Report.
pp. 1-57, New Delhi.
Mishra, P. (2013), 'Has India's Growth Story Withered?', Economic and Political Weekly, forthcoming.
Using Ideas and Producing Ideas', Proceedings of the World
Muralidharan, K. (2012), 'Priorities for Primary Education Policy in India's 12th Five-year Plan', in NCAER-Brookings India Policy Forum 2012-2013, NCAER, New Delhi.
TeamLease (2012), 'India Labor Report (2012), Massifying Indian
National Sample Survey (2012), 'Informal Sector and Conditions of Employment in India', Report No. 539, January 2012. National Statistical Commission (2012), 'Report of the Committee on Unorganised Sector Statistics', Government of India, February 2012. Nayar, R., P. Gottret, P. Mitra, G. Betcherman, Y. Lee, I. Santos, M. Dahal, M. Shrestha (2012), More and Better Jobs in South Asia, World Bank.
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Panagariya, A. (2004), 'India's Trade Reform', in S. Bery, B. Bosworth, and A. Panagariya (eds.), India Policy Forum, vol. 1, Romer, P. (1992), 'Two Strategies for Economic Development: Bank Annual Conference on Development Economics. Higher Education: The Access and Employability Case for Community Colleges', TeamLease and Indian Institute of Job Training. United Nations Population Division,(2010), Revision of World Population Prospects. World Bank (2013), World Development Report. World Bank (2013), Doing Business: Measuring Business Regulations. World Bank (2009), Doing Business in India. World Bank (2012), World Development Indicators, July.
Public Finance
3
CHAPTER
The fiscal outcome of the Central government in 2012-13 so far indicates significant
improvement over 2011-12. The fiscal outcome in 2011-12 was affected by macroeconomic developments of growth slowdown, high global crude oil prices, and sluggish financial market conditions for effecting the budgeted disinvestment programme. These developments continued through the first half of the current year. The government then pushed harder for reforms. An initial step was to set up the Kelkar Committee. Following its recommendations, the government unveiled a revised fiscal consolidation roadmap. The fiscal position of states has continued to progress with fiscal deficit budgeted at 2.1 per cent of gross domestic product (GDP). Staying on the indicated fiscal consolidation path is critical to sustaining the desirable macroeconomic outcomes not only in terms of higher growth in real GDP and lower inflation, but also in easing the financing of the widening current account deficit (CAD), for which India’s sovereign credit rating is important. Widening of the tax base and prioritization of expenditure are key factors in effecting the desired reduction in the Central government’s fiscal deficit over the medium term, and in reducing the key risks to fiscal marksmanship (the difference between actual outcomes and budgetary estimates as a proportion of GDP).
3.2 Latest available data indicate nascent signs of a turnaround in the macroeconomic environment. The stress witnessed in 2011-12 continued through the first half of the current year delaying the recovery process. This was manifest with growth continuing to be below 5.5 per cent, inflation moderating somewhat but continuing to be above 7 per cent, and only a brief moderation in the global crude oil prices. A pickup in financial markets, which gained steam as reforms were rolled out, the moderation in WPI inflation to 6.6 per cent in January 2013 and a bottoming out of industrial slowdown are broad indications of the turnaround. Indicating the trends in fiscal outcome in the first half of the current fiscal, the Mid-Year Economic Analysis 2012-13, pointed out that the mid-year threshold benchmarks in terms of fiscal responsibility and budget management (FRBM) rules had not been met and with the corrective measures proposed, fiscal deficit was likely to exceed budget estimates by 0.2 percentage http://indiabudget.nic.in
point. The seriousness of the challenge can be seen by comparing the assumptions that were made when the Budget was presented with the actual outcome so far. 3.3 The Budget for 2012-13 was presented on 16 March 2012 in an atmosphere of uncertainty about the global and domestic economic outlook. The continued high levels of global crude oil prices and domestic pressures that were manifest in persistent inflation, which necessitated keeping interest rates high, had their impact on aggregate demand (both consumption and investment). The Budget for 2012-13 attributed India’s growth slowdown in 2011-12 to weak industrial growth and underscored the recovery in core sectors at that time which was seen as a sign of gradual recovery. Real GDP thus was projected to grow at around 7.6 per cent with inflation moderating on year-onyear basis. The fiscal slippage in 2011-12 was due
57
Public Finance to lower realization in direct tax revenues and under provisioning of subsidies. Recognizing the need for funding the higher levels of outgo on subsidies on account of elevated levels of global crude oil prices, higher provision was made for the same in Budget 2012-13. However, as part of the fiscal consolidation process, the Budget also announced the intent to restrict expenditure on central subsidies to under 2 per cent of GDP. 3.4 The Budget for 2012-13 introduced amendments to the FRBM Act as part of the Finance Bill. These amendments contained two important features of expenditure reforms. First is the introduction of the concept of effective revenue deficit, which excludes from the conventional revenue deficit, grants for the creation of capital assets. This is an important development for the reason that while the revenue deficit of the consolidated general government fully reflects total capital expenditure incurred, in the accounts of the centre, these transfers are shown as revenue expenditure. Therefore the mandate of eliminating the conventional revenue deficit of the centre becomes problematic. With this amendment, the endeavour of the government under the FRBM Act would be to eliminate the effective revenue deficit. Similarly, at state level also, some of the capital transfers to local bodies or parastatals could get reflected as revenue expenditure. By understating capital expenditure, this might lead to a divergence between the national accounts data on capital formation on the government accounts and the conventional public finance data that is gleaned from the Budgets. 3.5 The second important feature is the introduction of the provision for 'Medium Term Expenditure Framework Statement’ in the FRBM Act. This medium-term framework provides for rolling targets for expenditure, imparting greater certainty, and encourages prioritization of expenditure. Together with the measures proposed to raise the tax-GDP ratio, the expenditure reforms are expected to yield better fiscal marksmanship, thereby mitigating key fiscal risks.
FISCAL MARKSMANSHIP 3.6 Post the FRBM Act but prior to global financial crisis, significant fiscal consolidation was achieved with the fiscal deficit of the centre declining rapidly to 2.5 per cent of GDP in 2007-8, which was much below the threshold target of 3 per cent set in the http://indiabudget.nic.in
FRBM Act (Table 3.1). However, the government’s fiscal policy is evaluated not only on overall fiscal marksmanship in terms of fiscal and revenue deficits which are in effect-derived indicators, but also on marksmanship in terms of key revenue and expenditure targets. 3.7 It is useful to note that in the immediate postFRBM period, fiscal marksmanship of the central government had a series of overperformances to its credit except in 2008-9 and in 2011-12 (Figure 3.1). While the overshooting of the deficit targets in 2008-9 was a conscious decision to obviate the adverse impact of the global financial crisis, the large slippage in 2011-12 owed to a confluence of adverse economic outcomes arising from global and domestic factors. It was on account of lower receipts (which explains about 58 per cent of total slippage) due to a sharp deceleration in real GDP growth, particularly in the industry sector, elevated levels of inflation, subdued financial market conditions for generating the required disinvestment receipts, and overshooting of expenditure (accounting for the remaining 42 per cent of slippage) mainly on account of persistently high levels of global crude oil and fertilizer prices which were not passed through to the domestic price setting. Thus the risks Table 3.1 : Trends in Deficits of Central Government Year
Revenue Fiscal Primary Revenue Deficit Deficit Deficit Deficit as per cent of Fiscal Deficit (As per cent of GDP)
Enactment of FRBM 2003-4 3.5 2004-5 2.4 2005-6 2.5 2006-7 1.9 2007-8 1.1 2008-9 4.5 2009-10 5.2 2010-11 3.2 2011-12(BE) 3.4 2011-12(P) 4.3 2012-13(BE) 3.5
4.3 3.9 4.0 3.3 2.5 6.0 6.5 4.8 4.6 5.7 5.1
0.0 0.0 0.4 -0.2 -0.9 2.6 3.2 1.8 1.6 2.6 1.9
79.7 62.3 63.0 56.3 41.4 75.2 81.0 67.5 74.4 75.5 68.2
Sources : Union Budget documents and Controller General of Accounts. BE : Budget Estimates. P: Provisional Actuals (Unaudited). Notes: The ratios to GDP at current market prices (CMP) are based on the Central Statistics Office’s (CSO) National Accounts 2004-5 series.
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to the fiscal outcome are in realizing the budgeted revenues and underprovisioning of key expenditure items; both of which were exacerbated in 2011-12 and 2012-13 (April-September). 3.8 Fiscal outcome is also affected by the underlying assumption regarding the nominal GDP. Declining fiscal deficit as a ratio of GDP may be an outcome of either declining growth of fiscal deficit over time or increasing growth of GDP over time or both. In the post-FRBM period prior to 2008-9, the declining fiscal deficit to GDP ratio was mainly an outcome of a decline in the growth of the fiscal deficit (Table 3.2). In the year 2011-12 a sudden overshooting of the growth of the fiscal deficit as compared to growth in GDP over the previous year caused a higher fiscal deficit to GDP ratio. Table 3.2 : Trends in Fiscal Deficit and GDP Year
Fiscal Growth Deficit in Fiscal Deficit
GDP at Growth current in market GDP prices ` crore)(Per cent) (` ` crore)(Per cent) (`
2004-5
125794
2.0
3242209
14.2
2005-6
146435
16.4
3693369
13.9
2006-7
142573
-2.6
4294706
16.3
2007-8
126912
-11.0
4987090
16.1
2008-9
336992
165.5
5630063
12.9
2009-10
418482
24.2
6477827
15.1
2010-11
373592
-10.7
7795314
20.3
2011-12(P)
509732
36.4
8974947
15.1
2012-13(BE)
513590
0.8
10028118
11.7
Sources : Union Budget documents and Controller General of Accounts and Central Statistics Office. BE : Budget Estimates. P: Provisional Actuals (Unaudited).
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NON-DEBT RECEIPTS 3.9 At the time of the annual budget, fiscal adjustment is essentially about the assumptions regarding the growth in total non-debt receipts and total expenditure of the Central government. The Budget for 2012-13 envisaged a growth of 22.7 per cent in non-debt receipts (revenue receipts plus nondebt capital receipts) and in total expenditure of 13.1 per cent over 2011-12 (revised estimates [RE]). Revenue receipts were estimated at ` 9,35,685 crore in BE 2012-13, which comprised net tax revenue of ` 7,71,071 crore and non-tax revenue of ` 1,64,614 crore. Together with recoveries of loans of ` 11,650 crore and disinvestment receipts of ` 30,000 crore, the Budget for 2012-13 placed nondebt receipts for the year at ` 9,77,335 crore. Before evaluating the assumptions for the current fiscal, it would be instructive to analyse the outcome in 2011-12 vis-Ă -vis assumptions behind the 2011-12 (budget estimates [BE]). 3.10 The Budget for 2011-12 had estimated a yearon-year growth of 3.6 per cent in non-debt receipts comprising a growth of 18.5 per cent in gross tax revenue and (-) 43.0 per cent in non-tax revenue over 2010-11 (RE). After adjusting for onetime receipts from the auction of 3G-spectrum in 2010-11(RE), year-on-year growth in 2011-12 (BE) of non-debt receipts and non-tax revenue were placed at 19.1 per cent and 9.9 per cent respectively. The actual outcome as per the provisional data of the Controller General of Accounts indicates a growth of (-)3.3 per cent, 13.2 per cent and (-) 43.5 per cent in 2011-12 for non-debt receipts, gross tax revenue, and non-tax revenue respectively over 2010-11(RE). Adjusting for onetime receipts of
Public Finance auction of 3G-spectrum in 2010-11(RE), year-onyear growth in 2011-12 (Provisional Actuals) of non-debt receipts and non-tax revenue are placed at 11.2 per cent and 8.9 per cent respectively. 3.11 While the BE had estimated revenue receipts at ` 7,89,892 crore and total expenditure at ` 12,57,729 crore, the provisional actuals were ` 7,56,193 crore and ` 12,98,444 crore respectively, leaving a fiscal deficit of ` 5,09,732 crore as against ` 4,12,817 crore budgeted (Appendix Table 2.19). As indicated earlier, the actual fiscal outcome was affected by certain adverse macroeconomic developments in 2011-12. A somewhat longerhorizon analysis of the growth in non-debt receipts and expenditure indicates a mixed outcome. A wide gap can be observed between the non-debt receipts to GDP ratio and total expenditure to GDP ratio which essentially reflects the extent of the fiscal deficit (Table 3.3). As a proportion of GDP, total expenditure in the post crisis period is significantly
59
lower [Figure 3.2(a)]. On the other hand, non-debt receipts to GDP ratio remained volatile in the post crisis period, it has nonetheless been estimated to improve in 2012-13 (BE) as compared to the previous year. It is further to be observed that since 2008-9 the growth of total expenditure has been generally declining except for the BE of 2012-13. The higher growth of total expenditure in 2012-13 (BE) would have to be compensated by much higher growth in revenue receipts [Figure 3.2(b)]. This would in effect mean a higher tax buoyancy which was premised on a turnaround in macroeconomic environment envisaged at the time of BE 2012-13. 3.12 Tax buoyancy is a measure of the responsiveness of tax receipts with respect to GDP or National Income. A tax is buoyant when revenues increase by more than 1 per cent for a 1 per cent increase in GDP. In the post FRBM period, both direct and indirect taxes remained buoyant except in the crisis years (2008-9 and 2009-10) and
Table 3.3 : Receipts and Expenditure of the Central Government 2007-8
2008-9
2009-10 2010-11#
2011-12 (BE)
2011-12 (P)
2012-13 (BE)
(As per cent of GDP) 1. Revenue receipts (a+b) (a) Tax revenue (net of states’ share) (b) Non-tax revenue 2. Revenue expenditure of which: (a) Interest payments (b) Major subsidies (c) Defence expenditure 3. Revenue deficit (2-1) 4. Capital receipts of which: (a) Recovery of loans (b) Other receipts (mainly CPSEs disinvestment) (c) Borrowings and other liabilities $ 5. Capital expenditure 6. Non-debt receipts 7. Total expenditure [2+5=7(a)+7(b)] of which: (a) Plan expenditure (b) Non-plan expenditure 8. Fiscal deficit (7-6) 9. Primary deficit [8-2(a)]
10.9 8.8 2.1 11.9
9.6 7.9 1.7 14.1
8.8 7.0 1.8 14.1
10.1 7.3 2.8 13.4
8.8 7.4 1.4 12.2
8.4 7.0 1.4 12.7
9.3 7.7 1.6 12.8
3.4 1.3 1.1 1.1 3.4
3.4 2.2 1.3 4.5 6.1
3.3 2.1 1.4 5.2 7.0
3.0 2.1 1.2 3.2 5.2
3.0 1.5 1.1 3.4 5.2
3.0 1.6 1.1 4.3 6.0
3.2 1.8 1.1 3.5 5.5
0.1 0.8
0.1 0.0
0.1 0.4
0.2 0.3
0.2 0.4
0.2 0.2
0.1 0.3
2.5 2.4 11.7 14.3
6.0 1.6 9.7 15.7
6.5 1.7 9.4 15.8
4.8 2.0 10.6 15.4
4.6 1.8 9.4 14.0
5.7 1.8 8.8 14.5
5.1 2.0 9.7 14.9
4.1 10.2 2.5 -0.9
4.9 10.8 6.0 2.6
4.7 11.1 6.5 3.2
4.9 10.5 4.8 1.8
4.9 9.1 4.6 1.6
4.6 9.9 5.7 2.6
5.2 9.7 5.1 1.9
Sources : Union Budget documents and Controller General of Accounts. CPSEs Central Public Sector Enterprises. # Based on provisional actuals for 2010-11. $ Does not include receipts in respect of the Market Stabilization Scheme, which will remain in the cash balance of the central government and will not be used for expenditure. Notes : 1. The ratios to GDP at current market prices are based on the CSO’s National Accounts 2004-5 series. 2. The figures may not add up to the total due to rounding/approximations.
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Economic Survey 2012-13
2011-12 (Figure 3.3). During 2011-12, both direct and indirect tax revenues grew at a lower rate than what the BE envisaged as well as the 2010-11 growth rate (Table 3.4) mainly because of economic slowdown, weak market sentiment, slow investment growth, global uncertainty, and persistent high inflation. This led to a sharp fall in tax buoyancy in 2011-12. The decline has been more in corporate taxes than personal income taxes. During this period, direct tax buoyancy (ratio of direct taxes growth to nominal GDP growth) also declined and has been less than 1. This may be on account of lower profitability of corporates considering higher inflation. 3.13 The Budget for 2012-13 estimated higher tax revenues on the strength of several measures announced like widening of the base of service tax through a single negative list (of exempted categories), a new schedule of rates and slab for
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personal income tax, raising of the standard rate of excise duty as well as merit rates and the peak rate of customs duty of 10 per cent that had been left unchanged notwithstanding the pickup in import demand. The details of the trends in different components of tax revenue and non-tax revenue are discussed in the following paragraphs.
DIRECT TAXES 3.14 As is evident from Table 3.4, there has been a compositional change in gross tax revenues since 2007-8. As a proportion of GDP, direct taxes accounted for 5.5 per cent in 2011-12, well below the peak of 5.9 per cent in 2007-8. The Budget for 2012-13 envisaged a growth of 13.9 per cent in direct taxes over 2011-12 (RE). Continuing with the policy of moderation of tax rates, the Budget has further broadened the slabs for individual taxpayers. The exemption limit for individual taxpayers below
Public Finance
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Table 3.4 : Sources of Tax Revenue 2007-8
2008-9
2009-10
Direct (a)
295938
319859
367648
Personal income tax
102644
106046
Corporation tax
192911
213395
Indirect(b)
279031
Customs
104119
Excise
123611
2010-11
2011-12 (BE)
2011-12 (P)
2012-13 (BE)
438477
525151
489312
564337
122475
139069
164526
165276
189866
244725
298688
359990
323250
373227
269433
244737
344530
397250
392273
504423
99879
83324
135813
151700
149489
186694
108613
102991
137701
163550
145205
193729
(` ` crore)
Service tax Gross tax revenue #
51301
60941
58422
71016
82000
97579
124000
593147
605299
624528
793072
932440
890622
1077611
Tax revenue as a percentage of gross tax revenue Direct (a)
49.9
52.8
58.9
55.3
56.3
54.9
52.4
Personal income tax
17.3
17.5
19.6
17.5
17.6
18.6
17.6
Corporation tax
32.5
35.3
39.2
37.7
38.6
36.3
34.6
Indirect(b)
47.0
44.5
39.2
43.4
42.6
44.0
46.8
Customs
17.6
16.5
13.3
17.1
16.3
16.8
17.3
Excise
20.8
17.9
16.5
17.4
17.5
16.3
18.0
8.6
10.1
9.4
9.0
8.8
11.0
11.5
Service tax
Tax revenue as a percentage of gross domestic product Direct(a)
5.9
5.7
5.7
5.6
5.8
5.5
5.6
Personal income tax
2.1
1.9
1.9
1.8
1.8
1.8
1.9
Corporation tax
3.9
3.8
3.8
3.8
4.0
3.6
3.7
Indirect(b)
5.6
4.8
3.8
4.4
4.4
4.4
5.0
Customs
2.1
1.8
1.3
1.7
1.7
1.7
1.9
Excise
2.5
1.9
1.6
1.8
1.8
1.6
1.9
1.0
1.1
0.9
0.9
0.9
1.1
1.2
11.9
10.8
9.6
10.2
10.4
9.9
10.7
Service tax Gross tax revenue #
Sources : Union Budget documents and Controller General of Accounts. # includes taxes referred in (a) & (b) and taxes of Union Territories and ‘other’ taxes. Notes: 1. Direct taxes also includes taxes pertaining to expenditure, interest, wealth, gift, and estate duty. 2. The ratios to GDP at current market prices are based on the CSO’s National Accounts 2004-5 series.
the age of 60 years has been enhanced from ` 1,80,000 to ` 2 lakh. The income slab for 20 per cent tax rate has been broadened for all individual taxpayers irrespective of their age and will now be applicable to total income between ` 5 lakh and ` 10 lakh instead of the earlier slab of ` 5 lakh and ` 8 lakh. The tax rate of 30 per cent will now be applicable to total income exceeding ` 10 lakh. Securities transaction tax on certain transactions in specified securities has been reduced from the existing 0.125 per cent to 0.1 per cent. 3.15 The two specific measures aimed at expanding the direct tax base in the Budget for http://indiabudget.nic.in
2012-13 were the introduction of the provisions of GAAR in the Income Tax Act and extending the provisions of alternate minimum tax (AMT) to all non-company assessees. In an environment of moderate rates of tax, it is necessary that the correct tax base be subject to tax in the face of aggressive tax planning and use of opaque low tax jurisdictions for residence as well as for sourcing capital. The need for making statutory provisions for codifying the doctrine of ‘substance over form’ has been realized by introducing the chapter on GAAR. However, in view of the apprehensions raised about the Rules and the recommendations of the Shome Committee, the provisions have been deferred.
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Economic Survey 2012-13
3.16 Besides the above, in order to widen the tax base, the provisions regarding AMT have been extended to all non-company assessees and it is provided that a person other than a company that has claimed deduction under any section (other than section 80P) included in Chapter VI-A under the heading 'C – Deductions in respect of certain incomes’ or under section 10AA, shall be liable to pay AMT at the rate of 18.5 per cent. In order to bring about greater certainty and to reduce litigation in matters related to transfer pricing and international taxation, the advance pricing agreement (APA) scheme has been notified. APA is an agreement in advance between a taxpayer and the revenue department on an appropriate transfer-pricing methodology for a set of transactions over a fixed period of time in the future. APAs therefore offer
better assurance on transfer-pricing methods and are conducive for providing certainty and unanimity of approach. 3.17 The modernization of the business processes of the tax administration through extensive use of information technology is continuing, viz. along with e-filing of income tax returns, various forms, audit reports, and statements of tax deduction at source have been made compatible with electronic filing and computerized centralized processing. These measures would enable tax administration to function in a more efficient and automated environment.
INDIRECT TAXES 3.18 The Budget for 2012-13 estimated revenue from indirect taxes to grow by 26.7 per cent over
Box 3.1 : Sector-Specific Proposals in Central Excise 1.
CEMENT: The excise duty structure on cement manufactured and cleared in packaged form rationalized. The graded retail selling price (RSP) slabs for the purpose of charging of duty on cement manufactured and cleared in packaged form done away with. The duty rates on cement and cement clinkers revised as follows: Description 1. Cement manufactured and cleared in packaged form:(a) from mini cement plants (b) from other than mini cement plants 2. Cement cleared other than in packaged form. 3. Cement clinker
Revised rate of duty 6% + ` 120 per tonne 12% + ` 120 per tonne 12% 12%
Cement also notified under section 4A, that is RSP-based assessment with an abatement of 30 per cent on RSP. 2.
PRECIOUS METALS: (i) Excise duty on gold jewellery sold from export-oriented units (EOUs) into domestic tariff area (DTA) increased from 5 per cent to 10 per cent; (ii) Excise duty on refined gold increased from 1.5 per cent to 3 per cent; (iii) Excise duty on gold produced from copper smelting increased from 2 per cent to 3 per cent; (iv) Excise duty on silver produced from copper smelting reduced from 6 per cent to 4 per cent; (v) Gold coins of 99.5 per cent and above purity and silver coins of 99.9 per cent and above purity manufactured out of duty paid gold fully exempted from excise duty; (vi) Articles of gold /silver jewellery exempted from excise duty.
3.
MASS CONSUMPTION ITEMS: (i) Refills and inks used for the manufacture of writing instruments of value not exceeding ` 200 per piece fully exempted from excise duty subject to actual user condition;(ii) Exemption limit on footwear enhanced from ` 250 per pair to ` 500 per pair. Footwear above ` 500 per pair to attract excise duty of 12 per cent; (iii) Excise duty on iodine reduced from 10 per cent to 6 per cent.
4.
ENVIRONMENT-FRIENDLY GOODS: (i) Excise duty reduced from 10 per cent to 6 per cent on battery packs supplied to manufacturers of electric vehicles for use as spares and original equipment manufacturers subject to enduse condition; (ii) Excise duty reduced from 10 per cent to 6 per cent on specific parts of hybrid vehicles supplied to manufacturers of hybrid vehicles subject to end-use condition; (iii) Excise duty on LED lamps reduced to 6 per cent.
5.
PETROLEUM: The rate of cess leviable on indigenous petroleum crude oil under the Oil Industry (Development) Act 1974 increased from ` 2500 per metric tonne to ` 4500 per metric tonne.
6.
TEXTILES: For the purpose of charging excise duty on ready-made garments bearing a brand name or sold under a brand name, the level of abatement from RSP increased from 55 per cent to 70 per cent.
7.
MISCELLANEOUS: (i) Full exemption from excise duty provided to food preparations containing fruits and vegetables falling under Chapter 20, which are prepared in a hotel, restaurant, or retail outlet, whether or not such food is consumed in such hotels/restaurants/retail outlets; (ii) The composite rate applicable to automobile chassis converted into an ad valorem rate and fixed at 14 per cent for diesel driven buses, lorries, and trucks; (iii) Excise duty on parts of mobile phones, other than those cleared to a manufacturer of mobile phones, reduced from 10 per cent to 2 per cent, provided no Cenvat credit is taken; (iv) Excise duty reduced from 10 per cent to 6 per cent on matches manufactured by semi-mechanized units and processed food products of soy; (v) Full exemption from excise duty withdrawn from mega/ultra mega power projects except 113 specified projects.
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Public Finance 2011-12 (RE) on the strength of assumed economic recovery. In so far as union excise duties are concerned, the BE 2012-13 envisaged a growth of 29.1 per cent in revenue over 2011-12 (RE). An increase in the effective rate of excise duty on non-petroleum products from 10 per cent earlier to 12 per cent in BE 2012-13 and a pickup in the manufacturing sector were the bases for these assumptions. The Budget for 2012-13 also made the following other changes: raised the concessional rate of excise duty on non-petroleum products from 5 per cent to 6 per cent; increased the lower rate on non-petroleum products without Cenvat Credit from 1 per cent to 2 per cent with the exception of coal and fertilizers; enhanced the rate of excise duty from 22 per cent to 24 per cent and from '22 per cent+ ` 15,000 per vehicle’ to 27 per cent on certain categories of automobiles; increased the rates of specific excise duty on cigarettes (both filter and non-filter) of length exceeding 65mm; raised the excise duty on cigars, cheroots, and cigarillos to '12 per cent or ` 1,370 per thousand, whichever is
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higher’; increased the basic excise duty on handrolled bidis from ` 8 to ` 10 per thousand and on machine-rolled bidis from `19 to ` 21 per thousand (See Box 3.1 for sector-specific details). 3.19 In so far as revenue from customs is concerned, the Budget for 2012-13 envisaged a growth of 22.0 per cent over 2011-12 (RE). The two important general reductions in customs duties were the exemption of education cess and secondary and higher education cess from the CVD portion of customs duty so as to avoid computation of such cesses twice; the duty-free allowance under the baggage rules has been increased for adult passengers of Indian origin from ` 25,000 to ` 35,000 (returning after stay abroad of more than three days) and from ` 12,000 to ` 15,000 (returning after stay abroad of three days or less). Continuing with the practice of sectoral changes in duty rates, Budget 2012-13 announced many sector-specific measures (Box 3.2).
Box 3.2 : Sector-specific changes in Customs: 1.
AGRICULTURE/AGRO PROCESSING/PLANTATION SECTOR: (i) Basic customs duty on sugarcane planter, root or tuber crop-harvesting machine and rotary tiller and weeder and parts and components for their manufacture reduced from 7.5 per cent to 2.5 per cent; (ii) At present, project import status available for installation of mechanized handling systems and pallet racking systems in mandis or warehouses for foodgrains and sugar, with concessional rate of basic customs duty of 5 per cent. Such systems also exempt from additional duty of customs (CVD) and special additional duty of customs (SAD). The same dispensation extended to such systems installed in mandis or warehouses for horticultural produce; (iii) Project import status granted to greenhouses set up for protected cultivation of horticulture and floriculture produce with concessional basic customs duty of 5 per cent; (iv) Basic customs duty reduced from 10 per cent/7.5 per cent to 5 per cent (until March 2014) on specified coffee plantation and processing machinery; (v) Basic customs duty reduced from 10 per cent to 5 per cent (until March 2014) on coffee brewing and vending machines (commercial type). Basic customs duty also reduced to 2.5 per cent on parts required for manufacture of such coffee- brewing and -vending machines; (vi) Basic customs duty reduced on specified soluble fertilizers and liquid fertilizers, other than urea, from 7.5 per cent to 5 per cent and from 5 per cent to 2.5 per cent respectively.
2.
AUTOMOBILES: Basic customs duty on completely built units (CBUs) of large cars/ MUVs/ SUVs permitted for import without type approval (value exceeding US $ 40,000 and engine capacity exceeding 3000 cc for petrol and 2500 cc for diesel) increased from 60 per cent to 75 per cent.
3.
METALS: (i) Basic customs duty on coating material for manufacture of electrical steel reduced from 10 per cent to 5 per cent subject to actual user condition; (ii) Basic customs duty on ammonium meta-vanadate used in the manufacture of ferro-vanadium reduced from 7.5 per cent to 2.5 per cent; (iii) Nickel oxide/ hydroxide and nickel ore/ concentrate fully exempted from basic customs duty; (iv) Exemption from SAD currently available to CRGO steel restricted to prime quality of such steel; (v) Basic customs duty on flat rolled products (HR and CR) of non-alloy steel increased from 5 per cent to 7.5 per cent.
4.
PRECIOUS METALS: (i) Basic customs duty on standard gold bars and platinum increased from 2 per cent to 4 per cent; (ii) Basic customs duty on non-standard gold increased from 5 per cent to 10 per cent; (iii) Additional customs duty on gold ore/concentrate and bars for refining increased from 1 per cent to 2 per cent; (iv) Basic customs duty of 2 per cent imposed on cut and polished coloured gemstones.
5.
CAPITAL GOODS/INFRASTRUCTURE: (i) Basic customs duty on capital goods, plant, and equipment imported for setting up or substantial expansion of iron ore pellet plants or iron ore beneficiation plants reduced from 7.5 per cent to 2.5 per cent; (ii) Full exemption from basic customs duty until March 2015 provided for initial setting up and substantial expansion of fertilizer projects; (iii) Steam coal fully exempted from basic customs duty. CVD reduced from 5 per cent to 1 per cent on such coal (valid up to 31.3.2014); (iv) Natural gas/liquefied natural gas imported for power generation by a power generation company fully exempted from basic customs duty; (v) Full exemption from (Contd...)
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Economic Survey 2012-13
Box 3.2 : Sector-specific changes in Customs: (Contd..) basic customs duty provided to uranium concentrate, sintered natural uranium dioxide, sintered uranium dioxide pellets for generation of nuclear power; (vi) Full exemption from basic customs duty, CVD and SAD extended to equipment imported for road construction projects awarded by metropolitan development authorities; (vii) Full exemption from basic customs duty and CVD presently available to tunnel boring machines and parts for hydel and road projects extended to all infrastructure projects without end-use condition; (viii) Full exemption from basic customs duty and CVD extended to tunnel excavation and specified lining equipment also; (ix) Full exemption from basic customs duty extended to coalmining projects; (x) Basic customs duty for machinery and instruments for surveying and prospecting reduced and unified at 2.5 per cent; (xi) Basic customs duty on railway safety (train protection and warning system) equipment and railway track-laying machines reduced from 10 per cent to 7.5 per cent. 6.
AIRCRAFT AND SHIPS: (i) Full exemption from basic customs duty and CVD provided to new and retreaded aircraft tyres; (ii) Full exemption from basic customs duty and CVD extended to parts of aircraft and testing equipment for maintenance and repair of aircraft imported by maintenance, repair, and overhaul (MRO) units; (iii) Customs duties on foreign-going vessels on conversion for coastal trade now to be charged on proportionate basis depending on the period for which they operate as coastal vessels in India; (iv) Full exemption from SAD extended to import of dredgers.
7.
ENVIRONMENT PROTECTION: (i) Equipment for setting up of solar projects fully exempted from SAD; (ii) Concessional rate of 5 per cent basic customs duty extended to raw materials for the manufacture of intermediates, parts, and sub-parts of blades for rotors for wind energy generators; (iii) Full exemption from basic customs duty extended to tri band phosphor for use in the manufacture of compact fluorescent lamps; (iv) Full exemption from basic customs duty and SAD along with 6 per cent CVD available to specified parts for the manufacture of hybrid vehicles extended to some additional parts; (v) The customs duty regime of 6 per cent CVD and nil SAD extended to lithium ion batteries for the manufacture of battery packs for supply to electric or hybrid vehicle manufacturers.
8.
HEALTH/NUTRITION: (i) Basic customs duty reduced from 5 per cent to 2.5 per cent on iodine; (ii) Basic customs duty reduced on isolated soya protein and soya protein concentrate from 15 per cent and 30 per cent respectively to 10 per cent; (iii) Basic customs duty reduced from 10 per cent to 5 per cent on probiotics; (iv) Customs duty on six specified lifesaving drugs/vaccines and their bulk drugs reduced from 10 per cent to 5 per cent with nil CVD; (v) A concessional import duty regime of 2.5 per cent basic customs duty with 6 per cent CVD/excise duty and nil SAD prescribed for specified raw materials for the manufacture of syringes, needles, catheters, cannulas subject to actual user condition. (vi) A concessional import duty regime of 2.5 per cent basic customs duty with 6 per cent CVD and nil SAD extended to parts and components for the manufacture of blood pressure monitors and blood glucose monitoring systems (glucometers); (vii) Full exemption from basic customs duty and CVD extended to steel tube and wire, cobalt chromium tube, Hayness Alloy-25, and polypropylene mesh for the manufacture of coronary stents/coronary stent systems and artificial heart valves subject to actual user condition.
9.
TEXTILES: (i) Basic customs duty on new shuttle-less looms, along with parts and components for their manufacture reduced from 5 per cent to nil; (ii) Basic customs duty on new automatic silk-reeling and -processing machinery and raw silk testing equipment reduced from 5 per cent to nil; (iii) The concessional rate of basic customs duty of 5 per cent restricted only to new textiles machinery; (iv) Basic customs duty on wool waste and wool tops reduced from 10 per cent and 15 per cent respectively to 5 per cent; (v) Basic customs duty on titanium dioxide reduced from 10 per cent to 7.5 per cent; (vi) Full exemption from basic customs duty extended to Aramid yarn and fabric when used in the manufacture of bulletproof helmets for supply to defence and police.
10. ELECTRONICS/ HARDWARE: (i) Full exemption from basic customs duty provided to LCD and LED TV panels of 19 inches and above; (ii) LEDs required for the manufacture of LED lamps exempted from SAD; (iii) The scope of full exemption from basic customs duty, CVD, and SAD extended to parts of memory cards until March 2013; (iv) Full exemption from basic customs duty currently available to copper, brass, phosphor bronze strips, and similar items imported for the manufacture of connectors withdrawn; (v) Full exemption from basic customs duty currently available to poly-laminated aluminum tape and poly-laminated steel tape if imported for the manufacture of cables and conductors for telecom use withdrawn. 11. EXPORT PROMOTION: (i) Basic customs duty reduced from 10 per cent to 5 per cent on marine seawater pumps with fibre impellers and automatic fish/prawn feeders for aquaculture; (ii) Basic customs duty on artemia reduced from 30 per cent to 5 per cent. 12. PAPER: Waste paper fully exempted from basic customs duty. 13. SAD: Brass scrap and timber logs fully exempted from SAD. 14. MISCELLANEOUS: (i) A basic customs duty of 10 per cent imposed on digital still cameras of certain specifications; (ii) Basic customs duty on boric acid increased from 5 per cent to 7.5 per cent; (iii) Basic customs duty on boiler quality tubes and pipes for the manufacture of boilers reduced from 10 per cent to 7.5 per cent subject to end-use condition; (iv) A concessional customs duty of 5 per cent basic customs duty + 6 per cent CVD+ nil SAD prescribed for imports of hydrophilic non-woven, hydrophobic non-woven, and super absorbent polymer for manufacture of adult diapers subject to actual user condition; (v) Full exemption from customs duty withdrawn from mega/ultra mega power projects except 113 specified projects.
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Public Finance
COLLECTION RATES
SERVICE TAX
indicated that service tax has been emerging as an important source of revenue. Budget 2012-13 envisaged a growth of 30.5 per cent in the revenue from service tax vis-à -vis 2011-12 (RE). This was based on the increase in the rate from the existing 10 per cent to 12 per cent and a change in the tax base (Table 3.6). As against the usual practice of expanding the list of services, the Budget for 2012-13 introduced a 'negative list’ approach effective 1 July 2012. For operationalizing the negative list approach, a number of changes have been made in Chapter V of the Finance Act 1994 (when service tax was initially introduced). Service of transportation of passengers with or without accompanied belongings by railways in first class or an air conditioned coach and services by way of transportation of goods by railways has been subjected to service tax effective October 1, 2012. Following the revision in the rate of service tax, changes have also been made in specific and compounding rates of tax for services in relation to purchase and sale of foreign currency including money changing; promotion, marketing, organizing, or in any manner assisting in organizing lottery; and reversal of Cenvat credit under rule 6(3)(i).
3.21 In 2011-12, growth in service tax revenue was 37.4 per cent amounting to ` 97,579 crore, which
3.22 A number of amendments in the Finance Act 1994 and changes in the rules governing the levy of
3.20 Given the large number of exemptions to the application of statutory rate of customs, the increase in value of imports does not necessarily imply similar magnitude in customs revenue. Collection rates are an indicator of overall incidence of customs tariffs including countervailing and special additional duties of imports. These are computed as the ratio of revenue collected from these duties to the aggregate value of imports in a year (or period) and thus represent trade-weighted tariffs. The trends in the rates for important commodity groups as well as for all commodities taken together over the years are shown in Table 3.5. A major reason for the fall in rates has been the lower levels of duties on many items including on petroleum, oil, and lubricants (POL), which has significant import value and of course the impact of the various exemptions. At overall level, the effective rate of taxes at around 6 per cent in 2011-12 as against the level of simple average tariff rates of basic customs duties and the CVD indicates the impact of exemptions.
Table 3.5 : Collection Rates for Selected Import Groups* (in per cent) Sl. Commodity No. Groups I II
POL Non-POL of which: 1. Food products 2. Chemicals 3. Man-made fibres 4. Paper & newsprint 5. Natural fibres 6. Metals 7. Capital goods 8. Others
III
Total
2006-7
2007-8
2008-9
2009-10
2010-11
2011-12
5 12
6 13
3 9
2 8
6 9
3 7
23 22 28 10 12 24 14 6
19 22 30 10 13 24 16 6
4 16 17 8 6 17 13 4
3 14 22 8 4 17 11 4
3 17 30 8 5 22 13 4
3 14 22 7 3 20 12 4
10
10
7
6
8
6
Source : Department of Revenue, Ministry of Finance * Collection rate is defined as the ratio of revenue collection (basic customs duty + countervailing duty) to value of imports unadjusted for exemptions, expressed in percentage. Notes : S.No. 1 includes cereals, pulses, tea, milk and cream, fruits, vegetables, animal fats, and sugar. S.No. 2 includes chemical elements, compounds, pharmaceuticals, dyeing and colouring materials, plastic, and rubber. S.No. 4 includes pulp and waste paper, newsprint, paperboards and manufactures, and printed books. S.No. 5 includes raw wool and silk. S.No. 6 includes iron and steel and non-ferrous metals. S.No. 7 includes non-electronic machinery and project imports, electrical machinery.
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Economic Survey 2012-13
Table 3.6 : Service Tax: A Growing Revenue Source Year
No. of services
Tax rate in per cent
Revenue (` crore)
Growth over previous year in per cent
2004-5
75
10
14200
80.0
2005-6
78
10
23055
62.4
2006-7
92
12
37598
63.1
2007-8
98
12
51301
36.4
2008-9
106
12*
60941
18.8
2009-10
109
10
58422
-4.1
2010-11
117
10
71016
21.6
2011-12(P)
119
10
97579
37.4
Negative list#
12
80927
33.0
2012-13 (April- December)@
Source : Receipts Budget and Controller General of Accounts. * Reduced to 10% w.e.f. 24 February 2009. @ Growth for 2012-13 (April-December) is over corresponding period previous year. # Shifted to negative list approach w.e.f 1 July 2012.
service tax have been made. These include: the Place of Provision of Service Rules 2012; new reverse charge mechanism; Cenvat Credit Rules 2004; Service Tax Rules 1994; and Point of Taxation Rules 2011 (Box 3.3).
TAX EXPENDITURE 3.23 There is significant divergence between the statutory rates of taxes as notified in the various schedules and the actual or effective rate of taxation, which is essentially a simple ratio of tax revenue collected to the tax base. This arises on account of the exemptions to the tax rate specified in the schedule. As indicated earlier in the section on collection rates, the magnitude of revenue foregone (tax expenditure) is indeed high. In the Receipts Budget for 2012-13, tax foregone on account of exemptions under corporate income tax for 2010-11 and 2011-12 was estimated at ` 57,912 crore and ` 51,292 crore respectively net of MAT. In the case of corporate taxpayers, deduction on account of accelerated depreciation, deduction for export profits of export-oriented units located in special economic zones (SEZs) and profits of businesses in the power and telecom sectors were some of the major incentives. The absolute amount of deductions has decreased as a result of phasing out of profit-linked deductions. Further, the levy of http://indiabudget.nic.in
MAT has led to a higher effective rate of taxation in the case of corporates from 20.55 per cent for 2006-7 to 24.1 per cent for financial year 2010-11. Tax forgone on account of exemptions under personal income tax for individual taxpayers was estimated at ` 30,653 crore and ` 35,698 crore respectively in 2010-11 and 2011-12. The bulk of the revenue foregone under personal income tax was on account of the exemptions given for certain investments and payments under section 80 C of the Income Tax Act. 3.24 In so far as indirect taxes are concerned, revenue forgone is defined as the difference between duty that would have been payable but for the issue of exemption notification and actual duty paid in terms of the relevant notification. The revenue forgone for financial year 2011-12 in respect of excise duties is estimated at ` 2,12,167 crore including ` 12,880 crore on account of area-based exemptions. Duty forgone for the year 2010-11 on account of all the exemption notifications on customs was estimated at ` 2,30,131 crore as against the duty forgone of ` 2,33,950 crore in 2009-10. This is projected to rise to ` 2,76,093 crore in 2011-12. All these estimates are based on certain assumptions and have to be interpreted with caution and the actual outcome in dynamic markets with different elasticities for different products may turn out to be very different.
Public Finance
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Box 3.3 : Changes in Service Tax 1.
PLACE OF PROVISION OF SERVICES RULES 2012: An important component of the changes is the introduction of the Place of Provision of Services Rules 2012. The new rules have replaced the existing Export of Services Rules 2005 and the Taxation of Services (Provided from Outside India and Received in India)Rules 2006. Rule 5 of the export rules has been incorporated in Service Tax Rules.
2.
AMENDMENTS IN THE FINANCE ACT 1994: Chapter V of the Finance Act 1994 has been amended to: (i) Prescribe that the value of taxable service (particularly in the case of import and export of taxable services)and the rate of tax shall be determined in terms of Point of Taxation Rules 2011; (ii) Introduce provisions relating to special audit in the service tax law on the lines of the Central Excise Act 1944. Now special audit can be ordered under specified circumstances. Consequently, section 14AA has been omitted from section 83; (iii) Increase the one-year time limit for issuance of notice for specified category of offences prescribed under section 73(1)of the Finance Act 1994 to 18 months. A new subsection (1A)has been inserted in section 73 of the Finance Act 1994 to prescribe that follow-on notices issued on the same grounds need not repeat the grounds but only state the amount of service tax chargeable for the subsequent period. Statement of tax due for the subsequent period, served on the assessees with reference to the earlier demand notice, will be deemed as a notice under section 73(1)of the Finance Act 1994; (iv) Make Settlement Commission provisions applicable to service tax in line with the similar provisions contained in the Central Excise Act 1944; (v) Make the revision mechanism prescribed in section 35EE of the Central Excise Act 1944 applicable to service tax to the extent possible; (vi) Amend sections 85 and 86 on the lines of sections 35 and 35E of the Central Excise Act so as to harmonize the limitation for filing assessee's appeal before Commissioner (Appeals)and revenue appeal before the Tribunal; (vii) Obtain powers (a) to provide for the manner of compounding and to specify the amount of compounding of offences along the lines of Central Excise (Compounding of Offences)Rules 2005; (b) to provide for rules for settlement of cases along the lines of Central Excise.
3.
NEW REVERSE CHARGE MECHANISM: (i) Section 68(2) of the Finance Act,1994 has been amended to put the onus of payment of service tax on reverse charge basis partly on service provider and partly on service receiver. The scheme has been made applicable on three specific services, i.e. hiring of means of transport; construction; and manpower supply and security services; (ii) Consequent to the above change, suitable amendment has also been made in the concept of 'person liable to pay' provided in Rule 2(1)(d) of Service Tax Rules 1994.
4.
RENTING OF IMMOVABLE PROPERTY SERVICE: Constitutional validity of the levy of service tax on renting of immovable property had been the subject matter of litigation leading to pronouncement of court judgments favourable to revenue, including those of Hon'ble Delhi High Court and Hon'ble Supreme Court. Taking an overall view, the government has decided to waive the penalty for those taxpayers who pay the service tax due on the renting of immovable property service (as on 6.3.2012), in full along with interest. For this purpose, a new section 80A has been inserted in the Finance Act 1994. This scheme of penalty waiver was open only for a period of six months from the date of enactment of the Finance Bill 2012.
5.
AMENDMENTS IN RULES: (i) Cenvat Credit Rules 2004 have been amended as follows: (a) Existing rule 5 replaced with a new rule to simplify the procedure for refund of unutilized credit on account of exports; (b) Credit allowed on motor vehicles (except those under heading nos 8702, 8703, 8704, 8711 and their chassis). The credit of tax paid on the supply of such vehicles on rent, insurance, and repair is also allowed; (c) Credit of insurance and service station service is allowed to insurance companies in respect of motor vehicles insured and re-insured by them; and manufacturers in respect of motor vehicles manufactured by them; (d) Rules 4(1)and 4(2)amended to allow a service provider to take credit of inputs or capital goods whenever the goods are delivered to him, subject to specified conditions. (e) Rule 7 for input service distributors amended to provide that credit of service tax attributable to service used wholly in a unit should be distributed only to that unit and that the credit of service tax attributable to service used in more than one unit should be distributed prorata on the basis of the turnover of the concerned unit to the sum total of the turnover of all the units to which the service relates. (f) Rule 9(1)(e)amended to allow availment of credit on the tax payment challan in case of payment of service tax by the service receiver on reverse charge basis. (ii) Service Tax Rules, 1994 has been amended as follows: (a) The time period provided in rule 4A for issuance of invoice increased to 30 days. For banks and financial institutions providing banking and other financial services, the period is 45 days; (b) Rule 6(4A)amended to allow unlimited amount of permissible adjustments. (c) In case of export and individuals and firms rendering eight specified services, the point of taxation shifted from the Point of Taxation Rules to the Service Tax Rules. (d) In case of exporters, the period extended by the Reserve Bank of India (RBI)on specific requests included in the period for which the tax liability is allowed to be deferred. (e) The option of deferred payment allowed for all service providers rather than for specific services. The facility is available only to individuals and partnership firms (including limited liability partnership)up to a turnover of taxable services of ` 50 lakh subject to the condition that their turnover of taxable services in previous year was below ` 50 lakh. For computing the above limits, the turnover of the whole entity is required to be summed up and not any single registration. (iii) Point of Taxation Rules 2011 have been amended to : (a) Change the definition of continuous supply of service to capture the entire dimension of the concept, viz. the recurrent nature of services and the obligation for payment periodically or from time to time; (b) Omit rule 6 in respect of continuous supply of service and merge it with rule 3. Rules 4 and 5, which deal with situations covering change in effective rate of tax and taxation of new services, are now applicable to continuous supply of services also; (c) Define the date of payment; (d) Give an option to determine the point of taxation in respect of advances up to ` 1000 received in excess of the amount indicated in the invoice, on the basis of invoice or completion of service rather than payment; and (e) Incorporate a new residual rule to ascertain point of taxation in cases where the same could not be ascertained by the rules prescribed.
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Economic Survey 2012-13
Nevertheless, there is merit in limiting the exemptions or their grandfathering on a case-by-case basis so as to realize fuller tax potential through a wider tax base.
NON-TAX
REVENUE
3.25 Non-tax revenues grew at a compound annual rate of 7.6 per cent in the 10 years ending 2009-10. The spurt in 2010-11 owed to higher-than-budgeted realization from the proceeds of auction of telecom 3G/broadband wireless access spectrum. As against the estimated revenue of ` 1,25,435 crore in 2011-12 (BE), the realization fell marginally short at ` 1,24,307 crore notwithstanding the fact that the auctions of telecom spectrum and phase III FM Radio which were to bring in ` 14,600 crore could not take place. Budget 2012-13 estimated a growth of 32.0 per cent over 2011-12 (RE) in non-tax revenue mainly on account of estimated receipts of ` 40,000 crore from the telecom spectrum auction. As the 2G telecom spectrum auction elicited lukewarm response on account of the high reserve price in the current year, the government has revised the reserve price downwards. As such, the proceeds from this component are as yet an important risk to the actual fiscal outcome for 2012-13. The other main component is dividends and profits, which have also in the past exhibited sluggish growth.
NON-DEBT
CAPITAL RECEIPTS
3.26 Recoveries of loans and disinvestment are the two key receipts of the non-debt capital variety. As against ` 16,897 crore in 2011-12 (provisional actuals), Budget 2012-13 has placed recoveries of loans at ` 11,650 crore this year. The 12th Finance Commission’s recommendation against loan intermediation from the centre to states coupled with the fact that such recoveries of loan have become a minor source in the receipts side has resulted in disinvestment assuming greater importance in comparison. As against ` 40,000 crore budgeted under disinvestment in 2011-12, actual receipts were ` 15,622 crore on account of the subdued financial market conditions. The Budget for 2012-13 has estimated that ` 30,000 crore would accrue in 201213. In April-December 2012, receipts under this head were ` 8,178 crore. The government has taken several steps to expedite the process of disinvestment. The Cabinet Committee on Economic http://indiabudget.nic.in
Affairs has approved disinvestment in the following:— (a) Disinvestment of 9.33 per cent paid up equity of Minerals and Metals Trading Corporation (MMTC) Ltd out of the Government of India’s holding of 99.33 per cent through an offer for sale of shares through stock exchanges, as per the Securities and Exchange Board of India (SEBI) Rules and Regulations. (b) Disinvestment of 10 per cent paid up equity of Oil India Ltd. (OIL) out of the Government of India’s holding of 78.43 per cent through an offer for sale of shares through stock exchanges as per SEBI Rules and Regulations. (c) Disinvestment of 12.15 per cent paid up equity in National Aluminium Company Limited. (d) Disinvestment of 9.59 per cent equity in Hindustan Copper Limited. (e) Disinvestment of 9.50 per cent paid up equity capital in the National Thermal Power Corporation (NTPC) Ltd out of the Government of India’s shareholding of 84.50 per cent. The Cabinet Committee on Economic Affairs has approved disinvestment of 9.50 per cent equity of NTPC Ltd, out of its holding of 84.50 per cent through an offer for sale of shares through stock exchanges as per SEBI Rules and Regulations. (f) Exchange-traded fund (ETF) for the stocks of the listed central public-sector enterprises (CPSEs) is also being proposed.
ACTUAL 2012-13
REVENUE OUTCOME IN VIS-À-VIS BUDGET ESTIMATES
3.27 Against the estimated growth in non-debt receipts discussed in the previous section in terms of various taxes, non-tax revenue, and disinvestment receipts, the actual outcome in the first nine months of the current fiscal indicates the challenge in marksmanship for this year (Table 3.7). Gross tax revenue in April-December 2012 has grown yearon-year by 15 per cent to reach ` 6,81,345 crore. While this level of growth is much higher than that of 12.2 per cent in April-December 2011, it falls significantly short of the growth envisaged by BE 2012-13. As a proportion of BE, gross tax revenue
Public Finance in April-December 2012 was 63.2 per cent, lower than the last five-years’ average of 69.0 per cent. This level of growth in April-December 2012 comprises a growth of 17.4 per cent in union excise duties; 6 per cent in customs; 22.5 per cent in personal income tax; 33 per cent in service tax; and 10.6 per cent in corporate income tax. In terms of the implied year-on-year growth envisaged by BE 2012-13 over provisional actuals of 2011-12, there is slippage in the first nine months of the current fiscal in corporate income tax by 4.9 percentage points, customs by 18.9 percentage points, and central excise by 16 percentage points. There is overperformance in service tax collection by 5.9 percentage points and personal income tax by 7.6 percentage points. In terms of overall gross tax revenue the slippage is 6 percentage points in April-December 2012. Based
69
on the observed collection in the last quarter of the previous year, the slippage in tax revenue collection could be lowered with some additional efforts. 3.28 Apart from these, non-tax revenue in April-December 2012 is placed at ` 86,380 crore, which is 52.5 per cent of BE, well below the last five years’ average. This outcome is because of the lower realization from auction of 2G spectrum thus far. In non-debt capital receipts, there is significant shortfall as of April-December 2012 on account of disinvestment receipts, as only ` 8,178 crore of the budgeted amount of ` 30,000 crore has been realized. Thus the overall outcome in terms of nondebt receipts was ` 5,86,424 crore in April-December 2012, which is 60.0 per cent of the BE, indicating the stiff challenge in the fourth quarter of the current fiscal for better marksmanship.
Table 3.7 : Central Government Finances Budget Estimates 2012-13
2011-12
2012-13
(2)
(3)
(4)
(5)
(6)
935685 1077612 771071 164614 555241 11650 30000 513590 1490925 969900 865596
(` ` crore) 498491 592348 420414 78077 397870 14115 2743 381012 896361 619457 550692
570536 681345 484156 86380 420587 7710 8178 404699 991123 695233 625598
61.0 63.2 62.8 52.5 75.7 66.2 27.3 78.8 66.5 71.7 72.3
14.5 15.0 15.2 10.6 5.7 -45.4 198.1 6.2 10.6 12.2 13.6
319759 179554 63183 104304 521025 420513 100512 1490925 1286109
179429 104181 40454 68765 276904 233903 43001 896361 784595
201959 166824 44839 69635 295890 242975 52915 991123 868573
63.2 92.9 71.0 66.8 56.8 57.8 52.6 66.5 67.5
12.6 60.1 10.8 1.3 6.9 3.9 23.1 10.6 10.7
164672 204816 350424 185752 513590 193831
84149 111766 286104 201955 381012 201583
74283 122550 298037 223754 404699 202740
45.1 59.8 85.1 120.5 78.8 104.6
-11.7 9.6 4.2 10.8 6.2 0.6
(1) 1.
2.
3. 4.
5.
6.
7. 8. 9. 10.
Revenue receipts [(ii)+(iii)] (i) Gross tax revenue (ii) Tax (net to Centre) (iii) Non-tax revenue Capital receipts (i) Recovery of loans (ii) Other receipts (iii) Borrowings and other Liabilities Total receipts (1+2) Non-Plan expenditure [(i)+(ii)] (i) Revenue account of which: Interest payments Major subsidies Pensions (ii) Capital account Plan expenditure (i)+(ii) (i) Revenue account (ii) Capital account Total expenditure [(4)+(5)=(i)+(ii)] (i) Revenue expenditure of which: Grants for creation of capital assets (ii) Capital expenditure Revenue deficit Effective revenue deficit Fiscal deficit Primary deficit
April-December
Source : Controller General of Accounts, Ministry of Finance.
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Col.(4) as Per cent % of (2) change 2012-13 over 2011-12 (BE) Col.(4) over (3)
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Economic Survey 2012-13
EXPENDITURE
TRENDS
3.29 Given the large unmet minimum needs of development, and factoring in the resource availability, the annual budgets estimate the expenditure to be incurred for the year with due consideration to the level of fiscal deficit that is required under the FRBM mandate. Rapid reduction in expenditure as part of fiscal consolidation is constrained by the level of committed expenditure on interest payments, defence, civil service pay and pensions, etc., which appropriate large part of the revenue receipts on the one hand, and the need to step up development expenditure that is so critical for raising the level of welfare of the masses on the other. Thus the annual budget has to maintain a delicate balance between the need to reduce the expenditure that is perceived as non-developmental, given the structural rigidities in the key expenditure components and the needs for raising the levels of development expenditure for inclusive growth. It is in this context successive budgets have focused on reprioritization of expenditure. 3.30 In the post-FRBM period prior to the global crisis, total expenditure as a proportion of GDP was brought down from 15.4 per cent in 2004-5 to 13.6 per cent in 2006-7. Following the global crisis and the fiscal stimulus that followed, this proportion rose in excess of 15.7 per cent in 2008-9 and 15.8 per cent in 2009-10. Notwithstanding the significant fiscal consolidation achieved in 2010-11 when the stimulus measures were partially rolled back, total expenditure as a proportion of GDP was placed at 15.4 per cent, which was possible due to the oneoff nature of surge in non-tax revenues from 3G/ BWA telecom spectrum auction/proceeds as well as high levels of nominal GDP. Going forward, fiscal marksmanship in expenditure will depend on the emerging trends in key components that are discussed in the following paragraphs.
SUBSIDIES 3.31 As indicated earlier, while the Budget for 2011-12 had estimated total expenditure to be contained at 14.0 per cent of GDP, there was an overshooting on account of the high global oil prices and the insufficient pass through to domestic oil and fertilizer prices. The overshooting of expenditure on subsidies was also because of the accounting changes which placed all subsidies 'above the line’. http://indiabudget.nic.in
The Budget for 2012-13 estimated growth in total expenditure at 13.1 per cent over 2011-12 (RE) and sought to restrict expenditure on subsidies to 2 per cent of GDP. As against a provision of ` 23,640 crore in 2011-12 for oil subsidies, the Budget for 2012-13 provisioned an amount of ` 43,580 crore assuming a certain level of global crude oil price. It must be noted that oil subsidies are paid to the oil marketing companies (OMC) on a calendar-year basis because only after quarterly results are declared is the subsidy released. 3.32 In the event, the Indian basket crude oil was $107.52 per bbl (April-December) in 2012 and even with the pass through effected in the course of the year, under-recoveries of OMCs surged and were estimated at ` 1,24,854 crore during April-December 2012-13. As the bulk of the under-recoveries is accounted for by two subsidized products, viz. diesel and LPG, the government raised diesel prices by ` 5 per litre and capped the subsidized cylinders at six per connection per year in September 2012. With continued rise in prices, on January 17, 2013 the government further permitted OMCs to raise diesel prices in small measures periodically. However, in order to protect household budgets, it simultaneously raised the annual LPG cap from six to nine cylinders per connection. 3.33 The high level of global crude oil prices also has a significant bearing on the level of fertilizer subsidies because it is not only a key input as feedstock, but also because there is inadequate pass through in urea (the major domestic fertilizer) prices. Subsidy on fertilizers had increased substantially from ` 32,490 crore in 2007-8 to reach ` 67,199 crore in 2011-12 (RE). It is budgeted at ` 60,974 crore in 2012-13. The government has been calibrating pricing policies to address the issue of burgeoning fertilizer subsidies. One of the important decisions taken was to fix per tonne subsidy on key non-nitrogenous fertilizers, thereby limiting the increase in subsidy outgo to the extent of increase in consumption. 3.34 Another major subsidy outgo in recent years, growing at an annual average rate of 25.4 per cent in the last five years ending 2011-12, is on account of food. While the targeted public distribution system (TPDS) accounts for the bulk of the food subsidy outgo, there are other welfare schemes under which food subsidy is provided. A part of the subsidy outgo
Public Finance also owes to the carrying cost of the buffer stock, which has mounted in recent years. In terms of the merits of subsidization, priority needs to be accorded to food subsidy in view of the under-consumption of basic food by the poor and the extent of malnutrition in the country. The government has sought to correct this through the National Food Security Act (see Chapter 8), though concerns have been expressed that this will lead to a higher subsidy outgo. However, as indicated earlier, it is a part of the challenge of prioritization to provide for this basic minimum need even as other items of expenditure are minimized. Further, there is need for better targeting of subsidies and for reducing leakages involved in their delivery. Direct benefit transfer (DBT) (Box 3.4) is one such initiative.
INTEREST
PAYMENTS
3.35 The cumulative impact of the level of deficit and debt is reflected in the interest payments outgo. As a proportion of GDP, interest payments fell in the post FRBM period and have continued to be low at around 3.1 per cent in recent years notwithstanding the rise in fiscal deficit. A part of this owed to lower growth in interest payments visà-vis nominal GDP. As against an average annual growth of 12.7 per cent in interest payments in the last five years ending 2011-12, annual average nominal GDP growth was 15.9 per cent. It would be instructive to note that the base for interest payments is the cumulative debt in the previous year plus the incremental assumption of debt in the current year. The average cost of borrowing thus measured is placed at 7.9 per cent in 2011-12 (RE) and was budgeted to remain at the same level in 2012-13 (Table 3.8)
71
Table 3.8 : Interest on Outstanding Internal Liabilities of Central Government Outstanding Internal Liabilities (end-March)
Interest on Internal Liabilities
( ` crore)
Average Cost of Borrowings (per cent per annum)
2004-5
1603785
105176
2005-6
1752403
111476
7.2 7.0
2006-7
1967870
128299
7.3
2007-8
2247104
149801
7.6
2008-9*
2565991
170388
7.6
2009-10
2874683
192567
7.5
2010-11
3212521
212707
7.4
2011-12(RE)
3738151
253995
7.9
2012-13(BE)
4284660
296940
7.9
Source: Union Budget documents. Notes: * Excludes ` 563 crore towards premium on account of domestic debt-buyback scheme and prepayment of external debt. 1. Average cost of borrowing is the percentage of interest payment in year ‘ t’ to outstanding liabilities in year ‘t-1’. 2. Outstanding internal liabilities exclude National Small Savings Funds (NSSF) loans to states,with no interest liability on the part of the centre. 3. The figures for interest payments reported in the earlier issues may differ as these figures are net of interest payments on NSSF paid by the government since 19992000, i.e. the constitution of the NSSF.
PAY
ALLOWANCES AND PENSION
3.36 Pay and allowances constituted 0.9 per cent of GDP in 2007-8, rising to 1.4 per cent of GDP in 2009-10 on account of the implementation of the
Box 3.4 : Direct Benefit Transfer (DBT) The DBT plan was introduced on 1 January 2013 with seven schemes in 20 districts. India has embarked on a DBT scheme in selected districts wherein it has been envisaged that benefits such as scholarships, pensions, and MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) wages will be directly credited to the bank or post office accounts of identified beneficiaries. The DBT scheme will not substitute entirely for delivery of public services for now. It will replace neither food and kerosene subsidies under the TPDS nor fertilizer subsidies. The DBT is designed to improve targeting, reduce corruption, eliminate waste, control expenditure, and facilitate reforms. Electronic transfer of benefits is a simple design change and transfers that are already taking place through paper and cash mode will now be done through electronic transfers. This has been enabled by rapid roll out of Aadhar (Unique Identity) now covering 200 million people and rapidly growing to cover 600 million (nearly half of our population), with the National Population Register covering the other half of the populace. The DBT in tandem with such unique identification will ensure that the benefits reach the target groups faster and minimize inclusion and exclusion errors as well as corruption that are associated with manual processes.
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Economic Survey 2012-13
award of the Sixth Central Pay Commission. At 1.1 per cent of GDP in 2011-12 (BE), there has been some moderation. Similarly, pension constituted 0.5 per cent of GDP in 2007-8 and rose to 0.9 per cent in 2009-10; it is placed at 0.6 per cent in 2011-12. A longer time trend analysis reveals that growth in pensions was very modest prior to 2004-5 and subsequently picked up due to the impact of the contributory scheme introduced for fresh entrants to government service in addition to the outgo under the earlier pension scheme with undefined contribution. In tandem with pay and allowances, pensions also grew sharply in 2008-9 and 2009-10, reflecting the impact of the Sixth Pay Commission.
CENTRAL PLAN OUTLAY 3.37 Plan outlay comprises gross budget support (GBS) for Plan (central Plan plus central assistance to states/ union territories [UTs]) and internal and extra budgetary resources of the central publicsector enterprises (CPSEs). The Twelfth FiveYear Plan envisages GBS of 5.25 per cent of GDP. The Budget for 2012-13 placed Central Plan outlay at ` 6,51,509 crore as against ` 5,58,172 crore in 201112 (RE). GBS for Plan is placed at ` 3,91,027 crore in BE 2012-13. 3.38 Broad sector-wise, the following are the allocations as a proportion of the total outlay: energy (23.8 per cent); social services (27.5 per cent); transport (19.2 per cent); communication (2.4 per cent); rural development (7.8 per cent); agriculture and allied activities (2.7 per cent); and irrigation and flood control (0.2 per cent). Central assistance to state and UT plans is placed at ` 1,29,998 crore in BE 2012-13. Reprioritization of expenditure from nonPlan to Plan would be critical in meeting the proposed Twelfth Plan outlay.
SUPPLEMENTARY DEMANDS GRANTS
FOR
3.39 Given the constitutional provision that no expenditure can be incurred without Parliamentary sanction, additionalities of expenditure over BE have to be made through supplementary demands for grants. Supplementary demands for grants arise on account of two factors, viz. fresh proposals that were not envisaged at the time of the BE and the additional expenditure arising out of underprovisioning in the BE under various heads. A part of the additionalities are met through re-appropriations from one budget http://indiabudget.nic.in
head to another, which implies no net cash outgo, and through additional demands entailing cash outgo. The extent of the latter has implications for overall fiscal marksmanship. 3.40 In recent years, underprovisioning of petroleum and fertilizer subsidies has been an important reason for supplementary demands for grants with a cash outgo. In 2011-12, out of the three supplementary demands for grants with cash outgo that were presented, about 60.7 per cent was on account of petroleum and fertilizer subsidies. In 2012-13, only one supplementary demand for grants has been presented. Of the demands involving net cash outgo of ` 30,804.13 crore, ` 28,500 crore was the outgo on account of compensation for the under-recoveries of the OMCs and ` 2,000 crore on account of equity infusion for the Turn Around Plan and Financial Restructuring Plan of Air India.
ECONOMIC AND FUNCTIONAL CLASSIFICATION 3.41 While the conventional analysis of the trends in expenditure, revenue, and deficits is useful for understanding the trends in public finances, the macroeconomic impact of fiscal policies is best understood in terms of a national accounting framework. But the latter comes out with some time lag. It is here that the economic and functional classification of the central government Budget is useful. Such an analysis of the central government Budget indicates that out of the total expenditure of ` 12,88,763 crore in 2011-12 (RE), consumption expenditure was ` 2,56,898 crore and expenditure on gross capital formation ` 70,050 crore (Appendix Table 2.21). Financial investments and loans to the rest of the economy were ` 46,149 crore. With the rest of the expenditure being transfer payments, such financial transfers were 71.0 per cent of total expenditure. In 2012-13 (BE), out of total estimated expenditure of ` 14,97,636 crore, consumption expenditure is placed at ` 2,90,124 crore and gross capital formation ` 94,906 crore. Transfer payments to the rest of the economy at ` 10,10,950 crore constituted 67.5 per cent of the total expenditure. 3.42 In terms of classification by functional heads, social and economic services (broadly covering the total development outlays) at ` 6,41,944 crore constituted 42.9 per cent of the total expenditure of ` 14,97,636 crore in 2012-13 (BE). Expenditure on
Public Finance general services is estimated at ` 3,49,199 crore, constituting 23.3 per cent of the total. Such items as statutory grants-in-aid to states, non-Plan grants to UTs, food and other consumer subsidies, interest on public debt, pension, and aid to other nations constitute the unallocable category accounting for 33.8 per cent of the total expenditure. The salient feature of the economic and functional classification of the Central Budget 2012-13 is the estimated growth in capital formation (including financial assistance for capital formation) which is placed at 22.9 per cent and growth of 16.2 per cent in social services in 2012-13 (BE) over 2011-12 (RE), indicating the thrust of the Budget on higher investment and an inclusive development agenda.
EXPENDITURE
OUTCOME IN
2012-13
3.43 As against implied year-on-year growth of 14.8 per cent envisaged by BE 2012-13 (over provisional actuals of 2011-12), growth in total expenditure in April-December 2012 has been 10.6 per cent only (see Table 3.7). Non-Plan revenue expenditure in April-December 2012 is placed at 72.3 per cent of BE, which is well below the five-year average of 77.7 per cent. Similarly expenditure on both Plan revenue as well as Plan capital expenditure in April-December 2012 is well below the five-year average as proportions of BE. However, major subsidies have burgeoned in April-December 2012 to reach a figure of ` 1,66,824 crore (92.2 per cent of BE). The expenditure restraint has helped keep deficits lower in April-December 2012.
DEFICIT
OUTCOME IN
2012-13
3.44 The Budget for 2012-13 estimated a deficit level of ` 5,13,590 crore. The net outcome of slippage in non-debt receipts and expenditure restraint fed into the outcome in terms of the desired indicators of revenue deficit as well as fiscal deficit in AprilDecember 2012. As a proportion of BE, fiscal deficit is placed at 78.8 per cent, significantly below the five-year average of 85.9 per cent and last year’s level of 92.3 per cent. Similarly, revenue deficit is placed at 85.1 per cent, well below the level achieved in the recent past. However, the indicator effective revenue deficit is placed at 120.5 per cent in AprilDecember 2012. Though it is below last year’s level in the same period, it is a slippage and owes to lower outgo of grants for creation of capital assets.
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GOVERNMENT
73
DEBT
3.45 The high levels of fiscal deficit in the postcrisis period added to the overall debt burden of the central government. Prolonged fiscal deficits lead to accumulation of debt beyond levels sustainable for an economy and can result in higher real and nominal interest rates, slower growth in capital formation, and potentially lower the rate of output growth. The outstanding liabilities of the central government were placed at ` 44,68,714 crore, equivalent of 49.8 per cent of GDP at end-March 2012 (Table 3.9). As a proportion of GDP, outstanding liabilities (adjusted) of the centre peaked at 67.0 per cent in 2002-3 and have fallen subsequently notwithstanding the rise in fiscal deficit in the postcrisis years. This is on account of the fact that growth in incremental assumption of liabilities has been lower than that of nominal GDP and the debt to GDP ratio dynamics is aided by the differential between nominal GDP growth and nominal interest rates, which makes it possible to achieve a greater reduction through a given primary balance. 3.46 The total liabilities for the Government of India include debt and liabilities accounted for in the Consolidated Fund of India (technically defined as public debt) as well as liabilities accounted for in the public account. Public debt constitutes 76.3 per cent of total liabilities at end March 2012. It is further classified into internal and external debt. Internal debt, constituting 90.9 per cent of public debt, largely consists of fixed tenor, fixed coupon dated securities (72.1 per cent) and treasury bills (10.2 per cent). State governments are not allowed to directly borrow externally hence their entire debt is domestic. Over time, there is a compositional shift toward marketable debt, while the public account liabilities have seen a commensurate decline. The share of marketable debt to total internal liabilities, which was about 30 per cent in the beginning of the 1990s, increased to 40 per cent in the beginning of the 2000s and is budgeted to increase to 67.5 per cent by end-March 2013. The share of public account liabilities on the other hand is estimated to decline to 22.8 per cent in 2012-13 (BE) from about 30 per cent in 2001-2 and about 46 per cent in the beginning of the 1990s. 3.47 A greater dependence on domestic debt insulates the debt portfolio from volatility in international capital markets. It also minimizes currency risk. Apart from this, internal debt of the
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Economic Survey 2012-13
Table 3.9 : Outstanding Liabilities of the Central Government 2007-8
2008-9
End-March 2009-10 2010-11
2011-12 (RE)
2012-13 (BE)
(As per cent of GDP) 1. Internal liabilities a) Internal debt#
54.6
53.9
52.4
48.5
47.9
48.3
36.1
35.9
35.9
34.2
35.7
37.3
i) Market borrowings ii) Others b) Other internal liabilities 2 External debt(outstanding)* 3 Total outstanding liabilities Memorandum items a) External debt @ b) Total outstanding
22.1 13.9 18.6 2.2 56.9
23.8 12.1 18.1 2.2 56.1
27.0 9.0 16.5 2.1 54.5
26.6 7.6 14.3 2.0 50.5
27.9 7.7 12.2 1.9 49.8
29.8 7.5 11.0 1.8 50.1
4.2
4.7
3.8
3.6
3.6
3.3
liabilities(adjusted)**
58.9
58.6
56.3
52.1
51.5
51.7
Sources : Union Budget documents, Controller of Aid Accounts and Audit and Reserve Bank of India. # Internal debt includes net borrowing of ` 29,062 crore for 2005-6, ` 62,974 crore for 2006-7, ` 1,70,554 crore for 2007-8, ` 88,773 crore for 2008-9, ` 2,737 crore for 2009-10, and ` 20,000 crore for 2011-12(BE) under the Market Stabilisation Scheme. * External debt figures represent borrowings by central government from external sources and are based upon historical rates of exchange. @ Converted at year end exchange rates. For 2006-7, the rates prevailing at the end of March 2007, for 2007-8, the rates prevailing at the end of March 2008, and so on. ** Internal liabilities and external debt (converted at year end exchange rates). Note : The ratios to GDP at current market prices are based on the CSO’s National Accounts 2004-5 series.
Government of India has the following favourable features which provide some comfort.
cent in 2011-12 from about 50 per cent in the beginning of the 2000s.
(a) Weighted average maturity of outstanding government securities at 9.8 years is high compared to international standards. At endMarch 2012, the proportion of debt maturing in less than one year was only 3.5 per cent and 30.2 per cent of outstanding stock had a residual maturity of up to five years. This implies that over the next five years, on an average, about 6.0 per cent of outstanding stock needs to be rolled over every year. Thus the rollover risk in the debt portfolio remained low.
(d) A relatively stable weighted average yield of primary issuance indicates stability in interest payments/revenue receipts and interest payments/debt ratios, pointing towards the sustainability of the debt in the country.
(b) Most of the public debt in India is at fixed interest rates. Of the total outstanding dated securities, only 1.8 per cent was on floating rate. Thus interest payments are largely insulated from interest rate volatility, imparting stability to the Budget. (c) The average cost of the debt (interest payments/ debt ratio) and interest payments as a percentage of revenue receipts are on a secular decline, though some rise was seen in the past two years. Ratio of interest payments to revenue receipts has declined to around 36 per http://indiabudget.nic.in
3.48 Government debt could also arise from the assumption of liabilities associated with recapitalizing public-sector enterprises including the banking sector. It is, therefore, customary to look at their finances.
PERFORMANCE OF DEPARTMENTAL ENTERPRISES OF THE CENTRAL GOVERNMENT Railways 3.49 The Twelfth Five Year Plan (2012-17) envisions an integrated approach for the transport sector as a whole. It states that the vision for the transport sector should be guided by a modal mix that will lead to an efficient, sustainable, economical, safe, reliable, environmentally friendly, and regionally balanced transport system. The rail network would also have to develop a strategy to be part of an effective multi-
Public Finance modal transport system. The Twelfth Plan identifies safety, modernization, and capacity augmentation as the focus areas, for which initiatives are underway in Indian Railways to supplement its internal resources judiciously through public-private partnerships (PPP), cost sharing with state governments and other stakeholders, and market borrowings. 3.50 Freight loading by Indian Railways during fiscal 2011-12 was placed at 969.8 million tonnes against 921.7 million tonnes in 2010-11, registering an increase of 5.2 per cent with an incremental loading of 48.1 million tonnes over 2010-11 levels. The freight traffic target for 2012-13 (BE) has been fixed at 1,025 million tonnes, an increase of 5.7 per cent over the previous year. During April-November 2012, Indian Railways has carried 647.11 million tonnes of revenue-earning freight traffic. The freight carried shows an increase of 29.06 million tonnes over the freight traffic of 618.05 million tonnes actually carried during the corresponding period of the previous year, translating into an increase of 4.7 per cent. 3.51 Freight earnings at ` 69,547.59 crore during 2011-12 exceeded the revised target by ` 927 crore, registering a growth of 10.7 per cent over 2010-11. Passenger earnings (including other coaching earnings) during 2011-12 stood at ` 30,962.96 crore as against ` 28,263 crore in 2010-11, an increase of 9.6 per cent. The overall traffic revenue for 2011-12 at ` 1,04,153 crore registered a growth of 10.2 per cent over 2010-11. Taking into account further accumulation of ` 43 crore to the traffic outstanding, the gross traffic receipts of the Railways for 2011-12 stood at ` 1,04,110 crore. Gross traffic receipts for 2012-13 have been budgeted at ` 1,32,552 crore. 3.52 Ordinary working expenses at ` 74,537.4 crore during 2011-12 show an increase of 9.4 per cent over 2010-11. The total working expenses including appropriations to the Depreciation Reserve Fund and Pension Fund at ` 98,667.41 crore recorded an increase of 10.3 per cent over 2010-11. Ordinary working expenses are budgeted at ` 84,400 crore for 2012-13 while the total working expenses are ` 1,12,400 crore. 3.53 Taking into account the net variation of the miscellaneous receipts and miscellaneous expenditure, Railways’ net revenue in 2011-12 was ` 6,781.60 crore. After fully discharging the dividend http://indiabudget.nic.in
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liability of ` 5,656.03 crore for the fiscal, Railways during 2011-12 generated an excess of around `1,125.57 crore. Dividend liability during 2012-13 has been budgeted at ` 6,676 crore. There was a marginal deterioration of the operating ratio (percentage of total working expenses to gross traffic earnings) of the Railways, which stood at 94.9 per cent in 2011-12 as against 94.6 per cent in 2010-11. The operating ratio for 2012-13 has been targeted at 84.9 per cent in the Rail Budget. The net revenue as a proportion of capital-at-charge and investment from Capital Fund for the fiscal stood at 4.2 per cent in 2011-12. The target for 2012-13 (BE) is 12.1 per cent. 3.54 The Plan Outlay for 2011-12 (provisional) stood at ` 45,499 crore including internally generated resources of ` 8,934 crore (i.e. 19.6 per cent of the Plan outlay) and market borrowings of ` 15,228 crore (i.e. 33.5 per cent of the Plan outlay) by the Indian Railway Finance Corporation (IRFC), which also includes borrowings of ` 108 crore for Rail Vikas Nigam Limited. The Annual Plan outlay for 2012-13 has been budgeted at ` 60,100 crore, which is the highest ever Plan investment. The Plan has been budgeted to be financed through GBS of ` 24,000 crore (40.0 per cent), internal resources of ` 18,050 crore (30.0 per cent), ` 2,000 crore from the Railway Safety Fund (3.3 per cent) and extra-budgetary resources of ` 16,050 crore (26.7 per cent) including market borrowings of ` 15,000 crore through IRFC.
Department of Posts 3.55 The gross receipts in 2011-12 of the Department of Posts were placed at ` 7,899.35 crore. The gross and net working expenses during the year were ` 14,163.91 crore and ` 13,705.27 crore respectively, yielding a deficit of ` 5,805.92 crore. In the current fiscal as per BE 2012-13, gross receipts are budgeted to go up to ` 7,793.31 crore with gross and net working expenses estimated at ` 14,379.71 crore and ` 13,714.66 crore respectively. The deficit is projected to be ` 5,921.35 crore. 3.56 The government has approved the IT Modernization Project of the Department of Posts for computerization of all the non-computerized post offices, mail offices, administrative and other offices, establishment of required IT infrastructure, and development of required software applications. The continuation of the IT modernization project involving operating and maintenance (O&M) costs of ` 4,909.00 crore has been approved on 22 November 2012.
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Broadcasting 3.57 The expenditure of Prasar Bharati in 2011-12 was ` 3,340.57 crore (provisional) excluding charges on account of space segment and spectrum charges and interest and depreciation costs. The total revenue earned in 2011-12 was ` 1,409.54 crore (subject to reconciliation). 3.58 The government has proposed several schemes for the Twelfth Five Year Plan to be implemented through All India Radio (AIR) and Doordarshan which include the scheme for Digitalization of Transmitters, Studios, and Connectivity. The scheme inter alia envisages digitalization of 98 studios and connectivity and installation of 100-watt FM Digital Compatible Transmitters at 100 locations. As such, the scheme for Digitalization of the AIR/Doordarshan Network continues to be one of the Major Thrust Areas of the Twelfth Plan. Auction of 839 additional private FM channels in 294 cities is also likely to be completed in 2013-14. An allocation of ` 2,047.35 crore has been made in 2012-13 (BE) to cover the resource
gap in the operating cost of Prasar Bharati.In addition, as part of the financial restructuring package for Prasar Bharati, the government has recently approved various measures which include meeting 100 per cent expenses towards salary and salary-related establishment expenses during the next five years from 2012-13 to 2016-17 while all other items of operating expenses are to be borne by Prasar Bharati from its internal resources.
STATE-LEVEL FINANCES 3.59 While there has been some stress in central government finances in recent years, the finances of states are in fine fettle. The combined gross fiscal deficit of states did not exceed 3.0 per cent of GDP even in the years of global crisis. After reaching a level of 1.5 per cent of GDP in 2007-8, the fiscal deficit of states rose to 2.9 per cent in 2009-10 but has moderated to 2.1–2.3 per cent subsequently (Table 3.10). As a proportion of GDP, tax receipts moderated in 2008-9 and 2009-10 and together with stable non-tax receipts helped in fiscal consolidation
Table 3.10 : Receipts and Disbursements of State and Consolidated General Government Item
2007-8
2008-9
2009-10
2010-11
2011-12 (RE)
2012-13 (BE)
(As per cent of GDP) State governments I. Total receipts (a+b) a) Revenue receipts (1+2) 1. Tax receipts 2. Non-tax receipts b) Capital receipts II. Total disbursements a) Revenue b) Capital c) Loans and advances III. Revenue deficit IV. Gross fiscal deficit General government I. Total receipts (a+b) a) Revenue receipts (1+2) 1. Tax receipts 2. Non-tax receipts b) Capital receipts II. Total disbursements a) Revenue b) Capital c) Loans and advances III. Revenue deficit IV. Gross fiscal deficit
15.4 12.5 8.8 3.7 2.8 15.1 11.6 3.2 0.3 -0.9 1.5
15.8 12.3 8.6 3.8 3.5 15.7 12.1 3.3 0.3 -0.2 2.4
15.6 11.9 8.2 3.7 3.7 15.7 12.3 3.1 0.3 0.5 2.9
15.1 12.0 8.7 3.3 3.1 14.9 12.0 2.7 0.2 0.0 2.1
15.9 12.7 9.0 3.7 3.2 16.0 12.7 2.9 0.4 -0.1 2.3
16.3 13.3 9.4 3.8 3.0 16.3 12.8 3.2 0.3 -0.4 2.1
27.2 21.3 17.6 3.7 5.9 26.4 21.5 4.5 0.4 0.2
27.8 19.8 16.5 3.4 8.0 28.4 24.1 3.9 0.4 4.3
28.5 18.7 15.2 3.5 9.8 28.6 24.4 3.8 0.4 5.7
27.6 20.3 16.0 4.2 7.4 27.5 23.5 3.4 0.6 3.2
28.3 19.5 16.2 3.3 8.8 28.1 23.8 3.6 0.6 4.3
28.3 20.7 17.1 3.5 7.6 28.3 23.7 4.1 0.5 3.1
4.0
8.3
9.3
6.9
8.1
7.2
Source: Reserve Bank of India. Notes : (1) The ratios to GDP at current market prices are based on the CSO’s National Accounts 2004-5 series. (2) Disinvestment proceeds are inclusive of miscellaneous capital receipts of the states. (3) Negative (-) sign indicates surplus in deficit indicators. (4) Capital receipts include public accounts on a net basis. (5) Capital disbursements are exclusive of public accounts.
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Public Finance notwithstanding a small rise in 2011-12 (RE). With the exception of 2009-10, the combined position of states in terms of revenue deficit has been one of surplus. Besides, what is noteworthy is that there has been an improvement in the quality of expenditure with a rise in capital expenditure to GDP ratio and development expenditure. However, as with many other economic indicators, there are large inter-state variations in the attainments in terms of fiscal outcome. Another concern arising from state finances is that there is incomplete information on extra-budget activities and quasi-fiscal activities. The RBI’s study of state budgets 2012-13 has indicated that notwithstanding the information gap, fiscal transparency at state government levels has increased. One of the main problems with states’ finances is in the financial health of the power
77
distribution companies, which continue to accumulate losses estimated at ` 1,90,000 crore at end-March 2011. This is mainly on account of non-revision of tariffs, subsidy arrears, high aggregate and technical losses and the high cost of buying short-term power. Thus, continued reform initiatives are critical for maintaining sound finances of the states.
CONSOLIDATED GENERAL GOVERNMENT 3.60 As indicated earlier, fiscal deficit of the centre widened from 4.8 per cent of GDP in 2010-11 to 5.9 per cent in 2011-12 (RE). With the fiscal deficit of states exhibiting a modest deterioration to 2.3 per cent of GDP, the fiscal outcome in terms of centre and states combined was placed at 8.1 per cent in
Box 3.5 : Terms of Reference of 14th Finance Commission The following are the broad Terms of Reference and the matters to be taken into consideration by the 14th Finance Commission in making the recommendations: 1. (i) the distribution between the union and states of the net proceeds of taxes which are to be, or may be, divided between them under Chapter I, Part XII of the Constitution and the allocation between the states of the respective shares of such proceeds; (ii) the principles which should govern the grants-in-aid of the revenues of the states out of the Consolidated Fund of India and the sums to be paid to the states which are in need of assistance by way of grants-in-aid of their revenues under article 275 of the Constitution for purposes other than those specified in the provisos to clause (1) of that article; and (iii) measures needed to augment the Consolidated Fund of a state to supplement the resources of the panchayats and municipalities in the state on the basis of the recommendations made by the Finance Commission of the state. 2. The Commission has been mandated to review the state of finances, deficit, and debt levels of the union and states and suggest measures for maintaining a stable and sustainable fiscal environment consistent with equitable growth including suggestions to amend the FRBMAs currently in force. The Commission has been asked to consider and recommend incentives and disincentives for states for observing the obligations laid down in the FRBMAs. 3. In making its recommendations, the Commission inter alia is required to consider: the resources of the central government and the demands on the resources of the central government; the resources of the state governments and demands on such resources under different heads, including the impact of debt levels on resource availability in debt-stressed states; the objective of not only balancing the receipts and expenditure on revenue account of all the states and the union but also generating surpluses for capital investment; the taxation efforts of the central government and each state government and the potential for additional resource mobilization; the level of subsidies required for sustainable and inclusive growth and equitable sharing of subsidies between the central and state governments; the expenditure on the non-salary component of maintenance and upkeep of capital assets and the non-wage-related maintenance expenditure on Plan schemes to be completed by 31 March 2015 and the norms on the basis of which specific amounts are recommended for the maintenance of capital assets and the manner of monitoring such expenditure; the need for insulating the pricing of public utility services like drinking water, irrigation, power ,and public transport from policy fluctuations through statutory provisions; the need for making public-sector enterprises competitive and market oriented; listing and disinvestment; relinquishing of non-priority enterprises; the need to balance management of ecology, environment, and climate change consistent with sustainable economic development; and the impact of the proposed goods and services tax on the finances of the centre and states and the mechanism for compensation in case of any revenue loss. 4. The Commission is required to generally take the base of population figures as of 1971 in all cases where population is a factor for determination of devolution of taxes and duties and grants-in-aid; however, the Commission may also take into account the demographic changes that have taken place subsequent to 1971. 5. The Commission is to review the present public expenditure management systems in place including budgeting and accounting standards and practices; the existing system of classification of receipts and expenditure; linking outlays to outputs and outcomes; best practices within the country and internationally and to make appropriate recommendations thereon. 6. The Commission is to review the present arrangements as regards financing of Disaster Management with reference to the funds constituted under the Disaster Management Act 2005(53 of 2005) and make appropriate recommendations thereon. 7. The Commission is to indicate the basis on which it has arrived at its findings and make available the state-wise estimates of receipts and expenditure.
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Economic Survey 2012-13
2011-12 (RE) as against 6.9 per cent in 2010-11 (Table 3.10). In 2012-13 (BE), fiscal deficit is budgeted to come down to 7.2 per cent of GDP. While there is a likely slippage of 0.2 percentage point in terms of the centre’s target, the overperformance in states might help in achieving the budgeted levels in the overall fiscal outcome in 2012-13. 3.61 The 14th Finance Commission was constituted on 2 January 2013 under the Chairmanship of Dr Y.V.Reddy, former RBI Governor. Other members of the commission are (i) Professor Abhijit Sen (ii) Ms Sushma Nath (iii) Dr M.Govinda Rao (iv) Dr Sudipto Mundle. The Commission’s mandate is detailed in Box 3.5.
OUTLOOK 3.62 It might be recalled that the Mid-Year Economic Analysis 2012-13 sought to allay
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concerns about the fiscal outcome for 2012-13 through allusion to the measures taken and indicated that the fiscal deficit for the year would be contained at 5.3 per cent of GDP. The outcome in April-December 2012 in terms of fiscal deficit broadly indicates that this is likely to happen notwithstanding the significant shortfall in revenue. The overall shortfall in non-debt receipts could be contained with ongoing greater efforts at mobilization and reforms already in place. The longer-term outlook has already been outlined in terms of the fiscal consolidation roadmap leading to a fiscal deficit of 3.0 per cent of GDP in 2016-17. As indicated earlier in the chapter, addressing the key fiscal risk of petroleum subsidies is critical in better fiscal marksmanship. With the recent reforms in diesel prices and efforts at expenditure reprioritization, the medium-term fiscal consolidation plan is credible and could yet again yield macroeconomic dividends in terms of higher growth and price stability.
Prices and Monetary Management
4
CHAPTER
Inflation, as measured by the Wholesale Price Index (WPI), has remained above 7 per cent since December 2009. Food inflation has been particularly elevated over this period, contributing to an average of one third of total inflation. Consumer price inflation, with higher weights on food, have been generally higher than the headline WPI inflation. A moderation in WPI inflation is now clearly visible, but the moderation has largely been due to deceleration in the rate of inflation of nonfood manufactured products. Inflation pressures have eased globally. Global consumer prices rose at a 3.7 percent annualized rate at the end of 2012. Inflation for developing countries also moderated to a 5.4 percent annualized rate in the three months through November 2012, from an average 7.2 percent in 2011. Benign inflation in global commodity prices, with inflation for energy and non-energy commodities in base line scenario expected to be around (-) 2.6 per cent and (-) 2.0 per cent respectively in 2013, will check the inflation of tradeable commodities even in India. Apart from monetary policy attempting to control demand, supply side responses will be necessary to bring down inflation in a sustained way, and ongoing policy initiatives need to be pursued.
INFLATION-BROAD
TRENDS
4.2 The financial year 2012-13 started with a headline Wholesale Price Index (WPI) inflation of 7.50 per cent. It has remained in the 7.18 to 8.07 per cent range in the nine months up to December 2012. Consumer price inflation for the major indices, which had declined to the range of 4.92 to 7.65 per cent in January 2011, however, started witnessing an increase since then. For most of the current year, inflation measured in terms of Consumer Price Index for industrial workers (CPIIW) and the new series of CPI has remained in double digits. CPIs for agricultural and rural labourers have also inched up to double digit level in the last two months (Table 4.1).
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WPI INFLATION-TRENDS
AT THE LEVEL OF BROAD COMMODITY GROUPS
4.3 Headline WPI inflation which averaged 9.56 per cent in 2010-11 and 8.94 per cent in 2011-2012 decelerated to 7.55 per cent in the first nine months of 2012-13 (Apr-Dec). Although in December 2012, inflation was at a three year low of 7.18 per cent, it has been in the range of 7-8 per cent in last thirteen months. Relative importance of different commodity groups contributing to this persistent inflation, however, changed over time. The persistently elevated prices for animal products (eggs, meat and fish), the rise in the prices of cereals and vegetables, along with the increase in international prices of fertilizers (non-urea) and the increase in administered prices of diesel have contributed to inflation in differing degrees over time. The build-up
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Table 4.1 : Annual Inflation as per Different Price Indices Month
WPI
CPI-IW
2011-12 2012-13
2011-12 2012-13
CPI-NS
CPI-AL
2011-12 2012-13
CPI-RL
2011-12 2012-13
2011-12 2012-13
Apr
9.74
7.50
9.41
10.22
-
10.26
9.11
7.84
9.11
8.01
May
9.56
7.55
8.72
10.16
-
10.36
9.63
7.77
9.63
8.11
Jun
9.51
7.58
8.62
10.05
-
9.93
9.32
8.03
9.14
8.54
Jul
9.36
7.52
8.43
9.84
-
9.86
9.03
8.61
9.03
8.94
Aug
9.78
8.01
8.99
10.31
-
10.03
9.52
9.18
9.71
9.34
Sep
10.00
8.07
10.06
9.14
-
9.73
9.43
9.43
9.25
9.93
Oct
9.87
7.32
9.39
9.60
-
9.75
9.36
9.85
9.73
9.84
Nov
9.46
7.24
9.34
9.55
-
9.90
8.95
10.31
9.14
10.47
Dec
7.74
7.18P
6.49
11.17
-
10.56
6.37
11.33
6.72
11.31
Jan
7.23
5.32
7.65
4.92
5.27
Feb
7.56
7.57
8.83
6.34
6.68
Mar
7.69
8.65
9.38
6.84
7.19
Average
8.94
7.55*
8.39
10.00*
-
10.04*
8.19
9.17*
8.35
9.41*
Source: Office of the Economic Adviser, Labour Bureau, Central Statistics Office (CSO). *: Average (Apr-Dec) P: Provisional CPI : Consumer Price Index; IW : Industrial Workers; AL : Agricultural Labourers; RL : Rural Labourers; NS: New Series.
in price pressures seems to have tapered off in recent months, as headline WPI has remained steady. Month-over-month price changes in most commodity groups have been small, indicating that the pressure on generalized inflation has fallen, as has the momentum of inflation, as measured by the seasonally adjusted annualized rate of inflation (SAAR) of the WPI index (Figure 4.1). 4.4 The level of inflation and its movement across three major commodity groups varied significantly. Inflation of primary articles having a weight of 20.12
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per cent in the WPI, after declining to 6.7 per cent in Q4 of 2011-12, increased in first three quarters of the current year and was 10.6 per cent in December 2012. Inflation for commodities in the group ‘fuel & power’, with a weight of 14.91 per cent in the WPI witnessed some moderation in the current year. Apart from the base effect, deceleration in the inflation of non-administered petroleum products contributed to the moderation. This helped contain the effects of the increase in administered prices of diesel effected in September 2012. Finally, the deceleration in inflation of manufactured products,
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Table 4.2 : Quarterly Inflation in Major Group of the WPI (%) Major Groups/ Composite groups
Weight
Average
(%)
(Apr-Mar) 2010
2011
-11
-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3P
8.94
9.60
9.71
9.01
7.50
7.54
7.87
7.25
All Commodities
100.0
9.56
Primary Articles
20.12
17.75
9.80
13.09
12.05
7.76
6.70
9.87
10.32
9.27
Fuel & Power
14.91
12.28
13.96
12.74
12.99
15.08
14.94
11.90
9.72
10.34
Manufactured Prod.
64.97
5.70
7.26
7.38
7.87
7.95
5.89
5.29
6.23
5.46
All food
24.31
11.10
7.24
8.36
8.81
6.60
5.30
9.12
9.07
9.05
Non-Food Non-Manufacturing
20.69
15.67
14.51
16.20
14.97
13.72
13.33
10.52
10.79
10.37
Non Food Manufacturing
55.00
6.11
7.29
7.35
7.80
8.13
5.92
5.15
5.71
4.64
Composite groups
Source: Office of the Economic Adviser.
P : Provisional
with a weight of 64.97 per cent in WPI, was relatively sharp (Table 4.2). 4.5 A disaggregation of WPI inflation in terms of composite groups indicates that food inflation, comprising primary food articles and manufactured food products (24.31 per cent weight in the WPI) at 9.05 per cent in Q3 of 2012-13 was significantly higher than the 5.30 per cent in Q4 of 2011-12. Food inflation had once in fact declined to 1.45 per cent in January 2012 before inching upward to 10.39 per cent in December 2012. Non-food nonmanufacturing inflation did moderate over the current year, but remains high, in the double digits, largely because of higher inflation for oilseeds and the commodities in the group ‘fuel and power’. Core inflation which corresponds to inflation for non-food manufactured products, and is a central focus for
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the Reserve Bank of India (RBI), however, continued to show moderation from its peak in Q3 of 2011-12. The contribution of this composite group to overall inflation also declined from over 43 per cent in Q3 of 2011-12 to around 30 per cent in Q3 of 2012-13 (Figure 4.2). Apart from monetary measures taken by the RBI, softening of international and domestic prices of metals, chemicals and textile products also contributed to the moderation in core inflation.
Distribution of Commodities in terms of Price Range 4.6 The distribution of inflation across commodities included in the WPI indicates that there has been a sharp reduction in the number of commodities experiencing inflation of over 20 per cent. As against 72 commodities with a weight of
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Economic Survey 2012-13
Table 4.3 : Frequency distribution of WPI commodities in terms of inflation range 2010-11 2011-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3P
7.50
7.54
7.87
7.25
Headline inflation
9.56
8.94
9.60
9.71
9.01
Number of Commodities in inflation range Negative
141
126
137
122
133
146
131
94
90
0 to 5 per cent
240
243
222
220
220
276
310
349
352
6 to 20 per cent
235
257
248
262
259
217
202
204
201
60
50
69
72
64
37
33
29
33
Above 20 per cent Weights of the Commodities in inflation range Negative
13.96
13.99
16.69
13.56
15.96
17.13
14.18
10.11
8.55
0 to 5 per cent
29.96
31.39
27.82
25.43
24.53
33.16
31.37
44.01
45.90
6 to 20 per cent
47.82
42.77
41.49
47.19
46.50
40.95
47.44
40.38
38.26
8.26
11.85
13.99
13.81
13.01
8.77
7.01
5.50
7.29
Above 20 per cent
Source : Office of the Economic Adviser.
P : Provisional
13.8 per cent, which reported above 20 per cent inflation in Q2 of 2011-12, the number of such commodities declined to 29 with a weight of 5.5 per cent in Q2 of 2012-13. Nearly two thirds of the commodities with over half of the weight in WPI now experience inflation of 5 percent or less (Table 4.3). This distributional shift seems to have plateaued in the last three quarters. The small number of commodities in the inflation range of 20 per cent and above suggests that besides economy wide measures like monetary and fiscal policies, strategies focused on specific commodities may also have high payoffs in further containing inflation.
WPI- Food Inflation 4.7 Inflation for both primary food articles and manufactured food products have moved together since 2011-12. Overall food inflation declined to 5.30 per cent in Q4 of 2011-12, its lowest quarterly level in the last seven quarters. Inflation in both primary food articles and manufactured food products was also at its lowest during this quarter (Table 4.4). An increase in inflation has been observed for both these groups in the current year. Within primary food articles, however, inflation in protein foods has moderated, especially so in the case of milk and animal products, where it has been significant and sequential. For pulses too, a sharp decline in inflation in Q3 of 2012-13 is observed. Cereals have, however, emerged as the major contributor to an increase in the inflation in food articles in first three http://indiabudget.nic.in
quarters of the current year. Inflation in cereals which had moderated to a level of 2.73 per cent in Q3 of 2011-12 increased to 17.05 per cent in Q3 of 201213 mainly contributed by wheat, rice and maize. There has also been an increase in inflation in fruits and vegetables partly because of the increase in inflation in onions and potatoes. While in the case of potatoes, the current increase in prices may be a correction as prices had declined below the base level prices of 2004-05 in January 2012, an upsurge in onion prices and inflation has been observed in the last two months. 4.8 In the manufactured food products group, a sequential and sharp moderation in inflation has been observed in dairy products from Q4 of 2011-12. This decline in inflation is sharper and more pronounced than the inflation in milk. Grain mill products have witnessed an increase in inflation largely because of an upsurge in wheat prices, the key ingredient for these commodities. Sugar inflation had also shown an upward trend, after having remained at moderate levels in 2010-12. Prices have been particularly buoyant in the second and third quarter of the current year. In last two months, however, there has been some moderation in sugar prices. Futures prices also suggesting a softening trend of a moderate level. While inflation in edible oils has remained stable though elevated, there has also been increase in inflation in oil cakes in the current financial year. Momentum of food inflation as observed from the seasonally adjusted monthly WPI series indicates a mild upward trend (Figure 4.3).
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Table 4.4 : Sub components of WPI food inflation (%) Components / Sub components
Weight
Average
(%)
2011-12
2012-13
(Apr-Mar) 201011
201112
Q1
Q2
Q3
Q4
Q1
Q2
Q3P
FOOD INFLATION
24.31
11.10
7.24
8.36
8.81
6.60
5.30
9.12
9.07
9.05
(A) Food Articles
14.34
15.60
7.30
8.83
9.14
6.34
5.05
10.82
9.18
8.76
Non-Protein food
7.97
12.33
4.79
11.50
9.50
1.96
-2.88
8.00
6.23
7.54
Cereals
3.37
5.26
3.87
5.08
4.83
2.73
2.90
6.36
11.06
17.05
Fruits & Vegetables
3.84
16.44
6.45
16.11
14.93
1.71
-5.26
14.40
5.30
3.98
Other Food (Tea & Coffee)
0.18
-7.25
18.97
22.62
20.90
18.43
14.21
10.01
15.25
13.10
Condiments & Spices
0.57
33.56
-2.65
14.47
0.49
-3.83 -18.07 -18.18 -12.48 -15.99
6.37
19.78
10.32
5.78
8.72
11.75
Protein food
14.85
14.28
12.66
10.13
Pulses
0.72
3.20
2.52
-8.32
-3.03
12.95
9.65
16.2
30.68
18.84
Milk
3.24
20.13
10.31
6.84
10.15
11.02
13.08
11.56
7.05
6.13
Eggs, Meat & Fish
2.41
25.51
12.73
9.17
10.64
12.32
18.55
17.12
14.63
12.47
9.97
3.72
7.12
7.52
8.19
7.07
5.76
6.02
8.85
9.59
(B) Food Products Dairy Products
0.57
9.56
12.85
6.04
12.11
17.94
15.28
9.38
4.09
-1.13
Processed Food
0.36
5.05
9.72
7.22
8.87
10.55
12.15
8.12
2.47
1.15
Grain Mill Products
1.34
5.67
0.27
2.80
0.81
-0.30
-2.10
-0.55
3.90
9.48
Bakery Products
0.44
8.60
0.75
-0.58
0.40
1.43
1.74
2.12
2.13
3.62
Sugar, Gur & Khandsari
2.09
-0.88
4.50
3.74
5.41
5.49
3.36
5.27
14.50
14.29
Edible Oils
3.04
5.43
12.55
14.92
14.45
12.22
9.00
10.35
10.82
9.59
Oil Cakes
0.49
0.79
3.95
3.91
6.85
1.60
3.63
12.60
25.90
24.41
Processed Tea & Coffee
0.71
3.48
4.55
11.19
4.77
-3.16
6.11
-1.98
-0.71
7.77
Salt
0.05
2.67
0.84
-6.70
1.47
3.73
5.42
5.51
5.51
1.72
Other Food Products
0.88
4.72
11.54
9.22
13.92
14.48
8.69
6.15
1.89
3.57
Source : Office of the Economic Adviser.
http://indiabudget.nic.in
P : Provisional
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Economic Survey 2012-13
WPI- Non-food non-manufacturing inflation 4.9 The composite non-food non-manufacturing group is a heterogeneous mix of commodities and comprises non-food primary articles including minerals as well as commodities in the broad group of ‘fuel and power’. Inflation in this composite group at aggregate level has shown some moderation from its peak in Q1 of 2011-12, though it has remained in double digits overall. Within this composite group, inflation differed widely across commodity groups. In case of non-food primary articles, inflation witnessed a sharp downturn and a nearly ‘V’ shaped rebound. The drivers for the downturn and the rebound, however, were different. Fibres led by cotton witnessed inflation of 62.7 per cent in Q1 of 2011-12, but this turned negative by Q4 of the same year. A sharp increase in cotton production in 2010-12 and recessionary global conditions affected prices. In other non-food primary articles, inflation surged in 2010-11 largely because of increase in prices of sugarcane and rubber. In 2011-12, guar seed, used in variety of industrial application, became the main driver of inflation in this group with an
average inflation of 155 per cent. Oilseeds also witnessed a sustained increase in prices. Inflation in minerals followed the prices of crude petroleum. For commodities in the ‘fuel and power’ group an increase in the price of electricity across states pushed up the inflation in Q2 and Q3 of the current year. The prices of non-administered petroleum products tracked international prices and witnessed moderation in inflation from its peak in Q3 of 2011-12. The increase in inflation of administered petroleum products in Q3 of 201213 was due to increase in the prices of diesel (Table 4.5). Diesel prices have been revised again in January and inflationary impact of this revision would be reflected in the WPI for January 2013. While this will add to inflation, it will also reduce suppressed inflation, and through its contribution to fiscal consolidation, have a moderating effect in the long run. 4.10 Momentum of inflation in this heterogeneous group based on SAAR indicates a downward trajectory. Stable or moderately rising crude oil prices and a benign inflationary outlook for other products suggests grounds for some optimism (Figure 4.4)
Table 4.5 : Sub components of WPI Non-food inflation (%) Components / Sub components
Weight
Average
(%)
2011-12
2012-13
(Apr-Mar) 201011
201112
Q1
Q2
Q3
Q4
Q1
Non-Food Non-Manufacturing 20.69
15.67
14.51
16.20
14.97
13.72
13.33
10.52
10.79 10.37
(A) Non-Food Articles
4.26
22.33
9.65
22.23
16.16
4.15
-0.89
5.64
12.60 12.88
Q3P
Fibres
0.88
41.69
10.09
62.69
29.78
Oil Seeds
1.78
4.71
12.33
11.64
15.08
10.79
11.86
18.11
Other Non-Food Articles
1.39
37.26
10.52
14.72
12.20
7.93
7.77
16.07
6.82
6.19
1.52
24.82
26.60
25.48
24.48
23.67
32.52
11.66
13.51
6.61
Metallic Minerals
0.49
44.70
10.10
11.70
7.00
4.91
16.74
9.70
12.51
6.33
Crude Petroleum
0.90
11.82
45.19
40.60
43.76
44.93
51.02
12.85
13.44
5.23
14.91
12.28
13.96
12.74
12.99
15.08
14.94
11.90
9.72 10.34
Coal
2.09
5.68
15.52
13.25
13.25
13.25
21.97
13.92
13.92 13.92
Mineral Oils
(B) Minerals
(C) Fuel & Power
1.39 -26.05 -20.84
Q2
1.04 -1.77 27.84 29.18
9.36
16.00
16.85
16.05
16.49
18.84
16.02
12.23
7.20
Administered POL
6.32
15.12
10.43
8.99
10.94
10.87
10.85
10.00
2.67 11.73
Non-administered POL
3.04
17.47
27.43
27.62
26.18
32.36
23.89
15.35
3.45
5.38
1.64
0.27
-0.32
2.63
4.00
8.56
Electricity
Source : Office of the Economic Adviser.
http://indiabudget.nic.in
P : Provisional.
14.17
8.93 4.95
16.52 13.16
Prices and Monetary Management
WPI- Non-Food Manufacturing Inflation 4.11 Non-food manufacturing (NFM) inflation, defined as core inflation by the RBI, has declined from 8.35 per cent in November 2011 to 4.24 per cent in December, 2012. Within the non-food manufacturing group, beverages and tobacco products, wood and wood products, chemical and chemical products witnessed inflation of over 6 per cent in Q3 of 2012-13. Deceleration in inflation was witnessed across all major segments of manufacturing. However, inflation in machinery and transport equipment has generally remained low (Table 4.6).
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4.12 SAAR of non-food manufacturing (Figure 4.5) also shows a downward momentum. Non-food manufactured products, except urea, are fully tradeable and as such are significantly influenced by global price trends. With global commodity prices witnessing a decline in 2013 and a near stability in 2014 (Box 4.3), non-food manufacturing inflation may see some further moderation. 4.13 Within core inflation, inflation in capital goods continued to remain muted. Inflation in consumer durables, though generally above core inflation, has started showing signs of moderation from Q3 of 201112 and has since been gradually converging to the
Table 4.6 : Sub components of WPI Non-food Manufacturing inflation (%) Components / Sub components(%)
Weight
Average (Apr-Mar)
2011-12
2012-13
201011
201112
Q1
Q2
Q3
Q4
Q1
Q2
Q3P
55.00
6.11
7.29
7.35
7.80
8.13
5.92
5.15
5.71
4.64
Beverages & Tobacco Prod.
1.76
7.36
11.67
10.01
13.23
13.32
10.21
7.79
6.76
7.89
Textiles
7.33
12.08
7.46
15.78
9.69
6.14
-0.78
-2.78
2.86
4.49
Wood & Wood Products
0.59
3.97
8.09
5.87
8.88
8.91
8.70
6.67
5.92
6.03
Paper & Paper Products
2.03
5.33
5.39
7.51
5.53
5.30
3.30
2.21
2.86
3.35
Leather & Leather Products
0.84
-0.99
2.32
0.16
0.91
2.71
5.61
3.73
3.98
2.18
Rubber & Plastic Products
2.99
6.68
5.97
8.56
7.70
5.67
2.23
1.88
2.85
3.24
12.02
5.34
8.61
7.45
8.71
9.93
8.36
7.24
7.63
6.09
2.56
2.68
5.73
3.91
4.12
7.65
7.23
7.13
9.22
5.44
10.75
8.67
11.06
8.46
11.58
13.19
10.97
10.62
8.39
4.68
Machinery & its Tools
8.93
2.82
3.11
2.96
3.20
3.41
2.88
2.50
2.91
2.52
Transport, Equipment
5.21
3.02
3.52
2.16
4.07
4.54
3.34
3.83
3.80
4.34
Non-Food Manuf. (Core)
Chemicals & Products Non-Metallic Mineral Prod. Basic Metals, Alloys & Prod.
Source : Office of the Economic Adviser.
http://indiabudget.nic.in
P : Provisional
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Economic Survey 2012-13
levels of core inflation (Figure 4.6). Moderation in inflation in consumer durables, where demand is interest sensitive, probably reflects the impact of monetary policy.
CONSUMER PRICE INDICES (CPIS) CPI-IW-Inflation 4.14 In India, most attention, including from policymakers, is devoted to headline WPI inflation. WPI series have a wider commodity basket, with commodity weights derived from the National Accounts, reflect the underlying economy-wide inflation better. Some economists, however, would prefer the central bank to target consumer price inflation rather than the NFM WPI inflation (or WPI headline), because the former is what each consumer experiences. Moreover, generalized and persistent CPI inflation could generate high inflationary expectations amongst the public. http://indiabudget.nic.in
4.15 There have been 3 consumer price indices, before the Central Statistics Office launched the new CPI series in January 2011, each for a specific class of consumers. The CPI for industrial workers (CPIIW), which is primarily used for wage indexation, however, has been the CPI index preferred by many economists. Inflation during August 2010 to March 2012 appears to follow a more or less similar trend irrespective of whether it is measured in terms of the WPI or CPI-IW. However, a nearly 2-percentage point gap has emerged in recent months between these two measures. The momentum of the CPIIW, as measured by its deseasonalized series, in recent months is consistent with WPI-food inflation (Figure 4.7). 4.16 Turning to components of CPI-IW, inflation for the food group, after declining to 4.52 per cent in Q4 of 2011-12, started showing an increase thereafter and has been in double digits in last three quarters of 2012-13. Inflation in the fuel and light and broad group pan supari and tobacco has also remained in double digit in the last seven quarters.
Prices and Monetary Management
87
Table 4.7 : Inflation in Consumer Price Index for Industrial Workers (CPI-IW) Major groups
Weights 2010-11
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
General
100
10.45
8.91
9.16
8.39
7.17
10.14
9.76
10.1
Food group
46.2
9.89
7.58
7.29
6.05
4.52
10.57
11.49
11.41
Pan, supari, tobacco & intoxicants
2.27
12.42
13.91
15.23
16.87
15.21
14.9
15.13
14.94
Fuel & light
6.43
9.81
13.73
14.17
15.37
17.82
18.97
12.06
12.8
15.27
21.12
12.17
10.95
10.95
8.96
8.96
6.73
6.73
6.57
6.73
12.94
14.43
15.61
13.11
10.79
9.35
8.44
23.26
5.26
6.75
7.73
8.03
7.05
7.35
7.57
8.61
53.8
11
10.23
11.01
10.75
9.77
9.73
8.11
8.84
Housing Clothing, bedding & footwear Miscellaneous group Non-food Source : Labour Bureau.
Inflation in housing has declined since Q1 of 201112 (Table 4.7).
4.17 The Central Statistics Office in the Ministry of Statistics and Programme Implementation started
Table 4.8 : Quarterly inflation in Consumer Price Index for New series (CPI-NS) (2010=100) Areas
Groups
Weights (%)
2011-12 Q4
Rural
Urban
Combined
General
2012-13 Q1
Q2
Q3
100.00
8.11
9.63
9.82
10.20
Food
56.59
6.01
10.10
11.62
12.27
Non-food
43.41
10.86
9.03
7.53
7.59
General
100.00
9.33
11.02
10.00
9.86
Food
35.81
6.76
11.13
12.16
11.74
Non-food
64.19
10.81
10.95
8.79
8.81
General
100.00
8.62
10.18
9.87
10.07
Food
47.57
6.25
10.47
11.81
12.10
Non-food
52.43
10.8
9.92
8.13
8.26
Source : CSO.
http://indiabudget.nic.in
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Economic Survey 2012-13
a new series of CPI in January 2011. The new series has a wide geographical spread and covers 310 towns and 1181 villages. With a weighting scheme derived from the Consumer Expenditure Survey Data (2004-05), the new series has an all India character. Since the series is fairly new, inflation numbers are available only for 12 months so far. Broad food and non-food weights of the new CPI series more or less match those on CPI-IW. Though the points of inflection are common, the new series shows higher overall food inflation than the CPI-IW (Table 4.8).
Why has inflation persisted? 4.18 Inflation in protein foods, particularly eggs, meat and fish, and in fruits & vegetables has persisted because of changes in dietary habits and supply constraints. Long time series data from National Accounts on private final consumption expenditure (PFCE) indicate a structural shift in per capita consumption (Table 4.9). The share of food consumption in total consumption has declined over
time, from an average of 51.34 per cent during 195060 to an average of 27.17 per cent during 20072012. Average annual growth in per capita food consumption at 0.94 per cent during 1950-2012 has been significantly lower than the overall growth in consumption averaging 1.84 per cent. The consumption of protein foods, though increasing more slowly than the increase in PFCE, had a growth of 1.50 per cent during 1950-2012, higher than the growth of overall expenditure on food. Therefore, the share of protein foods within overall food expenditure increased from 26.28 per cent during 1950-60 to 33.71 per cent during 2007-2012 (Figure 4.8). 4.19 A secular decline in expenditure on food relative to that in other commodities and services as expected has been associated with rising income levels (Figure 4.9). Average annual growth of per capita expenditure during 1950-2011 was 2.40 per cent for non-food group. Within non-food commodities and services, average annual growth
Table 4.9 : Change in consumption pattern Average Annual Consumption per capita at
Trend Growth Rates
2004-05 prices (Rupees) 1950-91 1992-97 1997-02 2002-07 2007-12 1950-2012 1950-1991 1991-2012 Food
4550
5803
6123
6066
6700
0.94
0.83
0.88
Protein Food (Pulses; Milk; Eggs, Meat & Fish)
1090
1654
1881
1962
2258
1.50
0.65
2.09
Cereals
1560
1705
1634
1578
1586
0.22
0.46
-0.55
Others
1900
2444
2608
2525
2856
1.10
1.25
0.92
Non-Food
4623
7206
9192
12015
17957
2.48
1.36
5.79
clothing & footwear
555
951
1083
1312
2062
3.05
3.13
4.61
medical care & health services
255
404
620
879
1172
3.64
3.46
7.09
transport & communication
523
1703
2402
3396
4796
5.57
4.41
7.09
Other Non-food
3290
4147
5087
6428
9927
1.64
0.49
5.35
Private Final Consumption Expenditure (PFCE) in domestic market
9174
13009
15315
18081
24657
1.84
1.10
3.99
49.6
44.61
39.98
33.55
27.17
Share of Food Groups in total Food Consumption (%) Protein foods 23.96
28.51
30.72
32.35
33.71
Cereals
34.29
29.39
26.68
26.01
23.67
Others
41.75
42.11
42.60
41.63
42.63
Share of Food in PFCE (%)
Source : National Accounts Statistics (NAS) various issues. Note : Last 4 periods correspond to Plan Periods.
http://indiabudget.nic.in
Prices and Monetary Management
was 5.53 per cent, 3.97 per cent, 3.60 per cent and 3.42 per cent for transport and communication; recreation and education; medical and health care;
http://indiabudget.nic.in
89
and miscellaneous goods and services, respectively. Growth in expenditure for these sub sectors significantly exceeded the growth in expenditure on
90
Economic Survey 2012-13 2012-13, 19 commodities (commodity groups) with a 28.68 per cent weight in WPI contributed 64.38 per cent to total inflation (Table 4.10). The contribution of each of these commodities to inflation in Q2 or Q3 of 2012-13 exceeded their weight by 1.5 times.
food. Post reform period (1992-93 to 2010-11) has shown a faster shift in consumption expenditure. 4.20 An increase in income made this desirable shift in consumption feasible. At national level, per capita income, adjusted for inflation continued to rise. There was also a significant increase in rural wages. Rural wages in nominal terms went up by an average of over 18 per cent from 2008-09. Inflationadjusted rural wages also went up by 7.5 per cent during this period. (Figure 4.10)
4.23 Inflation in India, as in other countries stems from a traditional mismatch between demand and supply. The relative magnitude of the imbalance, which varies across sectors, leads to relatively high or low inflation. Also, a change in controlled prices, as with diesel, can lead to inflation.
4.21 The input costs for producers in both the food and non-food segments, as reflected in the prices of feed, fodder and other inputs also increased. An increase in Minimum Support Price (MSP), while necessary to ensure remunerative returns to farmers, raised the floor prices and also contributed to the rise in input prices.
4.24 Two factors contributed to an increase in inflation in cereals. Besides an increase in the MSP for wheat and rice, there has been a mismatch between open market availability and demand, particularly for wheat. A sharp increase in procurement of wheat in particular, reduced its open market availability pushing prices upwards. While in normal circumstances, higher procurement raises the ratio of stock to use and may lead to price stabilization, a higher procurement which reduced
Commodities under price pressure and policy initiatives 4.22 As indicated earlier, a few commodities have contributed disproportionately to inflation. In Q2 of
Table 4.10 : Weighted Contribution to Headline WPI Inflation: Items to be watched Major groups
Weights 2010-11
Food Products
13.03
2011-12
2012-13
FY
Q1
Q2
Q3
Q4
Q1
Q2
Q3P
9.44
12.91
14.79
11.03
14.02
22.99
30.24
35.37
Rice
1.79
1.33
0.66
0.84
0.68
0.68
1.61
2.77
4.02
Wheat
1.12
0.44
-0.01
-0.14
-0.52
-0.47
1.06
1.96
3.57
Maize
0.22
0.27
0.84
0.59
0.44
0.62
0.29
0.41
0.75
Gram
0.33
-0.06
0.25
0.82
1.77
1.89
2.44
2.96
1.95
Potatoes
0.20
-1.2
0.00
0.25
-0.38
-0.08
1.50
1.64
1.63
Onions
0.18
0.79
0.20
0.76
-2.09
-3.40
-0.24
-0.65
0.74
Fish (inland+ marine)
1.30
5.47
2.29
2.96
4.12
6.79
5.64
4.70
4.20
Black Pepper
0.03
0.14
0.33
0.31
0.41
0.41
0.36
0.37
0.24
Tea (primary+ manufacturing)
0.80
0.04
0.94
0.31
-0.39
0.48
0.17
0.37
0.93
Oil seeds+ edible oils+ oilcake
5.32
2.47
6.27
6.89
5.64
6.26
8.84
11.96
13.22
Sugar
1.74
-0.25
1.14
1.20
1.35
0.84
1.32
3.75
4.12
Manufactured Products
1.45
3.67
3.97
4.74
6.69
7.55
6.91
6.71
4.33
Non-Urea Fertilizer
1.08
0.83
1.01
1.39
2.90
3.41
3.33
4.00
2.81
Gold, Sliver & gold ornaments
0.37
2.84
2.96
3.35
3.79
4.14
3.58
2.71
1.52
Other products
14.2
18.3
23.01
24.37
30.23
38.8
28.65
23.65
24.68
Crude Petroleum
0.90
1.54
5.39
5.61
6.43
8.74
2.79
2.79
1.24
Coal
2.09
1.49
3.38
3.29
3.48
7.12
4.68
4.41
4.72
Non Administered Mineral Oil
3.04
6.63
10.92
10.20
13.73
13.18
9.01
7.84
3.17
Electricity
3.45
1.59
0.08
-0.09
0.80
1.40
2.89
5.31
4.66
Gaur Seed
0.05
0.04
0.25
0.50
0.68
2.40
3.99
1.28
0.85
High Speed Diesel
4.67
7.01
2.99
4.86
5.11
5.96
5.29
2.02
10.04
Source: Office of the Economic Adviser.
http://indiabudget.nic.in
P : Provisional
Prices and Monetary Management
non-PDS availability in a significant manner created inflationary pressures. Higher international prices and reduced global availability also pushed international prices upwards. This created space for exports of wheat and again reduced private availability of wheat. While the FCI has undertaken open market sales for domestic use and exports, these operations have so far had limited impact on domestic prices. Perhaps more aggressive open market sales may be necessary to cool down the market, though with MSP providing a high floor to market prices, there is limited room. An increase in MSPs of wheat and rice also partly contributed to higher domestic prices. The difference between retail prices of wheat and its MSP widened from July, 2012. In case of rice also, difference widened during March-October, 2012 and again in December, 2012 (Figure 4.11(a) and 4.11(b)). In pulses too an upsurge in prices has largely been due to persistent mismatch in demand and domestic availability. In the long run, containment of inflation in pulses would require an increase in the supply of pulses through improved productivity. 4.25 Prices of vegetables have remained volatile in the recent past. Apart from a demand and supply mismatch, inefficient intermediation and the loss in the value of vegetables at different stages of their movement from farm to mouth have contributed to an increase in prices, high volatility, and significant dispersion across locations. All these could be reduced considerably with improvements in the supply chain. The existence of a large number of intermediaries between the farmer and the consumers and time delays due to their activities leads to intermediation costs and value losses. http://indiabudget.nic.in
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Organised marketing and greater private sector participation is critical for improving this state of affairs but it requires reforming the APMC legislation. The Inter Ministerial Group on Inflation (IMG)(see box 4.1) had suggested exempting perishables from the purview of APMC Act, providing farmers the freedom to make direct sales to aggregators and processors, introducing electronic auction platforms for all mandis and replacing licenses of the APMC market with open registration backed by bank guarantees. Electronic display of prices for short duration vegetable crops could reduce the asymmetry in information flow and provide appropriate marketing signals to producers. A committee set up by Planning Commission to encourage investment in supply chains has also suggested exempting perishables from the purview of APMC. 4.26 There have been some developments along these recommended lines. To develop integrated value chains, the government has emphasized the need for exempting vegetables from the levy of market fees. The States of Madhya Pradesh and West Bengal have recently waived the market fee on fruits and vegetables. Such waivers are expected to promote investment in development of backend infrastructure by private sector. The Ministry of Agriculture in collaboration with Forward Markets Commission is facilitating display of spot and futures prices on price ticker boards in around 1700 mandis in different states. Recently, the government has permitted Foreign Direct Investment (FDI) in multibrand retail trading. This will help consumers and farmers by improving the logistical facilities connecting the two.
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Box 4.1 : Inter-Ministerial Group (IMG) on Inflation An Inter-Ministerial Group (IMG) on inflation was set up on 2 February, 2011, on the recommendation of the Prime Minister, under the chairmanship of Chief Economic Adviser, Ministry of Finance to review the overall inflation situation, with particular reference to primary food articles. The IMG has so far had eight meetings between 15 February, 2011 and 31 January, 2012 covering various aspects, including information system on all aspects of price monitoring, Foreign Direct Investment (FDI) in multi-brand retail, reform in APMC Act, policy options for diesel pricing and inflation in protein rich products among others. In the sixth and seventh meetings of IMG held on 28 May, 2012 and 14 September, 2012, IMG had discussed policy options to reduce the distortions in the prices between diesel and other petroleum product. It was suggested that in a gradual manner subsidy on diesel may be shifted to fixed per litre basis and price adjustment could be more frequent, and with regular intervals, may be on a monthly basis. It was also mentioned that any revision in diesel prices would have a direct and indirect impact on inflation, which continues to be at elevated levels. The revision, therefore, needs to be calibrated. IMG further recommended a long term credible policy intervention for augmenting supplies of primary products. MSP based incentives without a breakthrough in productivity level, may not be sufficient. Productivity of pulses could be increased with the use of genetic seeds and a proper regulatory environment.
4.27 The persistence of high inflation in animal products has partly been due to the regional concentration of production centres, rising input costs which raised the floor price and lower productivity. While in some cases, there has been an increase in availability, typically it has been at a higher cost. Further, due to limited organized marketing (even in case of milk it is around 15 per cent of total milk produced) back end infrastructure such as a seamless cold chain has not been established, reducing quality and increasing wastage. 4.28 There was an upsurge in sugar prices in first half of the current year with domestic and global prices showing a divergent trend. An increase in prices in July 2012 has partly been due to the imposition of import duty. While there are no price controls per se (90 per cent of sugar production is for free sale), a regulated release mechanism restricts availability and may often distort prices. The quantum of non-levy sugar to be released every quarter for domestic consumption is decided by the Central Government taking into consideration the production, stock, requirement and prices of sugar in the country. Though this mechanism is meant to ensure price stability, sugar prices on the contrary, have demonstrated a high degree of volatility. The Rangarajan Committee, after studying the problems of the sugar industry, has recommended deregulation of the sugar industry and dismantling of the regulated release mechanism together with the levy obligations. These recommendations are under consideration of the Department of Food and Public Distribution. http://indiabudget.nic.in
4.29 Except some of the primary food articles, urea and administered petroleum products, the rest of the components in WPI are fully tradeable and none of these products are under an administered price regime. Domestic prices for these products are governed both by global commodity prices and their domestic availability. A stable rupee and moderate global prices, both relatively exogenous factors, may be important in keeping the prices of these products stable. 4.30 The inflation picture is further complicated in India because of a shifting consumption basket to which the supply of proteins and micro-nutrients like fruits and vegetables has not responded quickly. Interest rates are probably an inappropriate tool to shift people’s preferences. This is why it may be reasonable for the RBI to look through the rise in food prices (which is what it does by focusing on NFM “core” inflation, which puts lower emphasis on food prices), while trying to ensure that food inflation does not feed into wages and generalized inflation. However, food is a large part of a worker’s consumption basket, and higher food prices do feed into higher wage demands. What can be done? Government’s efforts to create the conditions for greater protein supply (some of which are described earlier) are important. Tempering government interventions that raise wage increases above productivity increases may also be worth exploring.
Measures to contain inflation 4.31 Inflation has been a major cause of concern for both the government and the RBI. They have taken a number of measures to contain it as
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Box 4.2 : Measures Taken and Proposed by the Government to Contain Price Rise 1. Fiscal measures
Import duties for wheat, onions, pulses, and crude palmolein were reduced to zero and 7.5 per cent for refined vegetable & hydrogenated oils.
Duty-free import of white/raw sugar was extended up to 30 June 2012; presently the import duty has been fixed at 10 per cent.
2. Administrative measures
Ban on exports of onions was imposed for short periods of time whenever required. Exports of onions were calibrated through the mechanism of minimum export prices (MEP).
Futures trading in rice, urad, tur, guar gum and guar seed was suspended.
Exports of edible oils (except coconut oil and forest-based oil) and edible oils in blended consumer packs up to 5 kg with a capacity of 20,000 tons per annum and pulses (except Kabuli chana and organic pulses and lentils up to a maximum of 10,000 tonnes per annum) were banned.
I Stock limits were imposed from time to time in the case of select essential commodities such as pulses, edible oil, and edible oilseeds and in respect of paddy and rice up to 30 November 2013.
3. The government has undertaken various measures to insulate the vulnerable sections of society from price rise.
The central issue prices (CIP) for rice (at Rs 5.65 per kg for below poverty line [BPL] and Rs 3 per kg for Antodaya Anna Yojana [AAY] families) and wheat (at Rs 4.15 per kg for BPL and Rs 2 per kg for AAY families) have been maintained since 2002.
Under the targeted PDS (TPDS) allocation of foodgrains is being made to 6.52 crore AAY and BPL families at 35 kg per family per month at a highly CIP.
The government has allocated rice and wheat under the Open Market Sales Scheme (OMSS).
The scheme for imports of pulses which envisaged imports for distribution to BPL households through the PDS with a subsidy of Rs 10 per kg operated from November 2008 to June 2012. The government has decided to implement a varied form with a subsidy element of Rs 20 per kg per month for BPL cardholders for the residual part of the current year. The targeted BPL cardholders will be as estimated by the Department of Food and Public Distribution.
The Scheme for Distribution of Subsidized Imported Edible Oils has been implemented since 2008-9 through state/ union territory (UT) governments for distribution of 1 litre per ration card per month with a central subsidy of Rs 15 per kg. The scheme has been extended up to 30 September 2013.
4. Budgetary and other measures
A number of measures were announced in Union Budget 2012-13 to augment supply and improve storage and warehousing facilities. The government launched a National Mission for Protein supplements in 2011-12 with an allocation of Rs 300 crore. To broaden the scope of production of fish to coastal aquaculture, apart from fresh water aquaculture, the outlay in 2012-13 was stepped up to Rs 500 crore. Recently the government permitted FDI in multibrand retail trading. This will help consumers and farmers as it will improve the selling and purchasing facilities.
5. Monetary measures
The RBI had also taken suitable steps to contain inflation with 13 consecutive increases by 375 basis points (bps) in policy rates from March 2010 to October 2011.
indicated in Box 4.2. The measures could be classified as those that contain demand (such as higher interest rates), those that improve supply (such as incentives for producers), those that shield vulnerable consumers (such as targeted subsidies for below poverty line (BPL) families), those that protect all against a price rise (such as subsidizing diesel prices), and those that shut down markets so as to suppress price signals (such as shutting http://indiabudget.nic.in
down commodity futures markets) or to quell price increases (such as export bans). 4.32 Given that inflation has been persistent, it suggests a significant mismatch between demand and supply. In the short run, curbing demand moderately so as to allow supply to catch up can be an effective tool, while in the long run, measures to increase supply are the only way to have non-
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Trends in Global Commodity Prices
inflationary growth. For some articles such as food, where demand is hard and probably unwise to curb, supply increases have to be the primary solution. The government can curb demand through fiscal consolidation, while the RBI does so through high policy rates and tight liquidity. These measures may have an adverse effect on growth, but that is precisely how they curb inflation. Given that India faces a number of constraints on supply, such as low agricultural productivity, poor infrastructure, and a limited skill base, the growth-friendly way to deal with inflation is to focus on boosting the supply side, as a number of government initiatives attempt. And because the vulnerable segments of society may be adversely affected before supply side measures kick in, some targeted support is reasonable. However, broader support (such as a diesel subsidy) tends to suppress price signals, boosts demand excessively, expands the fiscal deficit, and makes the fight against inflation harder. Such short term palliatives need to be avoided. Equally counterproductive are periodic bans of exports, imposition and removal of tariffs, and repeated closure of futures markets. These tend to make it harder for producers to plan, reduces their incentives to produce by limiting their remuneration, and inhibits the production increases that are needed to bring prices under more sustained control.
4.33 Global commodity prices peaked in Q3 of 2008-9. Prices started decelerating thereafter and this trend continued until January 2009, since then prices have firmed up. The increase was particularly sharp in 2010 and Q1 of 2011, both for energy and non-energy commodities. While non-energy prices began to moderate from Q2 of 2011-12 and inflation began to turn negative for most of the commodity groups, the moderation in energy prices began a little later (Table 4.11 and Figure 4.12). In the first three quarters of the current year, both energy and non-energy prices registered a decline. This was partly because of the base effect and partly because of a decline in prices, particularly for beverages and basic metals. 4.34 Global supply shortages in food grains in 201213, particularly in wheat and coarse grains resulted in sharp increase in prices in wheat and maize, pushing up the commodity index for the broad group of grains. In Q2 of 2012-13, fats and oils also witnessed an increase in prices because of the food, feed and fuel leakages. Prices for fats and oils moderated thereafter and remained range bound in Q3. 4.35 The benign inflationary trend is expected to continue and the World Bank in its Global Economic
Table 4.11 : Inflation in Global Commodity Groups Major groups
2010-11 2011-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Index (2005=100) Energy
154.5
193.0
197.6
187.2
186.6
200.8
183.7
183.2
182.1
Non-energy
188.4
202.8
217.2
212.3
188.8
192.9
189.3
191.0
186.9
Beverages
194.1
196.2
218.7
210.7
183.7
171.7
162.7
169.7
160.8
Grains
189.7
236.8
245.8
245.4
229.3
226.8
227.1
263.9
258.9
Fats & Oils
202.2
216.7
227.1
220.4
202.5
216.9
231.1
250.2
221.9
Base Metals
181.0
185.1
203.8
194.4
164.1
178.2
166.2
162.1
167.7
Precious Metals
294.2
385.7
370.2
404.5
382.0
386.1
363.6
372.7
390.7
Energy
21.10
24.94
38.35
35.12
20.02
10.80
-7.05
-2.14
-2.41
Non-energy
24.82
7.63
32.70
24.52
-4.62
-12.93
-12.83
-10.02
-1.01
Beverages
17.47
1.08
24.33
12.61
-5.09
-21.91
-25.61
-19.43
-12.46
Inflation YOY (%)
Grains
14.14
24.87
65.93
45.07
10.31
-2.87
-7.63
7.53
12.87
Fats & Oils
18.22
7.20
36.78
20.96
-7.78
-9.93
1.76
13.54
9.57
Base Metals
30.08
2.27
27.41
19.35
-13.90
-15.40
-18.44
-16.59
2.16
Precious Metals
31.02
31.12
41.02
50.20
21.75
16.61
-1.77
-7.85
2.27
Source : World Bank Pink Sheet.
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Box 4.3 : Global Commodity Prices : Forecast Table : Nominal Price Indices- actual and forecasts (2005=100) Forecast
Rate of change (%) 2012-13 2013-14
2008
2009
2010
2011
2012
2013
2014
183
115
145
188
187
183
183
-2.6
0.1
Energy Non-Energy
182
142
174
210
190
186
180
-2.0
-3.2
Metals
180
120
180
205
174
176
176
1.3
0.1
Agriculture
171
149
170
209
194
188
180
-3.2
-4.4
Food
186
156
170
210
212
205
192
-3.2
-6.4
Grains
223
169
172
239
244
239
225
-2.1
-6.0
Fats and oils
209
165
184
223
230
220
206
-4.2
-6.5
Other food
124
131
148
168
158
153
143
-3.1
-6.6
Beverages
152
157
182
208
166
158
155
-4.7
-2.0
Raw Materials
143
129
166
207
165
162
162
-2.2
0.4
Fertilizers
399
204
187
267
259
245
232
-5.6
-5.3
Precious Metals
158
175
272
372
378
378
353
0.0
-6.7
97
62
79
104
105
102
102
-2.9
0.2
872
973
1225
1569
1670
1600
1550
-4.2
-3.1
Crude oil ($/bbl) Gold ($/toz) Source : World Bank
The broad assessment of inflation for commodity groups by the World Bank is as under:
•
Nominal oil prices are expected to average US $102/bbl in 2013 and 2014 as supplies accommodate moderate demand growth. Over the longer term, oil prices are projected to fall in real terms, due to growing supply, efficiency gains, and a substitution away from oil. While OPEC may continue to limit production, it probably will not let prices rise too high, for fear of inducing a search for alternative oil supplies or energy sources that alters the long-term price of oil.
•
Overall metal prices, except copper are expected to increase. Aluminum prices may increase by 3 percent in 2013 and remain at that level in the two subsequent years due to rising power costs, and the fact that current prices have pushed some producers at or below production costs. Copper prices may decline mostly due to substitution pressures, and slowing demand. Although there are no physical constraints in metal markets, declining ore grades, environmental issues, and rising energy costs may force prices higher.
•
Assuming that there are no major shifts for biofuels, agricultural prices are projected to decline in 2013. Specifically, wheat and maize prices are expected to be lower than their 2012 levels. Soybean and palm oil prices are also expected to be lower because of adequate availability.
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Prospects in January, 2013 has projected nonenergy prices to continue to disinflate, with moderate inflation expected for energy products (Box 4.3). The impact of benign inflationary expectations internationally will have a moderating influence on commodity prices in India. Domestic prices of industrial raw materials and metals usually follow the international trend and in case of crude oil and edible oils, international prices directly impact the domestic prices because of a high import dependency.
RESIDEX 4.36 Rural urban migration is an inevitable part of economic growth. Resources are reallocated from low productivity rural sectors to high productivity urban centric activities. This, coupled with a faster productivity growth through externalities, generates economic dynamism and accelerated growth. But the migration of population from rural to urban areas exerts pressure on civic amenities and housing. Though the cost of delivering basic services is cheaper in densely populated urban centres relative to sparsely populated rural areas, investment needs to be made in civic amenities and housing. The rising share of urban population from around 17 per cent in 1951 to 30 per cent in 2011 and to an expected 50 per cent by 2040, therefore, generates both opportunities and challenges for raising resources.
4.37 Inadequate housing activities and the paucity of innovative financing schemes for housing have also created the problems of urban slums. Until recently, we did not have an index to capture the prices of residential buildings in urban areas which could be used to assess collateral values for financing housing. In an initiative which begun in 2005-6, the National Housing Bank undertook a pilot scheme for examining the feasibility of preparing a Residex, an index to capture changes in the prices of residential buildings at the national level. Residex, launched in July 2007, covers 20 cities and has been released with a quarterly frequency from 2011-12. 4.38 The pace of change of prices of residential properties varies considerably across the cities (Table 4.12). While in case of Hyderabad, Jaipur and Bangalore, there has been a decline in prices in July-September 2012 compared to the prices in 2007, Pune, Bhopal and Chennai have witnessed an increase of over 100 per cent in residential prices. Increase in prices in the other three metro cities, that is, Delhi, Mumbai and Calcutta, have also been in the range of 75 per cent to 100 per cent.
GDP Deflators 4.39 The CPI and WPI are proxy measures for inflation. But for the economy as a whole, GDP deflators whether at market prices or factor costs are more appropriate measures of the inflation in
Table 4.12 : Quarterly Movement of Housing Price Index in Major Cities (2007=100) Cities
2011-12
2012-13
Change in prices since Jul-Sept 2007 (%)
Apr-Jun
Jul-Sept
Oct-Dec
Jan-Mar
Apr-Jun
Hyderabad
91
84
79
86
85
84
-15.7
Jaipur
64
65
64
80
78
85
-14.7
Bengaluru
92
93
100
92
100
98
-1.7
Patna
146
141
140
129
140
138
37.6
Lucknow
160
154
165
164
171
175
75.0
Delhi
147
154
167
168
172
178
78.5
Ahmedabad
169
163
167
164
174
180
79.7
Kolkata
194
191
190
191
196
191
90.9
Mumbai
181
194
193
190
197
198
98.0
Pune
150
169
184
181
200
201
101.1
Bhopal
224
208
211
204
207
206
106.1
Chennai
248
271
296
304
309
312
212.0
Source : National Housing Bank
http://indiabudget.nic.in
Prices and Monetary Management goods and services produced. These alternate measures match WPI but diverge somewhat from CPI-IW. In the case of CPI-IW, moderation in inflation in Q2 of 2009-10 is insignificant, largely because food inflation remained elevated during this period.
MONETARY MANAGEMENT Monetary Developments During 2011-12 4.40 The RBI’s monetary policy stance has continued to focus on the twin objectives of containing inflation and facilitating growth (a flow chart depicting the transmission of monetary policy is at Box 4.4). Mounting inflationary pressures during January 2010 to October 2011 required adoption of a tight monetary policy by the Reserve Bank of India (RBI). During this period, RBI raised
97
policy rates (repo rates) by 375 basis points, from 4.75 per cent to 8.5 per cent. There was a moderation in inflation from its peak of 10.9 per cent in April 2010, to an average of 7.6 per cent during AprilDecember 2012. However, increasing risks to growth from external as well as domestic sources and tight monetary policy in face of persistent inflationary pressures has contributed to a sharper slowdown of the economy than anticipated. There has been a shift in the policy stance of RBI since October 2011 wherein it has attempted to balance growth and inflation dynamics. It reduced repo rates by 50 basis points in April, 2012 and again in January 2013 by 25 basis points and reduced the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) to improve liquidity conditions (Table 4.13). 4.41 As per the assessment of RBI, global economic and financial conditions have continued
Table 4.13 : Revision in Policy Rates (per cent) Effective date 2010-11 20 Apr. 2010 24 Apr. 2010 2 Jul. 2010 27 Jul. 2010 16 Sep. 2010 2 Nov. 2010 18 Dec. 2010 25 Jan. 2011 17 Mar. 2011 2011-12 3-May-11 9-May-11 16 Jun. 2011 26 Jul. 2011 16 Sep. 2011 25 Oct. 2011 28 Jan. 2012 10 Mar. 2012 2012-13 17 Apr. 2012 18 Jun. 2012 11 Aug. 2012 22 Sep. 2012 03 Nov. 2012 18 Dec. 2012 29 Jan. 2013 09 Feb 2013
Repo rate
Reverse repo rate
CRR
SLR
5.25 5.25 5.50 5.75 6.00 6.25 6.25 6.50 6.75
3.75 3.75 4.00 4.50 5.00 5.25 5.25 5.50 5.75
5.75 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
25.00 25.00 25.00 25.00 25.00 25.00 24.00 24.00 24.00
7.25 7.25 7.50 8.00 8.25 8.50 8.50 8.50
6.25 6.25 6.50 7.00 7.25 7.50 7.50 7.50
6.00 6.00 6.00 6.00 6.00 6.00 5.50 4.75
24.00 24.00 24.00 24.00 24.00 24.00 24.00 24.00
8.25 8.50 9.00 9.25 9.50 9.50 9.50
8.00 8.00 8.00 8.00 8.00 8.00 7.75 7.75
7.00 7.00 7.00 7.00 7.00 7.00 6.75 6.75
4.75 4.75 4.75 4.50 4.25 4.25 4.25 4.00
24.00 24.00 23.00 23.00 23.00 23.00 23.00 23.00
9.00 9.00 9.00 9.00 9.00 9.00 8.75 8.75
Source : Reserve Bank of India (RBI).
http://indiabudget.nic.in
* Note: The MSF commenced from 9 May 2011.
MSF rate*
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Economic Survey 2012-13
Box 4.4 : Transmission of Monetary Policy
Box 4.4: Transmission of Monetary Policy
Policy Rates
Expectations
Money Market Interest Rates
Money Credit
Asset Prices
Bank Rates
Exchange Rate
Shocks outside the control of the Reserve Bank Changes in bank capital
Wage and pricesetting
Supply and demand in goods and labour markets
Changes in the global economy
Domestic Prices
Import Prices Changes in fiscal policy
http://indiabudget.nic.in
Price developments Changes in commodity prices
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Prices and Monetary Management to remain too fragile to provide any external growth stimulus to the economy. On the other hand, inflationary pressures originating from within the country and outside, particularly the depreciating rupee exerting its pressure on tradables, may make any reduction in policy rates counterproductive. Furthermore, tight liquidity conditions emerged as a risk to adequate flow of credit to productive sectors. Monetary policy therefore has continued to follow a cautious stand, which, while keeping liquidity comfortable to support growth, had to pause in its policy rate reduction during April-December 2012 due to persistent inflation risks. This cautious monetary policy stance was also considered necessary by RBI in view of mounting subsidies and deteriorating fiscal situation. Government in September 2012, however, announced a road map of fiscal consolidation with a clearly defined midterm fiscal target. It also attempted to improve the investor perception and create a favourable environment for investment. In January 2013, the Government also announced an increase in diesel prices to indicate its resolve to reduce fiscal deficit consistent with the medium term fiscal target announced earlier in September, 2012. There has been some moderation in inflation in the Q3 of 201213 and with the expected fiscal consolidation, the current macroeconomic situation creates room for a somewhat accommodative monetary policy. 4.42 The monetary policy stance of Reserve Bank of India in the current year was based on its projection of macroeconomic parameters for 201213. In its Monetary Policy Statement 2012-13 released on April 17, 2012, RBI expected GDP growth at 7.3 per cent and WPI inflation to gradually
moderate to 6.5 per cent by March 2013. In its First Quarter Review of July 31, 2012 while the growth projection was revised downwards to 6.5 per cent, the WPI inflation projection was revised upwards to 7.0 per cent. Consistent with this growth and inflation expectation, it set a target of M3 and non-food credit growth of 15 per cent and 17 per cent, respectively. In its Second Quarter Review on October 30, 2012, RBI reduced its projection of GDP growth further to 5.8 per cent and revised its inflation projection upwards to 7.5 per cent. The indicative targets of M3 and credit growth, therefore, were revised downwards to 14 per cent and 16 per cent, respectively. RBI in its Third Quarter Review of monetary policy on January 29, 2013 reduced its GDP projection to 5.5 per cent with expected inflation also moderating to 6.8 per cent by March 2013. Further, M3 growth projections were lowered to 13.0 per cent even though credit growth was retained at 16.0 per cent. Movement of the monetary aggregates, however, indicate that the growth of broad money and credit have been below the indicative levels set by RBI. 4.43 The moderation in growth and nearly flat inflation at around 7-8 per cent in the current year also affected the growth of aggregate deposits, from an average of 17.4 per cent in Q1 of 2011-12 to 12.9 per cent in Q3 of 2012-13. The rate of growth of bank credit also moderated from its peak of 21.7% in Q1 of 2011-12 to around 16-17% in the last 2 quarters. A lower deposit growth, notwithstanding the moderation in credit growth has given rise to an asset-liability gap, which is also indicated by the increase in the credit-deposit ratio (Table 4.14) Moderating growth and deceleration in capital
Table 4.14 : Movement of Key Monetary Aggregates (y-o-y growth rates in per cent) 2010-
2011-
11
12
Q1
Q2
Q3
Q4
Q1
Q2
GDP (at current market prices)
18.8
15.4
18.9
16.6
14.8
12.2
12.2
11.3
-
Reserve Money (Mo)
21.5
14.1
17.6
15.9
14.7
8.7
7.3
6.5
4.3
Broad Money (M3)
16.2
15.8
17.3
16.8
15.4
13.8
14.2
13.6
12.6
Aggregate Deposits
15.7
16.2
17.4
17.2
16.0
14.3
14.7
14.0
12.9
Bank Credit
21.3
18.7
21.7
19.6
17.6
16.4
18.1
16.8
16.5
Investments
9.4
14.3
10.3
15.5
15.5
15.7
16.1
14.4
15.2
1.28
1.27
1.22
1.20
1.31
1.35
1.20
1.17
-
5.0
5.0
4.92
5.03
5.07
5.12
5.24
5.37
5.44
73.3
74.7
74.3
73.5
74.3
76.4
76.5
75.4
76.7
Velocity of Money (M3/GDP) Money Multiplier (M3/M0) CD Ratio (per cent) Source : RBI
http://indiabudget.nic.in
2011-12
2012-13 Q3
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Economic Survey 2012-13
Table 4.15 : Component and Sources of Reserve Money (y-o-y growth rates in per cent) 2011-12 Q2 Q3
2010-11
2010-12
Q1
21.5
14.1
17.6
15.9
Currency in circulation
19.2
14.1
17.1
Bankers’ Deposits with RBI
29.1
14.8
19.5
Currency as % of Mo
73.1
73.2
Reserve Money
Q4
Q1
14.7
8.7
7.3
14.6
12.8
12.3
20.0
20.9
0.9
73.4
72.1
72.6
2012-13 Q2 Q3 6.5
4.3
12.3
13.3
11.7
-6.4
-11.0 -15.5
74.5
76.9
76.7 77.8
Components of Reserve Money
Sources of Reserve Money Net foreign exchange assets of RBI
0.9
11.9
9.1
11.1
19.1
8.2
14.4
Currency Liabilities to the Public
13.0
6.4
10.2
4.7
5.3
5.5
8.3
14.3 13.6
9.0
1.6
Net Non-Monetary liabilities of RBI
-8.7
45.7
25.0
32.2
71.4
51.8
74.1
49.9 19.0
FE assets as % to Mo
107
105
100
106
111
102
106
108
108
Source : RBI
formation, however, increased the flow of banking sector funds to investment in government and other securities.
Reserve Money (M0) 4.44 The rate of growth of reserve money comprising currency in circulation and deposits with RBI (bankers and others) decelerated from an average of 17.6% in Q1 of 2011-12 to 4.3% in Q3 of 2012-13. Almost the entire increase in the reserve money of ` 2381 billion between Q3 of 2011-12 and Q3 of 2012-13 consisted of increase in currency in circulation. As sources of reserve money, net RBI credit to Government and increase in net financial assets of RBI contributed to the growth of base money. The rate of growth of base money was muted largely because of an increase in non-monetary liabilities of RBI which increased from ` 1572 billion in 2011-12 to ` 3596 billion between Q3 of the current year to Q3 of 2011-12. Though net foreign exchange
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assets constituted more than 100% of the base money, rate of growth of acquisition of NFA has moderated considerably, and was 1.6% in Q3 of 2012-13. Increase in net monetary liabilities of RBI was particularly sharp in 2011-12 and first 2 quarters of the current year. Currency constituted nearly 3/ 4th of the base money.
Broad money (M3) 4.45 The rate of growth of broad money (M3) was not only lower than the indicative growth set by the Reserve Bank of India but also it witnessed continuous and sequential deceleration in the last 7 quarters. Overall M3 growth moderated to 11.2% in December, 2012. Aggregate deposits with the banks were the major component of broad money counting for over 85% of total M3 and this share has almost remained stable. The sources of broad money are net bank credit to the Government and to the commercial sector. These two together
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Table 4.16 : Components and Sources of Broad Money 2010-
2011-
11
12
Q1
Q2
Q3
Q4
Q1
Q2
Q3
16.2
15.8
17.3
16.8
15.5
14.0
14.3
13.9
12.7
Currency with the public
19.2
14.0
16.9
14.4
12.6
12.2
12.1
13.1
11.7
Aggregate deposits with banks
15.7
16.2
17.4
17.2
16.0
14.3
14.7
14.0
12.9
Aggregate deposits with banks as % to M3
85.8
86.1
85.6
86.3
86.3
86.0
85.9
86.4
86.4
Bank Credit to Government
21.5
21.8
18.9
22.1
23.1
23.1
22.1
20.2
17.7
Bank credit to Commercial Sector
20.6
18.7
21.6
19.6
17.7
16.6
18.2
17.0
16.4
0.9
11.4
9.6
10.2
17.5
8.3
14.4
9.1
1.4
Net Currency Liability to the public
13.0
6.4
10.2
4.7
5.3
5.5
8.3
14.3
13.6
FE Assets as % to M3
22.3
21.5
21.1
21.6
22.5
20.6
21.1
20.7
20.3
Credit to Commercial Sector as % to M3
63.0
64.6
63.9
63.8
64.5
66.1
66.1
65.5
66.6
Rs Billion Broad Money
2011-12
2012-13
Components of Money Stock
Sources of M3
Net FEA of the banking sector
Source : RBI
accounted for nearly 100% of the broad money in 2012-13 compared to 89% in 2009-10. The rate of growth of the bank credit to the commercial sector, however, declined from an average of 21.6% in Q1 of 2011-12 to 16.4% in Q3 of 2012-13. The rate of growth of bank credit to Government continued to be sticky at over 20% until Q2 of 2012-13 before moderating to 17.7% in Q3. Though the rate of growth of foreign exchange assets of the banking sector witnessed a decelerating trend, their share in overall broad money continued to remain at around 20%. 4.46 At end March 2012, the money multiplier (ratio of M3 to M0) was 5.2, higher than end-March http://indiabudget.nic.in
2011, aided by the cumulative 125 basis point reduction in CRR cut effected in Q4 of 2011-12. During the current financial year 2012-13, the money multiplier has generally stayed high reflecting the CRR cuts. As on December 28, 2012, the money multiplier was 5.5 compared with 5.2 on the corresponding date of the previous year.
LIQUIDITY MANAGEMENT 4.47 One of the objectives of the monetary policy is to provide adequate liquidity to the economy. A liquidity deficit, however, is considered necessary for quicker and correct signaling of the monetary
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Economic Survey 2012-13
policy stance. The medium term trend indicates a widening liquidity deficit, requiring liquidity injection often exceeding the 1 per cent level of net demand and time liabilities considered comfortable by RBI (Figure 4.15). During 2011-12, liquidity conditions had remained benign until mid-November, but pressures intensified in the subsequent part of the year, with average net borrowing under the liquidity adjustment facility (LAF) reaching as high as ` 1,570 billion in March 2012, with an all-time high of ` 2,028 billion on March 30, 2012. Both structural and frictional factors – such as foreign exchange market interventions by the RBI, divergence between credit and deposit growth and build-up of government cash balances with RBI– contributed to the liquidity pressures. Responding to the tight liquidity conditions, the RBI had conducted open market operations (OMOs) aggregating ` 1.3 trillion between November 2011 and March 2012, besides sequentially reducing CRR, injecting thereby primary liquidity of around ` 0.8 trillion into the banking system.
comfort level for liquidity. On the basis of prevailing macroeconomic situation, the Reserve Bank (in the Second Quarter Review of Monetary Policy 201213, announced on October 30, 2012) reduced the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.50 per cent to 4.25 per cent of their net demand and time liabilities (NDTL) effective from the fortnight beginning November 3, 2012. Consequently, an estimated amount of around Rs.175 billion of primary liquidity was injected into the banking system. The average daily net liquidity injection under the LAF increased to around Rs.670 billion in October 2012 from around Rs.520 billion in September 2012. The liquidity stress continued in November 2012 with average daily net liquidity injection under the LAF increasing to Rs.940 billion. The liquidity conditions tightened further in the second-half of December 2012 on account of quarterly advance tax outflows, and the average daily net liquidity injection under the LAF increased significantly to around Rs.1230 billion during the month.
4.48 Liquidity conditions eased gradually during the first half of 2012-13. The turnaround in liquidity conditions was due to a decline in government’s cash balances, injection of liquidity of about ` 860 billion by way of OMOs purchases of securities and increased use of the export credit refinance facility by banks. Reduction in SLR by one percentage point also improved the access of banks to potential liquidity. In September and October 2012 liquidity conditions, however, tightened taking the average net LAF borrowing to ` 904 billion since October 15, 2012, which was well above the (+/-) one per cent of net demand and time liabilities (NDTL)
4.49 The liquidity conditions remained above the Reserve Bank’s comfort zone during most of the third quarter of 2012-13. Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank resumed Open Market Operations (purchase of government securities) on December 4, 2012 after a gap of nearly five months. Total purchase under OMO auctions stood at around Rs.1060 billion during 2012-13 so far (till January 7, 2013), while total purchases through the anonymous trading platform (NDS-OM) stood at around Rs.228.7 billion during this period. Although the Reserve Bank
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Prices and Monetary Management
lowered the cash reserve ratio, CRR, successively in September and October 2012, and carried out open market operations (OMO) injecting systemic liquidity of ‘470 billion during December and January to augment liquidity, the average net LAF borrowings at ‘929 billion in January were above the Reserve Bank’s comfort level. This tightness could potentially hurt credit flow to productive sectors of the economy. The structural deficit in the system provided a strong case for injecting permanent primary liquidity into the system. Accordingly, the RBI lowered the CRR from 4.25 per cent to 4.0 per cent in its third quarter review of Monetary Policy, effective from February 9, 2013. By the end of first week of February, LAF borrowings had declined to the RBI’s comfort level.
MONEY MARKET 4.50 Money markets have remained orderly during 2012-13 so far. As a result of the reduction in the policy (repo) rate in the Annual monetary policy statement 2012-13 (released on April 17, 2012) and improvement in liquidity conditions, the average daily call money rate declined to 7.92 per cent in September 2012 from 8.14 per cent in June 2012 (9.17 per cent in March 2012). Call money rates in latter months have moved in a narrow range (Fig 4. 16). Interest rates on commercial paper and certificate of deposits also peaked in March 2012 and decelerated thereafter in line with the moderation in interest rates for other instruments. 4.51 Banks and primary dealers remained the major groups of borrowers in the collateralized
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103
segments, while mutual funds (MFs) remained the major group of lenders in the collateralized borrowing and lending obligation (CBLO) segment. But, recently, the share of MFs in total lending has declined in the market repo segment, and nationalized banks have emerged as the major group of lenders in this segment. The collateralized segment continued to remain the predominant segment of the overnight money market; its share was around 78 per cent during the financial year (till December 2012). 4.52 Certificates of Deposit (CD) - The amount of outstanding CD declined from around Rs.4195 billion at end-March 2012 to around Rs.3030 billion at midDecember 2012, which indicates decline in net issuances. The weighted average effective interest rate (WAEIR) of CDs declined to 8.6 per cent at mid-December 2012 from 11.1 per cent at endMarch 2012. 4.53 Commercial paper (CP)- During 2012-13 so far, the commercial paper (CP) market also picked up and the average size of fortnightly issuance increased significantly to ` 317 billion (till end December 2012). The weighted average discount rate decreased to 9.04 per cent in December 2012 from 12.2 per cent in March 2012.
CHALLENGES
AND
OUTLOOK
4.54 The headline WPI inflation has remained muted in the current financial year and declined to a three year low of 6.62 per cent in January 2013
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Economic Survey 2012-13
Table 4.17 : Volume in Money market (in ` billion) Month
LAF Average
CP Out-
of the month
Call money Market Repo 2011 January February March April May June July August September October November December
2012
-929 -1292 -786 -1405 -810 -1574 -188 -1029 -546 -986 -741 -913 -438 -481 -407 -462 -559 -517 -541 -671 -916 -941 -1167
-1231
2011
2012
2011
2012
CBLO 2011
2012
CP Out-
standing standing (as on last (as on last day of the reporting month) friday) 2011
2012
2011 2012
78 104 113 134 110 116 115 113 138 129 110
173 142 175 250 185 152 146 129 143 150 141
115 132 151 144 159 167 117 148 139 132 133
89 122 112 143 151 180 173 183 185 218 207
448 423 432 562 409 413 410 391 451 416 329
280 331 380 377 339 376 382 459 502 436 368
1018 1013 803 1250 1212 1047 1337 1488 1446 1688 1735
1499 1618 912 1310 1498 1258 1732 1879 1706 1941 1994
3776 4185 4247 4474 4333 4238 4122 4057 3835 3859 3784
3909 4029 4195 4448 4394 4252 4155 4030 3572 3531 3066
149
142
99
147
265
398
1341
1818
4030 3031
Source : RBI
backed by moderation in the non food manufacturing sector. However, CPI inflation has shown a rising trend in the past couple of months mainly on account of higher food inflation leading to a higher gap between WPI and CPI. Unlike last year when the food price inflation was mainly driven by higher protein food items, this year the pressure has been mounting in cereals. On the other hand milk and other protein items have shown a welcome decline. The recent increase in onion prices in January 2012 and revision in diesel prices may put some pressure on headline inflation. However, with moderation in non food manufacturing sector and global commodity prices, the headline WPI inflation may decline to 6.2 to 6.6 per cent in March 2013. 4.55 Inflation has eased in almost all major advanced and emerging market economies in the current year. The positive effect of continuous policy easing by the major advanced and developing countries could pose a higher risk to inflation expectations and may be considered as an upside risk to inflation forecast. However, in the short run, given weak growth sentiments, the impact of policy easing may not lead to a surge in inflation and inflation expectations may remain anchored around current target inflation rates.
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4.56 As per the World Bank’s global economic prospects, January 2013, except for metals, most global commodity prices are expected to decline further in 2013 and 2014. The impact of benign inflationary expectations internationally will have a moderating impact on domestic prices. Given that India faces a number of constraints on the supply side, in the short run, curbing demand moderately to catch up with supply may be an effective tool. However, in the long run, measures to improve supply are the only way to have non-inflationary growth. 4.57 The RBI’s monetary policy stance has continued to focus on the twin objectives of containing inflation and facilitating growth. Increasing risks to growth from external as well as domestic sources and tight monetary policy in face of persistent inflationary pressures have contributed to a sharper slowdown of the economy than anticipated. There has been some moderation in inflation in Q3 of 2012-13 and with the expected fiscal consolidation the current macroeconomic situation creates room for a more accommodative monetary policy. Further, with a significant part of inflation getting generated because of poor supply responses, a further shift in the policy stance of RBI, coupled with improving access to credit with moderation in its cost, would be desirable.
Financial Intermediation
5
CHAPTER
E
fficient intermediation by financial markets leads to higher economic growth by increasing savings and their optimal allocation for productive uses. A shift of our growth trajectory to the pre-crisis level of over 8 per cent and above critically depends on efficient financial intermediation between savers and borrowers. Historically, banks have played this role. However, with the start of the reform process beginning 1990s, the importance and nature of financial intermediation has undergone a transformation with other intermediaries including non-banking financial companies (NBFCs), insurance and pension funds, and mutual funds(MF) emerging as the new mechanisms for channelling savings to investments. These developments have also been accompanied by the emergence of equity and debt markets, financial products like forwards, futures and other derivatives instruments which have the capacity of reallocating risks and putting capital to more efficient use. However, keeping in view India's growing integration with global financial markets, external-sector vulnerabilities have an increasingly large impact on India through the trade and capital account channels. It is therefore important that the development of an efficient and healthy financial market should also be accompanied by an effective regulatory mechanism that keeps track of external vulnerabilities. This chapter summarises the recent developments in the financial sector in India and the challenges and opportunities it faces in the context of developments in the global financial market.
BANK CREDIT 5.2 Banks as financial intermediaries collect deposits from savers and on-lend these to investors and others. The deposits of banks form the basis of their lending operations. Aggregate deposits of the banking sector increased from an average of ` 48,019.8 billion in 2010-11 to ` 64,362.3 billion during Q3 of 2012-13. Year-on-year growth of aggregate deposits, however, moderated from an average of 17.9 per cent in Q1 of 2011-12 to 12.87 in Q3 of 2012-13. This decline in the rate of growth of aggregate deposits also moderated the rate of growth of credit, from an average of 21.73 per cent in Q1 of 2011-12 to 16.49 per cent in Q3 of 2012-13. While the growth of food credit which is primarily http://indiabudget.nic.in
advanced for food procurement, and constitutes around 2 per cent of total credit, fluctuated, growth in non-food credit had a near secular decline (Table 5.1). 5.3 Banks use their deposits for advancing credit or for making investment in government and other securities. The ratio of their investment in approved securities to aggregate deposits has remained range bound at around 30 per cent, significantly higher than the minimum required under the statutory liquidity ratio (SLR). The higher allocation to government securities may be either because of a higher risk perception or non-availability of quality lending opportunities to the private sector or both. The ratio of credit to deposits, however, increased
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Economic Survey 2012-13
Table 5.1 : Growth Rate of Deposits, Credit, and Investments (y-o-y per cent) 2010-11 2011-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Aggregate deposits
15.69
16.51
17.92
17.59
16.25
14.51
14.62
13.91
12.87
Bank credit
21.27
18.71
21.73
19.63
17.61
16.37
18.07
16.79
16.49
Food credit
15.85
33.02
24.72
42.52
35.64
29.80
56.99
35.28
33.76
Non-food credit
21.36
18.48
21.69
19.29
17.32
16.14
17.45
16.46
16.17
9.42
14.26
10.26
15.45
15.46
15.74
16.09
14.45
15.18
Investments in approved securities
from 74.3 per cent in Q1 of 2011-12 to 76.7 per cent in Q3 of 2012-13, allowing the banks to maintain a higher credit growth than would otherwise have been feasible given the growth in deposits (Figure 5.1).
to deposit and lending rates of banks is relatively less pronounced compared to money market rates, reflecting the presence of structural rigidities in the credit market.
Interest Rates
Domestic Deposit Rates
5.4 Monetary policy started becoming a little more accommodative in 2012-13. A moderation in inflation created space for the Reserve Bank of India (RBI) to reduce policy rates and take other measures for improving liquidity in the system. The policy rates were cut during 2012-13, including a reduction of 75 basis points (bps) in the repo rate in two steps (50 bps in April 2012 and 25 bps in January 2013), a reduction of 100 bps in the SLR in August 2012, and a 75 bps cut in the cash reserve ratio (CRR) in three steps (25 bps effective 22 September 2012, 25 bps effective 3 November 2012 and 25 bps effective 9 February 2013). Taking a cue from these cuts, several banks reduced their deposit and lending rates during the year. Though the impact of these policy measures is still unfolding, the transmission of the policy rate
5.5 The modal term deposit rates for banks across all maturities declined by 15 bps to 7.27 per cent during 2012-13 (as on 15 December 2012). The decline was noted across all bank groups and mostly for maturities up to one year (Table 5.2).The rates of interest on savings deposits, which were deregulated by the RBI effective October 2011, however were generally stable. Eighteen scheduled commercial banks (SCBs) with a market share of 5.5 per cent in aggregate deposits, increased their savings deposit rates in the range of 100-300 bps for savings deposit balances up to ` 1 lakh and 100-680 bps for balances above ` 1 lakh. So far, none of the public-sector banks has increased its savings deposit rates, since the deregulation of these rates by the RBI.
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Financial Intermediation
107
Table 5.2 : Deposit and Lending Rates of SCBs (per cent) Item
Dec.- 11
Mar.- 12
Jun. -12
Sept.-12
Dec.-12#
Up to 1 year
1.00-9.55
1.00-9.75
4.00-9.25
4.00-9.25
4.00-9.00
1 - 3 years
8.55-9.75
9.00-9.75
8.75-9.50
8.50-9.30
8.50-9.25
Above 3 years
8.00-9.50
8.50-9.50
8.00-9.50
8.50-9.30
8.50-9.10
3.00-9.25
3.00-9.50
3.00-9.25
3.00-9.25
3.00-9.00
1 - 3 years
8.00-10.50
8.00-10.50
8.00-10.00
8.00-9.75
8.00-9.75
Above 3 years
8.00-10.10
8.00-10.10
8.00-10.00
8.00-9.50
8.00-9.50
(A) Domestic deposit rates (i) Public-sector banks
(ii) Private-sector banks Up to 1 year
(iii) Foreign banks Up to 1 year
3.50-10.00
3.50-11.80
3.50-9.25
2.43-9.25
2.21-9.00
1 - 3 years
3.50-9.75
3.50-9.75
3.50-9.75
3.50-9.75
3.50-9.75
Above 3 years
4.25-9.50
4.25-9.50
3.75-9.50
3.75-9.50
4.35-9.50
7.46
7.42
7.40
7.29
7.27
Public-sector banks
10.00-10.75
10.00-10.75
10.00-10.50
9.75-10.50
9.75-10.50
Private-sector banks
10.00-11.25
10.00-11.25
9.75-11.25
9.75-11.25
9.75-11.25
6.25-10.75
7.38-11.85
7.38-11.85
7.25-11.75
7.20-11.75
10.75
10.75
10.50
10.50
10.50
Public-sector banks
10.25-15.25
10.60-15.35
10.50-15.50
10.50-15.38
-
Private-sector banks
10.00-15.50
10.50-15.50
10.63-15.38
10.20-15.63
-
9.50-14.38
10.00-14.50
10.00-14.50
9.95-14.50
-
SCBs Modal deposit rate (all tenors) (B) Base Rate
Foreign banks SCBs Modal base rate (C) Median lending rate*
Foreign banks
Source : RBI. *: Median range of interest rate on advances at which at least 60 per cent business has been contracted. Notes: #: As on 15 December 2012.
Interest Rates on NRI Deposits 5.6 The modal interest rate on non-resident (external) rupee (NRE) deposits of banks declined by 37 bps during 2012-13 (up to December 15) to 8.71 per cent, reflecting subdued demand for export credit in the economy. Interest rates on foreign currency non-resident (bank) account (FCNR [B]) deposits continue to be regulated by the RBI. With a view to augmenting foreign currency inflows into the economy, effective 5 May, 2012 the interest rate ceiling on FCNR (B) deposits was raised to LIBOR/ Swap rates plus 200 bps for 1-3 year maturity and LIBOR/Swap rates plus 300 bps for 3-5 year. The interest rate ceiling on overseas line of credit arranged by banks for exporters has also remained regulated by the RBI. At present, the prescribed ceiling in this regard is at six-month LIBOR/EURO LIBOR/
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EURIBOR plus 250 bps, subject to review as and when warranted.
Lending Rates 5.7 Following the reduction in the repo rate in April 2012 and the calibrated liquidity easing measures announced by the RBI during 2012-13, the modal base rate of banks declined by 25 bps to 10.50 per cent during the current fiscal (Table 5.2). The median lending rates on bank advances (at which 60 per cent or more business was contracted), other than export credit, ranged between 9.50 and 15.75 per cent in November 2012, showing a moderation of 25-50 bps compared to the rates which prevailed in March 2012. The median lending rates on preshipment rupee export credit up to 180 days ranged between10.55-13.00 per cent in November 2012 compared to 10.75-12.88 per cent in March 2012.
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Economic Survey 2012-13
Table 5.3 : Sectoral Deployment of Credit 2010-11 2011-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
37525
38299
39957
42244
44190
44610
46386
Credit disbursed (` ` billion) Total credit Food credit
33359
39506
546
726
625
678
769
832
949
950
1018
4159
4561
4524
4388
4459
4874
5217
5266
5479
Industry
14461
17656
16541
17121
17964
18999
19772
19890
20752
Services
7859
9298
8903
8943
9395
9950
10405
10383
10617
Personal loans
6333
7255
6932
7129
7369
7588
7847
8121
8520
1.77
1.93
1.97
2.15
2.13
2.20
Agriculture & allied activities
Shares of the broad sectors in credit disbursed (per cent) Food credit
1.64
1.84
1.66
Agriculture & allied activities
12.47
11.55
12.06
11.46
11.16
11.54
11.81
11.80
11.81
Industry
43.35
44.69
44.08
44.70
44.96
44.98
44.74
44.59
44.74
Services
23.56
23.53
23.73
23.35
23.51
23.55
23.55
23.28
22.89
Personal loans
18.99
18.36
18.47
18.61
18.44
17.96
17.76
18.20
18.37
Average annual rate of growth (per cent) Total credit
20.84
18.43
21.19
19.43
17.15
16.38
17.76
16.48
16.09
Food credit
16.03
32.91
19.63
39.00
39.48
33.46
51.95
40.01
32.38
Agriculture & allied activities
19.82
9.67
12.54
10.27
6.63
9.39
15.32
20.02
22.86
Industry
26.48
22.10
24.82
22.57
21.21
20.24
19.54
16.17
15.52
Services
19.55
18.30
22.23
19.93
16.76
15.02
16.87
16.10
13.01
Personal loans
11.96
14.54
17.78
15.45
13.27
12.13
13.19
13.92
15.61
Source : RBI.
Table 5.4 : Particulars of Priority Sector Advances (` crore) Public Sector Banks Private Sector Banks Mar-10
Foreign Banks
Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12
Total Priority sector Advances
863777 1021496 1129993 214669 249099 286420
59959
66737
80559
Advances to Agriculture#
372463
414973
475148
90737
92146 100900
121
56
111
Advances to Micro and Small enterprises
276318
369930
396343
64824
88115 110513
21147
20981
21760
Advances to weaker sections
211376
240321
293960
25532
28575
38929
0 .00
0.00
0.00
NA
NA
NA
NA
NA
NA
35167
43322
51742
Advances to Exports
Priority Sector Advances as percentage of total advances Total Priority sector Advances
41.50
40.90
37.40
45.80
46.60
39.40
36.00
39.70
40.90
Advances to Agriculture#
17.90
16.60
15.70
19.30
17.20
13.80
0.00
0.00
0.00
Advances to Micro and Small enterprises
13.20
14.80
13.10
13.80
16.50
15.20
12.70
12.40
11.00
Advances to weaker sections
10.10
9.60
9.70
5.40
5.30
5.30
0.00
0.00
0.00
21.10
25.70
26.20
Advances to Exports Source: RBI.
Note: # Indirect agriculture is reckoned only up to 4.5 per cent of the ANBC or credit equivalent of off-balance sheet exposures, whichever is higher; NA-Not Applicable
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Financial Intermediation
Foreign Currency Export Credit 5.8 The interest rate on export credit in foreign currency was deregulated effective 5 May 2012 to increase foreign currency loans to exporters. The modal lending rate (at which 60 per cent or more business was contracted) for the reporting banks on pre-shipment credit in foreign currency declined by 20 bps to 4.03 per cent between November 2012 and June 2012 in line with decline in LIBOR rate during the period. On the assets side, trade credit for importers has also remained regulated and at present, all-in-cost ceilings on trade credit for imports for maturity period up to five years is at six-months LIBOR (for the respective currency of credit) plus 350 bps effective 11 September, 2012.
Sectoral Deployment of Credit 5.9 Details of sectoral deployment of credit are maintained by the RBI on a regular basis for 47 scheduled banks accounting for nearly 95 per cent of total credit flow. Industry has remained the dominant sector accounting for around 45 per cent of total credit disbursed by the banks. While food credit, primarily advanced for food procurement, has fluctuated, credit to the agriculture and allied sector has grown after Q3 of 2011-12. While the growth of credit for the industry and services sectors has declined, growth in personal loans appears to have bottomed out and some recovery is visible in Q3 of 2012-13 (Table 5.3). Inflation affected the consumption of non-food items. Sectoral shares in the credit flow have generally remained stable.
Priority-sector Lending 5.10 In view of the need to ensure adequate institutional credit flow to the vulnerable sectors, the RBI has mandated that banks should lend a minimum of 40 per cent of their advances to the priority sectors. Priority sector broadly includes advances to agriculture, small scale industries, weaker section, exports, education, SHGs, etc. Details of priority sector are provided in Appendix 4.6 . Revised guidelines issued by the RBI on priority sector lending (PSL) on 20 July 2012, mandates commercial banks and foreign banks with 20 or more branches to allocate 40 per cent of their adjusted net bank credit (ANBC) or credit equivalent amount of off-balance sheet exposures (OBE), whichever is higher, to the priority sector. Within this, sub-targets of 18 per cent and 10 per cent of ANBC or credit equivalent amount of OBE have been mandated for
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lending to agriculture and the weaker sections respectively. For foreign banks with less than 20 branches, the target PSL is 32 per cent of ANBC or credit equivalent amount of OBE, whichever is higher. Foreign banks have been given a period of 5 years beginning April 2013 to achieve their PSL target. Their action plan, however, is required to be approved by the RBI. 5.11 The total outstanding priority-sector advances of public-sector banks (PSB) increased from ` 10,21,496 crore as on the last reporting Friday of March 2011 to ` 11,29,993 crore as on the last reporting Friday of March 2012, showing a growth of 10.6 per cent. The achievement of PSBs as a group was 37.4 per cent as on the last reporting Friday of March 2012. The outstanding priority-sector advances of private-sector banks grew by 14.9 per cent in 2011-12 and these were 39.4 per cent of their total advances as on the last reporting Friday of March 2012.The outstanding priority-sector advances of foreign banks had reached the targeted level of 40 per cent as on March 2012, though these advances have largely been in export sector (Table 5.4).
RURAL INFRASTRUCTURE DEVELOPMENT FUND 5.12 The Rural Infrastructure Development Fund (RIDF) was instituted in the National Bank for Agriculture and Rural Development (NABARD) through an announcement in Union Budget 1995-6 with the objective of giving low cost fund support to states and state-owned corporations for quick completion of ongoing projects relating to medium and minor irrigation, soil conservation, watershed management, and other forms of rural infrastructure. Allocation to the RIDF is made from the shortfall in meeting PSL targets by the banks. From the inception of the RIDF in 1995-6 to March 2012, 462,229 projects have been sanctioned with a sanctioned amount of ` 143,230 crore. Of the cumulative RIDF loans sanctioned to state governments, 42 per cent have gone to the agriculture and allied sector, including irrigation and power; 15 per cent to health, education, and rural drinking water supply; while the share of rural roads and bridges has been 31 per cent and 12 per cent, respectively. The annual allocation of funds under the RIDF has gradually increased from ` 2,000 crore in 1995-6 (RIDF I) to ` 20,000 crore in 2012-13 (RIDF XVIII).
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Economic Survey 2012-13
Table 5.5 : Sanctions and Disbursements under the RIDF and Bharat Nirman (Rural Roads Components) (` crore) 2012-13 (up to November 2012) Region
South West North Central East NER & Sikkim Sub total Warehousing Bharat Nirman Grand total
Cumulative up to November 2012
Target
Achievement
Achievement (%)
Sanction Disbursement* Disbursement as % of sanction
3775 2170 4850 1480 3800 725 16800 16800
1420 1134 1810 356 863 145 5728 101 -
37.6 52.3 37.3 24.1 22.7 20.0 34.1 -
37899 22149 44668 13080 26600 6758 151154 2512 18500
26529 15693 30092 8078 15625 4034 100051 1208 18500
70.0 70.9 67.4 61.8 58.7 59.7 66.2 48.1 100.0
5829
34.7
172166
119759
70.0
Source : NABARD. Note: NER is north-eastern region.
5.13 As against the total allocation of ` 1,72,500 crore, encompassing RIDF I to XVIII, sanctions aggregating ` 1,51,154 crore have been accorded to various state governments and an amount of ` 1,00,051 crore disbursed up to the end of November 2012. Nearly 55 per cent of allocation has been made to southern and northern regions. The National Rural Roads Development Agency (NRRDA) has disbursed the entire amount of ` 18,500 crore sanctioned for it (under RIDF XII-XV) by March 2010. During 2012-13 (up to end November 2012), ` 5,829 crore was disbursed to the states under the RIDF (Table 5.5).
FINANCIAL INCLUSION Micro-Finance: Self Help Group-Bank Linkage Programme 5.14 Though there are different models for pursuing micro-finance, the Self-Help Group (SHG)-Bank Linkage Programme has emerged as the major micro-finance programme in the country. It is being implemented by commercial banks, regional rural banks (RRBs), and cooperative banks. Under the SHG-Bank Linkage Programme, as on 31 March 2012, 79.60 lakh SHG-held savings bank accounts with total savings of ` 6,551 crore were in operation. By November 2012 another 2.14 lakh SHGs had come under the ambit of the programme, taking the cumulative number of savings-linked groups to 81.74. As on 31 March 2012, 43.54 lakh SHGs had
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outstanding bank loans of ` 36,340 crore (Table 5.6). During 2012-13 (up to November 2012), 3.67 lakh SHGs were financed with an amount ` 6,664.15 crore.
Extension of Swabhimaan scheme 5.15 Under the Swabhimaan financial inclusion campaign, over 74,000 habitations with population in excess of 2,000 had been provided banking facilities by March 2012, using various models and technologies including branchless banking through business correspondents (BCs). The Finance Minister in his Budget Speech of 2012-13 had announced that Swabhimaan would be extended to habitations with population more than 1,000 in the north-eastern and hilly states and population more than 1,600 in the plains areas as per Census 2001. Accordingly, about 45,000 such habitations had been identified for coverage under the extended Swabhimaan campaign. As per the progress received through the convenors of State Level Bankers' Committee (SLBC), out of the identified habitations, 10,450 have been provided banking facilities by end of December, 2012. This will extend the reach of banks to all habitations above a threshold population.
Setting up of Ultra Small Branches 5.16 Considering the need for close supervision and mentoring of the business correspondent agents (BCAs) by the respective banks and in order to ensure that a range of banking services are available to the residents of such villages, ultra small branches
Financial Intermediation
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Table 5.6 : Progress of Micro-finance Programme Year
SHGs Financed by Banks during the year*
Bank Loan Outstanding
No. (lakh)
Amount (` ` crore)
Growth (%)
No. (lakh)
Amount Growth (%) (` ` crore)
2007-08
12.28
8849.26
-
36.26
16999.90
-
2008-09
16.09
12256.51
38.50
42.24
22679.85
33.41
2009-10
15.87
14453.30
17.90
48.52
28038.28
23.62
2010-11
11.96
14547.73
0.65
47.87
31221.17
11.35
2011-12
11.48
16534.77
13.66
43.54
36340.00
16.40
Source: NABARD. Note: *Includes new as well as repeat loans to SHGs.
(USBs) are being set up in all villages covered through BCAs under financial inclusion. These USBs will comprise a small area of 100-200 sq. feet where the officer designated by the bank will be available with a laptop on pre-determined days. While cash services will be offered by the BCAs, the bank officer will offer other services, undertake field verification, and follow up banking transactions. The periodicity and duration of visits can be progressively enhanced depending upon business potential in the area. A total of over 40,000 USBs have so far been set up in the country.
Roll out of Direct Benefit Transfer 5.17 The Government of India has decided to introduce a Direct Benefit Transfer (DBT) scheme with effect from 1 January 2013. To begin with, benefits under 26 schemes will directly be transferred into the bank accounts of beneficiaries in 43 identified
districts across respective states and union territories (UT). Banks will ensure that all beneficiaries in these districts have a bank account. All PSBs and RRBs have made provision so that the the data collected by the Departments/Ministries/Implementing agency concerned can be used for seeding the bank account details in the core banking system (CBS) of banks with Aadhaar. All PSBs have also joined the Aadhaar Payment Bridge of the National Payment Corporation of India for smooth transfer of benefits.
Agricultural Credit 5.18 As against the target of ` 4, 75,000 crore fixed for 2011-12, ` 5, 11,029.09 crore was disbursed to the agricultural sector, thereby exceeding the target by 8 per cent. While commercial banks and RRBs together extended credit to 99.65 lakh new farmers during 2011-12, cooperative banks extended
Table 5.7 : Agency-wise Credit Disbursed to the Agriculture Sector between 2006-07 and 2012-13 (` ` crore) Sl No. Agency 1
Cooperative banks $ Share (%)
2
RRBs Share (%)
3
Commercial banks Share (%) Total (1+2+3)
2006-07
2007-08
2008-09
2009-10
2010-11 2011-12^
2012-13 *
42480
48258
46192
63497
78121
87963
64664
18.52
18.95
15.30
16.51
16.68
17.21
26.99
20435
25312
26765
35218
44293
54450
32127
8.91
9.94
8.87
9.16
9.46
10.65
13.41
166485
181088
228951
285799
345877
368616
142838
72.57
71.11
75.83
74.33
73.86
72.13
59.61
229400
254658
301908
384514
468291
511029
239629
Source: Commercial Bank data – Indian Banks Association (IBA)/RBI, Cooperative Banks and RRBs data –NABARD. Notes: $ Including others, ^ Provisional, * Up to September 2012.
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Economic Survey 2012-13
Table 5.8 : Agency-wise KCCs Issued and Amount Sanctioned (As on 31 August 2012) Agency
Amount Sanctioned (` ` crore)
Cards Issued (lakh)
2009-10 2010-11
2011-12 2012-13* 2009-10
2010-11 2011-12 2012-13**
Cooperative banks
17.43
28.12
29.59
9.75
7606
10719
10642
4111
RRBs
19.50
17.74
19.96
6.2
10132
Commercial banks
53.13
55.83
68.03
NA
39940
11468
11516
4127
50438
69518
NA
Total
90.06
101.69
117.58
15.95
57678
72625
91676
8238
Source: NABARD and RBI. Notes: NA-Not Available * Up to **
31 August
2012
Amount outstanding against cards issued during the year 2012-13 up to 31 August 2012
credit to 21.52 lakh new farmers during the same period, thus taking the total number of new farmers brought under the banking system to 121.17 lakh. The total number of agricultural loan accounts financed as on March 2012 was 6.47 crore. The credit flow to agriculture during 2012-13 by commercial banks, cooperative banks, and RRBs together was ` 2,39,629 crore till September 2012, accounting for 42 per cent of the annual target of ` 5,75,000 crore set for 2012-13 (Table 5.7).
Kisan Credit Card Scheme 5.19 The Kisan Credit Card (KCC) has been an important initiative for universal access of farmers
to institutional credit . The number of operative KCCs issued by cooperative banks and RRBs in the country as on 31 August 2012 was 406 lakh against which the outstanding loan amount was ` 1,12,333.90 crore. During 2012-13 (April 2012 to August 2012), 16 lakh (approximately) KCCs were issued by cooperative banks and RRBs against which the outstanding loan amount was ` 8,238 crore. As reported by the RBI, Commercial banks, had issued a total of 547.49 lakh cards (cumulative since inception) as on 31 March 2012, with a sanctioned amount of ` 3,53,144.82 crore (Table 5.8).
Box 5.1 : Interest Subvention Scheme 2012-13 The Interest Subvention Scheme 2012-13 for short-term crop loans up to ` 3 lakh is being made available during 2012-13 with the following stipulations: (i)
Interest subvention of 2 per cent per annum to PSBs, cooperative banks, and RRBs on their own funds used for shortterm crop loans up to ` 3,00,000 per farmer provided the lending institutions make available short-term credit at the ground level at 7 per cent per annum. Interest subvention is calculated on the crop loan amount from the date of its disbursement/drawal up to the date of actual repayment, subject to a maximum period of one year.
(ii)
An additional interest subvention of 3 per cent is available to the prompt-paying farmers from the date of disbursement of the crop loan up to the actual date of repayment or up to the due date fixed by bank for repayment of crop loan, whichever is earlier, subject to a maximum period of one year from the date of disbursement.
(iii) Further, in order to discourage distress sales, post-harvest benefit of interest subvention was made available in the year 2011-12 to small and marginal farmers holding KCCs for a further period of up to six months on the same rates as available to crop loans against negotiable warehouse receipts for keeping their produce in warehouses. This has been continued in 2012-13 as well. (iv) In order to provide relief to farmers, it was also decided that in cases where crop loans were restructured due to drought during 2012-13, the interest subvention of 2 per cent per annum which is already available for short-term crop loans to PSBs, RRBs, and rural cooperative credit institutions will continue to be available for the current financial year on the full restructured loan amount. However, the restructured loans will attract normal rate of interest from the next financial year onwards.
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Financial Intermediation
Interest Subvention Scheme 5.20 The Interest Subvention Scheme is being implemented by the Government of India since 20067 to make short-term crop loans up to ` 3 lakh for a period of one year available to farmers at the interest rate of 7 per cent per annum. The Government of India has since 2009-10 been providing additional interest subvention to farmers who repay their loans in time. The additional subvention which was 1per cent in 2009-10 was gradually increased to 2 per cent in 2010-11 and 3 per cent in 2011-12 and 2012-13 (see Box 5.1).
FINANCIAL PERFORMANCE
OF
BANKS
5.21 Performance of Indian banks during the year 2011-12 was conditioned to a large extent by fragile recovery of the global financial markets as well as a challenging operational environment on the domestic front, with persistent high inflation and muted growth performance. In addition, stressed financial conditions of some State Electricity Boards and airline companies added to the deterioration in asset quality of banks. The consolidated balance sheet of SCBs grew at a slower pace during 2011-12 as compared to the previous year due to slower growth of credit as well as deposits. In addition, net profit of banks slowed down. Though Indian banks remained well-capitalized, concerns regarding growing nonperforming assets (NPAs) persisted. 5.22 The operating performance of the SCBs as shown in Table 5.9 can be summed up as follows:
PSBs had a dominant share and accounted for 72 per cent of the total income of the SCBs and 72.8 per cent of aggregate assets.
In 2011-12, there was a sharp increase in the expenditure on provisioning and contingencies; the rate of growth, however, varied across the bank categories. While contingency and provisioning expenses recorded a growth of 16.1 per cent for all commercial banks, the rate of growth was 21.3 per cent for PSBs and only 3 per cent for the new private-sector banks. As percentage of PSB assets, the provisioning expenditure increased from 1.04 per cent in 201011 to 1.11 per cent in 2011-12.
PSBs were able to increase their interest spread from 2.55 per cent in 2010-11 to 2.59 per cent in 2011-12. The interest spread declined for old private-sector banks and foreign banks. An increase in interest spread for all SCBs during http://indiabudget.nic.in
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2011-12 with a relatively moderate growth in credit disbursement is significant.
Net profit as percentage of assets remained sticky at 0.98 per cent in 2010-11 and 2011-12. However, in case of the PSBs, this declined from 0.85 per cent in 2010-11 to 0.82 per cent in 2011-12. Foreign banks and old and new privatesector banks, however, were able to increase the ratio of net profit to assets.
Capital Adequacy Ratio 5.23 Following the uncertainties prevailing in the domestic market and relatively subdued performance of the equity market during the first half of 2011-12, banks abstained from raising resources through public issues during 2011-12. During 2011-12, banks' resource mobilization through private placements also slowed down as compared to the previous year. However, this reduction was seen in the case of PSBs, while private-sector banks continued to raise resources through private placements. 5.24 The capital to risk-weighted assets ratio (CRAR) remained well above the RBI's stipulated 9 per cent for the system as a whole as well as for all bank groups during 2011-12, indicating that Indian banks remained well-capitalized. Also, the CRAR at system level improved marginally compared to the previous year. The CRAR (under Basel II) at systemwide level stood at 14.24 per cent as at end-March 2012, as compared to 14.19 per cent as at endMarch 2011. 5.25 As capital is a key measure of banks' capacity for generating loan assets and is essential for balance sheet expansion, the Government of India has regularly invested additional capital in the PSBs to support their growth and keep them financially sound so as to ensure that the growing credit needs of the economy are adequately met. A sum of ` 12,000 crore was infused in seven PSBs during 2011-12 to enable them to maintain a minimum Tier-I CRAR of 8 per cent and also to increase shareholding of the Government of India in these PSBs. 5.26 In 2012-13 also, the Government has infused capital in PSBs to augment their Tier-I capital so that they maintain their Tier-I CRAR at a comfortable level and remain compliant with the stricter capital adequacy norms under BASEL-III. This will also support internationally active PSBs in their national and international banking operations undertaken through their subsidiaries and associates. For this
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Economic Survey 2012-13
Table 5.9 : Operating Parameters of Commercial Banks (` ` crore) Items
Income
Interest Income
ExpenInterest diture Expended
Provisions and contingencies
Net Profit
Total Assets
2010-11 PSBs
414099
366135
369199
231153
55080
Foreign banks
39505
28493
31786
10623
8595
7719
491175
Old private-sector banks
26328
23299
23226
14768
2858
3101
309011
New private-sector banks All SCBs
44901 5294006
91259
73414
76649
42381
12261
14610 1089206
571191
491341
500860
298925
78795
70331 7183398 49514 6037982
2011-12 PSBs
535098
484740
485584
328539
66831
Foreign banks
47223
36340
37797
15195
9056
9426
583600
Old private-sector banks
35975
32592
32051
22506
3005
3924
375015
New private-sector banks
122503
101387
103709
64279
12626
18794 1302786
All SCBs
740799
655059
659141
430519
91517
81658 8299383
As percentage to Assets 2010-11 PSBs
7.82
6.92
6.97
4.37
1.04
0.85
2.55
Foreign banks
8.04
5.80
6.47
2.16
1.75
1.57
3.64
Old private-sector banks
8.52
7.54
7.52
4.78
0.92
1.00
2.76
New private-sector banks
8.38
6.74
7.04
3.89
1.13
1.34
2.85
All SCBs
7.95
6.84
6.97
4.16
1.10
0.98
2.68
2011-12 PSBs
8.86
8.03
8.04
5.44
1.11
0.82
2.59
Foreign banks
8.09
6.23
6.48
2.60
1.55
1.62
3.62
Old private-sector banks
9.59
8.69
8.55
6.00
0.80
1.05
2.69
New private-sector banks
9.40
7.78
7.96
4.93
0.97
1.44
2.85
All SCBs
8.93
7.89
7.94
5.19
1.10
0.98
2.71
purpose an amount of ` 12, 517 crore has been allocated in the Revised Estimates (RE) 2012-13 under Plan. 5.27 The High Level Committee to assess the capitalization of PSBs in the next 10 years, headed by the Finance Secretary has inter alia recommended various options for funding of PSBs. Given the budgetary constraints, it may not be feasible for the government to infuse huge sums into the PSBs. The High level Committee has, therefore, recommended the formation of a non-operating http://indiabudget.nic.in
financial holding company (HoldCo) under a special act of Parliament with the following key objectives:
to act as an investment company for the Government of India;
to hold a major portion of the Government of India's holdings in all PSBs;
to raise long-term debt from domestic and international markets to infuse equity into PSBs; and
to service the debt from within its sources.
Financial Intermediation
Recapitalisation of RRBs to improve their CRAR 5.28 RRBs have played a pivotal role in credit delivery in rural areas, particularly to the agriculture sector. To enhance their outreach and provide banking services more effectively to rural masses, RRBs need to undertake a continuous process of technology and capital upgradation. With a view to bringing the CRAR of RRBs up to at least 9 per cent, Dr K.C. Chakrabarty Committee inter alia recommended recapitalization support to the extent of ` 2,200 crore to 40 RRBs in 21 States. Pursuant to the recommendation of the Committee, recapitalization amount is to be shared by the stakeholders in proportion to their shareholding in RRBs, i.e. 50 per cent central government, 15 per cent concerned state government, and 35 per cent the concerned sponsor banks. The central government share works out to ` 1,100 crore. The, recapitalisation process, which started in 2010-11, was to be completed by 2011-12. Although the central government released an amount of ` 468.9 crore during 2010 and 2011-12 to 21 RRBs, the process of recapitalisation could not be completed in 2011-12 as all the state governments did not release their share towards recapitalisation. The recapitalisation scheme has therefore been extended up to March 2014. A provision of ` 200 crore was made for the purpose in the Budget for 2012-13 and the entire provision has been released. Thus, till 31 December 2012, a total sum of ` 668.9 crore had been released by the government to 27 RRBs.
Amalgamation of RRBs 5.29 With a view to minimising overhead expenses and optimizing the use of technology in RRBs, the
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government, in consultation with NABARD, the concerned state government, and sponsor banks, has initiated amalgamation of geographically contiguous RRBs in a state. This will enhance the capital base and area of operation of the amalgamated RRBs and increase their exposure. Thus the amalgamated entities will have sustainable financial health and will be able to serve their area better with absorption of technology and improved management. Till 1 January 2013, 22 RRBs had already been amalgamated into 9 RRBs.
Improving recovery in PSBs 5.30 Because of the slowdown and high levels of leverage, some industry and infrastructure sectors are experiencing a rise in NPAs. Overall NPAs of the banking sector increased from 2.36 per cent of total credit advanced in March 2011 to 3.57 per cent of total credit advanced in September 2012 (Figure 5.2). While there has been an across-the-board increase in NPAs, the increase has been particularly sharp for the industry and infrastructure sectors, with NPAs as a percentage of credit advanced increasing from 1.91 per cent in March 2011 to 3.44 per cent as in September 2012. Sectors particularly under stress include textiles, chemicals, iron and steel, food processing, construction, and telecommunications. 5.31 As per RBI data, gross NPAs (GNPA) of PSBs have shown a rising trend during the last three years from ` 59,972 crore ( March, 2010) to ` 71,080 crore (March, 2011), ` 1,12,489 crore (March, 2012), and ` 1,44,437 crore (September, 2012). As a percentage of credit advanced, NPAs were at a level of 4.01 per cent in September 2012 compared to 2.09 per cent in 2008-9. Although GNPAs have
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Economic Survey 2012-13
increased at system level, the GNPA ratios of PSBs are still at manageable levels. However, given their rapid growth, albeit partly for technical reasons, they need to be closely monitored. 5.32 The main reasons for increase in NPAs of banks are (a) switchover to system-based identification of NPAs by PSBs; (b) current macroeconomic situation in the country; (c) increased interest rates in the recent past; (d) lower economic growth; and (e) aggressive lending by banks in the past, especially during good times. Some recent initiatives taken by the government to address the rising NPAs include (a) appointment of nodal officers in banks for recovery at their head offices/ zonal offices/ for each Debts Recovery Tribunal (DRT); (b) thrust on recovery of loss assets by banks; (c) close watch on NPAs by picking up early warning signals and ensuring timely corrective steps by banks; (d) directing the state-level Bankers' Committee to be proactive in resolving issues with the state governments; and (e) designating asset reconstruction companies (ARCs) resolution agents of banks. Pursuant to the second review of the Monetary Policy, the RBI has also announced the following remedial measures:
the provision for restructured standard accounts is to be raised from the existing 2 per cent to 2.75 per cent;
the sanction of fresh loans/ad-hoc loans from 1st Jan 2013 will be made on the basis of sharing of information among banks;
banks will conduct sector- /activity-wise analysis of NPAs; banks will put in place a robust mechanism for early detection of sign of distress, amendments in recovery laws, and strengthening of credit appraisal and post credit monitoring.
5.33 Steps taken by the government and the RBI have resulted in improvement in recovery of NPAs by the PSBs which has increased from ` 9,726 crore as on March 2010 to ` 13,940 crore as on March 2011 and ` 17,043 crore as in March 2012.
NON-BANKING FINANCIAL INSTITUTIONS (NBFIS) Financial Institutions (FIs) 5.34 As at end-March 2012, there were four institutions, viz. EXIM Bank, NABARD, National Housing Bank (NHB), and the Small Industries http://indiabudget.nic.in
Development Bank of India (SIDBI) regulated by the RBI as all-India financial institutions (FIs). The outstanding resources mobilized at any point of time by an FI, including funds mobilized under the 'umbrella limit' comprising term deposits, term money borrowings, certificates of deposit (CD), commercial paper (CP), and inter-corporate loans, as prescribed by the Reserve Bank, should not exceed 10 times its net-owned funds (NOF) as per its latest audited balance sheet. However, in view of the difficulties expressed by the NHB and EXIM Bank, their aggregate borrowing limit has been reviewed. Accordingly, EXIM Bank's aggregate borrowing limit has been enhanced to 12 times its NOF for a period up to 31 August 2013 and for the NHB to 11 times of NOF for a period up to 30 September 2012. The 'umbrella limit' for aggregate borrowings through these specified instruments should not at any time exceed 100 per cent of NOF of the FI concerned as per its latest audited balance sheet. However, in view of the difficulties expressed by the NHB, SIDBI, EXIM Bank and NABARD, their borrowing under 'umbrella limit' was enhanced from 100 per cent of NOF to 150 per cent of NOF for a period of one year (for NHB, SIDBI, and EXIM Bank up to 30 June 2012 and for NABARD up to 31 December 2012), subject to review. 5.35 Resources raised by FIs during 2011-12 were considerably higher than those raised during the previous year. While the long-term resources and short-term resources raised witnessed a sharp rise during 2011-12 as compared to a year earlier, foreign currency resources raised declined during the same period of time. The NHB mobilised the largest amount of resources, followed by NABARD and SIDBI (Table 5.10). 5.36 Total sources/deployment of funds of FIs increased 42.8 per cent to ` 4, 25,182 crore during 2011-12. A major part of the funds was raised internally, followed by external sources. A large part of the funds raised was used for fresh deployments, followed by repayment of past borrowings. Other deployments including interest payments formed a comparatively small part of the funds of FIs (Table 5.11). 5.37 The NBFCs as a whole account for 12.7 per cent of the assets of the total financial system. With the growing importance assigned to financial inclusion, NBFCs are being regarded as important financial intermediaries particularly for the smallscale and retail sectors. There are two broad
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Financial Intermediation Table 5.10 : Resources Mobilized by Financial Institutions
(Amount in ` crore)
EXIM Bank Long Term Short Term Foreign Currency Total
NABARD
NHB
SIDBI
Total
2010-11
11,132
9,741
7,538
11744
40155
2011-12
10,100
17,914
9814
14648
52476
2010-11
1,538
18,532
3380
5958
294708
2011-12
4205
9,035
5215
4250
22705
2010-11
11,456
-
-
1700
13156
2011-12
9,122
-
93
1980
11195
2010-11
24,126
28,273
10918
19402
82719
2011-12
23427
26,949
15122
20878
86376
Total Outstanding
2011
47,192
33,891
22765
46331
150179
(end March)
2012
54,655
42,299
26980
53785
177719
Source: Respective FIs. Notes: - Nil/Negligible; Long-term rupee resources comprise borrowings by way of bonds/debentures; and short-term resources comprise CP, term deposits, Inter Corporate Deposits, CDs and borrowing from term money. Foreign currency resources largely comprise bonds and borrowings in the international market.
categories of NBFCs based on whether they accept public deposits, viz. deposit-taking NBFCs (NBFCsD) and non-deposit-taking NBFCs (NBFCs-ND). The total number of NBFCs registered with the RBI witnessed a continuous decline mainly due to cancellation of certificates of registration and their exit from deposit-taking activities. The number of non-deposit-taking systemically important NBFCs
(NBFCs-ND-SI) with asset size ` 100 crore and above), however, increased (Table 5.12). The ratio of deposits of reporting NBFCs [including residuary non-banking companies (RNBCs)] to the aggregate deposits of SCBs dropped to 0.15 per cent as on 31 March 2012 from 0.21 per cent in the previous year mainly due to the decline in deposits of RNBCs.
Table 5.11 : Pattern of Sources and Deployment of Funds of Financial Institutions (` crore) Item Value
2011 Per cent Share
Value
2012 Per cent Share
Increase in per cent
A -Sources of funds
297784
100.0
425182
100.0
42.78
Internal
163197
54.8
262263
61.7
60.7
External
119072
40.0
149529
35.2
25.57
Others@
15515
5.2
13390
3.2
-13.69
B- Deployment of funds
297784
100.0
425182
100.0
42.78
Fresh deployment
174674
58.7
273914
64.4
56.81
Repayment of past borrowings
83971
28.2
129044
30.4
53.67
Other deployment
39139
13.1
22222
5.2
-43.22
Of which: interest payments
14227
4.8
14504
3.4
1.94
Source: RBI-Respective FIs (EXIM Bank, NABARD, NHB and SIDBI). @ Includes cash and balances with the RBI and others banks. Percentage variation could be slightly different due to rounding off.
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Economic Survey 2012-13
Table 5.12 : Number of NBFCs Registered with the RBI End June
Number of Registered NBFCs
Number of NBFCs-D
Number of NBFCsND-SI
2006
13014
428
149
2007
12968
401
173
2008
12809
364
189
2009
12740
336
234
2010
12630
308
260
2011
12409
297
330
2012
12385
271
370
Source: RBI.
NBFCs-D 5.38 The total assets of NBFCs-D (including RNBCs) increased to ` 1,24,419 crore as on 31 March 2012 from ` 1,16,897 crore in the preceding year. Public deposits held by NBFCs-D and RNBCs together declined by 15.5 per cent to ` 10,106 crore as on 31 March 2012 from ` 11,964 crore in the previous year. NOFs witnessed 25.4 per cent growth for the year ended March 2012 and stood at ` 22,544 crore. The consolidated balance sheet of NBFCs-D (excluding RNBCs) recorded 10.8 per cent growth for the year ended March 2012 (as against 11.9 per cent growth in the previous year). Borrowings, which is the major source of funds for NBFCs-D, increased by 15.9 per cent during the year. On the assets side, loans and advances witnessed a growth of 12.1 per cent while investments declined by 24.8 per cent for the year ended March 2012. 5.39 During 2011-12, there was significant increase in the GNPAs to total advances of NBFCs-D. Category-wise, GNPA and net NPA ratios of asset finance companies and loan companies deteriorated during 2011-12 as compared to the previous year. CRAR norms were made applicable to NBFCs-D in 1998, whereby every NBFC-D is required to maintain a minimum capital, consisting of Tier-I and Tier-II capital, of not less than 15 per cent (12 per cent up to 31 March 2011) of its aggregate risk-weighted assets. As on 31 March 2012, 187 out of 198 reporting NBFCs-D had CRAR of more than 15 per cent as against 199 out of 204 NBFCs-D in the previous year.
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NBFCs-ND-SI 5.40 The balance sheet size of the NBFCs-ND-SI sector increased by 21 per cent to ` 9,21,321 crore as on 31 March 2012 (against ` 7,61,282 crore in the previous year). Significant increase in balance sheet size of the NBFCs-ND-SI sector is mainly attributed to sharp increase in owned funds, debentures, bank borrowings. Owned funds (which accounted for 26.1per cent of total liabilities) increased by 21.5 per cent during 2011-12. Total borrowings (secured and unsecured) of the sector increased sharply by 29.3 per cent to ` 6,39,830 crore and formed 69.4 per cent of total liabilities as on 31 March 2012. During the period ended June 2012, total borrowings further increased by 4.0 per cent to ` 6,65,728 crore. The pattern of deployment of funds by the NBFCs-ND-SI sector for the year ending March 2012 remained broadly in line with the pattern witnessed in the previous year. Secured loans continued to constitute the largest share (48.7 per cent of total assets), followed by unsecured loans with a share of 15.3 per cent, hire purchase assets (6.8 per cent), investments (17.3 per cent), cash and bank balances (3.9 per cent), and other assets (7.9 per cent) during the year ended March 2012. 5.41 The financial performance of the NBFCs-NDSI sector deteriorated marginally as reflected in the decline in net profit during 2011-12. Return on assets (net profit as a percentage of total assets) of the sector stood at 1.5 per cent as on 31 March 2012 (2.1 per cent in the previous year). Both gross and net NPA ratios of the NBFCs-ND-SI sector increased for the year ended March 2012 indicating overall deterioration in asset quality of the sector. The GNPA ratio of the sector stood at 1.48 per cent for the year ended March 2012 (1.28 per cent in the previous year), while net NPAs remained at 0.88 per cent (0.51 per cent in the previous year) during the same period. 5.42 CRAR norms were made applicable to NBFCs-ND-SI w.e.f. April 2007. In terms of the extant instructions, every NBFC-ND-SI is required to maintain a minimum capital, consisting of Tier-I and Tier-II capital, of not less than 15 per cent of its aggregate risk-weighted assets. As on March 2012, barring a few, most of reporting companies maintained the stipulated minimum norm of 15 per cent CRAR.
Major Policy Developments 5.43 The regulatory and supervisory framework of NBFCs continued to focus on prudential regulations
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119
with specific attention to the NBFCs-ND-SI. Some of the important developments have been the following:
assets covering PPP and post COD projects that have completed at least one year of satisfactory commercial operations.
(i) NBFC-Micro Finance Institutions (NBFCMFIs): Provisioning Norms—Extension of Time and Modifications: Taking into account the difficulties faced by the MFI sector and the representation received by banks from them, it was decided to defer the implementation of asset classification and provisioning norms for NBFCMFIs to 1 April 2013.
(v) The Non-Banking Financial CompanyFactors (Reserve Bank) Directions 2012: Factoring business refers to the acquisition of receivables by way of assignment of such receivables or financing, there against either by way of loans or advances or by creation of security interest over such receivables but does not include normal lending by a bank against the security of receivables etc. A new category of NBFCs, viz. non-banking financial companyfactors, has been introduced and separate directions have been issued in this regard by the RBI. These directions include a mention that every company intending to undertake factoring business shall make an application for grant of CoR as NBFC-factor to the RBI. Existing NBFCs that satisfy all the conditions enumerated in these directions can also apply for change in their classification. An NBFC-factor, will need to commence business within six months from the date of grant of CoR. NOF for every company seeking registration as NBFC-factor has been fixed at a minimum of ` 5 crore.
(ii) Lending against Security of Single Product-Gold Jewellery: Since NBFCs that are predominantly engaged in lending against the collateral of gold jewellery have inherent concentration risk and are exposed to adverse movement of gold prices, as a prudential measure it was decided that all such NBFCs shall:
hereafter maintain a loan-to-value (LTV) ratio not exceeding 60 per cent for loans granted against the collateral of gold jewellery and
disclose in their balance sheet the percentage of such loans to their total assets;
maintain a minimum Tier l capital of 12 per cent by 1 April 2014;
not grant any advance against bullion / primary gold and gold coins.
(iii) Core Investment Companies (Reserve Bank) Directions 2011 Clarification on CICs Issuing Guarantees: Systemically important core investment companies (CIC) with total assets not less than ` 100 crore, either individually or in aggregate along with other CICs in the group, and that raise or hold public funds, shall apply to the RBI for grant of certificate of registration (CoR). (iv) Infrastructure Debt Funds (IDFs): The RBI on 21 November 2012 issued detailed guidelines with regard to the regulation of IDF-NBFCs. In terms of the guidelines, for the purpose of computing capital adequacy, IDF-NBFCs are permitted to assign a risk weight of 50 per cent on bonds covering Public Private Partnership(PPP) and post commercial operations date (COD) projects in existence over a year of commercial operation. In order to bring uniformity in regulations in this regard, this reduction in risk weight is extended to all infrastructure finance companies (IFCs) for
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(vi) Revisions to the Guidelines on Securitization Transactions: Securitisation is a process by which assets are sold to a bankruptcy remote special purpose vehicle (SPV) in return for an immediate cash payment. The cash flow from the underlying pool of assets is used to service the securities issued by the SPV. While there is sale of single asset or pool of assets to a 'bankruptcy remote' SPV in return for an immediate cash at the first stage of Securitisation, the second stage involves repackaging and selling the security interests representing claims on incoming cash flows from the asset or pool of assets to third party investors by issuance of tradable debt securities. In order to prevent unhealthy practices surrounding securitization, viz. origination of loans for the sole purpose of securitization and in order to align the interest of the originator with that of the investors and with a view to redistributing credit risk to a wide spectrum of investors, it was felt necessary that originators should retain a portion of each securitization originated and ensure more effective screening of loans. In addition, a minimum period of retention of loans prior to securitization was also
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Economic Survey 2012-13
considered desirable, to make the investors more comfortable regarding due diligence exercised by the originator.
CAPITAL MARKET Primary Market 5.44 During financial year 2012-13 (up to 31 December, 2012) resource mobilization through primary market (equity issue) witnessed an upward movement (Table 5.13). The cumulative amount mobilised as on 31 December 2012 through equity public issues stood at ` 13,050 crore. During 2012-13, 20 new companies [initial public offers (IPOs)] with resource mobilisation amounting to ` 6,043 crore were listed at the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) with mean IPO size of ` 302 crore. However, in the public issue of corporate debt category, ` 4,974 crore was mobilised through debt issue in 2012-13 compared to ` 35,611 crore in 2011-12.
Mutual Funds 5.45 After two years of redemption pressures, mutual funds (MF) mobilized ` 1,20,269 crore from the market in 2012-13 (Table 5.14). The market value of their assets under management stood at ` 7,59,995 crore as on 31 December 2012 compared to ` 5, 87,217 crore as on 31 March 2012, indicating an increase of 29.4 per cent.
Secondary Market 5.46 Indian benchmark indices, i.e. the BSE and NSE closed at 19426.7 and 5905.1 (as on 31 December 2012), gaining 25.70 per cent and 27.70 per cent respectively over the closing value of 15454.9 (Sensex) and 4624.3 (Nifty) on 30 December 2011 (Table 5.15). On 9 February 2013, the Honourable FM inaugurated the trading in equity and equity derivative segment by MCX-SX and the Exchange officially commenced trading in these segments on 11 February 2013. 5.47 Further, during the current financial year (up to 31 December 2012), the rise in the indices stood
Table 5.13 : Resource Mobilization through the Primary Market (` crore) Mode
2009-10
2010-11
2011-12
2012-13#
2500
9451
35611
4974
1.
Debt
2.
Equity
46736
48654
12857
13050
Of which IPOs
24696
35559
5904
6043
39
53
34
20
633
671
174
302
212635
218785
261282
263644
NA
NA
NA
NA
261871
276890
309750
281667
Number of IPOs Mean IPO size 3.
Private placement
4.
Euro issues (ADR/GDR) Total (1+2+3+4)
Source: Securities and Exchange Board of India (SEBI) and RBI (for Euro issues). Notes: NA indicates Not Available; # as on 31 December 2012 (Provisional); the Equity issues are considered only equity public issues; ADR is American Depository Receipts and GDR is Global Depository Receipts.
Table 5.14 : Trends in Resource Mobilization (net) by Mutual Funds (` crore) Sector
2009-10
2010-11
2011-12
2012-13#
1.
UTI
15653
-16636
-3184
10617
2.
Public
12499
-13555
-3394
8746
3.
Private
54928
-19215
-22024
100906
Total (1+2+3)
83080
-49406
-28602
120269
Source : SEBI.
Note : # As on December 31, 2012.
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Financial Intermediation at 11.62 per cent for the Sensex and 11.51 per cent in case of Nifty. Among the major Asian and markets, Indian markets have been the best performing in terms of returns. Annual movement of BSE and NSE index is provided in figure 5.3. 5.48 Reinvigorated foreign institutional investor (FII) inflows into the country during the year 2012 helped the Indian markets become one of the best performing in the world in 2012, recovering sharply from their dismal performance in 2011. The calendar year-wise trend in FII flows is provided in Figure 5.4.
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5.49 FIIs make investments in markets on the basis of their perceptions of expected returns from such markets. Their perceptions among other things are influenced by the prevailing macroeconomic environment, the growth potential of the economy, and corporate performance in competing countries. At the end of December 2012, 1,759 FIIs were registered with SEBI, with the number of registered sub-accounts increasing to 6,359. The total net FII flows to India in 2012 stood at US $ 31.01 billion. These flows were largely driven by equity inflows
Table 5.15 : Performance of Major Markets in the World (level and percentage change) Index
Last trading day of 2010 (31 Dec. 2010)
Last trading day of 2011 (30 Dec. 2011)
Last trading day of 2012 (31 Dec. 2012)
% change in 2012 over 2011
20509.09
15454.92
19426.71
25.7
6134.5
4624.3
5905.1
27.7
S&P 500
1257.64
1257.6
1426.19
13.4
DAX
6914.19
5898.35
7612.39
29.1
FTSE 100
5899.94
5572.28
5897.81
5.8
NIKKEI 225
10228.92
8455.35
10395.18
22.9
HANG SENG
23035.45
18434.39
22656.92
22.9
BRAZIL BOVESPA
69304.81
56754.08
60952.08
7.4
2051
1825.74
1997.05
9.4
11577.51
12217.56
13104.14
7.3
3190.04
2646.35
3167.08
19.7
2808.077
2199.417
2269.128
3.2
3804.78
3159.81
3641.07
15.2
BSE SENSEX NSE NIFTY
KOSPI DJIA Straits Times SHANGHAI SE COMPOSITE CAC 40 Source : Bloomberg.
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Economic Survey 2012-13
(80 per cent of total flows) which remained buoyant, indicating FII confidence in the performance of the Indian economy in general and Indian markets in particular. The economic and political developments in the Euro zone area and United States had their impact on markets around the world including India. The resolution of the 'fiscal cliff' in the US had a positive impact on the market worldwide including in India. Further, the reform measures recently initiated by the government have been well received by the markets. 5.50 Market turnover has also increased during the current year. In the cash segment of the equity market, the total turnover of the BSE and NSE stood at ` 4,10,230 crore and ` 19,73,624 crore during 2012-13 (April-December) as compared to ` 6,67,498
crore and ` 28,10,893 crore respectively in 2011-12 (Table 5.16). 5.51 In the equity derivatives segment, the NSE witnessed a total turnover of ` 2,28,79,486 crore during 2012-13 (April-December) as compared to ` 3,13,49,732 crore during 2011-12. The total turnover in the equity derivatives segment of the BSE stood at ` 57,41,593 crore in 2011-12 (April-December). 5.52 In the currency derivatives segment, the NSE witnessed a turnover of ` 37,25,842 crore in 201213 (April-December). The turnover in the currency derivatives segment of the Multi-Commodity Exchange (MCX-SX) stood at ` 23,63,819 crore in 2012-13 (April-December) . Further, the United Stock Exchange (USE) witnessed a turnover of ` 32,109 crore during the same period (Table 5.17).
Table 5.16 : Market Turnover (` crore) Market
2009-10
2010-11
2011-12
2012-13#
1378809
1105027
667498
410230
234
154
808476
5741593
4138024
3577410
2810893
1973624
17663665
29248221
31349732
22879486
BSE Cash Equity derivatives NSE Cash Equity derivatives Source: BSE and NSE. Note: # as on 31 December 2012.
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Table 5.17 : Trends in Currency Derivatives Year
NSE
MCX- SX
USE
2011-12
2012-13#
2011-12
2012-13#
2011-12
2012-13#
No. of contracts (lakh)
9733
6772
7703
4272
3153
57
` crore) Trading value (`
4674990
3725842
3732446
2363819
1488978
32109
18775
20140
14990
12777
5980
174
Average daily trading value (` ` crore)
Source: NSE, MCX-SX and USE. Note: # as on 31 December 2012.
Volatility in the equity and currency derivatives market
Category 1 : AIFs with positive spillover effects on the economy, for which certain incentives or concessions might be considered by SEBI or the Government of India or other regulators in India; and which shall include venture capital funds, small and medium enterprises (SME) funds, social venture funds, and infrastructure funds.
MAJOR POLICY INITIATIVES
5.54 In the overall context of the evolving macroeconomic situation in the country and global financial developments, the government in close collaboration with the RBI and SEBI has recently taken a number of initiatives to meet the growing capital needs of the Indian economy. Some of the initiatives are as follows:
Category 2 : AIFs for which no specific incentives or concessions are given by the government or any other regulator; which shall not undertake leverage other than to meet dayto-day operational requirements as permitted in these regulations
Category 3 : AIFs with funds (including hedge funds) that are considered to have negative externalities.
5.53 Together with an increase in the turnover in the securities markets, there was also a decline in volatility of both the Nifty and Sensex. Volatility which had increased in 2010-12 (two years), moderated considerably (Table 5.18).
Primary Market 5.55 SEBI (Alternative Investment Funds) Regulations 2012: With a view to extending the reach of regulation to unregulated funds, ensuring systemic stability, increasing market efficiency, encouraging new capital formation, and providing investor protection, SEBI has notified new regulations covering alternate investment funds (AIFs) under three broad categories:
Table 5.18 : Volatility of weekly returns on Indian Equity Markets Index
2009-10 2010-11 2011-12 2012-13#
Nifty
3.8
2.5
2.9
1.8
Nifty Junior
4.5
2.7
2.9
2.0
Sensex
3.6
2.5
2.9
1.8
BSE 500
3.9
2.4
2.8
1.8
Source : BSE and NSE. Note : # As on 31 December 2012.
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5.56 The recent initiatives taken to develop the Indian corporate bond markets are summarized in Box 5.2. 5.57 Financial Literacy: With the objective of promoting financial education in a synergistic manner, under the aegis of the Financial Stability and Development Council (FSDC) Sub-Committee a draft National Strategy on Financial Education has been formulated and public consultation on the same has been undertaken. The document is in the stage of finalization. 5.58 Two-way fungibility in Indian Depository Receipts (IDRs): Pursuant to the budget announcement of 2012-13, the Ministry of Corporate Affairs (MCA) [1 October 2012], the RBI, and SEBI (28 August 2012) have carried out amendments to the existing legal framework to facilitate two-way fungibility in Indian depository receipts.
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Economic Survey 2012-13
Box 5.2 : Recent Initiatives for further Development of Corporate Bond Markets
To permit banks to take limited membership in SEBI-approved stock exchanges for the purpose of undertaking proprietary transactions in the corporate bond markets.
To enhance liquidity in the corporate bond markets the Insurance Regulatory and Development Authority (IRDA) has permitted insurance companies to participate in the repo market. The IRDA has also permitted insurance companies to become users of credit default swap (CDS).
In consultation with the Technical Advisory Committee on Money, Foreign Exchange, and Government Securities Markets, it has been decided to reduce the minimum haircut requirement in corporate debt repo from the existing 10 per cent/12per cent/15per cent to 7.5 per cent/8.5per cent/10 per cent for AAA/AA+/AA-rated corporate bonds.
MFs have been permitted to participate in CDS in corporate debt securities, as users. MFs can participate as users in CDS for eligible securities as reference obligations, constituting from within the portfolio of only fixed maturity plans (FMP) schemes having tenor exceeding one year.
Revised guidelines on CDS for corporate bonds by the RBI provide that in addition to listed corporate bonds, CDS shall also be permitted on unlisted but rated corporate bonds even for issues other than infrastructure companies.
Users shall be allowed to unwind their CDS-bought position with the original protection seller at a mutually agreeable or Fixed Income Money Market and Derivatives Association of India(IMMDA) price. If no agreement is reached, then unwinding has to be done with the original protection seller at FIMMDA price.
CDS shall be permitted on securities with original maturity up to one year like CPs, certificates of deposit, and nonconvertible debentures with original maturity less than one year as reference/deliverable obligations.
Secondary Market Rajiv Gandhi Equity Savings Scheme 5.59 On 23rd November 2012, the government notified a new tax saving scheme called the Rajiv Gandhi Equity Savings Scheme (RGESS), exclusively for first-time retail investors in the securities market. This scheme provides 50 per cent deduction of the amount invested from taxable income for that year to new investors who invest up to ` 50,000 and whose annual income is below ` 10 lakh. The operational guidelines were issued by SEBI on 6 December 2012 (Box 5.3).
Electronic Voting Facility made mandatory for top listed companies 5.60 As mandated in the Union Budget 2012-13 for top listed companies to offer electronic voting facility to their shareholders, SEBI has come out with the necessary amendments in this regard on 13 July 2012, to be incorporated in the equity listing agreement by stock exchanges. To make a beginning, based on market capitalization, electronic voting is now mandatory for the top 500 listed companies at the BSE and NSE, in respect of those businesses to be transacted through postal ballot.
SME Exchange / Platform 5.61 Separate trading platforms for SMEs were launched and became functional at the BSE and
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NSE in March 2012 and September 2012 respectively. As on 14 January 2013, the number of equities listed on the BSE and NSE SME platforms is 12 and 2 respectively.
Reduced Securities Transaction Tax for cash delivery transactions 5.62 Following the announcement in Union Budget 2012-13, the rate of the securities transaction tax (STT) has been revised downwards by 20 per cent to 0.1 per cent from 0.125 per cent for delivery-based transactions in the cash market, effective 1 July 2012.
Regulatory framework for governance and ownership of stock exchanges, clearing corporations, and depositories 5.63 Based on the recommendations of the Dr. Bimal Jalan Committee, new Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations 2012 were notified on 20 June 2012 to regulate recognition, ownership, and governance in stock exchanges and clearing corporations. Further, the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations 2012 have been brought into effect from 11 September 2012 to regulate ownership and governance norms of depositories.
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Box 5.3 : RGESS The Rajiv Gandhi Equity Saving Scheme (RGESS) will give tax benefits to new investors whose annual income is up to ` 10 lakh for investments up to a maximum of ` 50,000. The investor will get 50 per cent deduction of the amount invested from taxable income for that year. Salient features of the scheme are as follows:
The scheme is open to new retail investors identified on the basis of their permanent account numbers (PAN).
The tax deduction allowed will be over and above the ` 1 lakh limit permitted allowed under Section 80 C of the Income Tax Act.
In addition to the 50 per cent tax deduction for investments, dividend income is also tax free.
For investments up to ` 50,000 in the sole RGESS demat account, if the investor opts for a basic service demat account, annual maintenance charges for the demat account are zero and for investments up to ` 2 lakh, ` 100.
Stocks listed under BSE 100 or CNX 100, or stocks of public-sector undertakings (PSUs) that are Navratnas, Maharatnas, and Miniratnas will be eligible under the scheme. Follow-on public offers (FPOs) of these companies will also be eligible.
IPOs of PSUs, which are scheduled to get listed in the relevant financial year and whose annual turnover is not less than ` 4,000 crore for each of the immediate past three years, will also be eligible.
Exchange-traded funds (ETFs) and MFs that have RGESS-eligible securities as their underlying and are listed and traded in the stock exchanges and settled through a depository mechanism have also been brought under the RGESS to provide the advantage of diversification and consequent risk minimization.
To benefit the small investors, investments are allowed in instalments in the year in which tax claims are made.
The total lock-in period for investments will be three years including an initial blanket lock-in of one year.
After the first year, investors will be allowed to trade in the securities. Investors are free to trade / churn their portfolios for around 90 days in each of the years following the first year of investment.
Investors would, however, be required to maintain their level of investment during these two years at the amount for which they have claimed income tax benefit or at the value of the portfolio before initiating a sale transaction, whichever is less, for at least 270 days in a year.
The general principle under which trading is allowed is that whatever is the value of stocks / units sold by the investor from the RGESS portfolio, RGESS-compliant securities of at least the same value are credited back into the account subsequently. However, the investor is allowed to take benefit of the appreciation of his RGESS portfolio, provided its value remains above the investment for which he has claimed income tax benefit.
In case the investor fails to meet the conditions stipulated, the tax benefit will be withdrawn.
The broad provisions of the Scheme and the income tax benefits under it have already been incorporated as a new Section80CCG- of the Income Tax Act 1961, as amended by the Finance Act 2012. The operational guidelines were issued by SEBI on 6 December 2012.
Initiatives to attract foreign investment and External Commercial Borrowings Expansion of Qualified Foreign Investors (QFIs ) Scheme 5.64 In Budget 2011-12, the government, for the first time, permitted qualified foreign investors (QFIs), who meet the know-your-customer (KYC) norms, to invest directly in Indian MFs. In January 2012, the government expanded this scheme to allow QFIs to directly invest in Indian equity markets. Taking the scheme forward, as announced in Budget 201213, QFIs have also been permitted to invest in corporate debt securities and MF debt schemes subject to a total overall ceiling of US$ 1 billion. In http://indiabudget.nic.in
May 2012, QFIs were allowed to open individual noninterest-bearing rupee bank accounts with authorized dealer banks in India for receiving funds and making payment for transactions in securities they are eligible to invest in. In June 2012, the definition of QFI was expanded to include residents of the member countries of the Gulf Cooperation Council (GCC) and European Commission (EC) as the GCC and EC are the members of the Financial Action Task Force (FATF).
Initiatives to attract FII Investment 5.65 As regards FII investment in debt securities, there has been progressive enhancement in the quantitative limits for investments in various debt
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Economic Survey 2012-13
categories. In June 2012, the FII limit for investment in G-Secs (government securities) was enhanced by US $ 5 billion, raising the cap to US $ 20 billion. The scheme for FII investment in long-term infra bonds has been made attractive by gradual reduction in lock-in and residual maturity periods criteria. In November 2012, the limits for FII investment in GSecs and corporate bonds (non-infra category) have been further enhanced by 5 billion each, taking the total limit prescribed for FII investment to US$ 25 billion in G-Secs and US$51 billion for corporate bonds (infra+non-infra). FII debt allocation process has also been reviewed for bringing greater certainty among foreign investors and helping them periodically re-balance their portfolios in sync with international portfolio management practices.
Liberalization in External Commercial Borrowings Policy during 2012-13 5.66 The important steps taken in the arena of external commercial borrowings (ECB) policy liberalization include:
Enhancing the limit for refinancing rupee loans through ECB from 25 per cent to 40 per cent for Indian companies in the power sector
Allowing ECB for capital expenditure on the maintenance and operation of toll systems for roads and highways so long as they are a part of the original project subject to certain conditions, and also for low cost housing projects
Reducing the withholding tax from 20 per cent to 5 per cent for a period of three years (July 2012- June 2015) on interest payments on ECBs
Introducing a new ECB scheme of US $10 billion for companies in the manufacturing and infrastructure sectors
Permitting the Small Industries Development Bank (SIDBI) as an eligible borrower for accessing ECB for on-lending to the micro, small, and medium enterprises (MSME) sector subject to certain conditions
Permitting the National Housing Bank (NHB)/ Housing Finance Companies to avail themselves of ECBs for financing prospective owners of low cost / affordable housing units
Sovereign Credit Rating of India 5.67 India's sovereign debt is usually rated by six major sovereign credit rating agencies (SCRAs) (Table 5.19). These are Fitch Ratings, Moody's Investors Service, Standard and Poor's (S&P), Dominion Bond Rating Service (DBRS), Japanese Credit Rating Agency (JCRA), and Rating and Investment Information Inc., Tokyo (R&I). The government is taking a number of steps to improve its interaction with the major SCRAs so that they make informed decisions.
Financial Stability and Development Council 5.68 With a view to strengthening and institutionalizing the mechanism for maintaining financial stability, enhancing inter-regulatory coordination, and promoting financial-sector development, the government has set up an apexlevel Financial Stability and Development Council (FSDC) in December 2010, in line with the G 20
Table 5.19 : Sovereign Ratings assigned by Rating Agencies as on 15.1.2013 Rating agency
Date of affirmation of ratings
Foreign currency
Local currency
Ratings
Outlook
Ratings
Outlook
JCRA
30.11.2012
BBB+
Stable
No ratings were given for local currency
Moody’s
26.11.2012
Baa3
Stable
Baa3 (upgraded from Ba1)
R&I
22.11.2012
BBB (LT)a-2 (ST)
Stable
No ratings were given for local currency
DBRS
06.08.2012
BBB (low) (LT)
Stable
BBB (low) (LT)
Stable
Fitch
15.06.2012
BBB- (LT)F3 (ST)
Negative
BBB-
Stable
S&P
25.04.2012
BBB- (LT) A-3 (ST)
Negative
No ratings were given for local currency
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Stable
Financial Intermediation initiatives. The Council is chaired by the Finance Minister and has heads of financial-sector regulatory authorities, the Finance Secretary and/or Secretary, Department of Economic Affairs, Secretary, Department of Financial Services, and the Chief Economic Adviser as members. Without prejudice to the autonomy of regulators, the Council monitors macro-prudential supervision of the economy, including functioning of large financial conglomerates, and addresses inter-regulatory coordination and financial-sector development issues. It also focuses on financial literacy and financial inclusion.
INSURANCE
AND
PENSION FUNDS
Insurance 5.69 Since the opening up of the insurance sector, the number of participants in the insurance industry has gone up from seven insurers (including the Life Insurance Corporation of India [LIC], four public-sector general insurers, one specialized insurer, and the General Insurance Corporation as the national re-insurer) in 2000 to 52 insurers as on 30 September 2012 operating in the life, non-life, and re-insurance segments (including specialized insurers, namely the Export Credit Guarantee Corporation and Agricultural Insurance Company [AIC]). Four of the general insurance companies, viz. Star Health and Alliance Insurance Company, Apollo Munich Health Insurance Company, Max BUPA Health Insurance Company, and Religare Health Insurance Company function as standalone health insurance companies. Of the 23 insurance companies that have set up operations in the life segment post opening up of the sector, 21 are in joint ventures with foreign partners. Of the 21private insurers who have commenced operations in the nonlife segment, 18 are in collaboration with foreign partners.
Life Insurance 5.70 From being the sole provider of life insurance till financial year 1999-2000, LIC is today competing in an industry with 23 private-sector insurers who have commenced operations over the period 200012. The industry which reported an annual growth rate of 19.8 per cent during the period 1996-7 to 2000-1 has, post opening up of the sector, reported an annual growth rate of 18.85 per cent during 20012 to 2011-12. The life insurers underwrote new http://indiabudget.nic.in
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business of ` 1,13,942 crore during financial year 2011-12 as against ` 1,26,398 crore during the year 2010-11, recording a decline of 9.85 per cent. Of the new business premium underwritten, the LIC accounted for ` 81,862.25 crore (71.85 per cent market share) and private insurers for ` 32,079.92 crore (28.15 per cent market share). The market share of these insurers was 68.84 per cent and 31.16 per cent respectively in the corresponding period of 2010-11.
Non-life Insurance 5.71 The industry which reported a growth rate of around 10 per cent during the period 1996-7 to 20001 has, post opening up of the sector, reported average annual growth of over 15 per cent over the period 2001-2 to 2011-12. In addition, the specialized insurers Export Credit Guarantee Corporation and AIC are offering credit guarantee and crop insurance respectively. The premium underwritten by the nonlife insurers during 2011-12 was ` 52,875.8 crore as against ` 42,576.5 crore in 2010-11, thus recording a growth of 24.19 per cent. The growth was satisfactory, particularly in view of the across-theboard cuts in tariff rates. The private insurers underwrote premium of ` 22,315.03 crore as against ` 17,424.6 crore in 2010-11, reporting growth of 28.07 per cent vis-a-vis 24.67 per cent in 2010-11. The publicsector insurers, on the other hand, underwrote a premium of ` 30,560.74 in 2011-12 as against ` 25,151.8 crore in 2010-11, i.e. a growth of 21.5 per cent as against 21.84 per cent in 2010-11. The market shares of the public and private insurers are 57.80 and 42.20 per cent in 2011-12 as against 59.07 and 40.93 in the previous year.
Insurance Penetration 5.72 The growth in the insurance sector is internationally measured based on the standard of insurance penetration defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP). Insurance density is another wellrecognized benchmark and is defined as the ratio of premium underwritten in a given year to total population (measured in US dollars for convenience of comparison). The Indian insurance business has in the past remained underdeveloped with low levels of penetration. Post liberalization, the sector has succeeded in raising the levels of insurance penetration from 2.7 (life 2.15 and non-life 0.56) in 2001 to 4.1 (life 3.4 and non-life 0.7) in 2011.
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5.73 Despite the growth in the insurance sector that was witnessed during the last few decades, insurance penetration and density remained low as compared to other developing countries of the world. It was felt that various legislative provisions were archaic and needed revision in line with the changing market conditions. Accordingly, the government introduced the Insurance Laws (Amendment) Bill 2008 in the Rajya Sabha on 22 December 2008.Based on the recommendations of the Standing Committee, the official amendments to the Insurance Laws (Amendment) Bill 2008 are proposed to be introduced at the earliest.
measures to liberalize, regulate, and develop the country's financial sector by adopting best international practices has been initiated. The results of these reforms have been encouraging and the country now has one of the most vibrant and transparent capital markets in terms of market efficiency, transparency, and price discovery process. However, there are still certain challenges in the development of the Indian financial sector which need to be addressed to make it an important avenue for productive chanelisation of savings by domestic investors and a preferred investment destination for international investors.
Pension Sector
5.76 A reasonably well-developed corporate bond market is very much required in any economy to supplement banking credit and the equity market and to facilitate the long-term funding requirement of corporate sector as well as infrastructure development in the country. Though, the development of the corporate bond market, has been an important area and has received greater policy attention in recent times,it is yet to take off in a significant manner. Some of the issues that need to be addressed in this regard include drawing up a roadmap for a structural shift from a bank-dominated financial system to a more diverse financial system where top-rated corporates access finance from capital markets, strengthening of the legal framework for regulation of corporate debt by necessary amendments in rules/regulations, and relaxation of investment guidelines for pension, provident, and insurance funds to enable the participation of longterm investors in the corporate bond market. Introduction of new products and making nascent products such as covered bonds, municipal bonds, credit default swaps, credit enhancements, and securitization receipts more attractive may be considered for public issuance of bonds at reduced cost. Improving the market infrastructure for enabling liquidity, transparency in price discovery, and stimulating growth in trading volumes also need to be suitably addressed.
5.74 The New Pension System (NPS) was introduced for the new recruits who join government service on or after 01January 2004. Till 5 January 2013 a total of 42.17 lakh subscriptions have been enrolled with a corpus of ` 26,189 crore. From 1May 2009, the NPS was opened up for all citizens in India to join on a voluntary basis. Although the NPS is perhaps one of the cheapest financial products available in the country, in order to make it affordable for the economically disadvantaged, the government in September 2010 introduced a lower cost version, known as Swavalamban Scheme, which enables groups of people to join the NPS at a substantially reduced cost. As per existing scheme under NPS, Swavalamban could be availed either in unorganized sector or in NPS Lite. NPS Lite is a model specifically designed to bring NPS within easy reach of the economically disadvantaged sections of the society. NPS Lite is extremely affordable and viable due to its optimized functionalities available at reduced charges. Under the Swavalamban scheme, the government provides subsidy to each NPS account holder and the scheme has been extended until 2016-17. A customized version of the core NPS model, known as the NPS Corporate Sector Model was also introduced from December 2011 to enable organized-sector entities to move their existing and prospective employees to the NPS under its Corporate Model. All the PSBs have been asked to provide a link on their website to enable individual subscribers to open online NPS Accounts.
CHALLENGES
AND
OUTLOOK
5.75 India has been a late starter in the process of reforming financial markets. Nevertheless, beginning the 1990s, a package of reforms comprising http://indiabudget.nic.in
5.77 The need for long-term finance for infrastructure projects is another issue that needs to be looked into in the context of the limitation of banks to finance such projects. Infrastructure projects, given their long pay-back period, require long-term financing in order to be sustainable and cost effective. However banks, which have been the main source of funding these projects, are unable to provide long-term funding given their inherent asset-liability mismatch. Moreover
Financial Intermediation banks are also approaching their exposure limits. In this regard, infrastructure development funds (IDF) through innovative means of credit enhancement are expected to provide long-term low-cost debt for infrastructure projects by tapping into savings like insurance and pension funds which have hitherto played a comparatively limited role in financing infrastructure. By refinancing bank loans of existing projects, IDFs are also expected to take over a fairly large volume of the existing bank debt that will release an equivalent volume for fresh lending to infrastructure projects. 5.78 The recent global financial crises have raised certain issues relating to governance of financial intermediaries and awareness of investors. As investors' awareness is a precondition for their protection, attempts are being made to address this issue through the financial literacy campaign. A simultaneous and coordinated effort on both fronts is needed to enable investors, especially the small investors, to take informed decisions and ensure orderly conditions in the market. The ongoing efforts need to be scaled up in a coordinated way for spearheading financial literacy and promoting investors' protection. 5.79 The enactment of the Banking Laws (Amendment) Act 2012 is expected to make the regulatory and supervisory powers of the RBI more effective and facilitate banks in raising funds from the capital market required for expansion of banking business. It will also facilitate finalization of guidelines by the RBI for providing licences for new banks, which is essential for achieving the objective of financial inclusion in the current perspective. This needs to be expedited accordingly. 5.80 Pension reforms in India have generated widespread interest internationally. They will not only facilitate the flow of long-term savings for development but also help establish a credible and sustainable social security system in the country.
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Lower levels of financial literacy, particularly among workers in the unorganized sector, non-availability of even moderate surplus, and lukewarm response so far from most of the state / UT governments to a co-contributory Swavalamban Scheme are the major challenges to universal inclusion of poorer sections of Indian society into the pension network. On the supply side, the lack of awareness about the NPS and of access points for people to open their accounts individually have been major inhibiting factors which should be addressed by the pension regulator immediately. As far as the insurance products are concerned, limited choice and high cost of providing covers and assessing claims are some of the issues that need to be suitably addressed to make insurance funds an effective means of channellizing savings to investments. 5.81 In the global context, the performance of the financial sector in India will be influenced by both short-term and long-term factors. In the long run, a strong growth in global output will be essential for sustaining investment activities across the globe, including India. In the short run, factors like expectation of higher relative returns, risk perception of investors, and global liquidity will decide the level of flow of funds to the domestic equity market. According to the World Bank's Global Economic Prospects (GEP), January 2013, conditions in the global financial markets have eased significantly since July 2012 reflecting substantial progress in improving fiscal sustainability and the mutual support mechanism in the European Union. The decline in financial market tensions is reflected in terms of international capital flows to developing countries reaching a new high, decline in developing country bond spreads (EMBIG), and rise in developing country stock index. Overall the global economic environment remains fragile and prone to further disappointment, although the balance of risk is now less skewed to the downside than it has been in recent years.
Balance of Payments
6
CHAPTER
India’s external sector exhibited resilience during the global financial crisis of 2008. The balance of payments however has been under increasing stress recently. Exports have declined while imports have not fallen significantly, resulting in increasing trade and current account deficits. Though capital flows are bridging the gap, the nature of portfolio capital may lead to greater potential financial fragility and also rupee volatility. India’s growing external exposures can also be attributed to the increasing integration of the Indian economy with the rest of the world, which is reflected in both current and capital account transactions. The combined share of exports and imports of goods increased from 14.2 per cent of GDP in 1990-91 to about 43.0 per cent in 2011-12. Two way external sector transactions (i.e, gross current account plus gross capital account flows) have risen from 30.6 per cent of GDP in 1990-91 to about 108.0 per cent in 2011-12. Therefore, while the globalization of Indian economy has helped raise growth, it has also meant greater vulnerability to external shocks. A focus on domestic macroeconomic rebalancing will help reduce vulnerability.
GLOBAL ECONOMY 6.2 There are early signs of a turnaround in the global economy. A series of measures by the euro zone authorities and the European Central Bank have allayed fears of an imminent meltdown. The fiscal cliff in the US has been deferred, albeit temporarily, and there are green shoots of recovery in China and India. As a result, growing investor optimism has translated into ‘risk on’ behaviour, which has led to a surge in capital flows to emerging economies. The renewed confidence has also led to ‘great rotation’, with investors shifting money from ‘safe haven’ government securities to equities in search for yield. The change is reflected in the equity market boom in advanced and emerging economies. However doubts still exist about the sustainability of the recovery. The eurozone still faces problems such as the continuing recession; the existence of a monetary union without fiscal union; the slow progress of the proposed European banking union; the continuing need for austerity in many advanced http://indiabudget.nic.in
economies. In addition, fiscal tensions in the United States might re-surface in the next few months. Japan has still to find a reasonable way out of its decade long slump. Emerging markets continue to face problems of overheating. All these cast a shadow on the prospects of the global economy. 6.3 The Indian economy is exhibiting early signs of recovery, as indicated by improvements in purchasing managers index (PMI), moderation in inflation, return of investor confidence through surge in portfolio investment flows and buoyant equity markets. The balance of payments, however, is under strain with current account deficit (CAD) widening to 4.6 per cent of GDP in the first half of 2012-13, after touching 4.2 per cent in 2011-12. The CAD is being financed by capital flows and not by running down reserves. However, a sizeable share of capital is in the nature of Foreign Institutional Investors (FIIs) investment that could moderate or even reverse if investors switch to risk-off mode. The balance of payments position therefore is more
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Balance of Payments vulnerable, which has been reflected in high rupee volatility. 6.4 The International Monetary Fund (IMF), in its January 2013 World Economic Outlook Update, reduced global growth forecast for the year 2012 to 3.2 per cent from its October 2012 estimate of 3.3 per cent. Advanced economies are expected to grow at 1.4 per cent in 2013, while emerging and developing economies are projected to grow at 5.5 per cent in 2013 (Table 6.1). 6.5 The euro area economy slipped back into recession in Q3 of 2012 as the GDP shrank by 0.1 per cent following a contraction of 0.2 per cent in the previous quarter. Spillovers from advanced economies and domestic constraints have affected economic activity in emerging and developing economies as well. The World Bank in its publication ‘Global Economic Prospects January 2013’ highlights that the uncertainty over future policy and necessary fiscal and financial restructuring would continue to be a drag on growth in many countries. The downside risks to the global economy include: a stalling of progress on the euro-area crisis, debt and fiscal issues in the United States, the possibility of a sharp slowing of investment in China, and a disruption in global oil supplies. However, the likelihood of these risks and their potential impact has diminished, and that of a stronger-than-anticipated recovery in highincome countries has increased. 6.6 Going forward, global recovery will depend upon how the risks emanating from US fiscal adjustment and euro area are managed. In the euro area, despite
several rescue packages over the last two years, the crisis has become deep, structural and multifaceted, posing a major downside risk to the global outlook. Some of the important measures which are needed to stabilize the euro area include mapping out the role of European Stability Mechanism; creating a single supervisory mechanism and a more integrated banking system; progress with the ratification of the Fiscal Compact; and further structural reforms in euro area member States.
BALANCE OF PAYMENTS (BOP) India’s BoP during 2011-12 6.7 India’s BoP was under stress during 2011-12, as the trade and current account deficit widened. Though capital inflows increased, it fell short of fully financing current account deficit, resulting in drawdown of foreign exchange reserves. The trade deficit increased to US$ 189.8 billion (10.2 per cent of GDP) in 2011-12 as compared to US$ 127.3 billion (7.4 per cent of GDP) during 2010-11. This increase of 49.1 per cent in trade deficit in 2011-12 was primarily on account of higher increase in imports relative to exports. Net invisible balances showed significant improvement, registering 40.7 per cent increase from US$ 79.3 billion in 2010-11 to US$ 111.6 billion during 2011-12. Net invisible balance as per cent of GDP improved to 6.0 per cent in 2011-12 from 4.6 per cent in 2010-11. The current account deficit widened to US$ 78.2 billion
Table 6.1 : Overview of World Economic Outlook Projections Percentage change year over year Projections World Output Advanced economies
2011
2012
2013
2014
3.9
3.2
3.5
4.1
1.6
1.3
1.4
2.2
United States
1.8
2.3
2.0
3.0
Euro Area
1.4
-0.4
-0.2
1.0
-0.6
2.0
1.2
0.7
0.9
-0.2
1.0
1.9
6.3
5.1
5.5
5.9
China
9.3
7.8
8.2
8.5
India
7.9
4.5
5.9
6.4
5.9
2.8
3.8
5.5
Japan United Kingdom Emerging and developing economies
World Trade Volume (goods and services)
Source: World Economic Outlook Update, January 2013. IMF.
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Table 6.2 : Balance of Payments : Summary Sl. No.
1 I
Item
2
(US$ million) 2010-11PR
2011-12P
2007-08
2008-09
2009-10
2011-12 H1 (AprilSept. 2011)PR
2012-13 H1 (AprilSept. 2012)P
3
4
5
6
7
8
9
166,162 257,629 -91,467 75,731 38,853 -5,068 41,945 -52,614 -15,737
189,001 308,520 -119,519 91,604 53,916 -7,110 44,798 -65,603 -27,914
182,442 300,644 -118,203 80,022 36,016 -8,038 52,045 -82,187 -38,181
256,159 383,481 -127,322 79,269 44,081 -17,952 53,140 -83,241 -48,053
309,774 499,533 -189,759 111,604 64,098 -15,988 63,494 -125,661 -78,155
158,202 247,739 -89,537 53,103 30,409 -7,587 30,281 -59,128 -36,433
146,549 237,221 -90,672 51,699 29,572 -10,510 32,637 -61,100 -38,973
106,585 2,114
7,395 2,439
51,634 2,890
63,740 4,941
67,755 2,296
43,490 640
39,989 15
22,609 15,930 11,759
7,861 -1,985 -3,245
2,000 7,558 2,083
12,160 12,034 4,962
10,344 6,668 16,226
8,388 5,940 19,714
1,726 9,511 14,899
179 43,326
4,290 8,342
2,922 50,362
3,238 42,127
11,918 39,231
3,937 17,087
9,397 18,608
15,893 27,433 10,847 1,316 92,164
22,372 -14,030 -6,016 440 -20,080
17,966 32,396 -13,259 -12 13,441
11,834 30,293 -12,484 -2,636 13,050
22,061 17,170 -7,008 -2,432 -12,831
15,741 1,346 -8,278 -1,338 5,719
12,812 5,796 -4,769 -653 363
-92,164
20,080
-13,441
-13,050
12,831
-5,719
-363
Current Account
1 2 3 4
Exports Imports Trade Balance Invisibles (net) A Non-factor Services B Income C Transfers 5 Goods and Services Balance 6 Current Account Balance II Capital Account Capital Account Balance i. External Assistance (net) ii. External Commercial Borrowings (net) iii. Short-term debt iv Banking Capital (net)] of which: Non-Resident Deposits (net) v Foreign Investment (net) of which: A FDI (net) B Portfolio (net) vi Other Flows (net) III Errors and Omission IV Overall Balance V Reserves change [increase (-) / decrease (+)] Source : RBI.
PR : Partially Revised. P : Preliminary.
(4.2 per cent of GDP) as compared with US$ 48.1 billion (2.8 per cent of GDP) in 2010-11. Net capital inflows were higher at US$ 67.8 billion (3.6 per cent of GDP) in 2011-12 as compared to US$ 63.7 billion (3.7 per cent of GDP) in 2010-11, mainly due to higher FDI inflows and NRI deposits. As the capital account surplus fell short of financing current account deficit, there was a drawdown of reserves (on BoP basis) to the extent of US$ 12.8 billion during 2011-12 as against an accretion of US$ 13.1 billion in 2010-11.
This is reflected in the higher current account deficit in H1 (April-September) of 2012-13 than the corresponding period of the previous year, mainly due to worsening of trade deficit reflected in sharper decline in exports than the imports and lower invisibles surplus. The net capital flows in absolute term, were also lower during H1 of 2012-13 vis-a-vis the corresponding period of 2011-12 (Table 6.2).
6.8 As per the latest available data for the first half (H1- April-September 2012) of 2012-13, India’s balance of payments continued to be under stress.
6.9 During 2011-12, exports crossed the US$ 300 billion mark for the first time. The rate of growth however, declined to 20.9 per cent to US$ 309.8
1
Current Account1 during 2011-12
As per the sixth edition of Balance of Payments Manual (BPM 6, 2009) of the IMF, the current account of the BoP includes all the transaction (other than those in financial items) involving exchange of economic value which takes place between resident and non-resident entities.
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Balance of Payments billion against 40.5 per cent (US$ 256.2 billion) in 2010-11. Exports at US$ 158.2 billion performed well in first half (H1–April-September 2011) of 201112 vis-a-vis exports of US$112.0 billion in H1 of 201011. There was, however, significant deceleration in exports during second half (H2- October 2011 – March 2012) of 2011-12 to US$ 151.6 billion (US$ 144.2 billion in H2 of 2010-11). This was on account of deterioration in global trading conditions reflecting weakening of world demand inter-alia caused by euro zone crisis. Imports valued at US$ 499.5 billion, recorded 30.3 per cent increase in 2011-12 over US$ 383.5 billion in 2010-11. The growth in imports during 2011-12 was mainly due to higher growth in imports of petroleum, oil and lubricants (POL), gold and silver and machinery. Oil imports grew by about 47 per cent, while gold and silver registered a growth of 49 per cent in 2011-12. Imports of oil and precious metal (gold and silver) together accounted for nearly 45 per cent of total imports in 2011-12. The trade deficit increased to US$ 189.8 billion (10.2 per cent of GDP) in 2011-12 as compared to US$ 127.3 billion (7.4 per cent of GDP) during 2010-11. Higher growth in imports than exports was responsible for the widening of the trade deficit in 2011-12. 6.10 The net invisible balances2 showed significant improvement, registering 40.7 per cent increase to US$ 111.6 billion during 2011-12 from US$ 79.3 billion in 2010-11, due to increase in invisibles receipts while invisible payments witnessed a decline. The invisible receipts increased by 15.1 per cent to US$ 219.2 billion in 2011-12 as compared to US$ 190.5 billion during 2010-11, mainly driven by services exports (comprising travel, transportation, insurance, Government not included elsewhere (GNIE), software and non-software), which recorded a growth of 14.2 per cent during 2011-12 (as against of 29.8 per cent in 2010-11). Invisibles payments decreased by 3.2 per cent to US$ 107.6 billion during 2011-12 (US$ 111.2 billion during 2010-11), mainly reflecting lower services payments. 6.11 Services exports increased to US$ 142.3 billion in 2011-12 from US$ 124.6 in 2010-11. Though the increase in services exports was broad-based, it was 2
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more prominent in case of insurance, transportation, travel and software services. Receipts on account of software services witnessed a rise, mainly on account of improved efficiency and diversified exports destinations. Software receipts at US$ 62.2 billion, accounting for nearly 43.7 per cent of total services receipts, showed an increase of 17.1 per cent in 2011-12. Payment on account of services imports witnessed a decline from US$ 80.6 billion in 2010-11 to US$ 78.2 billion in 2011-12, primarily on account of decline in the imports of business and software services. 6.12 Among other components of invisibles, transfers, mainly representing private transfers (secondary income as per BPM 6) recorded a significant increase while income (primary income as per BPM 6) showed a decline. Net private transfer receipts, which basically comprise remittances from Indians working overseas increased by 18.9 per cent to US$ 66.1 billion in 2011-12 from US$ 55.6 billion in the previous year. Increase in private transfers could be attributed to depreciation of rupee in the recent period. In contrast, income (net) showed an outflow of US$ 16.0 billion albeit marginally lower than the preceding year. Overall, gross invisible receipts, showed a sharp rise of 15.1 per cent in 2011-12. Invisible payments declined by 3.2 per cent to US$ 107.6 billion in 2011-12 from US$ 111.2 billion in 2010-11. The decline in payments was mainly on account of lower imports of software and business services and investment income payments. Net invisible balance as per cent of GDP improved to 6.0 per cent in 2011-12 from 4.6 per cent in 2010-11. 6.13 The Goods and Services deficit (i.e. Trade Balance plus Services) increased substantially by 51.1 per cent to US$ 125.7 billion (6.7 per cent of GDP) during 2011-12 as compared to US$ 83.2 billion (4.9 per cent of GDP) during 2010-11. The CAD widened to its highest ever level both in absolute terms as well as a proportion of GDP in 2011-12. The CAD in 2011-12 at US$ 78.2 billion was 4.2 per cent of GDP as compared with US$ 48.1 billion or 2.8 per cent of GDP in 2010-11 (Figure 6.1).
BPM 6 has strengthened the classification between goods and services by solely following the principle of change of ownership in the case of goods and time of providing in case of services for recording the respective transactions and accordingly, classified services under 12 heads. While the “goods and services account” shows transactions in items that are outcome of production activities, the income account shows income receivables and payables in return for providing temporary use of factors of production (i.e., primary income such as investment income and compensation of employees) and redistribution of income through current transfers (i.e. secondary income, such as personal transfers and current external assistance). The BPM 6 has introduced two accounts, namely, “primary income account” and “secondary income account”.
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Economic Survey 2012-13
Current Account during H1 of 2012-13 6.14 In the first Half (H1 - April-September 2012) of 2012-13, there was a steep decline in exports to US$ 146.5 billion, registering a 7.4 per cent decline over US$ 158.2 billion in H1 of 2011-12. Commoditywise data show that growth in exports of engineering goods, petroleum products, textile products, gems & jewellery and chemical & related products were severely affected as the demand conditions in key markets like the US and Europe continued to remain sluggish. During H1 of 2012-13, EU accounted for nearly 27 per cent of the total decline in merchandise exports, followed by Singapore (19 per cent), China (13 per cent) and Indonesia (6 per cent). Lower growth in export oriented Asian economies caused by setbacks to the global recovery has clearly weighed on India’s external demand from these economies. Detailed analysis is given in the chapter on international trade. Like exports, there was decline of 4.2 per cent in imports to US$ 237.2 billion in H1 of 2012-13 from US$ 247.7 billion during the corresponding period in previous year. The steep fall in exports than that in imports was responsible for widening of trade deficit to US$ 90.7 billion (10.8 per cent of GDP) in H1 of 2012-13 vis-à-vis US$ 89.5 billion (9.9 per cent of GDP) in H1 of 2011-12.
software services accompanied by decline in exports of travel, transport and insurance services led to a growth of 4.3 per cent in service exports in H1 of 2012-13, substantially lower than 22.7 per cent in the corresponding period of 2011-12. Lower growth in receipts under invisibles was also caused by lower growth in private transfers and decline in income receipts. Within income receipts, investment income declined by 19.1 per cent to US$ 3.5 billion during H1 of 2012-13 reflecting the lower level of interest rates abroad. In contrast to lower growth in receipts under invisibles, payments under invisibles recorded an increase of 12.3 per cent in H1 of 2012-13, as against a decline of 0.8 per cent in H1 of 2011-12. In particular, payment on account of business services showed a sharp increase as compared with a decline in H1 of 2011-12. Investment income payments rose by 17.6 per cent to US$ 14.5 billion during H1 of 2012-13 on account of rising external liabilities. Net secondary income receipts, which primarily comprise private transfers, increased by 8.2 per cent to US$ 32.9 billion during H1 of 2012-13 compared to US$ 30.4 billion a year ago. During H1 of 2012-13, net invisible balance declined to US$ 51.7 billion (6.2 per cent of GDP) from US$ 53.1 billion (5.9 per cent of GDP) in H1 of 2011-12.
6.15 During H1 (April-September 2012) of 2012-13, net surplus under invisibles showed a decline of 2.6 per cent as outflows on account of payments under invisibles increased considerably. Growth in invisible receipts decelerated to 4.7 per cent, mainly due to lower growth in exports of services, private transfers and decline in investment income. Lower growth in exports of
6.16 Goods and Services deficit at US$ 61.1 billion in H1 of 2012-13 recorded an increase of 3.4 per cent from US$ 59.1 billion during H1 of 2011-12. India’s CAD worsened further in H1; CAD was US$ 39.0 billion (4.6 per cent of GDP) during H1 of 2012-13 as compared to US$ 36.4 billion (4.0 per cent of GDP) in H1 of 2011-12. Besides global factors, the increase in the CAD to GDP ratio was also because of slower
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Box 6. 1 : Impact of Euro Zone Crisis on Current Account The unfolding of euro zone crisis, the austerity measures in advanced economies, recession in many euro zone countries, risk on/ risk off behaviour of investors and the uncertainty surrounding the future of euro zone have adversely affected the global economy. The fallout for the Indian economy has been a sharp deceleration in exports and a slowdown in GDP growth. Import demand however has remained resilient because of the continued high international oil prices that did not decline, unlike what happened after the Lehman meltdown of September, 2008. The high value of gold imports, driven mainly by the 'safe haven' demand for gold that has led to a sharp rise in prices, contributed to the high import bill and widening of the trade deficit. The trade deficit, as a result, increased to US$ 189.8 billion in 2011-12, which was 10.2 per cent of the GDP. With invisible surplus of US$ 111.6 billion (6.0 per cent of GDP), the current account deficit widened to record 4.2 per cent of GDP. This is unlike the situation during the 2008 crisis, when the high trade deficit of 9.8 per cent of GDP in 2008-09, was partly offset by an invisible surplus of 7.5 per cent, lowering CAD to 2.3 per cent of GDP. The signs of strain on BoP continued in the first half of 2012-13 (April-September 2012) with the trade deficit of US$ 90.7 billion increasing to 10.8 per cent of GDP and CAD of US$ 39.0 billion at 4.6 per cent of GDP. The high CAD has had implications for rupee volatility and business confidence in the economy. A positive development is that high CAD has lately been financed by capital inflows, which explains why the downhill movement of rupee, witnessed till July 2012, has been largely arrested. There has however been high dependence on volatile portfolio flows and external commercial borrowings. This makes capital account vulnerable to a 'reversal' and 'sudden stop' of capital, especially in times of stress.
GDP growth and its contraction in dollar terms due to the depreciation of rupee (Figure 6.2 & Box 6.1). 6.17 As per the latest data available from the Ministry of Commerce, exports of US$ 214.1 billion during April-December 2012, registered a decline of 5.5 per cent over export of US$ 226.6 billion during the same period in 2011-12. Imports of US$ 361.3 billion recorded a marginal decline of 0.7 per cent during April-December 2012 over the figure of US$ 363.9 billion during the corresponding period of previous year. As a result of steeper decline in 3
exports than imports, trade deficit increased by 7.2 per cent to US$ 147.2 billion during April-December 2012 as compared to US$ 137.3 billion in AprilDecember 2011.
Capital Account and Financial Account3 during 2011-12 6.18 The capital account which includes, inter alia, official transfer, net acquisition of nonproduced non-financial assets and other capital receipts including migrant transfers showed a small
According to BPM 6, the capital account comprises capital transfers receivable and payable between residents and non-residents and the acquisition and disposal of non-produced non-financial assets between residents and nonresidents. The financial account records transactions relating to financial assets and liabilities and that take place between residents and non-residents. Some of the major components of financial accounts include direct investment, portfolio investment, financial derivates (other than reserves) and employees stock options, other investments, reserve assets (monetary gold), equity and investment fund shares, debt instruments and other financial assets and liabilities. The overall balance on the financial account is called net lending/net borrowing depending on the outflow or inflow of resources.
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Box 6. 2 : Risk on/Risk off Behaviour and Capital Flows to India The main fallout of euro zone crisis is global uncertainty. This has led to investors' alternating between risk-on/risk-off behaviour, with consequent implications for surge and reversal of capital to emerging economies. A risk-on, prompted by new policy initiatives, creates a favourable disposition towards emerging economy investment, leading to surge in FIIs flows and vice versa. While change in investor attitude is generally observable in the long-run, the fallout of euro zone crisis has been quick shift between risk-on/risk-off behaviour that has immediate implications for capital flows. An additional factor has been quantitative easing in the US. This increases the supply of liquidity in the system and together with low interest environ and better growth prospects in emerging economies, contributes to increase in capital flows. A closer look at the global risk-on/off events and FII flows to India shows strong correlation between such events and surge and reversal of capital. For example, the US credit rating downgrade in early August 2011, together with worsening of euro crisis, created a risk-off environment. As a result, there was net withdrawal of FII investment of US$ 3.7 billion during August-October, 2011. The Long Term Refinancing Operation (LTRO) of European Central Bank that injected more than euro 1 trillion in the banking system in two tranche in December, 2011 and February, 2012 again created a risk-on environ. As a result, there was a net FII inflow of US$ 16.9 billion during December 2011-February 2012. The investor euphoria soon evaporated as the euro crisis worsened and the spectre of Greek exit loomed. Consequently, the investor behaviour again became risk-off, leading to net FII outflow of US$ 2.3 billion during March-June 2012. The investment climate began improving in July, 2012 with (i) announcement by European Central Bank President that the euro would be saved at all cost; (ii) proposal to set-up Banking Union in the euro zone; (iii) launch of permanent European Stability Mechanism and (iv) launch of QE3 in US. The resulting risk-on atmosphere has seen a net FII inflow of US$ 10.8 billion during July-October, 2012.
outflow of US$ 0.06 billion in 2011-12 vis-à-vis inflow of US$ 0.04 billion in 2010-11. In the first half of 2012-13, there was also an outflow of US$ 0.5 billion. During 2011-12, both gross inflows of US$ 478.8 billion and outflows of US$ 411.1 billion under the capital account (old format) were lower than those of US$ 503.7 billion and US$ 439.9 billion in the preceding year 2010-11. However, net inflows of US$ 67.8 billion under the capital account (bifurcated into capital account and financial account under BPM6) were moderately higher than that of US$ 63.7 billion in 2010-11. This was primarily on account of a revival in FDI flows to India, a surge in NRI deposits and higher overseas borrowings by banks. However, there was a decline in inflows under FII investments, ADRs/ GDRs, external assistance, ECBs and short term trade credit. Risk on/risk off behaviour significantly influenced capital flows (Box 6.2) to India.
received significant amount of inflows. Country-wise, investment routed through Mauritius remained, as in the past, the largest component, followed by Singapore and the UK. FDI by India (i.e., outward FDI) in net terms moderated by 37.0 per cent to US$ 10.9 billion in 2011-12 compared to US$ 17.2 billion a year ago. Sector-wise, moderation in outward FDI was observed in agriculture, hunting, forestry & fishing, financial insurance, real estate & business services, manufacturing and wholesale, retail trade, restaurants & hotels. Furthermore, sectors, viz. financial, insurance, real estate & business services and manufacturing continued to account for more than 50 per cent of total outward FDI during 2011-12. Net FDI (inward FDI minus outward FDI) at US$ 22.1 billion in 2011-12 showed a significant increase of about 87.0 per cent as against US$ 11.8 billion in 2010-11.
6.19 Even though the FDI to India (inward FDI) of US$ 33.0 billion in 2011-12 was significantly higher than US$ 29.0 billion in the preceding year, net inflows on account of portfolio investments at US$ 17.4 billion were lower as compared to US$ 31.5 billion in 2010-11 reflecting trend towards risk aversion among FIIs due to global economic uncertainty. Rise in inward FDI reflected flows received under BPReliance deal of US$ 7.0 billion in 2011-12. Sectorwise, manufacturing, construction, financial services, business services and communication services
6.20 Among the debt creating capital flows, net flows under NRI deposits of US$ 11.9 billion surged more than three-fold in 2011-12 vis-à-vis US$ 3.2 billion in 2010-11 because of the higher interest rates prevailing in India. Net flows under external commercial borrowing and trade credit showed a decline in 2011-12 vis-à-vis 2010-11. In net terms, capital inflows increased moderately by 6.4 per cent to US$ 67.8 billion (3.6 per cent of GDP) in 2011-12 as compared with US$ 63.7 billion (3.7 per cent of GDP) during 2010-11. Since net capital inflows were
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Balance of Payments inadequate to finance the higher CAD recorded during 2011-12, there was a net drawdown of foreign exchange reserves to the extent of US$ 12.8 billion during the same period.
Capital and Financial Account during H1 of 2012-13 6.21 Both gross inflows of US$ 219.5 billion and outflows of US$ 179.5 billion under the financial account were lower in H1 of 2012-13 as compared with gross inflow of US$ 246.4 billion and outflow of US$ 202.9 billion in the same period a year ago. In net terms also, financial inflows declined to US$ 40.0 billion in H1 of 2012-13 as against US$ 43.5 billion in H1 of 2011-12. As regards the pattern of capital inflows during H1 of 2012-13, there has been a mixed trend. Inward FDI to India at US$ 16.2 billion during H1 of 2012-13 decreased by 26.0 per cent compared to US$ 21.9 billion in H1 of 2011-12. Outward FDI by India was US$ 3.4 billion in April-September 2012 as against the US$ 6.1 billion in April-September 2011. The net FDI (inward minus outward) to India was US$ 12.8 billion during first half of 2012-13 vis-avis US$ 15.7 billion during the corresponding period of previous year. However, recent measures taken by Government regarding liberalisation of FDI limits are
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likely to improve investment sentiment and to boost FDI flows into the Indian economy. Scope for further liberalization of FDI norms however remains (Box 6.3). 6.22 Net portfolio flows including FIIs showed a quantum jump to US$ 5.8 billion during H1 of 2012-13 as against US$ 1.3 billion in H1 of 2011-12. Among debt creating flows, NRI deposits remained robust at US$ 9.4 billion in H1 of 2012-13 (US$ 3.9 billion in H1 of 2011-12) but net flows under ECBs declined sharply by about 80.0 per cent to US$ 1.7 billion during H1 of 2012-13 from US$ 8.4 billion in H1 of 2011-12. However, unlike in H1 of 2011-12, net flows under trade credit showed an increase of nearly 60 per cent to US$ 9.5 billion during April-September 2012 as against US$ 5.9 billion during the corresponding period of 2011-12. Net accretion to reserves (on a BoP basis) during H1 of 2012-13 at 0.4 billion was substantially lower as compared to US$ 5.7 billion in H1 of previous year. BoP numbers are given at Appendix 6.2 (old format) and 6.3 (new format) 6.23 As per the latest available information on capital inflows, FDI flows to India stood at US$ 22.2 billion during April-December 2012, which is 22.1 per cent lower than US$ 28.5 billion during
Box 6.3 : Liberalization of FDI norms Foreign Direct Investment (FDI) is preferred to the foreign portfolio investments primarily because FDI is expected to bring modern technology, managerial practices and is long term in nature investment. The Government has liberalized FDI norms overtime. As a result, only a handful of sensitive sectors now fall in the prohibited zone and FDI is allowed fully or partially in the rest of the sectors. Despite successive moves to liberalize the FDI regime, India is ranked fourth on the basis of FDI Restrictiveness Index (FRI) compiled by OECD. FRI gauges the restrictiveness of a country's FDI rules by looking at the four main types of restrictions viz. foreign equity limitations; screening or approval mechanism; restrictions on the employment of foreigners as key personnel; and operational restrictions. A score of 1 indicates a closed economy and 0 indicates openness. FRI for India in 2012 was 0.273 (it was 0.450 in 2006 and 0.297 in 2010) as against OECD average of 0.081. China is the most restrictive country as it is ranked number one with the score of 0.407 in 2012 indicating that it has more restriction than India. As there is moderation in FDI inflows to India in the current fiscal vis-Ă -vis last year it is imperative therefore to rationalize FDI norms further. At present, defence sector is open to FDI subject to 26 per cent cap. It also requires FIPB approval and is subject to licensing under Industries (Development & Regulation) Act, 1951 and guidelines on FDI in production of arms & ammunition. Within the 26 per cent cap, FII is also permissible subject to the proviso that overall cap is not breached. India needs to open up the defence production sector to get access and ensure transfer of technology. The existing FDI policy for defence sector provides for offsets policy. The offsets policy has been revised recently but its direct and indirect benefits have not had visible impact on the domestic defence industry. There is a strong case for a hike in the 26 per cent FDI limit in the defence production sector. By beginning to produce defence goods that advanced countries currently produce, there is scope for productivity improvement, strengthening of manufacturing, generation of employment and lowering of imports in the country. There is need to review increasing of FDI cap in insurance and public sector banks. By raising cap to 49 per cent in the insurance sector, there is scope for substantial growth in the coming years. Competition and adoption of best practices could strengthen this sector, reduce the premium and expand the services to the vast untapped rural India. This sector could be one of the major sources of long-term investment in infrastructure. Similarly, FDI limit in public sector banks could be increased to 26 per cent. Further, there is also a need to review existing approval mechanisms, operational restrictions and conditions in other sectors to attract foreign investment.
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April-December 2011. Up to December 2012, net FII flows amounted to at US$ 16.0 billion (US$ 2.7 billion during the corresponding period of 2011-12). FII flows in recent months witnessed improvement, reflecting the impact of various reform measures announced by the Government.
The movement of the US dollar against other currencies in which FCA are held, therefore impacts the level of reserves in US dollar terms. The level of reserves, denominated in US dollars declines when US dollar appreciates against major international currencies and vice versa. The twin objectives of safety and liquidity have been the guiding principles of foreign exchange reserves management in India with return optimization being embedded strategy within this framework.
FOREIGN EXCHANGE RESERVES 6.24 India's foreign exchange reserves comprise foreign currency assets (FCA), gold, special drawing rights (SDRs) and reserve tranche position (RTP) in the International Monetary Fund (IMF). The level of foreign exchange reserves is largely the outcome of the Reserve Bank of India (RBI) intervention in the foreign exchange market to smoothen exchange rate volatility and valuation changes due to movement of the US dollar against other major currencies of the world. Foreign exchange reserves are accumulated when there is absorption of the excess foreign exchange flows by the RBI through intervention in the foreign exchange market, aid receipts, interest receipts and funding from the International Bank for Reconstruction and Development (IBRD), Asian Development Bank (ADB), International Development Association (IDA) etc.
6.26 Beginning from a low level of US$ 5.8 billion at end-March 1991, India's foreign exchange reserves increased gradually to US$ 25.2 billion by end-March 1995, US$ 38.0 billion by end-March 2000, US$ 113.0 billion by end-March 2004 and US$ 199.2 billion by end-March 2007. The reserves stood at US$ 314.6 billion at end-May 2008 before declining to US$ 252.0 billion at the end of March 2009. The decline in reserves in 2008-09 was inter alia a fallout of the global crisis and strengthening of the US dollar vis-Ă -vis other international currencies. Foreign exchange reserves increased to US$ 279.1 billion at end-March 2010, mainly on account of valuation gain as the US dollar depreciated against most of the major international currencies. In fiscal 2010-11, the reserves again showed an increasing trend, reaching US$ 304.8 billion at end-March 2011. In fiscal 2011-12, they reached all-time high of US$ 322.0 billion at end-August 2011. However, they declined thereafter and stood at US$ 294.4 billion at end-March 2012. Details of foreign exchange reserves, component wise, since 1950-51 in rupee and US dollar are given at Appendix 6.1 (A) and 6.1 (B)
6.25 Foreign currency assets are maintained in major currencies like the US dollar, euro, pound sterling, Canadian dollar, Australian dollar and Japanese yen etc. Both the US dollar and the euro are intervention currencies, though the reserves are denominated and expressed in the US dollar only, which is the international numeraire for the purpose.
Table 6.3 : Summary of Changes in Foreign Exchange Reserves (US$ billion) Sl. No.
Year
Foreign exchange reserves at the end of financial year (end March)
Total Increase(+)/ decrease (-) in reserves
Increase/decrease in reserves on a BoP basis
Increase/decrease in reserves due to valuation effect
1
2
3
4
5
6
1
2007-08
309.7
110.5
2
2008-09
252.0
- 57.7
3
2009-10
279.1
27.1
4
2010-11
304.8
25.7
5
2011-12
294.4
- 10.4
6
2012-13 (up to Sept. 2012)
294.8
0.4
92.2 (83.4) -20.1 (34.8) 13.4 (49.4) 13.1 (51.0) - 12.8 (123.0) 0.3 (75.0)
Source : RBI. Note : Figures in parentheses indicate percentage shares of total change.
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18.3 (16.6) - 37.6 (65.2) 13.7 (50.6) 12.6 (49.0) 2.4 (-23.0) 0.1 (25.0)
Balance of Payments 6.27 In 2012-13, the reserves increased marginally by US$ 0.4 billion from US$ 294.4 billion at end-March 2012 to US$ 294.8 billion at endSeptember 2012. Of this total increase, US$ 0.3 billion was on BoP basis and US$ 0.1 billion was on account of valuation effect. A summary of changes in the foreign exchange reserves since 2007-08, with a breakdown into increase / decrease on BoP basis and valuation effect is presented in Table 6.3. 6.28 In the current fiscal, foreign exchange reserves on month-on-month basis remained in the range of US$ 286.0 billion (at end-May 2012) to US$ 295.6 billion (at end-December 2012). At endDecember 2012, reserves stood at US$ 295.6 billion, indicating a marginal increase of US$ 1.2 billion from US$ 294.4 billion at end-March, 2012. At this level, reserves provided about seven months of import cover. Issues relating to build up of foreign exchange reserves are summarized in Box 6.4.
Foreign Currency Assets (FCAs) 6.29 FCAs are the major constituent of India's foreign exchange reserves. FCAs increased by US$ 1.7 billion from US$ 260.7 billion at end March 2012
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to US$ 262.4 billion at end-December 2012. In line with the principles of preserving the long-term value of the reserves in terms of purchasing power, minimizing risk and volatility in returns and maintaining liquidity, the RBI holds FCAs in major convertible currencies instruments. These include deposits of other country central banks, the Bank for International Settlements (BIS) and top-rated foreign commercial banks, and in securities representing debt of sovereigns and supranational institutions with residual maturity not exceeding 10 years, to provide a strong bias towards capital preservation and liquidity. The annualized rate of return, net of depreciation, on the multi-currency multi-asset portfolio of the RBI has shown declining trend over the years. It declined from 4.2 per cent in 2008-09 to 2.1 per cent in 2009-10, 1.7 per cent in 2010-11 and further to 1.5 per cent in 2011-12.
Foreign exchange reserves of other countries 6.30 India continues to be one of the largest holders of foreign exchange reserves. Country-wise details of foreign exchange reserves reveal that India is the eighth largest foreign exchange reserves holder
Box 6.4 : Building up Foreign Exchange Reserves The distinction between convertible and non-convertible currencies is important for emerging economies, as most transactions with the rest of the world are in convertible currencies like US dollar, euro, pound sterling, yen, Swiss Franc etc. The need for increasing the availability of convertible currency for self-insurance has also been behind the race to build-up foreign exchange reserves (FER) in emerging economies after the Asian Crisis of 1997. Such FER accumulation, however, is constrained by the fact that it is possible only in times of currency appreciation. Following the BoP crisis of 1990-91 that was essentially due to depletion of foreign exchange reserves, there was a conscious effort by the RBI to build up FER. This was done through buying foreign currency in the market during periods of surge in capital flows. As a result, FER levels increased from US$ 5.8 billion in 1990-91 to US$ 314.6 billion at end May 2008. The RBI is however following a hands-off policy in foreign exchange market after the 2008 global crisis, with intervention limited to curbing excess rupee volatility. As a result, during 2009-10 and 2010-11, when rupee was appreciating due to increase in capital flows, there was virtually no intervention to build up FER. The sharp decline in rupee in 2011-12 however led the RBI to inject foreign exchange to the extent of US$ 20.1 billion to stem the rupee slide. The pressure on currency has continued in the financial year 2012-13 because of the ongoing euro-zone crisis. The import cover of FER, as a result, has declined from 14.4 months of imports in 2007-08 to 7.1 months in 2011-12. There are costs to intervention. The main cost is the release of corresponding rupee liquidity, when RBI intervenes in the market to buy foreign exchange. This may stoke inflation, which may not appeal in the current inflationary situation. Past experience however shows that measures like Market Stabilization Scheme (MSS) have been effective in draining excess liquidity from the system. Countries like China and Turkey use cash reserve ratio (CRR) for the same purpose. The cost of a particular policy, however, has to be weighed against the benefits, which are manifold. First, intervention to buy FER during surge in capital leads to build-up of reserves, which provides self-insurance against external vulnerability. Second, the higher reserve levels restore investor confidence and may lead to an increase in foreign direct and portfolio investment flows that spurs growth and helps bridge the current account deficit. Third, in a scenario of high trade and CAD, as in India, allowing the currency to appreciate through non-intervention during times of surge in capital, could have further negative fallout for the BoP by making exports less competitive and imports cheaper. Lastly, buying foreign exchange provides more ammunition for intervention when the currency is declining, which could potentially lower currency volatility.
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Table 6.4 : Foreign Exchange Reserves of Some Major Countries Sl. Country No.
1
2
1 2 3 4
China Japan Russia Switzerland (November 2012) 5 Brazil 6 Republic of Korea (November 2012) 7 China P R Hong Kong (November 2012) 8 India 9 Germany (November 2012) 10 France (November 2012) 11 Italy 12 Thailand
Foreign exchange reserves (end Dec. 2012) (US$ billion) 3 3310.0 1304.1 538.6
a
531.7 373.1 326.2 305.2 295.6
b
259.4 211.0 185.6 184.2
Source: IMF a : As per PBC, at end-December 2012, China’s foreign exchange reserves stood at US$ 3.31 trillion (source: http:/www.pbc.gov.cn). b : RBI In additional foreign exchange reserves of Taiwan are shown at US$ 403.2 billion (Q4) as per The Economist January 31, 2013.
in the world, after China, Japan, Russia, Switzerland, Brazil, Republic of Korea and China P R Hong Kong (Table 6.4) at end-December 2012.
EXCHANGE RATE 6.31 The exchange rate policy is guided by the broad principles of careful monitoring and management of exchange rates with flexibility, while allowing the underlying demand and supply conditions to determine the exchange rate movements over a period in an orderly manner. Subject to this predominant objective, intervention by the RBI in the foreign exchange market is guided by the objectives of reducing excess volatility, preventing the emergence of destabilizing speculative activities, maintaining adequate level of reserves, and developing an orderly foreign exchange market. 6.32 The movement of the exchange rate in 2011-12 indicates that the average monthly http://indiabudget.nic.in
exchange rate of rupee against the US dollar depreciated by 10.6 per cent from ` 44.97 per US dollar in March 2011 to ` 50.32 per US dollar in March 2012. Similarly, on point-to-point basis, the average exchange rate of rupee (average of buying and selling rate of FEDAI) depreciated by 12.7 per cent from ` 44.65 per US dollar on 31 March 2011 to ` 51.16 per US dollar on March 30, 2012. The monthly average exchange rate of rupee vis-a-vis pound sterling, euro and Japanese yen also depreciated in 2011-12. The monthly average exchange rate of rupee vis-a-vis pound sterling depreciated by 8.7 per cent from ` 72.71 per pound sterling in March 2011 to ` 79.65 in March 2012. Similarly, monthly average exchange rate of rupee depreciated by 5.3 per cent from ` 62.97 in March 2011 to ` 66.48 in March 2012 against the euro and against the Japanese yen by 9.9 per cent from ` 54.98 per 100 Japanese yen in March 2011 to ` 61.03 per 100 Japanese yen in March 2012. 6.33 On an annual average basis, rupee depreciated against major international currencies in fiscal 2011-12. The annual average exchange rate of rupee was ` 45.56 per US dollar in 2010-11 that depreciated by 4.9 per cent to ` 47.92 per US dollar in 2011-12. Similarly, the annual average exchange rate of rupee in 2010-11 was ` 70.87 per pound sterling, ` 60.21 per euro, and ` 53.27 per 100 Japanese yen which depreciated by 7.2 per cent to ` 76.38 per pound sterling, 8.6 per cent to ` 65.88 per euro and 12.3 per cent to ` 60.73 per 100 Japanese yen respectively in 2011-12. 6.34 The sharp fall in value of rupee can be explained by the supply-demand imbalance in the domestic foreign exchange market on account of slowdown in FII inflows, strengthening of US dollar in the international market due to the safe haven status of US Treasuries and heightened risk aversion and deleveraging due to the euro area crisis that impacted financial markets across emerging market economies. Apart from the global factors, there were several domestic factors that have added to the weakening trend of the rupee, which include increasing current account deficit, high inflation (Box 6.5). In order to reduce the volatility of exchange rate value of the rupee, the RBI intervened in the foreign exchange market through sale of US dollars amounting to US$ 20.1 billion in 2011-12. Further, in view of the sharp depreciation of the rupee in 2011-12, the RBI announced various policy measures that were aimed at curbing speculative behaviour of banks and corporate in the foreign exchange market.
Balance of Payments A number of steps were also taken to facilitate capital flows and boost exports to augment supply of foreign exchange. 6.35 In the current fiscal, the exchange rate value of rupee has so far undergone many ups and downs. The monthly average exchange rate of rupee per US dollar mostly remained in the range of ` 54-56 per US dollar except in the month of April 2012 when the rate was ` 51.81 and ` 53.02 in October 2012. In the first quarter of current fiscal 2012-13, monthly average exchange rate of rupee showed depreciating trend, going down by 2.9 per cent in April 2012, 4.9 per cent in May and 2.8 per cent in June 2012 over the previous month. In the month of June 2012, the rupee touched all-time low of ` 57.22 per US dollar (RBI's reference rate) on June 27, 2012 indicating 10.6 per cent depreciation over ` 51.16 per US dollar on March 30, 2012. In the second quarter of 2012-13, monthly average exchange rate of rupee has appreciated by 1.0 per cent in July 2012 and 1.7 per cent in September 2012 over the previous month, while in the month of August 2012 it has
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marginally depreciated by 0.1 per cent. In the third quarter, it appreciated by 3.0 per cent in October 2012 and 0.2 per cent in December 2012 while in month of November 2012 it depreciated by 3.2 per cent over the previous month level. 6.36 The Government of India and the RBI have taken a number of steps to boost exports and facilitate capital inflows so as to reduce external vulnerability. Under the Annual Supplement 2012-13 to Foreign Trade Policy 2009-14, the Government has announced initiatives to boost exports. The government has further liberalised FDI policy, including allowing foreign direct investment in multibrand retail. Other measures to boost capital inflows include a hike in FII investment in debt securities (both corporate and Government), enhancement of all-in-cost ceiling for external commercial borrowings (ECBs) between 3-5 year maturity, higher interest rate ceiling for foreign currency non-resident deposits, deregulation of interest rates on rupee denominated NRI deposits, and administrative steps to curb currency speculation.
Box 6.5 : Reasons for High Volatility in Rupee Exchange Rate The rupee has experienced unusually high volatility in the past few months. The currency touched the low of ` 57.22 per US dollar on 27th June, 2012, before appreciated to ` 51.62 per US dollar on October 05, 2012. It again began declining thereafter and has since been in the range of ` 53-54 per US dollar. Such volatility has introduced a measure of uncertainty in the domestic market and has impacted business confidence. The rupee has been under pressure since August 2011, when US sovereign rating was downgraded and the euro zone crisis escalated. The currency went steadily downhill till the end of July, 2012, except for intermitted respite and appreciation in January-February 2012, mainly due to European Central Banks Long Term Refinancing Operation (LTRO) that injected more than euro 1 trillion in three-year loans to banks and created a risk-on environment. The rupee fell due to decline in exports on account of euro-zone crisis and widening of trade deficit, as imports remained resilient due to high oil prices and gold imports. The widening of trade deficit to 10.2 per cent of GDP in 2011-12 had upset the supply-demand balance in the domestic foreign exchange market, placing downward pressure on the currency. The trade deficit has remained high at 10.8 per cent of GDP in the first six months of the current financial year (April-September 2012), with current account deficit at 4.6 per cent of GDP. Improved capital flows in recent months, particularly FII flows, however have dampened the downward pressure on the rupee. Such an increase in portfolio flows is partly due to the risk-on behaviour of investors, following series of policy initiatives in the euro zone that lowered the 'tail risk' of euro zone disintegration. The launch of quantitative easing (QE3) by the US Federal Reserve further helped the process. Capital flows have also been attracted by the confidence -inducing effects of major policy reforms that have been announced recently. The resulting increase in capital flows has more than balanced the widening current account deficit in recent months, curbing the rupee slide. Volatility however remains high because of high share of FII flows in total capital flows, and the week-to-week variation in such flows. Another contributory factor is the fluctuation in the dollar exchange rate vis-a-vis other international currencies. Since bulk of global trade is invoiced and settled in US$ and most capital flows are denominated in US dollar, the volatility in the value of US dollar exchange rate in the international market has an immediate impact on rupee-US dollar exchange rate. Thus, the fall in the US dollar exchange rate in the international market leads to rupee appreciation, unless offset by widening trade deficit/ changes in the volume of capital flows and vice-versa.
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6.37 Domestic policy measures for attracting FDI, coupled with the announcement of quantitative easing by the US Federal Reserve and Bank of Japan in September 2012 contributed to increase in capital inflows to India leading to strengthening of the rupee. Besides, the RBI sold nearly US$ 3.1 billion during 2012-13 (April-December 2012). As a result, the rupee recovered to ` 51.62 per US dollar on October 05, 2012. However, since the second week of October 2012, rupee again showed depreciating trend on account of concerns relating to high CAD and the demand for dollars from oil importing firms and continued uncertainty in the global financial markets. In December 2012, rupee remained range bound (Rs. 54.20-55.09 per US dollar) as FIIs continued to be largely buoyant except on December 21, 2012 when rupee touched a low of ` 55.09 per US dollar. The month-wise exchange rate of the rupee against major international currencies and the RBI's sale/purchase of foreign currency in the foreign exchange market during 2012-13 are shown in Table 6.5.
6.38 The monthly average exchange rate of the rupee per US dollar and its appreciation / depreciation during 2012-13 is depicted in Figure 6.3.
Exchange Rate of Other Emerging Economies 6.39 It may be noted that a depreciating exchange rate in 2012-13 is not specific to India. The currencies of other emerging economies, such as Brazilian real, Argentina peso, Russian rouble, and South Africa's rand also depreciated against the US dollar reflecting the increased demand for dollar as a safe haven asset in the wake of sovereign debt crisis in the euro zone and due to uncertain global economic environment. On a point-on-pont basis between March 30,2012 and December 28, 2012, the Argentina peso has depreciated by 10.9 per cent, Brazilian real by 10.5 per cent, South African rand by 9.7 per cent, Indian rupee by 6.7 per cent, Indonesian rupiah by 5.1 per cent and Russian rouble
Table 6.5 : Exchange Rates of Rupee per Foreign Currency and RBI’s Sale/Purchase of US Dollar in the Exchange Market during 2012-13 Average exchange rates ( ` per foreign currency) a Month
1 2011-12 (annual average) March 2012 2012-13 (monthly average) April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012
US Dollar
Pound sterling
Euro
Japanese Yenb
RBI Net sale (-) / purchase (+) (US$ million)
2
3
4
5
6
47.9190 (-4.9) 50.3213 (-2.3)
76.3809 (-7.2) 79.6549 (-2.5)
65.8761 (-8.6) 66.4807 (-2.1)
60.7257 (-12.3) 61.0259 (2.8)
(-) 20,138
51.8121 (-2.9) 54.4736 (-4.9) 56.0302 (-2.8) 55.4948 (1.0) 55.5594 (-0.1) 54.6055 (1.7) 53.0239 (3.0) 54.7758 (- 3.2) 54.6478 (0.2)
82.9119 (-3.9) 86.7323 (-4.4) 87.1349 (-0.5) 86.5173 (0.7) 87.3444 (-0.9) 87.8663 (-0.6) 85.2128 (3.1) 87.5374 (- 2.7) 88.1910 (- 0.7)
68.1872 (-2.5) 69.6991 (-2.2) 70.3087 (-0.9) 68.2520 (3.0) 68.8750 (-0.9) 70.1263 (-1.8) 68.7522 (2.0) 70.3665 (- 2.3) 71.6671 (- 1.8)
63.7934 (-4.3) 68.3286 (-6.6) 70.6743 (-3.3) 70.2809 (0.6) 70.6814 (-0.6) 69.9084 (1.1) 67.2305 (4.0) 67.6032 (- 0.6) 65.2805 (3.6)
-
(-) 3123.0 -275.0 -485.0 -50.0 -785.0 -452.0 - 10.0 - 95.0 - 921.0 -50.0
Source : RBI. Notes : aFEDAI market indicative rates. Data from May 2012 onwards are RBIs reference rates, b Per 100 Yen; Figures in parentheses indicate appreciation (+) and depreciation (-) over the previous month/year in per cent. Figures may not tally due to rounding off.
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Balance of Payments
by 3.4 per cent. The exchange rate of the rupee vis-Ă -vis select international currencies since 1991-92, year-wise, and during 2012-13, month-wise, is in Appendix 6.4.
Nominal Effective Exchange Rate and Real Effective Exchange Rate 6.40 Nominal rupee depreciation, while having some adverse effects such as greater imported inflation, is also useful over time in offsetting higher domestic inflation and ensuring Indian exports remain competitive. The nominal effective exchange rate (NEER) and real effective exchange rate (REER) indices are used as indicators of external competitiveness of the country over a period of time. NEER is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies, while REER is defined as a weighted average of nominal exchange rates, adjusted for home and foreign country relative price differentials. REER captures movements in crosscurrency exchange rates as well as inflation differentials between India and its major trading partners and reflects the degree of external competitiveness of Indian products. The RBI has been constructing six currency (US dollar, euro for euro zone, pound sterling, Japanese yen, Chinese renminbi and Hong Kong dollar) and 36 currency indices of NEER and REER. 6.41 The 6-currency trade-based NEER (base: 2004-05=100) depreciated by 9.6 per cent between March 2011 and March 2012 and by 8.0 per cent
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between March 2012 to December 2012. As compared to this, the monthly average exchange rate of rupee depreciated by 10.6 per cent between March 2011 and March 2012, while in current fiscal it depreciated by 7.9 per cent against the US dollar from ` 50.32 per US dollar in March 2012 to ` 54.65 per US dollar in December 2012. The 6-currency trade-based REER (base: 2004-05=100) of the Rupee depreciated by 5.5 per cent from 115.97 to 109.59 between March 2011 and March 2012. During 201213 so far (up to December 2012), the 6 currency index of 104.56 showed depreciation of 4.6 per cent over March 2012 index of 109.59 largely reflecting depreciation of rupee in nominal terms (Table 6. 6 and Appendix 6.5).
US dollar exchange rate in international market 6.42 In so far as international currencies are concerned, the US dollar appreciated by 2.2 per cent against the pound sterling, 6.0 per cent against the euro, and 0.8 per cent against the Japanese yen during between March 2011 and March 2012. However, it depreciated by 4.2 per cent against Australian dollar during the same period. In current fiscal (up to end-December 2012), the US dollar appreciated by 0.7 per cent against euro, 1.4 per cent against Japanese yen and 0.6 per cent against Australian dollar between March 2012 and December 2012. However, US dollar depreciated by 2.0 per cent against pound sterling (Table 6.7).
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Table 6.6 : Indices of NEER and REER of the Indian Rupee (Six-Currency Trade- based Weights) Base 2004-05 (April-March) = 100 Month average
NEER
1
Appreciation (+)/ depreciation (-) NEER over previous period/mo nth
2
REER
3
Appreciation (+)/ depreciation (-) REER over previous period/month
4
5
March 2011
90.29
115.97
March 2012
81.60
-9.6
109.59
-5.5
April 2012 (P)
79.24
-2.9
107.57
-1.8
May 2012 (P)
76.10
-4.0
104.12
-3.2
June 2012 (P)
74.67
-1.9
102.24
-1.8
July 2012 (P)
75.95
1.7
104.16
1.9
August 2012 (P)
75.53
-0.6
104.76
0.6
September 2012 (P)
75.67
0.2
105.75
0.9
October 2012 (P)
77.55
2.5
107.86
2.0
November 2012 (P)
75.33
- 2.9
105.11
- 2.5
December 2012 (P)
75.05
- 0.4
104.56
- 0.5
2012-13
Source : RBI.
P: Provisional
Table 6.7 : Exchange Rate of US Dollar against International Currencies Month/Year
USD/ GBP
1
USD/ Euro
JPY /USD 4
USD /AUD
2
3
5
March 2010
1.5082
1.3543
90.8850
0.9095
March 2011
1.6168
1.3999
81.7936
1.0102
March 2012
1.5817
1.3201
82.4348
1.0543
2.22
6.04
-0.78
-4.18
April 2012
1.6009
1.3162
81.4895
1.0350
May 2012
1.5906
1.2800
79.7084
0.9982
June 2012
1.5564
1.2526
79.3214
0.9986
July 2012
1.5589
1.2276
78.9830
1.0293
August 2012
1.5713
1.2400
78.6648
1.0468
US$ Appreciation (+) / Depreciation (-) (March 2011- March 2012) in percent 2012-13
September 2012
1.6119
1.2871
78.1678
1.0401
October 2012
1.6083
1.2975
78.9686
1.0293
November 2012
1.5966
1.2820
80.7920
1.0412
December 2012
1.6144
1.3109
83.5778
1.0477
-2.03
0.70
1.39
0.63
US$ Appreciation (+) /Depreciation (-) (March 2012-December 2012) in percent Source: Reserve Bank of India.
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Note: Exchange rate is based on monthly average.
Balance of Payments
EXTERNAL DEBT 6.43 India's external debt stock at end-March 2012 stood at US$ 345.4 billion (` 1,765,333 crore) recording an increase of US$ 39.5 billion (12.9 per cent) over end-March 2011 level of US$ 305.9 billion (` 1,365,929 crore). Component-wise, long-term debt increased by 10.9 per cent to US$ 267.2 billion at end-March 2012 from US$ 240.9 billion at end-March 2011, while short-term showed an increase of 20.3 per cent to US$ 78.2 billion from US$ 65.0 billion at end-March 2011. Appendices 8.4(A) and 8.4(B) present the disaggregated data on India's external debt outstanding in Indian rupee and US dollar terms, respectively. India's external debt stock increased by about US$ 20.0 billion (5.8 per cent) to US$ 365.3 billion at end-September 2012 over the level at endMarch 2012. The rise in external debt is largely due to higher NRI deposits, short-term debt and commercial borrowings. NRI deposits alone accounted for 42.1 per cent of the rise in total external debt at end-September 2012 over the level of endMarch 2012, while short-term debt and commercial borrowings together accounted for 52.6 per cent of the rise in debt during the period. 6.44 The maturity profile of India's external debt indicates the dominance of long-term borrowings. Long-term external debt at US$ 280.8 billion at endSeptember 2012 accounted for 76.9 per cent of the total external debt, while the remaining 23.1 per cent was short-term debt. Long-term debt at endSeptember 2012 increased by US$ 13.6 billion (5.1 per cent) over the level at end-March 2012, while short-term debt increased by US$ 6.3 billion
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(8.1 per cent). Within long-term, components such as commercial borrowings, NRI deposits and multilateral borrowings taken together, accounted for 62.1 per cent of total external debt at the end of September 2012 while other long-term debt components (viz. bilateral borrowings, export credit, IMF and rupee debt) accounted for 14.8 per cent of total external debt (Table 6.8). 6.45 The currency composition of India's total external debt shows that the share of US dollar denominated debt continued to be the highest in external debt stock at 55.7 per cent at endSeptember 2012, followed by Indian rupee (22.9 per cent), Japanese yen (8.6 per cent), SDR (8.1 per cent) and euro (3.2 per cent). The currency composition of Government (sovereign) debt indicates pre-dominance of SDR denominated debt (36.6 per cent), which is attributable to borrowing from International Development Association (IDA) i.e., the soft loan window of the World Bank under the multilateral agencies and SDR allocations by the IMF. The share of US dollar denominated debt was 26.2 per cent followed by Japanese yen denominated (19.3 per cent), Indian rupee (14.3) and euro (3.6). At end-September 2012, Government (sovereign) external debt was US$ 81.5 billion. It accounted for 22.3 per cent of India's total external debt. NonGovernment external debt amounted to US$ 283.9 billion which was 77.7 per cent of total external debt at end-September 2012. 6.46 Over the years, India's external debt stock has witnessed structural change in terms of composition. The share of concessional in total debt
Table 6.8 : Composition of External Debt
(per cent of total external debt)
March 2011 PR
March 2012 PR
June 2012 PR
September 2012 QE
3
4
5
6
15.8
14.6
14.3
13.9
2 Bilateral
8.4
7.7
7.8
7.6
3 IMF
2.1
1.8
1.7
1.7
4 Export credit
6.1
5.5
5.5
5.2
Sl. No. 1
Component 2
1 Multilateral
5 Commercial borrowings
28.9
30.4
29.9
29.8
6 NRI deposit
16.9
17.0
17.5
18.3
7 Rupee debt
0.5
0.4
0.3
0.4
8 Long-term debt (1 to 7)
78.8
77.4
76.9
76.9
9 Short-term debt
21.2
22.6
23.1
23.1
100.0
100.0
100.0
100.0
10 Total external debt (8+9) Source : Ministry of Finance and RBI.
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PR : Partially Revised.
QE : Quick Estimates.
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has declined due to shrinking share of official creditors and the Government debt and the surge in non-concessional private debt. The proportion of concessional in total debt declined from 42.9 per cent (average) during the period 1991-2000 to 28.1 per cent in 2001-2010 and further to 13.2 per cent at end-September 2012. The rising share of nongovernment debt is evident from the fact that such debt accounted for 65.6 per cent of total debt during the decade of 2000s, vis-a-vis 45.3 per cent in 1990s. Non-Government debt accounted for over 70 per cent of total debt in the last five years and stood at 77.7 per cent at end-September 2012. 6.47 The key external debt indicators are presented in Table 6.9. India's foreign exchange reserves provided a cover of 80.7 per cent to the total external debt stock at end-September 2012 vis-Ă -vis 85.2 per cent at end-March 2012. The ratio of short-term external debt to foreign exchange reserves was at 28.7 per cent at end-September 2012
as compared to 26.6 per cent at end-March 2012. The ratio of concessional debt to total external debt declined steadily and worked out to 13.2 per cent at end-September 2012 as against 13.9 per cent at end-March 2012. 6.48 India's external debt has remained within manageable limits as indicated by the external debt to GDP ratio of 19.7 per cent and debt service ratio of 6.0 per cent in 2011-12. The active external debt management policy of the Government of India has helped in containing rise in external debt and maintaining a comfortable external debt position. The policy continues to focus on monitoring long and short-term debt, raising sovereign loans on concessional terms with longer maturities, regulating external commercial borrowings through end-use, all-in-cost and maturity restrictions; and rationalizing interest rates on non-resident Indian deposits (Box 6.6).
Table 6.9 : India’s Key External Debt Indicators (per cent) Year
1
External debt (US$ billion)
Total external debt to GDP
Debtservice ratio
Foreign exchange reserves to total external debt
Concessional debt to total external debt
Short-term external debt* to foreign exchange reserves
Short-term external debt* to total debt
2
3
4
5
6
7
8
1990-91
83.8
28.7
35.3
7.0
45.9
146.5
10.2
1990-91
83.8
28.7
35.3
7.0
45.9
146.5
10.2
1995-96
93.7
27.0
26.2
23.1
44.7
23.2
5.4
2000-01
101.3
22.5
16.6
41.7
35.4
8.6
3.6
2005-06
139.1
16.8
10.1#
109.0
28.4
12.9
14.0
2006-07
172.4
17.5
4.7
115.6
23.0
14.1
16.3
2007-08
224.4
18.0
4.8
138.0
19.7
14.8
20.4
2008-09
224.5
20.3
4.4
112.1
18.7
17.2
19.3
2009-10
260.9
18.2
5.8
106.8
16.8
18.8
20.1
2010-11
305.9
17.5
4.3
99.6
15.5
21.3
21.2
2011-12
345.4
19.7
6.0
85.2
13.9
26.6
22.6
end-June 2012 PR
348.8
-
5.9
83.1
13.5
27.8
23.1
end-Sept. 2012 QE
365.3
-
-
80.7
13.2
28.7
23.1
2012-13
Source : Ministry of Finance and RBI. Notes : - Not worked out for the broken period. PR : Partially Revised QE-Quick Estimates. *: Short-term debt is based on original maturity. #: Works out to 6.3 per cent, with the exclusion of India millennium deposits (IMDs) repayments of US$ 7.1 billion and prepayment of US$ 23.5 million.Debt-service ratio is the proportion of gross debt service payments to external current receipts (net of official transfers).
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Balance of Payments
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Box 6.6 : Risks in Foreign Currency Borrowings Corporate borrowers in India and other emerging economies are keen to borrow in foreign currency to benefit from lower interest and longer terms of credit. Such borrowings however, are not always helpful, especially in times of high currency volatility. During good times, domestic borrowers could enjoy triple benefits of (i) lower interest rates, (ii) longer maturity and (iii) capital gains due to domestic currency appreciation. This would happen when the local currency is appreciating due to surge in capital flows and the debt service liability is falling in domestic currency terms. The opposite would happen when the domestic currency is depreciating due to reversal of capital flows during crisis situations, as happened during the 2008 global crisis. A sharp depreciation in local currency would mean corresponding increase in debt service liability, as more domestic currency would be required to buy the same amount of foreign exchange for debt service payments. This would lead to erosion in profit margin and have mark-to-market implications for the corporate. There would also be 'debt overhang' problem, as the volume of debt would rise in local currency terms. Together, these factors could create corporate distress, especially because the rupee tends to depreciate precisely when the Indian economy is also under stress, and corporate revenues and margins are under pressure. In this context, it is felt that one of the factors contributing to faster recovery of Indian economy after the 2008 global crisis was the low level of corporate external debt. As a result, the significant decline in the value of rupee did not have major fallout for the corporate balance-sheets. Foreign currency borrowings, therefore, have to be contracted carefully, especially when no 'natural hedge' is available. Such natural hedge would happen when a foreign currency borrower also has an export market for its products. As a result, export receivables would offset, at least to some extent, the currency risk inherent in debt service payments. This happens because fall in the value of the rupee that leads to higher debt service payments is partly compensated by the increase in the value of rupee receivables through exports. When export receivables and the currency of borrowings is different, the prudent approach is for corporations to enter currency swaps to re-denominate asset and liability in the same currency to create natural hedge. Unfortunately, too many Indian corporations with little foreign currency earnings leave foreign currency borrowings unhedged, so as to profit from low international interest rates. This is a dangerous gamble for reasons described above and should be avoided.
Table 6.10 : International Comparison of Top Twenty Developing Debtor Countries, 2011 Sl. No.
1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Countries
2 China Russian Federation Brazil India Turkey Mexico Indonesia Ukraine Romania Kazakhstan Argentina South Africa Chile Malaysia Thailand Colombia Philippines Venezuela Pakistan Vietnam
Total external debt stock (US$ million)
Total debt to GNI (per cent)
Short-term to total external debt (per cent)
Foreign exchange reserves to total debt (per cent)
3
4
5
6
685,418 542,977 404,317 334,331 307,007 287,037 213,541 134,481 129,822 124,437 114,704 113,512 96,245 94,468 80,039 76,918 76,043 67,908 60,182 57,841
9.4 31.1 16.6 18.3 40.1 25.2 26.0 83.3 72.3 77.9 26.3 28.4 41.0 34.8 24.0 24.3 33.6 21.8 27.3 49.1
69.6 12.9 10.4 23.3 27.3 17.9 17.9 24.3 22.9 7.2 14.5 16.6 17.8 46.3 56.2 14.1 9.2 24.6 4.2 17.2
467.3 83.6 86.7 81.1 25.5 50.2 49.9 22.6 33.1 20.2 37.7 37.5 43.6 139.5 209.1 40.8 88.5 14.6 24.1 23.4
Source : World Bank’s International Debt Statistics 2013. Note : Countries are arranged based on the magnitude of debt presented in Column 3 in the Table.
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International Comparison 6.49 A cross country comparison of external debt of twenty most indebted developing countries, based on data from the World Bank's 'International Debt Statistics, 2013' which contains the debt numbers for the year 2011 and has a time lag of two years, showed that in 2011 India was in fourth position in terms of absolute external debt stock after China, the Russian Federation and Brazil. The ratio of India's external debt stock to gross national income (GNI) at 18.3 per cent was the third lowest with China's being the lowest at 9.4 per cent (Table 6.10.). In terms of the cover of external debt provided by foreign exchange reserves, India's position was seventh highest at 81.1 per cent.
CHALLENGES
AND
OUTLOOK
6.50 The widening of the trade deficit to more than 10 per cent of GDP and the CAD crossing 4 per cent of GDP in 2011-12 and the first half of 2012-13 have been matters of concern. In recent years, net invisible balance reduced the need for financing, while capital inflows were sufficient to
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finance the CAD safely. In the current fiscal, the growth in invisibles is insufficient to narrow the growing trade deficit. Besides, the CAD is financed by volatile capital flows, which has led to financial fragility and is reflected in rupee exchange rate volatility. 6.51 The room to increase exports in the short run is limited, as they are dependent upon the recovery and growth of partner countries, especially in industrial economies. This may take time. The main focus has to be on curbing imports, mainly by making oil prices more market determined, and curbing imports of gold. At the same time, further measures to ease the inflow of remittances and steps to diversify software exports could help reduce financing needs. Greater emphasis on FDI including opening up sectors further can help increase the quantum of safe financing. FII flows need to be targeted towards longer term rupee instruments so as to minimize the 'reversal' of capital during risk-off phases. Finally, external commercial borrowing needs to be monitored carefully so that entities without access to foreign exchange revenues do not leave significant exposures unhedged.
7
International Trade
CHAPTER
A
fter moderating in the two years following the global economic crisis, world trade in both goods and services reached and surpassed pre-crisis levels in 2011. However, the deceleration in world growth and trade in 2012 and forecast of only a gradual upturn in global growth by international institutions, portend a weak and slow recovery for world trade. India's exports, which had surpassed pre-crisis levels within a year in 2010-11 with a record 40.5 per cent growth, continued growing even in 2011-12, but were finally affected by the global slowdown in 2012-13 with exports declining even more at - 4.9 per cent in the first ten months than the -3.5 per cent recorded during the crisis-ridden year of 2009-10 (full year).
WORLD TRADE
per cent in 2013 which is down 0.7 percentage points compared to its October 2012 update. Import and export volume growth rates of emerging market and developing economies are however projected to be higher than those of advanced economies. Global economic uncertainty including doubts about the ultimate resolution of the crisis in the euro area, doubts about the pace of fiscal withdrawal in the US, challenges to sustaining growth after the earthquake reconstruction rebound in Japan and trade disruptions with China, though of a passing nature, continue to cast their shadows on the trade growth of emerging and developing economies (EDEs) including India.
7.2 World merchandise trade value surpassed the pre-crisis (2008) level of US $ 16 trillion, reaching US $ 18.26 trillion in 2011 after an interregnum of two years. However, world trade volume decelerated sharply to 2.8 per cent in 2012 from 5.9 per cent in 2011 and 12.6 per cent in 2010 (Table 7.1). 7.3 World exports fell by 0.2 per cent in the first three quarters of 2012 over the corresponding periods of 2011 as per World Trade Organization (WTO) statistics. As per the January 2013 update of the IMF, world trade volume is projected to grow by 3.8
Table 7.1 : Trends in growth in trade volumes (per cent change) Projections
World trade volume (goods and services) Imports Advanced economies Emerging market & developing economies Exports Advanced economies Emerging market & developing economies
2011
2012
2013
2014
5.9
2.8
3.8
5.5
4.6 8.4
1.2 6.1
2.2 6.5
4.1 7.8
5.6 6.6
2.1 3.6
2.8 5.5
4.5 6.9
Source: International Monetary Fund (IMF), World Economic Outlook Update, January 2013.
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INDIA'S MERCHANDISE TRADE 7.4 India's merchandise trade increased exponentially in the 2000s decade from US$ 95.1 billion in 2000-1 to US$ 620.9 billion in 2010-11 and further to US$ 793.8 billion in 2011-12. India's share in global exports and imports also increased from 0.7 per cent and 0.8 per cent respectively in 2000 to 1.7 per cent and 2.5 per cent in 2011 as per the WTO. Its ranking in the leading exporters and importers improved from 31 and 26 in 2000 to 19 and 12 respectively in 2011. While India's total merchandise trade as a percentage of the gross domestic product (GDP) increased from 28.2 per cent in 2004-5 to 43.2 per cent in 2011-12 as per provisional estimates, India's merchandise exports as a percentage of GDP increased from 11.8 per cent to 16.5 per cent during the same period.
India's export growth 7.5 Bolstered by the measures taken by the government to help exports in the aftermath of the world recession of 2008 and also the low base effect, India's export growth in 2010-11 reached an all time high since Independence of 40.5 per cent. Though it decelerated in 2011-12 to 21.3 per cent, it was still above 20 per cent and higher than the compound annual growth rate (CAGR) of 20.3 per cent for the period 2004-5 to 2011-12. After registering very high growth of 56.5 per cent in July 2011, export growth started decelerating with a sudden fall to single digits
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in November 2011 as a result of the emerging global situation and then to negative figures from March 2012. Monthly export growth rates in 2012-13 (April-December) were negative except for a marginal positive growth in April 2012. For three months in 2012-13, exports declined YOY by double digits with the largest decline recorded in July 2012 at -15.1 per cent. In January, 2013, there is a marginal positive growth of 0.8 per cent.
Export growth and exchange rate changes 7.6 Export growth in dollar terms was negative at -4.9 per cent in 2012-13 (April-January), compared to 21.3 per cent growth in 2011-12 (full year). In rupee terms, it was positive at 9.1 per cent, though here too, there was a deceleration from the 28.3 per cent in 2011-12 (full year). 7.7 India's export growth has almost continuously been above world export growth in the 2000s decade and in 2011. One issue that has been a topic of debate is whether India's export growth rate is dependent on world growth/trade or exchange rate. There is a strong correspondence between India's export growth and world export growth (Figure 7.1 and Box 7.1). This is clearly visible in 2009 when there was a big dip in both world exports and India's exports. The relationship between changes in real effective exchange rate (REER) and India's export growth is not however as clear-cut as that with world trade.
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Box 7.1 : How much of recent slowdown in exports is explained by external factors? Export growth has slowed down considerably in India over the last few quarters. Based on GDP data from the expenditure side, the y-o-y growth for real exports of goods and services has decreased from a peak of 36% in 2011Q1 to 4% in 2012Q3. Merchandise exports have slowed down more; from 34% y-o-y in 2011Q1 to -6% y-o-y in 2012Q3 (based on BOP, deflated by US CPI to create exports in real terms). Importantly, magnitude of the slowdown for India has been more pronounced than that for the world as a whole as well as for China.
Source : CEIC and IMF Direction of Trade Statistics. Notes : Left panel: exports of goods and services are taken from the GDP-expenditure, measured at 2004-05 prices. Right panel. Real exports are created by deflating exports in US dollars by US CPI.
There are at least two reasons for the decline in export growth: (i) external factors or partner country incomes, (ii) changes in exchange rate. GDP growth of partner countries has also slowed down significantly (from more than 6% y-o-y in 2010Q1 to less than 1% in 2012Q3). This would exert a negative effect on India's export growth. On the other hand, the real effective exchange rate for India has depreciated, suggesting a positive effect on exports.
Partner country real GDP growth series are weighted average of y-o-y growth of quarterly GDP for India's top 10 trading partners (excluding the oil exporters).REER series is from the Information Notice System (INS) database of the IMF. REER indicators are CPI-based, and computed as a weighted geometric average of the level of consumer prices in the home country relative to that in its trade partners. The weights are calculated based on bilateral trade with all 184 IMF member countries. In order to decompose the decline in export growth, the elasticity of exports with respect to external demand and exchange rates has to be calculated. For this, a very simple regression of real exports (in millions of 1985 US dollars) on real effective exchange rates and trade-weighted real GDP of India's trading partners using data from 1991-2009 has been done. All variables are specified in logs of first differences. The estimates from the preferred specification suggest that a one percentage point increase in trade-weighted partner country real GDP is associated with a 2.5 percentage point increase in (Contd....)
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Box 7.1 : How much of recent slowdown in exports is explained by external factors? (Contd..) India's export growth, while a statistically significant effect of exchange rate changes on India's export growth is not found. The estimates are similar to the studies by Aziz and Chinoy (2010) and IMF (2012). To explain what fraction of the slowdown in Indian exports is due to a slowdown in external demand, the elasticity of exports with respect to partner country GDP is used. On average, the growth in exports has slowed down by 8.3 percentage points between 2011/12 and 2012/13 (first two quarters). Using an elasticity of 2.5, 5.2 percentage point decline can be explained by the slowdown in partner country GDP, that is, roughly two-thirds of the export slowdown can be explained by external factors. Since the real exchange rate depreciated over this period, the export slowdown cannot be attributed to exchange rate changes, even if a statistically significant effect were to be found (Table 1). Table 1 : Slowdown in exports of goods and services Partner GDP growth (in %)
Growth India
3.1 1.0 2.1
15.5 7.2 8.3
Average 2011-12 Average 2012-13 Slowdown (in pp)
Elasticity 2.5; Explained 5.2; Residual 3.1; Percentage explained 62 Source: Study by Shri Rohit Lamba and Dr. Prachi Mishra
Trade Quantums and Unit Values 7.8 The very high export growth rate in rupee terms in 2010-11 is due to the high increase in both volume and unit value indices from the very low base of the previous year (Table 7.2). While crude materials inedible except fuels and manufactured goods contributed to the high increase in unit values,
machinery and transport equipment, mineral fuels, lubricants and related materials, and manufactured goods classified chiefly by materials and food and food articles contributed to the high rise in volumes. The 28.3 per cent export growth in rupee terms in 2011-12 was due to the high growth in the unit value index of 20.2 per cent besides the 8.9 per cent growth in the volume index. While the high growth in the
Table 7.2 : Trade Performance: Growth in Quantum and Unit Value indices (Annual per cent change)
Exports Rupee terms
US$ terms
Imports
Quantum
Unit Value
Rupee terms
Terms of Trade
US$ Quantum terms
Unit Value
Net Income
2001-2
2.7
-0.6
0.8
1.0
6.2
2.9
4.0
2.8
-2.1
-1.7
2002-3
22.1
20.3
19.0
2.9
21.2
19.4
5.8
14.3
-9.8
7.8
2003-4
15.0
21.1
7.3
7.5
20.8
27.3
17.4
3.1
3.6
10.4
2004-5
27.9
30.8
11.2
14.9
39.5
42.7
17.2
18.9
-3.5
8.0
2005-6
21.6
23.4
15.1
6.1
31.8
33.8
16.0
14.0
-6.0
8.1
2006-7
25.3
22.6
10.2
13.7
27.3
24.5
9.8
15.1
-1.3
8.7
2007-8
14.7
29.0
7.9
5.1
20.4
35.5
14.1
1.9
2.6
10.9
2008-9
28.2
13.6
9.0
16.9
35.8
20.7
20.2
13.8
2.5
11.3
2009-10
0.6
-3.5
-1.1
1.0
-0.8
-5.0
9.9
-10.0
12.3
11.1
2010-11
35.2
40.5
15.2
13.8
23.4
28.2
8.0
13.0
1.1
16.7
28.3
21.3
8.9
20.2
39.3
32.3
-20.9
74.9
-27.2
-20.7
9.1
-4.9
-
-
14.5
0.01
-
-
-
-
2011-12 2012-13
a
Source : Directorate General of Commercial Intelligence and Statistics (DGCI&S). April-January. Note: Quantum and unit value indices of exports and imports are with new base (1999-2000=100) a
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International Trade unit value index is due to growth in chemicals and related products (41.2 per cent), inedible crude materials other than fuels (41 per cent), and mineral fuels and related materials (36 per cent), growth in the quantum index of exports is mainly due to growth in food and food articles (35.9 per cent) machinery and transport equipment (28.0 per cent) and miscellaneous manufactured articles (16.8 per cent). A dissection of country-wise export quantum indices shows that the high growth in this index in 2011-12 is due to the high export quantum growth to Japan (26.8 per cent), Belgium (26 per cent), Bangladesh (20.9 per cent), and the UK (17 per cent). 7.9 Contrary to general belief, the high import growth ( in rupee terms) in 2011-12 was not due to quantum increase but due to high unit value increase (74.9 per cent ), with growth in quantum of imports even being in negative figures at - 20.9 per cent in 2011-12. The unit value index of imports registered unusually high growth of 74.9 per cent in 2011-12 mainly due to growth in unit values of two high weighted items, machinery and transport equipment (169.2 per cent) due to a sharp rise in prices; and mineral fuels, lubricants, and related materials (28.9 per cent) due to the rise in price of crude petroleum and products. The high negative quantum growth of imports was mainly due to fall in quantum of machinery and transport equipment (- 52 per cent) which had become costlier and manufactured goods classified chiefly by materials (- 7.9 per cent) 7.10 The net barter terms of trade in 2011-12, which measures the unit value index of exports as a proportion of unit value index of imports, declined to
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- 27.2 per cent due to the high growth in the unit value index of imports while growth in the unit value index of exports was moderate. Income terms of trade, reflecting the capacity to import, declined for the first time after 2001-2 by 20.7 per cent, indicating a very unfavourable terms of trade situation for India.(Figure 7.2) In 2001-2, the fall was very marginal with the relevant component of the indicator also showing marginal increases.
Export performance of India and EDEs 7.11 The share of the select Emerging and Developing Economies (EDEs) in the US$ 18 trillion world exports in 2011 has increased to a sizeable 41 per cent with a change in share of 15.6 per cent over 2000. If the four newly Industrialized Asian Economies namely, Singapore, Hong Kong, Taiwan and Republic of Korea, which have now been classified under advanced economies by the IMF, are also included then the share would be 50.5 per cent. The performance of China is spectacular with its share in world exports increasing by 6.6 percentage points between 2000 and 2011, comprising 42.4 per cent of the total increase in EDEs share over this period, while India's rise in share of 1 percentage point constitutes only 6.5 per cent of the total increase. However, China's export growth rate at 20.3 per cent in 2011 was substantially lower than that of India. India's export growth rate of 33.8 per cent in 2011 over and above the 37.3 per cent growth of 2010 is one of the highest in the world. 7.12 India's share in world merchandise exports which started rising fast from 2004, reached 1.5 per
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Table 7.3 : Export growth and share in world exports : India and other select countries Value (US$ CAGR billion) 2011 200009
Growth rate % Annual
Share in world exports (%)
change in shares
2010
2011
2012 (JanOct.)
2000
2010
2011
2012 (JanOct.)
2011/ 2000
EDEs of which
7400
12.3
28.8
24.9
1.8
25.4
39.2
41.0
41.7
15.6
China Russia Mexico India Malaysia Brazil Thailand Indonesia South Africa NIAEs* Korea, Republic Hong Kong Singapore Taiwan World
1899 522 350 303 228 256 226 201 97
19.1 12.5 3.6 16.3 5.4 12.0 9.2 6.9 8.5
31.3 32.0 29.8 37.3 26.2 32.0 28.6 32.1 30.7
20.3 30.4 17.3 33.8 14.8 26.8 15.9 26.9 18.5
7.9 3.1 7.0 -5.1 -0.6 -5.2 0.8 -6.2 -9.8
3.9 1.7 2.6 0.7 1.5 0.9 1.1 1.0 0.5
10.4 2.7 2.0 1.5 1.3 1.3 1.3 1.0 0.5
10.5 2.9 1.9 1.7 1.3 1.4 1.3 1.1 0.5
11.2 2.9 2.1 1.6 1.3 1.3 1.3 1.0 0.5
6.6 1.2 -0.7 1.0 -0.3 0.6 0.2 0.1 0.1
557 429 410 308 18033
8.6 5.2 7.8 3.6 7.7
29.0 22.5 30.4 34.8 22.0
19.3 9.9 16.4 12.2 19.4
-1.3 1.4 0.3 NA -0.2
2.7 3.2 2.2 2.3 100.0
3.1 2.6 2.3 1.8 100.0
3.1 2.4 2.3 1.7 100.0
3.0 2.4 2.3 NA 100.0
0.4 -0.8 0.1 -0.6 -
Source : Computed from IMF, International Financial Statistics, January 2013. Note : * Newly Industrialized Asian Economies, NA : Not Available.
cent in 2010 and 1.7 per cent in 2011. It declined marginally to 1.6 per cent in 2012 (January-October), mainly due to its relatively negative export growth of - 5.1 per cent compared to world export growth of - 0.2 per cent (Table 7.3). In contrast China's share increased to 11.2 per cent in 2012 (January -October) with a positive export growth of 7.9 per cent.
been negative for most of the months in 2012. There has been a slight but unsteady pick-up in import growth in the last two or three months in countries like the US, Hong Kong, and Singapore and in December 2012 in China.
7.13 Latest monthly growth rates of exports and imports of some of India's major trading partners have been low or negative. The EU's import growth has
7.14 After recovering in 2010-11 from the previous year's fall, India's merchandise imports increased further to US$ 489.2 billion with a growth of 32.3 per
India's import growth
Source : Based on Ministry of Petroleum and Natural Gas data.
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Box 7.2 : Gold Imports and Policy Measures India is one of the largest importers of gold in the world, with import growth of 11.2 per cent in terms of quantity and 39.0 per cent in terms of value during 2011-12. Gold is the second major import item of India after POL and constitutes 11.3 of its imports in 2011-12 in value terms. The rise in imports of gold is one of the factors contributing to India's high trade deficit and CAD in 2011-12, forming 30 per cent of its trade deficit. The RBI in its draft report of the Working Group to Study 'Issues Related to Gold Imports and Gold Loans by NBFCs in India' has stated that if gold imports in India had grown by 24 per cent (an average of growth in world gold demand during past three years) instead of 39 per cent in 2011-12, the CAD would have been lower by approximately US$ 6 billion and the CAD-GDP ratio would have been 3.9 per cent instead of 4.2 per cent. Globally, the demand for gold is rising, mainly due to demand from emerging economies like China and India. The major source countries for import of gold include Switzerland, responsible for 52 per cent of the total imports by India of raw gold during 2011-12 (which has led to an unfavourable bilateral balance of trade for India), followed by the UAE (17.6 per cent), and South Africa (11.5 per cent). The rise in gold imports is due to many factors. The love of Indians for the yellow metal is well known. India is one of the largest consumers of gold in the world with consumption increasing from 721.9 tonnes in 2006 to 933.4 tonnes in 2011 and 612 tonnes in the first three quarters of 2012, accounting for around 27 per cent of world gold consumption in 2011, and 26.4 per cent in 2012 (total of first three quarters). As per the Annual Report 2011-12 of the Ministry of Mines, domestic production of gold is estimated at only 2.8 tonnes in 2011-12 and can meet around 0.3 per cent of the demand. This has inevitably led to its import. Gold is also used for trading/investment. Net retail investment constitutes 39.2 per cent of the India's total gold consumption in 2011 and 32.5 per cent during the first three quarters of 2012 in terms of quantity. As stated in the RBI report, one of the major components of gold demand in recent years has been investment demand at global level. Rising gold prices in recent years have not deterred the acquisition of gold in India, implying that investment in gold is becoming price inelastic. India also imports gold for manufacturing purposes and exports a portion of it as jewellery. In the case of export of gold jewellery, the major export destinations include the UAE (57.9 per cent), Hong Kong (14.1 per cent), and the USA (12.0 per cent). International gold price movements which have been volatile in recent years also have a bearing on the value of the country's gold imports. During the 2000 to 2012 period, international gold prices have grown at a CAGR of 16.2 per cent. In 201112 they increased by 23.4 per cent though they moderated to 4.3 per cent during April-November 2012 over the corresponding period in the previous year. Even with this moderation, gold prices were at a high level of US$1721 per troy ounce in November 2012 and currently at US$ 1672.3 per troy ounce (as on 5th February 2013). As stated by the RBI report, volatility in international gold prices in recent quarters is positively skewed, implying that it provides fewer large losses and a greater number of larger gains. The worsening global situation has also led to a rise in purchase of gold as a safety metal and a further rise in its price. Fluctuations in international gold prices get automatically reflected in India's gold prices along with the markup due to duties and taxes. Substantial increase in gold prices seems to have fuelled positive price expectations also contributing to sharp rise in the value of gold imports in recent years. To restrict the rising trend in gold imports which is adversely affecting India's balance of payments, measures were and are being taken by the government. In Budget 2012-13, import duty on standard gold and platinum was raised from 2 per cent to 4 per cent and non standard gold from 5 per cent to 10 per cent. On 21 January 2013, the Import duty on gold and platinum was increased from 4 per cent to 6 per cent. It has also been proposed to provide a link between the Gold ETF (Exchange Traded Fund) and Gold Deposit Scheme with the objective of unfreezing or releasing a part of the gold physically held by mutual funds under Gold ETFs and enabling them to deposit the gold with banks under the Gold Deposit Scheme. The value of gold imports during April-December 2012 declined by 14.7 per cent to US $ 38.02 billion and quantity of imports fell by 11.8 per cent compared to same period of previous year. Total gold consumption has also declined by 23 per cent during the first three quarters of 2012. While the supply of gold through organized channels can be constricted, there is need to be vigilant regarding gold inflows through unauthorized channels. Ultimately, the best way to reduce gold imports in a sustainable way will be to offer the public financial investment opportunities that generate attractive returns. This means bringing down inflation as well as expanding the range of investments investors have easy access to. Source: Compiled from reports and data of the RBI, EXIM Bank of India and the Gems and Jewellery Export Promotion Council.
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cent in 2011-12 (See Appendix Table 7.1 (B)). This was due to the increase in growth of petroleum, oil, and lubricant (POL) imports by 46.2 per cent and non-POL imports by 26.7 per cent. POL imports (with a share of 31.7 per cent in India's total imports) registered a high growth mainly due to increase in import price of the Indian crude oil import basket by 31.5 per cent in 2011-12 as against 22 per cent in 2010-11 (Figure 7.3). 7.15 POL import volume growth decelerated from 14.9 per cent in 2009-10 to 3.7 per cent in 2010-11 and 3.5 per cent in 2011-12. International oil prices (Brent) which reached a high of US$ 132.47/bbl in July 2008 declined sharply to US$ 40.35 /bbl in December 2008, following the global recession. From 2009 onwards, oil price has been increasing with intermittent volatility, reaching US$ 125.33/bbl in March 2012 and falling marginally with volatility in the following months. Currently Brent oil price is hovering around US$110/bbl. 7.16 Gold and silver imports (with a share of 12.6 per cent in India's total imports) grew by 44.5 per cent in 2011-12. Gold imports alone accounted for 91.7 per cent of the total imports of gold and silver. In 2011-12, gold imports grew by 38.8 per cent in value and 11.2 per cent in volume terms. Non-POL non-bullion imports increased by 23.3 per cent in 2011-12 compared to 29 per cent in 2010-11. 7.17 At US$ 406.9 billion imports in 2012-13 (AprilJanuary) registered a growth of 0.01 per cent. During 2012-13 (April-December), POL imports at US $ 125.2 billion grew by 12.8 per cent. Non-POL imports at US $ 239.8 billion declined by 5.1 per cent and gold and silver imports at US $ 39.3 billion declined by 14.7 per cent. Non-POL and non-bullion imports which basically reflect the imports of capital goods needed for industrial activity and imports needed for exports declined by 3.0 per cent.
Trade Deficit 7.18 Trade deficit (on customs basis) reached a peak of US$ 184.6 billion in 2011-12 from US$ 118.6 billion in 2010-11 with the highest growth of 55.6 per cent since 1950-1. Moderate export growth and high import growth, particularly in POL imports due to high prices and high gold and silver imports, led to the highest-ever trade deficit in India since 1950-1, contributing to a high current account deficit (CAD) of 4.2 per cent of GDP (also see Box 7.2). 7.19 The trade deficit of US $ 167.2 billion for 201213 (April-January) was 7.9 per cent higher than the US $ 154.9 billion in 2011-12 (April- January). While http://indiabudget.nic.in
POL imports grew by 46.2 per cent in 2011-12, POL export growth was relatively lower at 34 per cent due to lower growth in the quantum of POL exports by 3.8 per cent, resulting in net POL imports increasing to US $ 99.3 billion in 2011-12. In 201213 (April-November), though POL import growth moderated to 11.7 per cent, POL export growth was negative at - 7.3 per cent which was also due to the decline in the volume of POL exports by - 0.9 per cent. As a result the share of net POL imports in total imports increased to 23.5 per cent in 2012-13 (April-November) compared to 20.3 per cent in 201112 (whole year).
Trade Composition Export composition 7.20 Compositional changes in India's export basket have been taking place over the years. While the share of primary products in India's exports fell over the years from 16 per cent in 2000-1, in 201213 (April-November) it regained the share of 16 per cent mainly due to the export of agricultural items like rice and guar gum meal. The share of manufacturing exports fell drastically from 78.8 per cent in 2000-1 to 66.1 per cent in 2011-12 and further to 64.5 per cent in 2012-13(April-November) mainly due to the fall in shares of traditional items like textiles and leather and leather manufactures even though the share of engineering goods and chemicals and related products increased. Share of gems and jewellery fell marginally. Share of petroleum, crude & products exports, which also include refined items, increased from 4.3 per cent in 2000-1 to 18.3 per cent in 2011-12 and 18.6 per cent in 2012-13(AprilNovember). 7.21 The destination-wise exports of major items to the major trading partners from 2009-10 to 201213 (April-November) show great changes in the composition of exports to USA and China (Table 7.4). In the case of India's exports to the USA, the share of exports of primary products has increased from 6.8 per cent in 2009-10 to 21.3 per cent in 2012-13 (April-November), mainly due to the rise in share of agriculture and allied products, while the share of manufactured goods in India's exports to the USA has fallen from 89.1 per cent to 74.2 per cent during the same period. This decline has been mainly due to the fall in growth rates of exports of textiles and
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Table 7.4 : Composition of exports by major markets Percentage share 200001
I
(a)
(b)
II
(a)
(b)
(c)
(d)
(e)
(f)
III
Primary products World 16.0 USA 9.4 EU 13.1 China 45.2 others 18.9 Agri. & allied products World 14.0 USA 9.0 EU 11.9 China 18.9 others 16.8 Ores and minerals World 2.0 USA 0.4 EU 1.3 China 26.3 others 2.2 Manufactured goods World 78.8 USA 90.6 EU 86.8 China 54.6 others 71.4 Textiles incl. RMG World 23.6 USA 27.2 EU 29.2 China 9.3 others 20.2 Gems & jewellery World 16.6 USA 29.3 EU 11.5 China 0.0 others 14.4 Engineering goods World 15.7 USA 13.4 EU 14.0 China 9.9 others 17.5 Chemicals & related products World 10.4 USA 5.7 EU 9.7 China 15.5 others 12.4 Leather & leather mnfrs World 4.4 USA 3.7 EU 11.4 China 1.1 others 1.6 Handicrafts including carpet handmade World 2.8 USA 6.0 EU 4.4 China 0.3 others 0.8 Petroleum, crude & products World 4.3 USA 0.0 EU 0.0 China 0.0 others 8.1 Total exports World 100.0 USA 100.0 EU 100.0 China 100.0 others 100.0
Growth rate*
200910
201011
201112
201112 (Apr.Nov.)
201213 (Apr.Nov.)
200910
201011
201112
201112 (Apr.Nov.)
201213 (Apr.Nov.)
14.9 6.8 8.6 65.7 13.1
13.2 8.0 8.2 51.6 11.7
15.2 14.5 9.7 55.2 13.1
13.3 11.9 9.0 49.5 11.7
16.0 21.3 9.9 38.4 14.9
3.8 -13.5 -5.7 26.9 -1.7
23.9 52.8 22.2 4.7 31.7
39.8 149.5 33.8 24.8 35.7
37.2 123.7 38.3 7.0 41.9
11.2 101.6 -2.0 -42.1 17.5
10.0 5.8 7.1 14.8 11.3
9.7 7.1 7.1 16.8 10.2
12.4 13.7 8.1 26.5 12.0
10.7 11.0 7.6 20.4 10.7
14.0 20.4 8.7 17.8 13.8
1.1 -12.1 -6.4 122.8 -3.3
36.1 58.7 27.7 50.6 33.8
53.9 165.7 30.4 84.2 41.9
60.8 139.3 37.9 79.1 54.2
21.1 107.3 1.3 -35.0 18.9
4.9 1.0 1.5 50.9 1.8
3.4 0.9 1.2 34.8 1.5
2.8 0.8 1.6 28.7 1.1
2.6 0.9 1.4 29.1 1.0
2.0 1.0 1.2 20.6 1.1
9.9 -21.1 -2.5 12.8 9.6
-1.3 18.5 -3.5 -8.7 18.6
-0.4 24.4 54.6 -3.7 -7.4
-14.3 22.0 40.7 -16.6 -23.7
-29.6 29.2 -20.4 -47.2 1.9
67.2 89.1 73.2 32.2 65.1
69.0 87.4 72.1 42.4 67.8
66.1 81.4 74.9 39.2 63.5
66.9 83.3 73.9 42.3 64.4
64.5 74.2 72.6 58.0 60.8
-5.9 -8.7 -15.4 29.5 -2.5
44.2 27.0 25.8 75.4 53.4
16.2 27.9 18.6 7.8 13.6
27.7 35.2 34.4 4.3 25.7
-10.4 -0.2 -12.8 2.3 -12.6
10.5 18.4 18.5 1.8 7.4
9.1 17.1 16.3 2.8 6.4
8.7 14.1 16.3 4.1 6.2
8.6 13.7 15.7 3.7 6.3
8.7 12.0 14.4 8.6 6.5
-1.2 -7.6 -6.7 47.0 6.2
21.3 20.2 12.1 104.2 27.1
16.9 13.0 14.6 68.5 17.9
29.1 19.2 36.6 51.4 27.3
-6.4 -1.7 -18.7 73.6 -4.0
16.2 24.2 6.7 3.8 19.2
16.1 20.8 6.8 0.5 19.5
14.7 19.5 9.2 0.7 16.6
14.9 22.3 9.2 0.7 16.4
15.4 18.0 7.1 0.7 18.0
3.7 2.8 -26.2 -41.4 10.7
39.6 11.7 31.4 -81.0 49.1
10.8 28.5 52.9 42.8 3.6
38.6 52.7 90.8 25.0 30.5
-4.0 -9.4 -31.5 -25.5 1.5
18.2 17.1 20.8 12.4 18.2
19.8 20.2 20.9 25.8 18.9
19.2 19.8 21.0 18.8 18.6
19.2 20.5 20.8 20.7 18.4
19.3 17.1 21.5 24.4 18.9
-18.7 -33.9 -25.1 63.6 -15.8
53.0 53.0 28.6 177.9 53.2
17.3 34.5 14.6 -14.8 19.3
15.8 37.9 26.3 -21.3 14.6
-6.4 -6.6 -8.4 -11.9 -5.2
12.8 17.2 12.5 10.2 12.4
11.5 17.7 12.8 9.4 10.4
12.2 16.9 14.1 11.1 10.9
11.8 15.9 13.6 12.1 10.6
13.7 17.2 15.1 15.5 12.4
0.9 7.4 -11.8 40.8 1.7
26.0 33.2 30.9 23.3 22.9
28.6 30.9 25.6 37.7 28.2
35.4 28.9 36.6 48.5 35.6
7.4 21.1 -1.2 -4.5 8.0
1.9 1.5 6.3 0.4 0.7
1.6 1.4 5.5 0.5 0.6
1.6 1.3 5.8 0.7 0.6
1.6 1.3 5.9 0.7 0.6
1.7 1.4 5.8 1.1 0.7
-5.5 -17.8 -2.1 -2.2 -9.9
16.3 17.4 12.6 55.5 24.8
22.6 26.6 20.2 65.2 24.2
36.0 29.3 39.7 74.3 26.4
-2.8 20.8 -12.5 12.9 12.8
0.5 1.5 1.1 0.1 0.2
0.5 1.6 1.0 0.0 0.3
0.4 1.2 0.7 0.1 0.2
0.4 1.2 0.7 0.1 0.2
0.4 1.3 0.8 0.1 0.2
-10.6 -14.6 -7.5 106.9 -13.1
35.7 40.4 8.4 -40.9 80.1
-12.9 2.4 -12.1 40.1 -29.2
-6.7 14.6 -3.8 16.3 -27.9
7.4 16.5 -2.9 -2.4 8.5
15.8 2.3 16.9 0.8 19.9
16.5 3.7 18.8 5.3 19.4
18.3 3.5 15.0 6.3 23.5
18.7 4.5 16.5 8.6 23.3
18.6 3.7 17.0 3.2 23.5
2.3 180.3 45.4 -8.4 -3.9
47.1 110.9 42.7 745.2 43.6
34.0 30.1 -9.4 38.1 47.0
54.3 139.9 19.2 608.2 59.4
-7.3 -8.0 -8.7 -72.2 -6.5
100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0
100.0 100.0 100.0 100.0 100.0
-3.5 -7.6 -8.4 24.2 -3.4
40.5 29.5 27.9 33.3 47.2
21.3 37.4 14.1 16.8 21.3
32.7 43.9 31.4 12.4 33.3
-7.0 12.2 -11.2 -25.4 -7.6
Source : Computed from DGCI&S data. * Growth rate in US dollar terms. Notes: 1. RMG stands for ready-made garments. 2. Share in a particular item means share of each country in total exports of India to that country. 3. Totals may not add up mainly due to some unclassified items.
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Box 7.3 : Market vs Product Diversification India has been fairly successful in diversifying its export markets from developed countries like the US and Europe to Asia and Africa, which has helped to a great extent in weathering the global crisis of 2008 and the recent global slowdown (Table 1). Table 1 : Region-wise Share of India's Exports: 2000-1
2005-6
2011-12
2012-13 (Apr.-Nov.)
1)
Europe
25.9
24.2
19.0
18.7
2)
Africa
5.3
6.8
8.1
9.6
3)
America
24.7
20.7
16.4
19.5
4)
Asia
37.4
46.9
50.0
50.4
5)
CIS & Baltics
2.3
1.2
1.0
1.3
Source : Computed from DGCI&S data. However, in terms of product diversification a lot more needs to be done as can be seen from the following: In the top 100 imports of the world at the four-digit HS level in 2011, India has only 6 items in the top 50; it has only 5 items with a share of 5 per cent and above and 18 items with a share of 2 per cent and above (Table 2), with 6 new items with high export growth (India) entering the list and 3 going out of the list in 2011 compared to 2010. The new items are medicaments consisting of mixed or unmixed products for therapeutic use; other articles of iron and steel; men's or boys' suits, ensembles; cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels; cane or beet sugar and chemically pure sucrose in solid form; and maize.
ď Ź
Table 2 : Export Items of India with 2 per cent and above Share in Top 100 World Imports at Four-digit level Rank# HS4 World 2011 2 7 11 14 34 39 51 52 55 56 61 68 69 72 92 97 99 100
Items
2710 3004 2601 7102 7403 8803 6403 6204 7210 7113 2902 7326 3902 6203 6109 8901
India share in world 2011
Petroleum oils and oils obtained from bituminous minerals, etc. 6.7 Medicaments consisting of mixed or unmixed products for therapeutic use 2.1 Iron ores and concentrates, including roasted iron pyrites 2.3 Diamonds, whether or not worked, but not mounted or set. 23.8 Refined copper and copper alloys, unwrought 3.2 Parts of goods of heading no. 88.01 or 88.02. 3.5 Footwear with outer soles of rubber 3.1 Women's or girls' suits, ensembles, jackets, blazers, dresses 4.9 Flat-rolled products of iron or non-alloy steel 2.8 Articles of jewellery and parts thereof, of precious metal 28.5 Cyclic hydrocarbons. 4.4 Other articles of iron or steel. 2.0 Polymers of propylene or of other olefins, in primary forms. 2.8 Men's or boys' suits, ensembles, jackets, blazers, trousers, etc. 2.3 T-shirts, singlets & other vests, knitted or crocheted 6.0 Cruise ships, excursion boats, ferry-boats, cargo ships, barges, 2.2 and similar vessels 1701 Cane or beet sugar and chemically pure sucrose, in solid form. 6.0 1005 Maize 3.4
Growth rate in 2011 India World (Export) (Import) 49.0 36.0 -32.3 44.7 -53.7 45.4 23.0 34.8 0.8 83.6 47.8 97.9 46.0 31.5 22.1 40.0
39.4 5.7 37.8 14.7 12.2 1.2 9.2 9.2 12.2 13.4 27.8 13.9 17.3 16.4 12.1 -25.8
123.1 103.1
20.1 34.1
Source: Computed from UN Comtrade data extracted on 9 January 2013. Note: # Rank is in top 100 world imports.
ď Ź
India has a very high export share in world imports in the case of only two four-digit HS items, jewellery and diamonds. While India can increase its shares further in the other 16 items given in the table, there are many other simple items in the top 100 world imports with high demand where India has developed its competence. Most of the items come under the three Es, electronic, electrical, and engineering items and some textiles items. Greater focus on these items could lead to a perceptible increase in India's share of exports in world imports.
Source: Internal study, Economic Division, Department of Economic Affairs.
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International Trade gems and jewellery. In the case of India's exports to China, the share of primary products has fallen from 65.7 per cent in 2009-10 to 38.4 per cent in 2012-13 (April-November) due to the fall in share and growth rate of ores & minerals. The share of manufactures in India's exports to China has increased from 32.2 per cent to 58.0 per cent during this period, mainly due to the rise in share of engineering goods, textiles, and chemicals and related products. In the case of India's exports to the EU, there has been a marginal rise in the share of primary products and petroleum products and a fall in the share of manufactured goods. 7.22 The reason for India's export growth in 201213 (April-November) being more negative than in 2009-10 in the aftermath of the global recession can be seen from India's commodity-country export performance. India's exports to EU and China have been more negative during the recent global slowdown than in 2009-10, while its performance to USA has been better for most of the sectors except gems and jewellery. The performance of India's exports to EU of textiles and readymade garments, gems and jewellery and ores: and to China of manufactures, engineering goods, chemicals gems and jewellery and ores was worse off in 2012-13(April-November) compared to 2009-10. India's POL export growth to all major markets also decelerated in 2012-13 (AprilNovember) compared to 2009-10. Thus, the Euro Zone crisis and the Chinese slowdown have affected India's exports more during the recent slowdown than in 2009-10 Export diversification 7.23 In 2011, India had a global export share of 1 per cent or more in 53 out of a total of 99 commodities at the two-digit harmonized system (HS) level. While noticeable changes can be seen in India's market diversification, the same is not the case with its export basket diversification (Box 7.3).
Import composition 7.24 There have been some significant compositional changes in India's import basket in recent years. The share of POL imports increased from 28.7 per cent in 2010-11 to 31.7 per cent in 2011-12 (with a very high growth rate) and 34.6 per cent in 2012-13 (April-November). The share of gold and silver imports increased from 9.3 per cent in 2000-1 to 12.6 per cent in 2011-12 with a high import http://indiabudget.nic.in
159
growth rate of 44.5 per cent. However, in part due to policy measures like raising import duty on gold, there was a moderation in gold and silver imports in 2012-13 (April-November) with its share falling to 10.5 per cent following a negative growth of - 20.4 per cent. The import share of pearls, precious and semiprecious stones also fell sharply in 2011-12 to 6.1 per cent following a negative growth of -13.3 per cent and further to 4.1 per cent in 2012-13 (AprilNovember), with a high negative growth rate of - 32.3 per cent. Another important development is related to the share of capital goods imports which increased from 10.5 per cent in 2000-1 to 13.6 per cent in 201011 and further to 14.1 per cent in 2011-12, declining thereafter to 11.9 per cent in 2012-13 (April-November) following a negative growth rate of - 6.5 per cent. Among capital goods, the import shares of all items machinery except electrical and machine tools, transport equipment, project goods, and electrical machinery fell, clearly signaling a slowdown in industrial activity. The share of electronic goods, which includes both consumer electronics and capital goods, also fell in 2012-13 (April-November) (See Table 7.5 and Appendix Table 7.2(B).
Direction of Trade 7.25 There has been significant market diversification in India's trade. Region-wise, while India's exports to Europe and America have declined, its exports to Asia and Africa have increased (See Box 7.3). However, in 2012-13 (April- November), the share of India's exports to the USA increased to 13.5 per cent. Within Asia, while the share of North East Asia (consisting of China, Hong Kong, Japan) and ASEAN (Association of South East Asian Nations) fell from 14.8 per cent and 12.0 per cent in 2011-12 to 13.1 per cent and 10.3 per cent respectively in 2012-13 (April- November), there was a noticeable rise in the share of West Asia-GCC (Gulf Cooperation Council) countries from 14.9 per cent in 2011-12 to 17.7 per cent in 2012-13 (April- November). 7.26 In 2012-13 (April- November), compared to 2000-01, the share of India's imports from Europe has declined to 16.7 per cent from 27.6 per cent, while that from Asia has increased substantially to 61.1 per cent from 27.7 per cent. The share of America in India's imports also increased to 11.5 per cent from 7.9 per cent. India's top 15 trading partners have nearly 60 per cent in share in its trade with the top three contributing nearly half of this share. While Iran and UK are out of this top 15 list in 2011-12, Iraq
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Table 7.5 : Commodity Composition of India’s Imports Percentage share Commodity Group
200001
201011
201112
CAGR
2011- 2012- 2000-01 12 13 to
Growth ratea 201011
201112
(Apr. - Nov.) 2009-10 I.
Food and allied products, of which
3.3
2.9
3.1
3.1
3.5
22.7
1. Cereals
0.0
0.0
0.0
0.0
0.0
2. Pulses
0.2
0.4
0.4
0.4
0.4
201112
201213
(Apr. - Nov.) 2.2
44.4
38.0
11.6
24.3
15.8
-34.2
-46.6
6.8
38.3
-23.1
27.2
11.3
9.2
3. Edible oils
2.6
1.8
2.1
2.1
2.5
17.2
19.0
57.7
55.3
18.0
II. Fuel, of which
33.5
30.9
37.4
34.3
38.0
21.0
22.4
59.7
52.3
9.8
31.3
28.7
31.7
30.7
34.6
21.0
21.6
46.2
50.6
11.7
4. POL III. Fertilizers
1.3
1.9
2.4
2.3
2.2
29.0
4.8
72.1
32.2
-6.8
10.5
13.6
14.1
12.6
11.9
26.1
19.2
36.9
25.6
-6.5
5. Machinery except electrical & machine tool
5.9
7.0
7.2
6.7
6.3
24.4
24.0
35.8
28.2
-5.8
6. Electrical machinery
1.0
1.0
1.0
1.0
0.9
22.7
25.1
33.1
26.6
-5.5
IV. Capital goods, of which
7. Transport equipment V. Others, of which
1.4
3.1
3.0
2.5
2.3
36.4
-0.9
31.8
13.1
-8.3
52.5
49.6
49.0
47.6
44.3
19.3
43.2
30.8
29.6
-7.6
8. Chemicals
5.9
5.2
5.1
5.0
5.1
19.5
29.6
31.8
24.3
1.1
9. Pearls, precious, semiprecious stones
9.7
9.3
6.1
6.1
4.1
14.0
116.9
-13.3
4.3
-32.3
10. Gold & silver
9.3
11.5
12.6
13.0
10.5
23.0
43.0
44.5
59.2
-20.4
11.Electronic goods
7.0
7.1
7.1
7.0
6.5
21.6
28.4
31.7
22.2
-7.7
100.0
100.0
100.0
100.0 100.0
21.5
28.2
32.3
36.2
-0.8
Total imports
Source: Computed from DGCI&S data.
and Kuwait are the new entrants. The musical chairs for the top slot among the top three trading partners seems to be continuing with the USA relegated to third position in 2007-8 from first, UAE relegated to second position from first in 2011-12 by China, and China in turn relegated to second position by the UAE in 2012-13 (April-November). The final word for 2012-13 is not yet out as the USA is inching closer to China with its share increasing by around one percentage point and that of China falling. 7.27 At 10 per cent in 2011-12 India's trade deficit as a per cent of GDP is one of the highest in the world. Export-import ratios reflecting the bilateral trade balance (Table 7.6) show that among its top 15 trading partners, India had bilateral trade surplus with four countries in 2011-12, viz. the UAE, USA, Singapore, and Hong Kong. In 2012-13 (AprilNovember), India's trade balance with the UAE has turned slightly negative while it has improved further with the USA and Hong Kong. Another important
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a
Growth rate in US dollar terms
trend is the growing trade deficit of India with China and Switzerland, increasing from US$ 28 billion and US$24.1 billion in 2010-11 to US$ 39.4 billion and US$ 31.3 billion respectively in 2011-12. In 2012-13 (April-November), the export-import ratio with China worsened further to 0.23 from 0.31 in 2011-12.
WORLD TRADE IN SERVICES 7.28 Like world merchandise trade, world commercial services trade which was badly hit by the 2008 global crisis, crossed the pre-crisis level in 2011 to reach US$ 4.17 trillion after a gap of two years. The export growth rate of commercial services which was at 11 per cent in 2000-5 and became negative at -12 per cent in 2009, has taken a full turn to reach 11 per cent again in 2011. As per the WTO's International Trade Statistics, Europe recovered from its 4 per cent growth of commercial services exports in 2010 to 11 per cent in 2011, while North America
International Trade
161
Table 7.6 : India's Trade Share and Export-Import Ratio with Major Trading Partners Export/Import ratioa
Share in total trade Sl.
Country
2009-10 2010-11 2011-12 2011-12 2012-13
No.
2009-10 2010-11
2011-12 2011-12 2012-13
(Apr-Nov.)
(Apr-Nov.)
1 China
9.09
9.50
9.52
9.62
8.95
0.38
0.36
0.31
0.29
0.23
2 U A E
9.31
10.72
9.03
8.99
9.74
1.23
1.03
1.00
0.98
0.92
3 U SA
7.82
7.30
7.46
7.29
8.23
1.15
1.26
1.42
1.42
1.51
4 Saudi Arabia
4.50
4.04
4.63
4.57
5.43
0.23
0.23
0.18
0.17
0.28
5 Switzerland
3.27
4.11
4.22
4.30
3.50
0.04
0.03
0.03
0.03
0.04
6 Singapore
3.01
2.73
3.21
3.30
2.53
1.18
1.38
1.96
1.85
1.75
7 Germany
3.37
3.00
3.05
3.02
2.75
0.52
0.57
0.49
0.50
0.48
8 Hong Kong
2.70
3.18
2.97
3.09
2.53
1.67
1.10
1.21
1.09
1.51
9 Indonesia
2.51
2.52
2.68
2.69
2.50
0.35
0.57
0.46
0.38
0.34
10 Iraq
1.61
1.56
2.48
2.49
2.73
0.07
0.08
0.04
0.03
0.07
11 Japan
2.22
2.21
2.32
2.19
2.29
0.54
0.59
0.52
0.46
0.47
12 Belgium
2.09
2.32
2.22
2.21
1.91
0.62
0.67
0.69
0.71
0.52
13 Kuwait
1.93
1.96
2.21
2.02
2.38
0.09
0.18
0.07
0.08
0.06
14 Korea RP
2.57
2.29
2.20
2.20
2.30
0.40
0.36
0.33
0.35
0.29
15 Nigeria
1.86
2.08
2.19
2.19
2.14
0.19
0.19
0.18
0.18
0.20
57.84
59.50
60.40
60.16
59.91
0.56
0.55
0.51
0.49
0.50
100.00 100.00 100.00 100.00 100.00
0.62
0.68
0.62
0.62
0.58
Total of 15 countries India’s trade
Source : Computed from DGCI&S data. Note :
a
A coefficient of export and import ratio between 0 and 1 implies that India’s imports are greater than exports and if the coefficient is greater than one, India exports more than what it imports.
maintained the same growth rate of 9 per cent. The Commonwealth of Independent States (CIS) was the most dynamic region followed by South and Central America with 19 per cent and 13 per cent growth respectively in 2010. Asian economies saw their growth rates more than halved to 11 per cent in 2011 from 23 per cent in 2010 due to slower growth in transportation and other commercial services. All the three broad categories of commercial services, namely transport, travel, and other commercial services registered reasonably good growth in 2011. In 2012, services trade growth has decelerated as is evident from the WTO’s first quarter to third quarter data for 2012 which shows that export and import growths were zero per cent and 1 per cent in Q2 of 2012 and -2 per cent and -1 per cent in Q3 of 2012 over corresponding period of the previous year. Europe had a very high negative growth of -7 per cent in both exports and imports.
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INDIA'S SERVICES TRADE India's Services Exports 7.29 India's services export growth has been faster than that of merchandise exports with the export of services growing at a CAGR of 23.6 per cent during 2001-2 to 2011-12, while merchandise exports grew at a CAGR of 21.4 per cent during the same period. However, growth in services exports became erratic in the post global crisis period. Reflecting the impact of uncertainty in the global economy and weak growth in advanced economies, services exports at US$ 142.3 billion showed a lower growth of 14.2 per cent in 2011-12 as against 29.8 per cent in the preceding year. Growth in services exports decelerated further to 4.3 per cent during H1 of 2012-13 as against 22.7 per cent during H1 of 201112 (Table 7.7).
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Economic Survey 2012-13
7.30 Growth moderation in services exports was observed in almost all categories. Miscellaneous services, accounting for nearly 75 per cent of total services exports in H1 of 2012-13, grew by 8 per cent during this period as compared to 20.2 per cent in corresponding period of the previous year. Within miscellaneous services, growth in exports of software services, accounting for nearly 46 per cent of total services exports, was in single digit at 9.8 per cent in H1 of 2012-13 compared to the 21.8 per cent in H1 of 2011-12. Some categories like travel, transport, and insurance services showed a negative growth rate leading to lower growth in overall services exports. For 2012-13, NASSCOM has projected a lower export growth in IT and business process management of 8.4 per cent mainly due to reduced spending on technology by US corporations and continued crisis in Europe. While the challenges facing global economic growth persist, Gartner has projected that worldwide IT spending will increase by 4.2 per cent in 2013 (from US$ 3.58 trillion in 2012 to US$ 3.73 trillion in 2013). Among nonsoftware services, business services export growth was high at 23.9 per cent in the first half of 2012-13. However, export growth of this category of services
has been very erratic in recent years. Communication services export growth was also high at 16.5 per cent.
India's Services Imports 7.31 Services imports at US$ 78.2 billion declined by 2.9 per cent in 2011-12, as against an increase of 34.2 per cent in the preceding year. However, imports of services resurged in H1 of 2012-13 and grew sharply by 10.3 per cent as compared to a decline of 0.5 per cent in H1 of 2011-12. This rise in import of services was mainly on account of higher imports of software and business services which increased by 89.7 per cent and 22 per cent respectively during H1 of 2012-13 as against a decline of 47.5 per cent and 4.4 per cent respectively in H1 of 2011-12. However, financial services showed a decline of 34.7 per cent as against an increase of 17.7 per cent in H1 of 2011-12, which is perhaps a reflection of the fragile global financial conditions. Similarly, imports of transportation, travel, insurance also recorded a decline in H1 of 2012-13 as against positive growth in H1 of 2011-12 (Table 7.8).
Table 7.7 : India's Export of services Percentage Share Commodity Group
200102
201112
CAGR
2011- 2012- 2001-02 12 13 to (Apr. - Sept.)
Growth Ratea 201011
201112
2011-12
201112
201213
(Apr.- Sept.)
Travel
18.3
13.0
11.9
10.7
19.4
33.2
16.9
21.3
-5.9
Transportation
12.6
12.8
13.3
12.1
23.8
27.4
28.0
37.1
-4.8
1.7
1.8
1.8
1.6
24.8
22.3
35.3
39.8
-9.3
Insurance GNIE
3.0
0.3
0.4
0.4
-0.8
21.3
-10.7
30.6
7.7
64.4
72.0
72.6
75.2
25.0
29.8
11.3
20.2
8.0
Software Services
44.1
43.7
43.3
45.6
23.5
6.8
17.2
21.8
9.8
Non-Software Services
20.3
28.3
29.3
29.6
27.8
83.4
3.3
18.1
5.4
Business Services
3.0
18.2
17.8
21.2
47.9
112.4
7.7
10.6
23.9
Financial services
1.7
4.2
4.3
3.8
35.2
76.2
-8.3
-6.2
-6.9
Communication Services
4.4
1.1
1.1
1.3
7.8
27.2
2.4
1.1
16.5
100.0
100.0
100.0 100.0
23.6
29.8
14.2
22.7
4.3
Miscellaneous
Of which:
Total Services Exports Source: Computed from RBI data.
Notes: a Growth rate is based on values in US dollar terms.
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GNIE = Government not included elsewhere.
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International Trade Table 7.8 : India's Import of services Percentage Share Commodity Group
200102
201112
CAGR
2011- 2012- 2001-02 12 13 to (Apr. - Sept.)
Growth Ratea 201011
201112
2011-12
201112
201213
(Apr.- Sept.)
Travel
21.8
17.6
19.3
15.2
16.4
18.0
24.8
39.4
Transportation
-12.9
25.1
20.9
21.0
18.9
16.8
16.3
18.0
14.5
-1.0
Insurance
2.0
1.9
2.0
1.4
18.3
8.9
7.0
3.6
-23.3
GNIE
2.0
1.0
1.0
0.8
10.7
56.2
-4.9
9.2
-11.3
49.0
58.6
56.7
63.7
21.1
44.6
-14.3
-13.4
23.9
4.9
1.6
1.7
2.9
6.5
49.5
-42.8
-47.5
89.7
44.2
56.9
55.0
60.8
22.0
44.4
-13.0
-11.7
21.9
Business Services
10.9
34.2
33.8
37.4
33.4
53.4
-3.3
-4.4
22.0
Financial services
9.1
10.2
10.7
6.4
20.2
61.2
6.7
17.7
-34.7
Communication Services
2.7
2.0
2.0
0.6
15.5
-15.0
35.2
42.8
-66.2
100.0
100.0
100.0 100.0
18.9
34.2
-2.9
-0.5
10.3
Miscellaneous Software Services Non-Software Services Of which:
Total Services Imports
Source: Computed from RBI data. Note: a Growth rate is based on values in US dollar terms.
India's Balance of Trade in Services 7.32 Surplus on account of India's services exports has been a cushioning factor for financing a large part of the merchandise trade deficit in recent years. During 2006-7 to 2011-12, surplus in services exports, on average, financed around 38 per cent of merchandise trade deficit. During 2011-12, net surplus on account of services exports at US$ 64.1 billion stood significantly higher than that in 2010-11 and financed 33.8 per cent of trade deficit. During H1 of 2012-13, with slower growth in services exports and rise in services imports, the surplus at US$ 29.6 billion was 2.8 per cent lower than in H1 of 2011-12, financing 32.6 per cent of trade deficit. Going forward, downward risks to export of services persist as global economic conditions remain less conducive .
GNIE = Government not included elsewhere.
cost of trade credit are important in the current environment of financial uncertainties when the banking system is likely to be tempted to reduce exposure to cross-border banking.
Trade Credit: Indian scenario
TRADE CREDIT
7.34 Reflecting improved global financial conditions, the gross inflow of short-term trade credit (up to 1 year) to India reached ` 392,526 crore during end September 2012, which represented a year-on-year increase of 24.6 per cent (but a quarter-on-quarter decline of 1.1 per cent in Q2 of 2012-13). Inflow of trade credit in H1 of 2012-13 at US$ 57.6 billion was 14 per cent higher than in 2011-12 and growth in outflow of trade credit was lower at 7.7 per cent. As a result, net trade credit grew by 60.1 per cent in H1 of 2012-13 and stood at US$ 9.5 billion as compared to the decline of 14.4 per cent in H1 of 2011-12.
7.33 Trade credit is a critical component of global trade. Internationally active firms rely extensively on trade credits. As per a recent WTO study using quarterly country-level data of export credit insurers from the Berne Union for the period 2005 to 2011, a 1 per cent increase in trade credit granted to a country leads to a 0.4 per cent increase in real imports of that country. This effect does not vary between crisis and non-crisis periods. Thus both availability and
7.35 Export credit has been decelerating since 2011-12. In 2012-13 (up to 30 November 2012), it has grown by 4.7 per cent over end-March 2012 compared to 7.7 per cent in full FY 2011-12. Export credit as a per cent of net bank credit which was at 9.8 per cent as on 24 March 2000 has been decelerating almost continuously over the years. It further decelerated in 2012 to 3.7 per cent as on 30 November 2012 (Table 7.9). Taking note of the global
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Economic Survey 2012-13
Table 7.9 : Export Credit Outstanding as on
Export credit (Rs
Variations (Per cent)
Export credit as per cent
Crore)
of NBC
24 Mar. 2000
39118
9.0
9.8
23 Mar.2001
43321
10.7
9.3
22 Mar. 2002
42978
-0.8
8.0
21 Mar. 2003
49202
14.5
7.4
19 Mar. 2004
57687
17.2
7.6
18 Mar. 2005
69059
19.7
6.3
31 Mar. 2006
86207
24.8
5.7
30 Mar. 2007
104926
21.7
5.4
28 Mar. 2008
129983
23.9
5.5
27 Mar. 2009
128940
-0.8
4.6
26 Mar. 2010
138143
7.1
4.3
25 Mar. 2011
168841
22.2
4.3
23 Mar. 2012
181852
7.7
3.9
30 Nov. 2012
185803
4.7*
3.7
Source : RBI. Notes *: Variation over 18 November 2011. NBC: Net Bank Credit. Data pertain to all scheduled commercial banks excluding regional rural banks (RRBs) availing of export credit refinance from the RBI.
slowdown and the deteriorating global conditions for exports, the RBI has taken several measures to facilitate availability of bank credit to exporters (see Box 7.4)
TRADE POLICY Recent Trade policy measures 7.36 The government has announced many trade policy measures in the Annual Supplement to Foreign Trade Policy (FTP) released on 5 June 2012. Many measures were also taken by the government in Union Budget 2012-13 and the RBI in its monetary and credit policies during the course of the year to help exports (Box 7.4).
Policy for Promoting State-wise Exports 7.37 The top five states in India's exports in 201112 were Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, and Karnataka, accounting for 63.4 per cent of India's exports. While in 2011-12, these five states had high robust growth (except Gujarat with 5.5 per cent growth) in 2012-13 (April-November) all http://indiabudget.nic.in
of them had negative growth. In fact all the other states in the top 15 except Odisha had positive growth in 2012-13 (April-November) with Kerala, Rajasthan, and Punjab having high export growth in 2012-13 on top of robust growth in 2011-12. Export growth of Haryana was also relatively high in 201213 (April-November) though it was low in 2011-12. The state-wise exports are only indicative as there are certain weaknesses in the data as stated in Economic Survey 2011-12. 7.38 The Assistance to States for Developing Export Infrastructure and Allied Activities (ASIDE) Scheme provides assistance to state governments / union territory (UT) administrations for creating appropriate infrastructure for development and growth of exports. The budget outlay for financial year 2012-13(R.E.) under the ASIDE scheme is ` 655.5 crore of which ` 573.22 crore has been sanctioned/ released till the end of January 2013. The outlay has two components: state (80 per cent of the total outlay) and central (20 per cent of the total outlay). Statewise allocation under the state component of ASIDE shows that the top five states in terms of allocation in 2012-13 are Gujarat, Maharashtra, Tamil Nadu, Karnataka, and Andhra Pradesh which are also the top five states in India's exports. Among the northeastern states, those with significant allocation are Assam, Meghalaya, and Tripura.
Special Economic Zones 7.39 Since the Special Economic Zones (SEZ) Act and Rules were notified in February 2006, formal approvals have been granted for setting up of 579 SEZs, of which 384 have been notified. Of the total employment provided to 9,45,990 persons in SEZs as a whole, that to 8,11,286 persons is incremental employment generated after February 2006 when the SEZ Act came into force. This is apart from the million mandays of employment created by the developer for infrastructure activities. While in 201011 physical exports from SEZs were worth ` 3,15,867.85 crore, in 2011-12 the figure had gone up ` 3,64,477.73 crore in 2011-12, registering a growth of 15.4 per cent. The total physical exports from SEZs in the first half of the current financial year have been to the tune of ` 239628.78 crore approximately, registering a growth of 36 per cent over exports in the corresponding period of the previous year. The total investment in SEZs till 30 September 2012 was ` 2,18,795.41 crore approximately, including ` 2,14,759.90 crore in the
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Box 7.4 : Some important trade policy measures Budget related Imports of equipment for initial setting up or substantial expansion of fertilizer projects fully exempted from basic
customs duty of 5 per cent for a period of three years up to 31 March 2015; and basic customs duty on some watersoluble fertilizers and liquid fertilizers other than urea reduced from 7.5 per cent to 5 per cent and from 5 per cent to 2.5 per cent. Concessional import duty available for installation of mechanized Handling Systems and Pallet Racking Systems in
mandis or warehouses extended for horticultural produce. Full exemption from basic customs duty for coal-mining projects. Basic customs duty on plant and machinery imported for setting up or substantial expansion of iron ore pellet plants
or iron ore beneficiation plants reduced from 7.5 per cent to 2.5 per cent. Full exemption from basic customs duty of 5 per cent for automatic shuttle-less looms and reduction in basic customs
duty on wool waste and wool tops from 15 per cent to 5 per cent. Basic customs duty increased on standard gold bars; gold coins of purity exceeding 99.5 per cent and platinum from 2
per cent to 4 per cent and on non-standard gold from 5 per cent to 10 per cent. Credit related In November 2011, the RBI increased the all-in cost ceilings for External Commercial Borrowings (ECBs) increased to
350 basis points (bps) over 6-months Libor/Euro Libor/Euribor for a maturity period between three and five years and 500 bps over 6-months Libor/Euro Libor/Euribor for a maturity period more than five years. Accordingly the all-in cost ceiling on trade credits has also been increased to 350 bps over 6-months Libor/Euro Libor/Euribor until 31 March 2013. With effect from 5 May 2012, banks were allowed to determine their interest rates on export credit in foreign currency
with the objective of increasing the availability of funds to exporters. On 18 June 2012, the RBI enhanced the eligible limit of the export credit refinance (ECR) facility for scheduled banks
(excluding regional rural banks [RRB]) from 15 per cent of the outstanding export credit eligible for refinance to 50 per cent, with effect from 30 June 2012. The objective was to provide additional liquidity support to banks of over Rs 300 billion. The rate of interest charged on the ECR facility was retained at the prevailing repo rate under the liquidity adjustment facility (LAF). The 2 per cent Interest Subvention Scheme, earlier meant only for handlooms, handicrafts, carpets, and SMEs, was
extended on 1 April 2012 to 31 March 2013 for labour-intensive sectors also, viz. toys, sports goods, processed agricultural products, and readymade garments. This was further extended upto 31 March 2014 and 134 tariff lines of engineering goods were also included in the scheme. Foreign Trade Policy Measures in 2012-13 Incentive on Incremental Exports: Incentives to be granted on incremental exports made during the period January-
March 2013 over the base period January-March 2012. The incentive to be granted to an Importer and Exporter Code (IEC) holder at the rate of 2 per cent on incremental growth of exports made to the USA, Europe, and Asian countries during this particular quarter, i.e. January-March 2013. Export Promotion Capital Goods (EPCG) Scheme: Zero Duty EPCG Scheme extended up to 31t March 2013 and its
scope enlarged. Export obligation under this scheme to be 25 per cent of the normal export obligation for export of products from north-eastern states and export of specified products through notified Land Customs Stations of the north-eastern region provided additional incentive to the extent of 1 per cent of Free on Board (FOB) value of exports. Support for Export of Green Technology Products: To promote exports of 16 identified green technology products,
export obligation for manufacturing of these products under the EPCG Scheme reduced to 75 per cent of the normal export obligation. Support for Infrastructure for the Agriculture Sector: Status holders exporting products under ITC (HS) Chapter 1 to Chapter 23 (both inclusive) are getting Duty Credit Scrip equivalent to 10 per cent of FOB value of agricultural products so exported. Import of 14 specified equipments have now been notified in Appendix 37 F for setting up of pack- houses besides import of capital goods and equipment for cold storage units, pack-houses, etc. Incentives for Promoting Investment in Labour-intensive Sectors: Status holders issued status holders incentive scrip (SHIS) to import capital goods for promoting investment in upgradation of technology of some specified labourintensive sectors like leather, textile & jute, handicrafts, engineering, plastics and basic chemicals. Up to 10 per cent of the value of these scrips will be allowed to be utilized to import components and spares of capital goods imported earlier. (Contd....)
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Box 7.4 : Some important trade policy measures (Contd...) Market and Product Diversification: Seven new markets have been added to the Focus Market Scheme (FMS) and seven to the Special Focus Market Scheme (Special FMS). Forty-six new items have been added to the Market Linked Focus Product Scheme (MLFPS). The MLFPS has been extended till 31 March 2013 for exports to the USA and EU in respect of items falling under Chapter 61 and Chapter 62. Around 100 new items have been added to the Focus Product Scheme (FPS) list. Three new items have been added to the Vishesh Krishi and Gram Udyog Yojana (VKGUY). Additional measures announced as trade facilitation measures by widening and deepening of export incentives under chapter 3 of FTP in December, 2012 to be made effective from 01.01.2013. These include addition of 5 new markets to FMS, one new market to Special FMS, 62 new items to MLFPS and 102 new items to FPS. Simplification of Procedures: Import under advance authorization (AA) permitted at any of the Electronic Data Interchange (EDI) ports, irrespective of the EDI port in which the AA has been registered. There would be no requirement of Telegraphic Release Advice (TRA). Export shipments from Delhi and Mumbai through post, courier, or e-Commerce to be entitled for export benefits under the FTP. New 'e-BRC' Initiative: A major EDI initiative the 'e-BRC' launched which would herald electronic transmission of foreign exchange realization from the respective banks to the Directorate General of Foreign Trade (DGFT) server on a daily basis. The exporter will not be required to make any request to the bank for issuance of a bank export and realization certificate (BRC).
newly notified zones. As per the provisions of the SEZ Act 2005, 100 per cent FDI is allowed in SEZs through the automatic route. A total of 160 SEZs are exporting goods and services. Of this 93 are IT/ ITES, 17 multi-product and 50 other sector-specific SEZs. The total number of units in these SEZs is 3308.
2012 they have again increased with 114 investigations (up to June) compared to 68 in 2011 (up to June). In 2011 India topped the list of countries initiating such investigations, but in 2012 (up to June) Brazil is at the top followed by Argentina and Canada. India, the US, and EU with seven investigations each are at fourth spot (Table 7.10)
Contingency Trade Policy and Non-Tariff Measures
7.41 During 2012-13 (1.4.2012 to 31.12.2012), 10 fresh cases have been initiated by the Directorate General of Anti-dumping and Allied Duties (DGAD). The countries involved in these investigations are China PR, the European Union, Korea RP, Malaysia, Mexico, Taiwan, Thailand, Turkey, Saudi Arabia, and the USA.
7.40 Anti-dumping investigations initiated by all countries, at a high in 2001 declined almost steadily till 2007. They picked up once again in 2008 but started declining to reach a low in 2011. However, in
Table 7.10 : Investigations initiated by top ten users of Anti-Dumping Measures 1995-2012 Country India
1995 2001 2002 2003 2005 2007 2008 2009 6
79
81
46
28
47
55
31
2010 2011 41
19
2011 2012 Jan. -June 10
7
19952012* 663
United States
14
77
35
37
12
28
16
20
3
15
9
7
465
European Union
33
28
20
7
24
9
19
15
15
17
8
7
444
Argentina
27
28
14
1
12
8
19
28
14
7
4
10
301
5
17
8
4
6
13
23
9
37
16
11
26
258
Brazil Australia South Africa China Canada Turkey All countries
5
24
16
8
7
2
6
9
7
18
2
6
241
16
6
4
8
23
5
3
3
0
4
1
0
216
0
14
30
22
24
4
14
17
8
5
0
4
195
11
25
5
15
1
1
3
6
2
2
0
10
165
0
15
18
11
12
6
23
6
2
2
1
6
154
157
372
315
234
201
165
213
209
172
155
68
114
4125
Source : WTO
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*Upto June 2012.
International Trade 7.42 While the OECD (Organization for Economic Cooperation and Development) - WTO - UNCTAD (United Nations Conference on Trade and Development) joint report of October 2012 on G20[Group of 20] Trade and Investment Measures has pointed towards a slowdown in trade-restrictive measures, the persistence of the global crisis has added to political and economic pressures on governments to resort to contingency trade policies and non-tariff measures (NTMs). Moreover the new measures implemented over the past five months that can be considered as restricting or potentially restricting trade add to the restrictions adopted since the outbreak of the global crisis. The trade coverage of the restrictive measures put in place since October 2008, excluding those that have been terminated, is estimated to be around 3 per cent of world merchandise trade and 4 per cent of the trade of G20 economies.
WTO NEGOTIATIONS
AND
INDIA
167
countries have by and large adopted a defensive approach in the negotiations. The developed countries and a few developing countries are making efforts to harvest 'Trade facilitation' for an early outcome, in time for MC9. India along with most of the developing countries wants issues of market access and trade facilitation to be balanced with developmental issues such as duty free quota, free market access for LDCs, and acceptance of the modalities for reducing cotton subsidies. The G33 group of countries, which is a coalition of 46 developing countries, including India, has tabled a proposal on food security in the WTO on 16 November 2012. The proposal is for an amendment to certain provisions of the WTO Agreement on Agriculture to allow developing countries greater flexibility in their public stockholding operations for food security purposes. The issue of food security is very important for India and any concession on the trade facilitation front needs to be balanced by acceptance of the G33 proposal in any package deal for MC9.
7.43 The Doha Round of trade negotiations in the WTO which began in 2001 remains unfinished due to differences among members on various issues. The Eighth Ministerial Meeting of the WTO which was held in December 2011 in Geneva provided political guidance to the members to resolve the issues involved. However, there was no significant progress in 2012. Efforts are being made for an early harvest on some issues in time for the Ninth Ministerial Conference of the WTO (MC9) to be held in December 2013. India is of the view that any early outcome of the negotiations should invariably address issues of interest to the developing countries, especially the least developed countries (LDCs) and the small vulnerable economies (SVEs).
7.45 During the current year, some of the developed country members of the Information Technology Agreement (ITA) of WTO viz. the USA, European Union, and Japan, have proposed expansion of the agreement (called ITA-2) to increase the coverage of IT products on which customs duty would be bound at zero, addressing non-tariff measures, and expanding the number of signatory countries to include new signatories such as Argentina, Brazil, and South Africa. The proponents of ITA expansion have prepared a consolidated list containing around 350 IT products (combining products of interest to all proponents of ITA-2) on which tariff reductions are being sought. This is under active discussion in the WTO and India is carefully examining the proposal.
7.44 A Draft Consolidated Negotiating Text on Trade Facilitation was worked out by the WTO members on 14 December 2009. The Draft Text has since been revised fourteen times (till December 2012) through discussions in the meetings of the Negotiating Group on Trade Facilitation (NGTF). India is actively engaged in these negotiations and has also tabled a few proposals on 'Customs Cooperation', 'Rapid Alerts System of Customs Union', and 'Appeal Mechanism'. The Draft Text, however, lacks internal balance. The developed countries are holding up the laws and procedures of their own countries as benchmarks and want the developing countries to replicate them. Developing
7.46 Negotiations in services have continued primarily in the plurilateral format. Intensive negotiations were held in 2009, 2010, and also till the first half of 2011.These efforts culminated in a report by the Chair of the Committee on Trade in Services - Special Session (CTS-SS) and all subsidiary bodies under the CTS in April 2011. The Chair's report puts forth two views. The developed countries' view is that further progress on market access could include the binding of autonomous liberalization where possible, improved levels of access under commercial presence mode, that is, Mode 3 (including restrictions on foreign equity participation and
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Box 7.5 : India's Regional Trading Arrangements: Recent Developments Agreement on South Asia Free Trade Area (SAFTA): The SAFTA Agreement was signed on 6 January 2004 and came into force on 1 January 2006. Under SAFTA, India has granted zero basic custom duty to all LDCs, viz. Afghanistan, Bangladesh, Bhutan, and Maldives, on all items except 25 items relating to alcohol and tobacco. Under the SAFTA Agreement, India has reduced the SAFTA Sensitive List for non-LDCs from 878 to 614 by reduction of 264 tariff lines w.e.f. 6 September 2012. As per the schedule of Tariff Liberalisation Programme (TLP) under SAFTA, India has brought down its peak tariff rates to 5 per cent w.e.f. 1.1.2013 India-Thailand FTA, Early Harvest Scheme (EHS) under the Framework Agreement for establishing IndiaThailand FTA: On 9th October 2003, India and Thailand signed a Framework Agreement for establishing an IndiaThailand FTA, which includes trade in goods, trade in services, investment, and other areas of economic cooperation, to be concluded as a single undertaking. Under the EHS, tariff has gradually been eliminated on a list of 82 common items simultaneously by both sides between 1 September 2004 and 31 August 2006. Under the India-Thailand FTA, it is proposed to provide ASEAN plus tariff concessions. So far 26 rounds of the India-Thailand Trade Negotiation Committee (ITTNC) meetings have been held. The last round was held on 26-27November 2012 in New Delhi. India-ASEAN Comprehensive Economic Cooperation Agreement (CECA): Services and Investment Agreements. The Trade in Goods Agreement, which was signed on 13 August 2009 under the broader framework of the CECA between India and ASEAN has already come into force. Conclusions of negotiations for the Services Agreement and Investment Agreement have been announced during the ASEAN-India Commemorative Summit held on 20 December 2012 in New Delhi. Legal scrubbing for these Agreements will be finalized by February,2013. The Agreement will be signed during ASEAN Economic Ministers (AEM)-India Consultations in August 2013. Regional Comprehensive Economic Partnership (RCEP) Agreement among ASEAN + 6 (Australia, China, India, Japan, Korea, and New Zealand): During the 20th ASEAN Summit held in Cambodia in April 2012, ASEAN States agreed to move towards establishing an RCEP involving ASEAN and its FTA partners. The objective of launching RCEP negotiations is to achieve a modern, comprehensive, high-quality, and mutually beneficial economic partnership agreement among the ASEAN member States and ASEAN's FTA partners. The RCEP will cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition, dispute settlement, and other issues. India - EU Broad Based Trade and Investment Agreement (BTIA): Fifteen rounds of negotiations and a number of intersessional and Chief Negotiator level meetings have been held till date. The 15th round was held during 4-7 December, 2012 in New Delhi. Chief negotiator level meeting was held on 29-30 January, 2013 in New Delhi. Global System of Trade Preferences (GSTP): The Agreement establishing the GSTP among developing countries was signed on 13 April 1988 at Belgrade following the conclusion of the First Round of Negotiations. Forty-three countries have ratified the Agreement and become participants. India has offered tariff concessions on 70.08 per cent of dutiable tariff lines with an across-the-board margin of preference (MoP) of 20 per cent on the applied tariffs prevailing on the date of import. India has also unilaterally offered special concessions to LDC participants by granting an MoP of 25 per cent on 77 per cent of all its dutiable tariff lines. The Cabinet Committee on Economic Affairs (CCEA), in its meeting on 23 August 2012, has granted approval for implementing India's schedule of concessions. The tariff concessions are to be implemented thirty days after a minimum of four participants ratify their schedules of concessions. So far India and Malaysia have ratified their schedules. Source: Department of Commerce, Ministry of Commerce and Industry, Government of India.
forms of commercial presence), as well as a robust and satisfactory outcome in Mode 4 (presence of natural persons). The developing countries' view is that there is an imbalance in market access negotiations, as evidenced by the fact that developing country flexibilities have not been taken into account in other members' requests, sectors of export interest to developing countries are not being fully reflected in developed members' offers; developing countries have already made a http://indiabudget.nic.in
significant contribution to the Doha Round; and some plurilateral requests and recent proposals have embodied a level of ambition going beyond that agreed in Annex C of the Hong Kong Ministerial Declaration. India has already made considerable improvement in its revised offer (from 37 sub-sectors in the Uruguay Round to 95 in the Revised Offer). Some of the major developed country members have shown nil or little movement in their Mode 4 offers, which is an area of interest to us.
International Trade
BILATERAL AND REGIONAL COOPERATION 7.47 While India has always stood for an open, equitable, predictable, non-discriminatory, and rule based multilateral trading system(MTS), it has also been active in recent years with regional trading arrangements (RTAs), to serve as 'building blocks'
169
for achieving trade liberalization and complementing the MTS. So far, India has signed 10 free trade agreements (FTAs) and 5 preferential trade agreements (PTAs) and these FTAs/PTAs are already in force. Further, India is currently negotiating 17 FTAs, including review/expansion of some of the existing ones. (See Box 7.5)
Box 7.6 : Diversifying Technology-intensive Export Products through the Regional Process Two trends in international trade are of great importance in the current global economic environment. One, the growing importance of technology-intensive exports and two, the increasing role of regional trade. Tradable products can be classified into five different groups based on the technology intensity. (1) Primary products have very little technology basis for retaining comparative advantage, (2) resource-based products having competitive advantages, generally arising from local availability of natural resources and using simple and labour-intensive technology, (3) low technology products having simple technologies mainly embodied in capital equipment, with labour constituting a major element of cost in competitiveness and operating under low-scale economies with low entry barriers, (4) medium technology products comprising skill- and scale-intensive technologies in capital and intermediate products where product development takes place with complex technologies, involving high level of research and development (R&D) expenditure and which require lengthy learning periods and are subject to high entry barriers, and (5) high technology products having advanced and fast changing technologies with emphasis on product design requiring high R&D investment, sophisticated infrastructures, high levels of specialized technical skills, and close interactions between firms and universities/research institutions. Trends in global trade indicate that there has been a proliferation of trade in technology-intensive manufacturing products. Among the globally dynamic products of trade, a significant proportion of items are high and medium technology-intensive items. India has been diversifying into technology intensive products with a fair amount of success with exports of high technology and medium technology products growing faster than the total exports of India during 2004-2011 (Table 1). Further, diversifying India's exports to include more technology-intensive product groups is of vital importance. Table 1 : India's Trade with technology Intensive products CAGR 2004 to 2007
2007 to 2011
2004 to 2011
1
Primary products
25.3
17.6
20.8
2
Resources based products
32.4
20.0
25.2
3
Low technology products
13.3
14.5
14.0
4
Medium technology products
27.0
20.0
23.0
5
High technology products
26.6
26.9
26.8
Total exports
24.3
18.8
21.2
In the present global trading environment, export promotion is more strategically pursued through the regional approach. India's export compound annual growth rate (CAGR) is faster with most of the 21 RTAs (covering more than 100 countries) considered here (based on India's level of exports with them, India's membership in some of them, and India's engagement with other continents including Africa), than its overall export CAGR of 19.1 per cent during 1999-2000 to 2010-11 (Table 2). Asia is emerging as the most important destination for India's exports through the regional process. Export potential in medium and high technology-intensive products varies across different RTAs. Decomposition of export potential products into their technology intensities in different regional blocs shows possibility of trade diversification for India in hi-tech product segments. Empirical evidence suggests that India can diversify its exports of technology-intensive products to RTAs. The EU, NAFTA, RCEP, APTA, ASEAN, IOR-ARC, etc. could be some important export destinations with sizeable trade opportunities for technology-intensive exports, though some of these regional arrangements overlap. (Contd....)
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Box 7.6 : Diversifying Technology-intensive Export Products through the Regional Process (Contd..) Table 2: India's Export Performance with Selected RTAs/FTAs RTA
Year of Eestabilshment
Value of exports (US$ million) 2010-11
2
3
4
5
6
7
8
9
10
11
12
IOR-ARC 1997 77097 RCEP/EAS 2005 51723 BIMST-EC 1997 11673 SAARC 1985 11634 IBSA 2003 7948 With/proposed tradeaAgreement EU 1992 45980 GCC 1981 42395 ASEAN 1967 25600 COMESA 1994 7128 MERCOSUR 1991 4730 SACU 1969 4118 Without trade agreement NAFTA 1992 27538 APTA 1975 25887 SADC 1992 8158 LAIA 1980 7443 EAC 1967 3994 ECOWAS 1975 3842 CIS 1991 2607 ECCAS 1985 1122 With bilateral trade agreement ISLFTA 2000 3503
17.9 14.7 4.8 3.9 1.1
30.7 20.6 4.7 4.6 3.2
25.1 22.8 18.6 21.0 30.6
51.8 155.3 9.1 2.5 11.2
22.5 27.3 38.0 33.1 19.8
17.5 18.9 10.8 25.4 17.2
11.3 8.5 11.9 9.7 7.9
28.0 23.3 24.9 23.1 38.8
20.6 22.0 14.4 8.7 16.3
26.2 8.7 6.1 2.3 0.7 0.8
18.3 16.9 10.2 2.8 1.9 1.6
15.3 26.5 24.8 21.6 30.4 27.2
205.2 10.0 35.1 3.8 12.2 3.7
19.9 14.8 24.7 21.1 14.1 22.9
17.8 17.0 17.9 29.7 18.6 17.8
16.6 17.1 9.8 10.5 9.2 9.9
30.4 40.6 24.5 30.5 41.9 34.5
15.3 10.4 23.1 8.2 16.2 14.9
24.8 5.9 1.9 1.5 0.7 1.5 2.9 0.1
11.0 10.3 3.3 3.0 1.6 1.5 1.0 0.4
10.6 25.4 25.3 26.4 29.0 19.6 8.5 33.6
93.8 79.5 5.3 28.4 0.9 3.3 14.8 0.3
17.8 25.0 19.1 12.1 12.9 29.8 12.3 13.7
13.1 19.6 24.1 17.4 47.1 31.6 15.1 30.0
14.9 6.2 10.2 12.9 7.3 12.3 14.2 14.9
33.6 24.9 34.0 39.2 25.3 20.6 42.0 33.0
20.6 24.3 12.6 18.4 7.3 5.6 16.4 8.3
1.8
3.9
27.7
0.6
20.2
19.1
6.3
20.5
34.0
1.4
1.4
19.4
0.1
25.8
30.7
16.1
22.5
4.9
1
Share in export % 199920102000 11
Export Trade CAG Ropport2010unities 11 over (US$ 1999 billion 2000
Share in total opportunities available in each RTA(%) Primary Resource Low Medium Products based techtechnology nology
High technology
With India's membership
ISCECA
2003
9816
* Year of establishment / entered into force.
Focused product-market diversification trade and marketing strategies should necessarily entail diversifying India's trade basket, particularly in favour of high and medium technology-intensive products in the targeted RTAs. While this type of focus could also help in avoiding the adverse effects of some RTAs concentrating on primary products involving livelihood concerns of a significant portion of our agricultural and rural communities, care should be taken to avoid inverted duty structures in the 'quid-pro-quo' during RTA negotiations. Source: Based on study by S. K. Mohanty, (2013), 'Examining Diversification of India's Exports to Developing Countries in a Situation of Partially Affected Global Economy by Recession', Backgrounder for the Economic Survey, MoF, GoI. Note: The RTAs included in the analysis are: Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), Regional Comprehensive Economic Partnership (RCEP)/ East Asian Summit (EAS), Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMST-EC), South Asian Association for Regional Cooperation (SAARC), India-Brazil-South Africa Initiative (IBSA), the European Union (EU), Gulf Cooperation Council (GCC), Association of South East Asian Nations (ASEAN), Common Market for Eastern and Southern Africa (COMESA), Southern Common Market (MERCOSUR), South African Customs Union (SACU), North American Free Trade Agreement (NAFTA), Asia-Pacific Trade Agreement (APTA), South African Development Community (SADC), Latin America Integration Association (LAIA), East African Community (EAC), Economic Community of Western African States (ECOWAS), Commonwealth of Independent States (CIS), Economic Community of Central African States (ECCAS), India-Sri Lanka Free Trade Agreement (ISLFTA), India-Singapore Comprehensive Economic Cooperation Agreement (ISCECA).
7.48 In the current situation when WTO negotiations are stalled, world trade has slowed down, and the shadow of protectionist measures looms large, a strategy of diversifying technology
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intensive exports through the regional process could lead to further trade promotion with trade liberalization (Box 7.6).
International Trade
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Box 7.7 : Reviving and Accelerating India's Trade: Micro, Sector- and Port-specific issues Some trade-related issues and suggested policies at the micro, sector-specific and port-specific levels are as follows: Infrastructure Related: Even the best of Indian ports do not have state-of-the-art technology as in Singapore, Rotterdam, and Shanghai. Port Infrastructure issues include poor road conditions and port connectivity, congestions, vessel berthing delays, poor cargo handling techniques and equipment., resulting in multiple handlings, increased lead time, high transaction costs and thus loss of market competitiveness. Port-specific infrastructure issues include restriction in port access points to Chennai Port, various surcharges like congestion surcharge and Chennai trade recovery charge on the users of Chennai Port, container relocation charges, imbalance surcharge, etc. levied without any legal sanction with the charge on the trade component being very low and port congestion at the Jawaharlal Nehru Port Trust (JNPT) Port at Mumbai, entry gates closing prematurely resulting in export consignments being dumped in the buffer yard at a very high cost and delay in shipments, and many vessels bypassing the JNPT Port carrying containers to be delivered at their next voyage thereby delaying vital raw materials for the industry. Trade Facilitation Measures: While India is ranked 132 in the 'ease of doing business', on 'trading across borders' India is ranked 127 with Singapore at first rank and China at 68th as per the World Bank and IFC 'Doing Business 2013'. India requires 9 export documents to be cleared, while China needs 8, with good practice economies like France needing 2. Time to export is 16 days for India and five for Denmark. Cost to export is $1120 per container, compared to $580 in China and $435 in Malaysia. Number of import documents that need clearance is 11 in India, 5 in China, and 2 in France. Time to import is 20 days in India and 4 in Singapore. Cost to import is $1200 per container in India, $615 in China, and $439 in Singapore. There are many trade facilitation measures that can help the export sector without any cost to the government exchequer. These include simplification of the multiple documentation procedures as on an average an Indian exporter is required to sign at about 130 places to complete an export transaction (from pre-shipment till receiving export related benefits) as per the Federation of Indian Export Organisations (FIEO). These procedures and costs need to be reduced to the barest minimum. Other procedural and documentation reforms include abolishing the system of printing and certifying export promotion(EP) copies of shipping bills, implementing 24x7 system for Container Freight Stations (CFSs) , reducing unnecessary paper work related to renewal of letters of undertaking (LUT) for export without payment of duty, discouraging the practice of insistence by banks for L/Cs through their branches in foreign countries, merging or streamlining the Market Access Initiative (MAI) & Marketing Development Assistance (MDA) schemes, removing the annual average export performance condition under the EPCG scheme, and addressing the issue of trade litigations. Some port-specific trade facilitation measures include addressing the issues of high terminal handling charges (THC) and increase in cut-off time resulting in containers missing the intended vessels and non-availability of electronic data interchange (EDI) facility inside the International Container Transhipment Terminal (ICTT) in Vallarpadam Port; and streamlining the timing of the Customs office at the Precious Cargo Customs Clearance Centre (PCCC), Mumbai, as it is open till 1.30 p.m. while the timing for receiving goods/parcels for exporting is till 4.00 p.m.. Tax and Customs Duty Related: These include fixing a time limit for disbursal of duty drawback, service tax refunds, and central excise rebate claims to the exporters as delays in the release of these claims adversely affect working capital, making them less competitive; crediting payment of central excise rebate claims directly to the bank account of the exporter; introducing value added tax (VAT) refund system for purchases in India by foreigners which can increase purchases in India by foreign tourists; and reviewing inverted duty structure under the India-Thailand FTA as finished jewellery imports from Thailand are cheaper than primary gold (raw material) available in India. Source: H.A.C. Prasad, (2012). 'Emerging Global Economic Situation: Its impact on India's Trade and some Policy Issues', Working paper No 1/2012-DEA, Ministry of Finance.
CHALLENGES
AND
OUTLOOK
Outlook 7.49 The prospects for world trade and India's trade are still uncertain. Some green shoots seem to have appeared with the import growth rates of the world and some of India's important trading partners like the USA, China, and Hong Kong showing slight upward movement in the last two months. However, http://indiabudget.nic.in
the Baltic Dry Index (BDI), a good proxy for the robustness of world trade, which started falling from its peak (in the last five years) of 11709 on 19 May 2008 has not recovered even halfway. The small bouts of recovery in the BDI, like the recent recovery in November-December 2012 which is among the highs in recent months, can in no way be compared to the highs of 2008. Even this upswing has been short-lived, being succeeded by a downswing in the
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beginning of January 2013 causing it to reach a low of 698 on 2 January2013. There has since been a marginal recovery for the BDI to its current level of 792 (28.1.2013). 7.50 This also suggests that the outlook for India's merchandise trade and shipping services which are directly dependent on merchandise trade is still uncertain. While there has been some pick-up in import growth rates of some of our trading partners like the US, Hong Kong, Singapore and China in the last two months as stated earlier, a look at their import growth rates from India in recent months shows a rather mixed picture. While the US's and Japan's imports from India grew by 12.6 per cent and 1.8 per cent respectively in 2012 (JanuaryNovember), China's and Hong Kong's imports from India fell by 19.6 per cent and 17.9 per cent respectively in 2012 (full year) and Singapore's imports from India fell by 8.3 per cent in 2012 (January-November). 7.51 Import moderation on the other hand may be limited despite fall in gold imports (as a result of the policy measures taken by the government), as international gold prices are still high and oil prices continue to hover around the US$ 110 per barrel mark. 7.52 Services export growth being equally dependent on global growth and trade has been very erratic in the post global crisis period. On the other hand, if imports of services continue to rise and the positive balance of trade in services continues to fall as in the first half of 2012-13, the cushion available for lowering the trade deficit would be limited.
Challenges 7.53 The challenges for India on the trade front are many. While India has successfully diversified its
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export basket, more needs to be done on the product diversification front. It also has to reposition itself in its traditional areas of strength like textiles and leather & leather manufactures where it has lost considerable ground, while at the same time making forays into new areas. With multilateral trade negotiations stalled, and RTAs on the rise, India also has to follow a strategic regional trading policy focusing on the potential technology-intensive items in the more important RTAs. Though geopolitical considerations are important, India may have to bargain more in its regional trade negotiations, particularly in cases where livelihood concerns of large pockets of the population are involved, There is also need to address the inverted duty structure in sectors like electronics, textiles, and chemicals and the artificial inverted duty structure caused by some FTAs/RTAs. On the services front, a gold mine of opportunity in sectors like tourism including health tourism is waiting to be tapped. 7.54 The recent global slowdown has thrown up new challenges for India with its export growth being continuously negative since May 2012 compared to very high growth rates of even above 50 per cent in some months of the previous year. With limited fiscal space available for the government and with protectionist measures of trading partners showing signs of rising, the policy options left are more at the micro level as indicated in Box 7.7. 7.55 Thus there are many micro, port-specific and sector-specific issues that need urgent attention. These are related to infrastructure, trade facilitation, tax and tariffs, and credit, and can realistically be addressed in the short and medium term. Addressing these issues, as is currently being done by the government, can exponentially promote India's export growth.
Agriculture and Food Management
8
CHAPTER
Indian agriculture is broadly a story of success. It has done remarkably well in terms of output growth, despite weather and price shocks in the past few years. India is the first in the world in the production of milk, pulses, jute and jute-like fibres, second in rice, wheat, sugarcane, groundnut, vegetables, fruits and cotton production, and is a leading producer of spices and plantation crops as well as livestock, fisheries and poultry. The Eleventh Five Year Plan (2007-12) witnessed an average annual growth of 3.6 per cent in the gross domestic product (GDP) from agriculture and allied sector against a target of 4.0 per cent. While it may appear that the performance of the agriculture and allied sector has fallen short of the target, production has improved remarkably, growing twice as fast as population. India's agricultural exports are booming at a time when many other leading producers are experiencing difficulties. The better agricultural performance is a result of: a) farmers' response to better prices; b) continued technology gains; and c) appropriate and timely policies coming together. Yet India is at a juncture where further reforms are urgently required to achieve greater efficiency and productivity in agriculture for sustaining growth. There is need to have stable and consistent policies where markets play a deserving role and private investment in infrastructure is stepped up. An efficient supply chain that firmly establishes the linkage between retail demand and the farmer will be important. Retionalization of agricultural incentives and strengthening of food price management will also help, toegether with a predictable trade policy for agriculture. These initiatives need to be coupled with skill development and better research and development in this sector along with improved delivery of credit, seeds, risk management tools, and other inputs ensuring sustainable and climate-resilient agricultural practices. Finally, while the sharp increase in prices of food articles, especially proteins, fruits and vegetables, and the growing foodgrains stocks in public sector continue to be subjects of debate, these may be the pointers towards the need for both relative price shifts responding to shifts in demand and reconsidering traditional instruments of food management.
8.2 Although agriculture, including allied activities, accounted for only 14.1 per cent of the GDP at constant (2004-5) prices in 2011-12, its role in the country's economy is much bigger with its share in total employment according to the 2001 census, continuing to be as high as 58.2 per cent. The declining share of the agriculture and allied sector in http://indiabudget.nic.in
the country's GDP is consistent with normal development trajectory of any economy, but fast agricultural growth remains vital for jobs, incomes, and the food security. The growth target for agriculture in the Twelfth Five Year Plan remains at 4 per cent, as in the Eleventh Five Year Plan.
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PERFORMANCE SECTOR
OF THE
AGRICULTURE
8.3 Average annual growth of the agriculture and allied sector during the Eleventh Five year Plan at 3.6 per cent fell short of the 4 per cent growth target. Realised growth, however, has been much higher than the average annual growth of 2.5 and 2.4 per cent achieved during the Ninth and Tenth Plans, respectively. Growth has also been reasonably stable despite large weather shocks during 2009 (deficient south west monsoon), 2010-11 (drought/deficient rainfall in some states), and 2012-13 (delayed and
deficient monsoon). An important reason for this dynamism has been due to a step-up in the gross capital formation (GCF) in this sector relative to GDP of this sector, which has consistently been improving from 16.1 per cent in 2007-8 to 19.8 per cent in 2011-12 (at constant 2004-5 prices) (Table 8.1). 8.4 Overall GCF in agriculture (including the allied sector) almost doubled in last 10 years and registered a compound average annual growth of 8.1 per cent (Fig 8.1). Rate of growth of GCF accelerated to 9.7 per cent in the Eleventh Plan (2007-12) compared to a growth of 2.7 per cent during the Tenth Plan
Table 8.1 : Agriculture Sector : Key Indicators (per cent at 2004-5 prices) Sl. Item No. 1
Growth in GDP in Agriculture & Allied Sector Share of Agriculture & allied sectors in total GDP Agriculture Forestry and logging Fishing
2
Share of agriculture & allied sectors in total Gross Capital Formation (GCF) Agriculture Forestry and logging Fishing
3 4
GCF in Agriculture and Allied sectors as per cent to GDP of the sector Employment in the agriculture sector as share of total workers (Census 2001)
2007-8
2008-9 2009-10 2010-11
2011-12 Ist Revision
5.8 16.8 14.3 1.7 0.8
0.1 15.8 13.4 1.6 0.8
0.8 14.6 12.3 1.5 0.8
7.9 14.5 12.3 1.4 0.7
3.6 14.1 12.0 1.4 0.7
6.4 5.9 0.1 0.5
7.8 7.2 0.1 0.5
7.3 6.7 0.1 0.5
6.2 5.6 0.0 0.5
6.8 6.2 0.1 0.5
16.1
19.4
20.1
18.4
19.8
58.2
Source : Central Statistics Office, Directorate of Economics & Statistics (Department of Agriculture and Cooperation) and Population Census 2001.
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Agriculture and Food Management (2002-07). Average annual growth of private investment at 12.5 per cent during Eleventh Plan (first four years) was significantly higher as against nearly stagnant investment during the Tenth Plan.
Rainfall Distribution during Monsoon 2012 8.5 The performance of Indian agriculture is still heavily dependent on rainfall and south west monsoon (June to September), comprising 75 per cent of total annual rainfall, substantially affects production and productivity of agriculture. During 2012, south-west monsoon rainfall over the country as a whole was 8 per cent less than the long period average (LPA). The seasonal rainfall was 93 per cent of its LPA over north-west India, 96 per cent over central India, 90 per cent over peninsular India, and 89 per cent over north-east India. Out of a total of 36 meteorological subdivisions in the country, 23 received excess/ normal rainfall and in the remaining 13 subdivisions rainfall was deficient (Table 8.2). 8.6 With more than half of the cultivated area dependent on monsoon, advance information about the intensity and spread becomes very important. With the objective of improving monsoon forecasts for the country over all temporal scales (short to medium and long term), the Earth System Science Organization (ESSO)/ Ministry of Earth Sciences has initiated the National Monsoon Mission during the Twlefth Five Year Plan with an estimated budget of ` 400 crore. Under this Mission, a dynamic framework for prediction of monsoon over all time
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scales will be implemented during the next five years. Joint collaborative research projects will also be undertaken with national and international scientists involved in monsoon research. This is a crucial step towards improving the reliability of monsoon forecasts for appropriate and timely policy interventions to support farmers and food management.
CROP PRODUCTION 8.7 During the Eleventh Plan period, foodgrains production in the country recorded an increasing trend, except in 2009-10 when total foodgrains production declined to 218.1 million tonnes due to severe drought experienced in various parts of the country. During 2011-12, total foodgrains production reached an all-time high of 259.32 million tonnes. However, the production of 2012-13 kharif crops (Table 8.3) is likely to be adversely affected by deficiency in the south-west monsoon and the resultant acreage losses. The overall area coverage at 665.0 lakh ha under foodgrains during kharif 201213 shows a decline of 55.8 lakh ha compared to 720.86 lakh ha during kharif 2011-12 (fourth AE) . Output is expected to decline in all major crops.
Area, Production, and Yield of Agricultural Crops 8.8 There are limitations to the expansion of area for cultivation. Multiple cropping, improvement in yield levels and shifts in area for certain crops hold the key to the long-term output growth. An analysis of
Table 8.2 : Monsoon Performance 2003-2012 (June-September) Year
Number of meteorological subdivisions Normal
Excess
Deficient/ Scanty
Percentage of districts with normal/ excess rainfall
Percentage of long period average rainfall for the country as a whole
2003
23
8
5
76
102
2004
23
0
13
56
87
2005
24
8
4
72
99
2006
21
6
9
60
100
2007
18
13
5
72
106
2008
31
2
3
76
98
2009
11
3
22
42
78
2010
17
14
5
70
102
2011
26
7
3
76
101
2012
22
1
13
58
92
Source : Indian Meteorological Department.
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Table 8.3 : Agricultural Production of Principal Crops Production in Million Tonnes/Bales Crop
Season 2000-01 2006-07 2009-10 2010-11 2011-12
Rate of Growth
2012-13
CAGR 2012-13/
(AE) 2011-12/
2011-12
2006-07 Rice
Kharif
72.8
80.2
75.9
80.7
92.8
90.7
3.0
-2.3
Coarse Cereals
Kharif
24.9
25.6
23.8
33.4
Cereals
Kharif
97.6
105.8
99.7
114.1
32.5
28.5
4.9
-12.3
125.2
119.2
3.4
-4.8
Pulses
Kharif
4.5
4.8
4.2
7.1
Foodgrains
Kharif
102.1
110.6
104
121.2
6.1
5.5
4.9
-9.8
131.3
124.7
3.5
-5.0
Oilseeds
Kharif
11.94
14.01
15.73
21.92
Cotton *
Kharif
9.52
22.63
24.02
33.0
20.7
19.5
8.1
-5.8
35.2
33.8
9.2
-4.0
Jute**
Kharif
9.32
10.32
11.23
10.01
10.7
Sugarcane
Kharif
295.96
355.52
292.3
342.38
361.0
10.6
0.7
-0.9
334.5
0.3
-7.3
Coarse Cereals
Total
31.1
33.9
33.5
43.7
42.04
38.47
4.4
Cereals
Total
185.7
203.1
203.4
226.5
242.23
232.57
3.6
Pulses
Total
11.1
14.2
14.7
18.2
17.09
17.58
3.8
Foodgrains
Total
196.8
217.3
218.1
244.8
259.32
250.14
3.6
Oilseeds
Total
18.44
24.29
24.88
32.48
29.8
29.5
4.2
Share of production in Kharif to total production (per cent) Total Cereals
52.6
52.1
49.0
50.4
51.7
51.3
Total Pulses
40.5
33.8
28.6
39.0
35.7
31.3
Total Foodgrains
51.9
50.9
47.7
49.5
50.6
49.9
Total Oilseeds
64.8
57.7
63.2
67.5
69.5
66.1
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. *Bales of 170 kgs each.
** Bales of 180 kgs each.
indicates significant progress towards increasing production, yield levels and crop diversification (Table 8.4).
the all-India compound annual growth rate (CAGR) in the indices of area, production, and yield of major agricultural crops during the last three decades
Table 8.4 : CAGRs of Area, Production, and Yield Indices of Principal Crops during 19801 to 1989-90, 1990-1 to 1999-2000 (Base : TE 1981-2=100), and 2000-1 to 2011-12 (Base: TE 1993-4=100) (% per annum) 1980-1 to 1989-90
1990-1 to 1999-2000
2000-1 to 2011-12*
Area Production
Yield
Area Production
Yield
Area Production
Yield
Rice
0.41
3.62
3.19
0.68
2.02
1.34
0.00
1.78
1.78
Wheat
0.46
3.57
3.10
1.72
3.57
1.83
1.35
2.61
1.24
Coarse cereals
-1.34
0.40
1.62
-2.12
-0.02
1.82 -0.81
3.01
3.85
Total pulses
-0.09
1.52
1.61
-0.60
0.59
0.93
1.60
3.69
2.06
Sugarcane
1.44
2.70
1.24
-0.07
2.73
1.05
1.38
2.07
0.68
Total oilseeds
1.51
5.20
2.43
0.86
1.63
1.15
2.12
3.36
1.22
-1.25
2.80
4.10
2.71
2.29 -0.41
3.22
13.53
9.99
Cotton
Source : Department of Agriculture and Cooperation. *As per fourth AE.
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Agriculture and Food Management 8.9 Overall, the 1980-90 period witnessed relatively higher growth in production and yield in major crops compared to the 1990-2000 period except for the marginal increase in growth of yield in coarse cereals and the same levels of growth in production of wheat and sugarcane. Further, a lower growth (coarse cereals, pulses, sugarcane) and marginally higher growth (rice, oilseeds) was observed in the area under these major crops during the 1990-2000 period vis a vis 1980-1990 except in wheat and cotton where
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growth rate was 1.72 per cent and 2.71 per cent respectively. By and large the growth rates achieved in the 1980-90 period could not be sustained during the 1990-2000 period. In coarse cereals yield increases were able to offset a negative growth in area. In both wheat and rice, in all the three sub periods, there was an increase in area and yield, though rate of increase in yield levels had significantly moderated in latter periods. Yield levels significantly improved for cotton, pulses and coarse cereals during
Box 8.1 : Sugar sector Reforms in India
India is the largest consumer and second largest producer of sugar after Brazil. Sugar and Sugarcane are notified as essential commodities under the Essential Commodities Act 1955. The production of sugarcane during 2012-13 is estimated at 334.54 million tonnes. However the Indian sugar sector suffers from policy inconsistency and unpredictability. The Sugar industry in India is over-regulated and prone to cyclicality due to price interventions. Deregulation of the sugar industry has been widely debated for a long time. From a purely economic point of view, greater play of market forces would provide better prices and serve the interests of all stakeholders. The government should come into the picture only in situations where absolutely necessary. Export bans and controls could be replaced with small variable external tariffs to stabilize prices.
A report on 'Regulation of the Sugar Sector in India: The way forward' has been submitted by the Committee under the chairmanship of Dr C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister. The ways forward suggested include: a) phasing out cane reservation area; b) dispensing with minimum distance criteria; c) dispensing with the levy sugar system; states that want to provide sugar under the PDS may procure it from the market according to their requirement, fix the issue price and subsidize from their own budgets. Currently, there is an implicit cross-subsidy on account of the levy as sugar mills are under a transition, some level of central support to help states meet the cost to be incurred on this account may be provided for a transitory period; d) dispensing with the regulated release mechanism (of non-levy) sugar; e) stable trade policy; no quantitative or movement restrictions on byproducts like molasses and ethanol and dispensing with compulsory jute packing. A stable, predictable, and consistent policy reforms have to be brought about in a fiscally neutral manner and issues considered for implementation in a phased manner.
Box 8.2 : Edible Oil Economy
India is one of the largest producers of oilseeds in the world. However, 50 per cent of its domestic requirements are met through imports, out of which crude palm oil and RBD palmolein constitute about 77 per cent and soyabean oil constitutes about 12 per cent. Import dependence was about 3 per cent during 1992-3. The production of oilseeds, though it has increased in recent years (from 184.40 lakh tons in 2000-1 to 297.99 lakh tons in 2011-12), has not kept pace with the demand for edible oils in India. Imports have helped raise the per capita availability of edible oils which has increased from 5.8 kg in 1992-3 increased to 14.5kg in 2010-11.
One instrument for promoting future domestic production is calibration of the import duty structure. Large imports of edible oils are primarily due to competitive prices of edible oils in the international market and the import duty structure which has been sharply reduced to near zero levels over time to protect consumers. India has a market share that allows it to set some independent tariff policy that can meet both goals better. Considering the situation, it is time to frame a price band for edible oils in a manner that harmonizes the interests of domestic farmers, processors, and consumers through imposition of import duty at an appropriate rate. The import duty would also generate revenue, which could also be utilized for an oilseeds development programme. Recently the tariff value of all edible oils which had remained unchanged since 2006 was updated to market levels. This is a right step for aligning the tariffs to current prices for edible oils in the international market. By freezing the tariff value, imports had become more attractive than domestic refining. Over time, domestic oil palm production may also gain.
India is also fortunate in having a wide range of oilseed crops grown in its different agro-climatic zones, including highvalue premium crops. Recently export of edible oils in branded consumer packs upto 5 kg has been allowed without any quantitative limit having minimum export price (MEP) of US $ 1500 per ton in order to encourage export of high value premium edible oils. Farmers respond to prices. The aim of policy is to consistently enhance their competitiveness.
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2000-2012. Cotton and pulses have become two 'star' performers, with Bt cotton and the pulses intensification programme being important reasons; oilseeds such as mustard and ground nuts too are responding reasonably well to better prices, as is the case in sugarcane (Boxes 8.1 and 8.2).
AGRICULTURAL INPUTS 8.10 Improvement in yield, which is the key to the long-term growth, depends on efficient use of quality seeds, fertilizers, pesticides, micronutrients, and irrigation. Each of these plays a role in determining yield level and in turn augmentation in level of production.
Seeds 8.11 Seeds are a critical input for agricultural crops. Farmers typically rely on farm-saved seeds, over use of which leads to a low seed replacement rate and poor yield. An Indian Seed Programme for encouraging the development of new varieties and protecting the rights of farmers and plant breeders has been put in place with the participation of central and state governments, the Indian Council of Agricultural Research (ICAR), state agricultural universities, seed cooperatives, and private sectors. A central-sector Scheme for Development and Strengthening of Infrastructure Facilities for Production and Distribution of Quality Seeds with the aim of making quality seeds of various crops available to farmers at affordable price is under implementation since 2005-6. As a result of this initiative, availability of certified quality seeds has increased from 140.5 lakh quintals in 2005-6 to 328.6 lakh quintals in 2012-13; 426 seed-processing plants have been sanctioned and an amount of Rs 37.24 crore released to small entrepreneurs for creation of 85.89 lakh quintal seed-processing capacity and 30.30 lakh quintal storage capacity; and seedprocessing capacity of 4.7 lakh quintals and seed storage capacity of 2.4 lakh quintals has been created in the public sector during 2011-12 (up to 31.10.2012). For achieving timely availability of seeds at affordable price to farmers in hilly/remote areas of north-eastern states, a Transport Subsidy on Movement of Seeds scheme is in operation whereby grants-in-aid of ` 12.6 crore was reimbursed to various implementing agencies for movement of 9.7 lakh quintals of seeds during the Eleventh Five Year Plan. A Sub-Mission on Seed and Planting Material under the National Mission for Agricultural Extension http://indiabudget.nic.in
and Technology with an allocation of ` 2088 crore is under consideration for the Twelfth Five Year Plan.
Mechanization and Technology 8.12 Tractors are the main power source for various farm operations and India is the world leader in tractor production with over 5 lakh tractors produced annually. Studies reveal that adoption of appropriate mechanization of farm operations can increase production and farm productivity by 10-15 per cent, cropping intensity by 5-20 per cent and effect savings in seeds (up to 15-20 per cent), fertilizer and chemicals (up to 15-20 per cent), and time and labour( up to 20-30 per cent). Progress in farm mechanisation at present is hindered by the low and erratic availability of farm power and shrinking holding sizes. Average farm power availability for the cultivated areas of the country has increased from 0.48 kW/ha in 1975-76 to 1.73 kW/ha at present and is likely to rise to 2.0 kW/ha by 2015. Shrinking landholding size with majority of the farmers being small and marginal is also making individual ownership of agricultural machinery progressively uneconomical. This requires steps for the setting up of custom-hiring centres/high-tech machinery banks so that small and marginal farmers can reap the benefits of farm mechanization. The government has initiated a Sub-Mission on Agriculture Mechanization in the Twelfth Five year Plan, with a focus on custom hiring.
Integrated Nutrient Management 8.13 India meets 80 per cent of its urea requirement through indigenous production but is largely import dependent for meeting its requirements of the potassic (K) and phosphatic (P) fertilizer requirements. The consumption of fertilizers in nutrient terms has shown improvement, indicating that the policies for increasing availability and consumption of fertilizers at affordable prices in the country have been successful (Table 8.5). However over-use of nitrogenous and limited use of P and K fertilizers are matters of great concern and need appropriate price incentives by reducing fertilizer subsidies so that sustainable practices are encouraged.
Policy Initiatives for Fertilizers 8.14 The government has notified the New Investment Policy 2012 (NIP-2012) in the urea sector which will encourage investments leading to increase in indigenous capacities, reduction in import
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Table 8.5 : Production and Consumption of Fertilizers (in lakh tonnes) 2007-8
2008-9
2009-10
2010-11
2011-12
2012-13*
Production of urea, DAP and compex fertilizers Urea
198.60
199.20
211.12
218.80
219.84
223.87
DAP
42.12
29.93
42.46
35.37
39.63
37.10
Complex fertilizers
58.50
68.48
80.38
87.27
77.70
79.47
Consumption of fertilizers in nutrient terms Nitrogenous (N)
144.19
150.90
155.80
165.58
173.00
Phosphatic (P)
55.15
65.06
72.74
80.50
79.14
Potassic (K)
26.36
33.13
36.32
35.14
25.25
Total (N+P+K)
225.70
249.09
264.86
281.22
277.39
Per ha consumption (kg)
116.50
127.20
135.76
144.14
141.30
Source : Department of Fertilizers. * Estimated.
dependence and savings in subsidy due to import substitution at prices below import parity price (IPP). It is expected that fresh investment will come for expansion, revival, and setting up of brownfield and greenfield projects. Adequate provisions are made in NIP-2012 to ensure the long-term availability of gas required for expansion and greenfield/brownfield projects. In the event of increase in gas prices or fall in IPP, provisions are made in the policy to protect the interest of investors. It has been decided to implement direct cash transfer to the farmers in a phased manner, which would help target small, marginal, and other farmers and bring more transparency in subsidy disbursement. Eleven districts have been identified for piloting this across 10 states.
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8.15 Under the Nutrient Based Subsidy (NBS) scheme for phosphatic and potassic (P&K) fertilizers implemented in 2010, a fixed amount of subsidy, decided on annual basis, is provided to each grade of P&K fertilizer, depending upon its nutrient content. An additional subsidy is also provided to secondary and micro-nutrients. Under this scheme, manufacturers/marketers are allowed to fix the maximum retail price (MRP). Presently (as in November 2012), farmers pay only 58 to 73 per cent of the delivered cost of P&K fertilizers; the rest is borne by the Government of India in the form of subsidy. However, the government continues to share a substantial burden in the form of fertilizer subsidy (Figure 8.2).
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Irrigation 8.16 India has made considerable progress in developing irrigation infrastructure. However irrigation efficiency is low for both surface and ground waters. In order to help the rainfed farmers improve productivity and profitability, in situ soil and water conservation practices are developed for different agro-climatic regions with special emphasis on effective rainwater management along with a suite of location-specific technologies. Substantial irrigation potential has been created through major and medium irrigation schemes. The central government initiated the Accelerated Irrigation Benefit Programme (AIBP) in 1996-7 for extending assistance for the completion of incomplete irrigation schemes. Under the AIBP, ` 55416 crore of central loan assistance (CLA)/grant has been released up to 31 December 2012. An irrigation potential of 7622.5 thousand ha is reported to have been created by states, from major / medium /minor irrigation projects under the AIBP till March 2011. The Command Area Development Programme has also been amalgamated with the AIBP to reduce the gap between irrigation potential that has created and that is utilized.
Agriculture Research and Education 8.17 Agriculture research has played a vital role in agricultural transformation. Indian Council of Agricultural Research (ICAR) Institutes undertake basic, strategic, and applied research, focusing particularly on problems of rainfed agriculture, while State Agricultural Universities (SAUs) concentrate on generating required manpower and on applied and adaptive research to address local problems. Publicsector agricultural R&D spending to agricultural GDP in India remained in the range of 0.50 to 0.59 per cent in the last decade, needing to be enhanced considerably. The ICAR in partnership with SAUs has developed a number of technologies that are being used by farmers on a large scale. These includes 9838 tonnes of breeder seed, 13,228 tonnes of foundation seed, 20,541 tonnes of certified seed, 14,860 tonnes of truthfully labelled seed, about 40,000 tissue culture plantlets of field crops and three new improved varieties of sugarcane during 2011-12.
PRICE POLICY FOR AGRICULTURAL PRODUCE 8.18 The government's price policy for agricultural produce seeks to ensure remunerative prices to http://indiabudget.nic.in
growers for their produce with a view to encourage higher investment and production as well as safeguarding the interests of consumers by making available supplies at reasonable prices. The price policy also seeks to evolve a balanced and integrated price structure in the perspective of the overall needs of the economy. To achieve this end, the government in each season announces Minimum Support Prices (MSPs) for major agricultural commodities and organizes purchase operations, wherever required, through public, cooperative, and other designated agencies to ensure that prices do not fall below that level. It decides on the support prices for various agricultural commodities taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP), the views of state governments and central ministries as well as such other relevant factors as are considered important for fixation of support prices. 8.19 MSP is announced well ahead of the sowing season so that farmers can take informed decisions on cropping. Taking into account the relevant factors especially for encouraging farmers that these are remunerative, the government fixed the MSPs for kharif crops of the 2012-13 season and rabi crops of 2012-13 season to be marketed in 2013-14. The substantial price increases in many crops are a noticeable feature (Table 8.6) especially at a time when the global food prices were also on a rising trend (Figures 8.3 and 8.4). This puts in substantial fiscal stress on the government, discussed in detail later in the Food Management section of this chapter. 8.20 Further, the Government of India has centrally designated agencies to undertake Price Support Scheme (PSS) operations. The losses, if any, incurred by the central agencies for undertaking PSS operations are fully reimbursed by the central government. The government also implements a Market Intervention Scheme (MIS) on the request of states/union territories (UTs) for horticultural and agricultural commodities, generally perishable in nature and that are not covered under the PSS. States/UTs bear 50 per cent of the loss (25 per cent in the case of north-eastern states), if any, incurred on its implementation. However the loss is restricted up to 25 per cent of total procurement value. Profit earned, if any, in implementing the MIS is retained by the procuring agencies. A few procurement operations were made by NAFED in 2011-12 in gram and urad in Rajasthan and milling copra in the Andaman & Nicobar islands and MIS was
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Table 8.6 : MSPs (` per quintal) 2009-10
2010-11
2011-12
2012-13
Difference between 2012-13 and 2011-12 Prices
Paddy (Common)
1000
1000
1080
1250
170
Paddy (Gr.A)
1030
1030
1110
1280
170
Kharif Crops
Jowar (Hybrid)
840
880
980
1500
520
Jowar (Maldandi)
860
900
1000
1520
520
Bajra
840
880
980
1175
195
Maize
840
880
980
1175
195
Ragi
915
965
1050
1500
450
Arhar (Tur)
2300
3500
3700
3850
150
Moong
2760
3670
4000
4400
400
Urad
2520
3400
3800
4300
500
Groundnut in shell
2100
2300
2700
3700
1000
Sunflower
2215
2350
2800
3700
900
Soyabean (black)
1350
1400
1650
2200
550
Soyabean(Yellow)
1390
1440
1690
2240
550
Sesamum
2850
2900
3400
4200
800
Nigerseed
2405
2450
2900
3500
600
1100
1170
1285
1350
65
Rabi Crops Wheat Barley
750
780
980
980
0
Gram
1760
2100
2800
3000
200
Masur(lentil)
1870
2250
2800
2900
100
Rapeseed/mustard
1830
1850
2500
3000
500
Safflower
1680
1800
2500
2800
300
Source : Department of Agriculture and Cooperation. Note : inclusive of bonus wherever applicable.
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implemented in arecanut, onion, and turmeric in Karnataka; apple in Himachal Pradesh; and potato in Uttar Pradesh.
MAJOR SCHEMES / PROGRAMMES FOR THE AGRICULTURAL SECTOR 8.21 Agriculture being a state subject, primary responsibility for increasing agriculture production, enhancing productivity and exploring the untapped potential of the sector rests with the states. The central government supplements the efforts of state governments through centrally sponsored and central-sector schemes.
National Food Security Mission 8.22 To enhance the production of rice, wheat, and pulses by 10, 8, and 2 million tonnes respectively by the end of the Eleventh Plan through area expansion and productivity enhancement; restoring soil fertility and productivity; creating employment opportunities; and enhancing farm-level economy to restore the confidence of farmers of targeted districts, a centrally sponsored National Food Security Mission (NFSM) was launched in 2007-8 with three major components, viz. NFSM-Rice, NFSM-Wheat, and NFSM-Pulses. During the Eleventh Five Year Plan, NFSM-Rice was implemented in 144 districts of 16 states, NFSM-Wheat in 142 districts of 9 states and NFSM-Pulses in 468 districts of 16 states. In 201213, six north-eastern states, viz. Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, and Sikkim were included under NFSM-Rice and the hill states of Himachal Pradesh, and Uttarakhand under NFSMRice and Wheat and J & K under NFSM- wheat.
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Specifically, during 2012-13 a Special Plan to achieve 19+ million tonnes of pulses production during kharif 2012 was launched with a total allocation of `153.5 crore comprising `107.3 crore for activities to be undertaken under the NFSM and `46.2 crore for activities to be undertaken under the Micro Irrigation Scheme. During 2012-13, ` 87.0 crore has been allocated for additional area coverage of pulses during rabi/summer 2012-13.
Rashtriya Krishi Vikas Yojana 8.23 The Rashtriya Krishi Vikas Yojana (RKVY) was launched in 2007-8 with an outlay of ` 25,000 crore in the Eleventh Plan for incentivizing states to enhance public investment. States were provided ` 22,408.79 crore under the RKVY during Eleventh Five Year Plan. The RKVY format permits taking up national priorities as sub-schemes, allowing the states flexibility in project selection and implementation. Allocation under the RKVY for 2012-13 is ` 9217 crore. The RKVY links 50 per cent of central assistance to those states that have stepped up the percentage of state plan expenditure on the agriculture and allied sector. A total of 5768 projects were taken up by states in the Eleventh Plan of which 3343 had been completed till December end 2012.
National Mission for Sustainable Agriculture 8.24 Climate change poses a major challenge to agricultural production and productivity. The National Mission for Sustainable Agriculture (NMSA), under the aegis of the National Action Plan on Climate Change (NAPCC), seeks to address issues related
Agriculture and Food Management to 'Sustainable Agriculture' in the context of risks associated with climate change. It hopes to achieve its objectives by devising appropriate adaptation and mitigation strategies for ensuring food security, enhancing livelihood opportunities, and contributing to economic stability at national level. The NMSA has already been accorded 'in-principle' approval by Prime Minister's Council on Climate Change . During the Twelfth Five year Plan, climate change adaptation and mitigation strategies will be operationalized by restructuring the existing programmes.
Bringing Green Revolution to Eastern India 8.25 Bringing Green Revolution to Eastern India, initiated in 2010-11, intends to address the constraints limiting the productivity of 'rice based cropping systems' in eastern India comprising seven states, viz. Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern Uttar Pradesh, and West Bengal. ` 400 crore each was allocated for the programme during 2010-11 and 2011-12 and of `1000 crore during 2012-13.
Rainfed Area Development Programme 8.26 Given the importance of rainfed agriculture in India, the Rainfed Area Development Programme (RADP) was launched by the government as a pilot scheme under the RKVY focusing on small and marginal farmers and farming systems. It adopted a holistic 'end-to-end approach' covering integrated farming, on-farm water management, storagemarketing, and value addition of farm produce in order to enhance farmers' income in rainfed areas. During 2012-13, the RADP is being implemented in 22 states and will be substantially upscaled during the Twelfth Plan as a programme component under the NMSA.
Macro Management of Agriculture 8.27 The Macro Management of Agriculture (MMA) scheme, revised in 2008, has formula-based allocation criteria and provides assistance to states/ UTs as 100 per cent grant. Out of the total outlay of ` 5500 crore for the Eleventh Five Year Plan, funds to the tune of ` 4625.24 crore have been utilized/ released to states/ UTs. Of an outlay of Rs 900 crore approved for 2012-13, ` 680.51 crore had been released till date. http://indiabudget.nic.in
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Integrated Scheme of Oilseeds, Pulses, Oil Palm, and Maize 8.28 The Integrated Scheme of Oilseeds, Pulses, Oil Palm, and Maize (ISOPOM) provides flexibility to states in implementation based on a regionally differentiated approach for promoting crop diversification and providing a focus to the programme. Under the Scheme, assistance is provided for purchase of breeder seed, production of foundation seed, production and distribution of certified seed, distribution of seed minikits, distribution of plant protection chemicals, plant protection equipments and weedicides, supply of rhizobium culture/phosphate solubilizing bacteria, supply of improved farm implements, distribution of gypsum/pyrite/liming/dolomite, distribution of sprinkler sets and water-carrying pipes, and publicity for encouraging farmers to grow oilseeds and maize.
National Horticulture Mission 8.29 The National Horticulture Mission (NHM) covered 18 states and three UTs during the Eleventh Plan. The scheme aims at the holistic development of the horticulture sector by ensuring forward and backward linkages through adopting a cluster approach with the active participation of all stakeholders. During the Eleventh Plan period 16.7 lakh ha of land was brought under horticulture / highvalue horticulture crops. 8.30 In order to harness production gains by reducing post harvest losses and creating value addition and better delivery mechanism to consumers through a cold chain system, a National Centre for Cold-Chain Development (NCCD) has been set up. Setting up of the NCCD is expected to provide the necessary boost for adding capacity and creating a cold chain network in the country. Over the years, the availability of horticultural produce has improved significantly (Table 8.7).
Agricultural Credit 8.31 Timely availability of agricultural credit at reasonable rate, especially for small and marginal farmers is crucial for agricultural-sector growth. Government has taken several measures for improving the flow of agricultural credit: (i) The flow of agricultural credit since 2003-4 has consistently exceeded the target. The target of agriculture credit flow for the year 2012-13 was fixed at ` 5,75,000 crore, against which achievement as of September 2012 was ` 2,39,629 crore.
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Table 8.7 : Per Capita Availability and Production of Fruits and Vegetables Per capita availability (gram / per person / day)
Production of fruits & vegetables (million tonnes)
Fruit
Vegetables
Total
Fruit
Vegetables
Total
2001-02
114
236
350
43
89
132
2007-08
158
309
467
66
128
194
2008-09
163
306
469
68
129
197
2009-10
167
313
480
71
134
205
2010-11
170
332
502
75
147
222
2011-12
172
350
522
76
156
232
Source : Department of Agriculture and Cooperation.
(ii) Farmers have been receiving crop loans up to a principal amount of ` 3 lakh at 7 per cent rate of interest since 2006-7. The effective rate of interest for farmers who promptly repay their crop loans during 2012-13 will be 4 per cent per annum. (iii) The Kisan Credit Card (KCC) scheme has been effective for extending agriculture credit. A revised KCC scheme was introduced in March 2012 in which the KCC passbook has been replaced by an ATM-cum-debit card to all eligible and willing farmers in a time-bound manner. The number of operative KCCs issued by cooperative and regional rural banks as on 31 August 2012 was 4.07 crore. The number of cumulative KCCs issued by commercial banks as on 31 March 2012 was 5.47 crore. (iv) Farmers were granted post-harvest loans against negotiable warehouse receipts at commercial rates. In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against warehouse receipts, the benefit of interest subvention has been extended to small and marginal farmers having KCCs for a further period of up to six months post-harvest on the same rate as crop loans. (v) The government is implementing a revival package for Short-term Rural Cooperative Credit Structure involving a financial outlay of ` 13,596 crore. Twenty-five state governments have signed memorandums of understanding (MoU) with the GoI and the National Bank for Agriculture and Rural Development (NABARD). As of July 2012, ` 9002.11 crore had been released by NABARD as the GoI share for recapitalization of 53,202 primary agriculture cooperative societies (PACS) in seventeen states. http://indiabudget.nic.in
Major crop insurance schemes 8.32 Indian agriculture faces risks from many factors ranging from weather changes, and natural disasters to uncertainties in output prices. Hence risk management and risk mitigation are of utmost importance. The government administers a number of crop insurance schemes.
National Agricultural Insurance Scheme 8.33 The Agriculture Insurance Company of India Ltd. implements the National Agricultural Insurance Scheme (NAIS). At present the scheme is being implemented by 24 states and two UTs. Since inception, claims of about ` 24,246 crore have been paid against premium income of about ` 7580 crore benefiting about 511 lakh farmers.
Modified NAIS 8.34 With the aim of further improving crop insurance schemes, the Modified NAIS (MNAIS) is under implementation on pilot basis in 50 districts of 16 states in the country from rabi 2010-11 season. Some of the major improvements made in the MNAIS are actuarial premium with subsidy in premium at different rates, all claims liability to be on the insurer, unit area of insurance reduced to village panchayat level for major crops, indemnity for prevented/sowing/ planting risk and for post-harvest losses due to cyclone, on account payment up to 25 per cent advance of likely claims as immediate relief, more proficient basis for calculation of threshold yield, and allowing private-sector insurers with adequate infrastructure. During 2011-12, about 11.80 lakh farmers with an area of about 13.48 lakh ha have been covered, insuring a sum amounting to ` 3195 crore.
Agriculture and Food Management
Pilot Weather Based Crop Insurance Scheme 8.35 The Pilot Weather Based Crop Insurance Scheme is intended to insure farmers against adverse weather incidence. From kharif 2007-8 to rabi 201112, 370.69 lakh farmers cultivating an area of about 520.86 lakh ha with sum insured of about ` 64,905 crore have been covered under the scheme. Claims of about ` 3208 crore have been paid against premium of about ` 5791 crore. The fund requirements as estimated by the implementing agency for these schemes for the year 2012-13 are ` 2200 crore.
AGRICULTURAL MARKETING 8.36 Organized marketing of agricultural commodities has been promoted in the country through a network of regulated markets to ensure reasonable gains to farmers and consumers by creating a market environment conducive for fair play of supply and demand. In order to bring about reforms in the sector, a model Agricultural Produce Marketing (Development and Regulation) (APMC) Act was prepared in 2003. Though the process of market reforms has been initiated by different state governments through amendments in the present APMC Act on the lines of Model Act, many of the states are yet to adopt the Model Act uniformly. It is therefore necessary to complete the process of market reforms early in order to provide farmers an alternative competitive marketing channel for transaction of their agricultural produce at remunerative prices. Development of an agricultural marketing infrastructure is the foremost requirement for the growth of a comprehensive and integrated agricultural marketing system in the country. For the purpose, the Ministry of Agriculture is implementing demand-driven Plan schemes by providing assistance to entrepreneurs in the form of back-ended credit-linked subsidy, viz. the Grameen Bhandaran Yojana and Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization.
Extension Services 8.37 The State Extension Programmes for Extension Reforms scheme was launched in 2005-6, aiming at making the extension system farmer driven and farmer accountable by providing new institutional arrangements for technology dissemination. This has been done through the setting up of Agricultural Technology Management Agencies (ATMA) at district http://indiabudget.nic.in
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(614 rural districts in 28 states and 3 UTs) level to operationalize the extension reforms. The ATMAs have active participation of farmers/farmer groups, non-governmental organizations (NGOs), and other stakeholders operating at district level and below. Gender concerns are being mainstreamed by mandating that 30 per cent of resources on programmes and activities are utilized by women farmers and women extension functionaries. Since inception, 2.19 crore farmers, of whom 25 per cent are women farmers, have benefited under various extension activities. Restructuring of all extension and IT-related schemes of the department and putting them under one mission scheme namely the National Mission on Agriculture Extension (NMAE) during the Twelfth Plan has been proposed.
ANIMAL HUSBANDARY, DAIRYING, AND FISHERIES 8.38 The livestock sector achieved an average growth rate of 4.8 per cent during the Eleventh Five Year Plan. In 2011-12, the production of milk was estimated at 127.9 million tonnes, eggs at 66.45 billion numbers , wool at 44.73 million kg, and meat at 5.51 million tonnes . The Livestock Census (2007) has placed total livestock population at 529.7 million and poultry birds at 648.8 million.
Dairy Sector 8.39 India ranks first in the world in milk production, which has gone up from 53.9 million tonnes in 19901 to 127.9 million tonnes in 2011-12. The per capita availability of milk has also increased from 176 grams per day in 1990-1 to 290 grams per day in 2011-12. This is comparable with the world per capita availability of milk at 289.31 grams per day for 2011. 8.40 This represents sustained growth in the availability of milk and milk products for the growing population of the country, apart from being an important secondary source of income for rural families (Figure 8. 5). 8.41 The Intensive Dairy Development Programme, Strengthening Infrastructure for Quality and Clean Milk Production, Assistance to Cooperatives, and Dairy Entrepreneurship Development Scheme are some of GoI's important schemes/programmes for meeting the growing demand for milk. The National Project for Cattle and Buffalo Breeding has been under implementation since 2000. A new scheme called the National Dairy Plan Phase I has been
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Economic Survey 2012-13
launched in March 2012 with the objectives of improving productivity of milch animals, strengthening and expanding village-level infrastructure for milk procurement, and providing producers greater access to the market in the dairy sector.
Poultry 8.42 The poultry sector encompasses a range of farming systems from highly industrialized and export oriented at one end to the backyard, small, and marginal model addressing livelihood issues at the other end. Per capita availability of eggs was around 55 per year in 2011-12. In order to encourage entrepreneurship skills of individuals, a central-sector Poultry Venture Capital Fund scheme is being implemented in capital subsidy mode since 1 April 2011, covering various poultry activities.
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Feed and Fodder 8.43 Adequate availability of feed and fodder for livestock is vital for increasing milk production and sustaining the ongoing genetic improvement programme. Green fodder shortage in the country is estimated at about 34 per cent. The central government has put in place a modified Centrally Sponsored Fodder and Feed Development Scheme since 2010 to supplement the efforts of states to improve fodder production. Besides, the Accelerated Fodder Development Programme was launched as a component of the RKVY in 2011-12 to promote production of fodder.
Fisheries 8.44 Fish is an important source of protein and also an important source of livelihood. Production of
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Table 8.8 : Procurement and Offtake of Wheat and Rice (million tonnes) 2008-09
2009-10
2010-11
2011-12
2012-13
Procurement Rice
34.1
32.0
34.2
35.0
23.0 *
Wheat
22.7
25.4
22.5
28.3
38.1
Total
56.8
57.4
56.7
63.3
52.8
Rice
24.62
27.37
29.93
32.12
24.02 **
Wheat
14.87
22.34
23.07
24.26
23.13 **
Total
39.49
49.71
53.00
56.38
47.16**
Offtake
Source : Department of Food and Pubic Distribution. Note : Figures of procurement of wheat and rice are marketing season wise. * As on 07.02.2013 ** 2012-13 (upto December, 2012)
fish, both marine and inland, has gone up from 5.6 million tonnes in 2000-1 to 8.7 million tonnes in 201112 (provisional). The exports of marine products have increased significantly as evident from Figure 8.6.
FOOD MANAGEMENT 8.45 The main objectives of food management are procurement of foodgrains from farmers at remunerative prices, distribution of foodgrains to consumers, particularly the vulnerable sections of society, at affordable prices, and maintenance of food buffers for food security and price stability. The instruments used are MSP and central issue price (CIP). The nodal agency for procurement, distribution, and storage of foodgrains is the Food Corporation of India (FCI). Procurement at MSP is open-ended, while distribution is governed by the scale of allocation and its offtake by beneficiaries. The offtake of foodgrains is primarily under the targeted public distribution system (TPDS) and other welfare schemes of the GoI.
Procurement and Offtake of Foodgrains 8.46 Due to good production of foodgrains in recent years and remunerative MSPs, along with various other steps taken by the government, the procurement of wheat and rice has steadily risen and reached record levels (Table 8.8). Besides Punjab and Haryana, contribution from States such as Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh in procurement of wheat was much higher compared to last season. In procurement of rice, non-traditional States like Bihar, Chhatsigarh, Uttar Pradesh and West Bengal showed significant increase over last year. http://indiabudget.nic.in
Decentralized Procurement Scheme 8.47 A number of states have opted for implementation of the Decentralized Procurement Scheme (DCP) introduced in 1997, under which foodgrains are procured and distributed by state governments themselves. Under this scheme, the designated states procure, store, and issue foodgrains under the TPDS and welfare schemes of the GoI. The difference between the economic cost fixed for the state and the CIP is passed on to the state government as subsidy. The decentralized system of procurement has the objectives of covering more farmers under MSP operations, improving efficiency of the PDS, providing foodgrains varieties suited to local tastes, and reducing transportation costs.
Economic Cost of Foodgrains to the FCI 8.48 The economic cost of foodgrains consists of the MSP (and bonus if applicable) as the price paid to farmers, procurement incidentals, and the cost of distribution. The economic cost for both wheat and rice has witnessed significant increase during the last few years thanks to increase in MSPs and procurement incidentals (Figure 8.7).
Food Subsidy 8.49 Provision of minimum nutritional support to the poor through subsidized foodgrains and ensuring price stability are the objectives of the food security system. In fulfilling its obligation towards distributive justice, the government incurs food subsidy. While the economic cost of wheat and rice has continuously
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Economic Survey 2012-13
gone up, the issue price has been kept unchanged since 1 July 2002. The government therefore continues to provide large and growing amounts of subsidy on foodgrains for distribution under the TPDS, other nutrition-based welfare schemes, and open market operations. The food subsidy bill is substantial, putting huge stress on the fiscal side (Figure 8.8).
following allocations have so far been made (upto 6-2-2013):
Normal TPDS allocation made is 499.42 lakh tonnes covering AAY, BPL, and APL families.
Additional allocations of 78.98 lakh tonnes of rice and wheat have also so far been made. These include (i) 50 lakh tonnes to BPL families made in July 2012, (ii) 21.21 lakh tonnes to poorest districts and (iii) 7.77 lakh tonnes of rice and wheat for festivals, calamity relief, etc.
49.26 lakh tonnes of rice and wheat has been allocated for other welfare schemes such as the Mid-day Meal Scheme, Wheat Based Nutrition Programme under the Integrated Child Development Service, and Annapurna.
Allocation of Foodgrains under the TPDS and Other Welfare Schemes 8.50 Allocations for Antyodaya Anna Yojana (AAY) and below poverty line (BPL) families are being made at 35 kg per family per month. For above poverty line (APL) families, allocation varies from 15 kg to 35 kg in different states. During 2012-13, the
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Agriculture and Food Management ď Ź
Total release of foodgrains during the current year so far has been 627.67 lakh tonnes.
Open Market Sale Scheme (Domestic) 8.51 The FCI on behalf of the GoI has been undertaking sale of wheat and rice at predetermined prices/reserve prices in the open market from time to time to enhance market supply of foodgrains to have a moderating influence on open market prices and to offload surplus stocks. Under the Open Market Sale Scheme (Domestic) (OMSS[D]), 95 lakh tonnes of wheat has been allocated for tender sale to bulk consumers and sale to small private traders since July 2012 for the period up to February 2013. Under the OMSS retail scheme, 5 lakh tonnes of wheat and 5 lakh tonnes of rice have been allocated for sale to states/UTs/cooperatives for the period up to March 2013.
Storage Capacity in the Country
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its position in agricultural and food exports to 10th globally. Exports of agriculture and allied products during 2011-12 accounted for 9.08 per cent of India's total exports against 6.9 per cent during 2010-11. In recent years, the policy impetus by the government has provided much required stability to agri exports. Given sufficient stocks of foodgrains in the central pool, the government has allowed exports of 4.5million tonnes of wheat from the central pool stock of the FCI through central public-sector undertakings and placed export of wheat and rice under open general licence (OGL). Permission to export wheat products up to 6.50 lakh tonnes through customs Electronic Data Interchange ports on private account has also been extended up to 31 March 2013. Though these measures are in the right direction, a consistent long-term trade policy with tariff in a narrow band may be required for India to acquire international presence in commodities wherein it has comparative advantage.
8.52 Storage capacity including both covered and cover and plinth (CAP), available with state agencies for storage of central stock foodgrains, has increased from 291.32 lakh tonnes as on 31 March 2012 to 341.35 lakh tonnes as on 31 December 2012. However, to meet the requirement of all-time high stock levels of 823.17 lakh tonnes achieved this year, the FCI resorted to short-term hiring to efficiently manage the stocks. In order to incentivizing the creation of storage capacity in the country, the government initiated the Private Entrepreneurs Guarantee (PEG) Scheme that aims to construct storage godowns through private entrepreneurs, the Central Warehousing Corporation (CWC), and State Warehousing Corporations (SWC). Under the PEG Scheme, the FCI guarantees 10-year usage of storage capacities to private investors and nine years to the CWC and SWCs. Construction of godowns in 19 states with a total capacity of 197 lakh tonnes has been approved out of which a capacity of 132.73 lakh tonnes has been sanctioned for construction. These measures are expected to address the shortage of covered godown space to a great extent.
The National Food Security Bill
Agricultural Exports
COMMODITY FUTURES MARKET
8.53 As per World Trade Organization (WTO) International Trade Statistics, 2012 (based on trade in 2011), global export and import of agricultural and food products is US$ 1.66 trillion and US$ 1.82 trillion respectively. India's share in this is 2.07 per cent and 1.24 per cent respectively. India has improved
8.55 The commodity futures market facilitates the price discovery process and provides a platform for price-risk management in commodities. Currently 113 commodities are notified for futures trading of which 51 are actively traded in five national and 16 regional commodity-specific exchanges. The year
http://indiabudget.nic.in
8.54 In order to address the issue of food security in a comprehensive manner, the Government introduced National Food Security Bill in the Lok Sabha on 22 December, 2011. The Bill, inter alia, envisages coverage of 75% of the rural and 50% of the urban population for subsidised foodgrains under the Targeted Public Distribution System, besides provisions for nutritional support to women and children. After its introduction, the Bill was referred to the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution for examination. The Committee held wide ranging consultations with Central Ministries/Departments, various other organizations and individuals and also visited States/UTs to obtain their views/suggestions on the Bill. The Standing Committee has submitted its report to the Speaker, Lok Sabha on 17th January, 2013, which is being processed in consultation with concerned Central Ministries/Departments and States/UTs. The Government is committed to early enactment of this historic legislation.
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Table 8.9 : Trade in Commodity Futures Market (Volume of trading in lakh tonnes, value ` in crore) Commodity
2011-11
2011-12
2012-13 (Up to 30-11-12)
Volume
Value
Volume
Value
Volume
Value
Agricultural commodities
4168 (32.6)
1456390 (12.2)
4942 (35.24)
2196150 (12.12)
3113 (30.77)
1536268 (13.21)
Bullion
7.38 (0.05) 1410 (11.0) 7220 (56.4)
5493892 (46.0) 2687673 (22.5) 2310959 (19.3) 29.04
10.27 (0.07) 1388 (9.9) 7686 (54.8)
10181957 (56.17) 2896721 (15.98) 2851270 (15.73) 6.45
5.02 (0.05) 1046 (10.33) 5954 (58.85)
5363816 (46.13) 2157139 (18.55) 2569619 (22.1) 1.28
12806
11948942
14026
18126104
10119
11626842
Metals Energy Others Total
Source : Department of Consumer Affairs. Note : Volume of certified emission reduction (CER), electricity, heating oil and gasoline not included in the total volumes of other commodities. Figures in brackets are the percentage to the total volume and value of trade of the respective group.
2012-13 witnessed a decline in the total value of trade compared to the corresponding period of the preceding year (Table 8.9).
CHALLENGES
AND
OUTLOOK
8.56 Foodgrains production in India has shown remarkable improvement in recent years. The production of food-grains in 2011-12 was at a record high of 259.32 million tonnes. This achievement comes at a time when it is generally recognized that inadequate attention to agriculture across many parts of the world led to food shortages and steep hikes in food prices. In comparison, Indian agriculture has performed well primarily due to timely policy interventions. Nevertheless, the average annual growth rate of 3.6 per cent during the Eleventh Five Year Plan for the agriculture & allied sector fell short of the target of 4 per cent. Moreover the country faces the stiff challenge of feeding its growing population. There are a number of constraints and challenges that need to be addressed and the country will have to invest heavily in farm research, rural infrastructure, providing better access to high value markets, better credit facilities and input use, so that the farming community as a whole is motivated to produce more and the target of 4 per cent growth set for the agriculture and allied sector in the Twelfth Five Year Plan is met. 8.57 Though India is one of the leading producers in the world of many major crops like paddy, wheat, pulses, sugarcane, spices, and plantation crops, the http://indiabudget.nic.in
comparison in terms of yield levels is not creditable with it achieving a much lower rank in many of these crops. Further, studies indicate that there are wide yield gaps among various crops across the country. Agriculture production can be substantially increased if we address this yield gap by adopting technological and policy interventions. Improvement in yields holds the key for India to remain self-sufficient in foodgrains and also make a place for itself in many agricultural crops and products in the international market. 8.58 Another challenge is how to maximize agricultural income while adopting a more sustainable agricultural strategy. The concerns here are land and water degradation due to soil erosion, soil salinity, water logging, and excessive application of nutrients. There are concerns arising also from over-exploitation of water resources, especially in the Green Revolution belt. Better management practices for rehabilitation of degraded land and water resources hold the key. Measures must be taken to promote use of quality seeds, cultivation of droughtresistant varieties of crops, judicious use of available water, balanced use of fertilizers, farm mechanization to improve efficiency levels, and wider use of irrigation facilities. Expenditure on agricultural research also needs to be stepped up substantially. 8.59 Climate change and extreme weather events with greater intensity and frequency can have serious implications for our agriculture sector and create greater instability in food production and thereby farmers' livelihood. The current crop insurance
Agriculture and Food Management system also needs to be further refined in order to cater to the unavoidable climatic conditions or pest epidemics. 8.60 Declining per capita availability of foodgrains has been a major concern in India. For ensuring nutritional security, it is not only important to increase per capita availability of foodgrains but also to ensure the right amounts of food items in the food basket of the common man. A thrust on horticulture products and protein-rich items is required for enhancing per capita availability of food items as well as ensuring nutritional security. 8.61 The pace of agricultural growth in the eastern and north-eastern regions has been slower than in the rest of the country. The good prospects of production in many crops in these parts of the country should quickly be taken advantage of in the years to come. Hence a strategy for agricultural development in eastern and north-eastern India comprising multiple livelihood opportunities, sustainable agricultural development through a farming systems approach, efficient national resources management, ecoregional technology missions, and rice-based farming systems needs to be put in place. 8.62 Another critical issue is supply chain management in agricultural marketing in India. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, and excessive regulation. Many agricultural crops are perishable in nature and post-harvest handling issues and marketing problems affect the farm incomes. It is necessary that we evolve mechanisms for linking
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191
wholesale processing, logistics and retailing with farm-production activities so as to generate enhanced efficiency, better farm prices, etc. The private sector should be allowed to operate in developing these market linkages for which suitable reforms will help. Recently the government allowed foreign direct investment (FDI) in retail, which has been supported by many farmer organizations as well, and it can pave the way for investment in new technology and marketing of agricultural produce in India. 8.63 There has been substantial increase in the MSPs of various crops over the last few years. Though considered necessary for incentivizing farmers, the MSP signals the floor price for the produce. There is a huge cost involved in the process, in the form of food subsidy. Further, this policy of stocking foodgrains well above the buffer norms comes under criticism on the grounds of hoarding and creating artificial shortages in the market, thereby jacking up the prices of essential commodities. Urgent attention needs to be accorded to efficient food stocks management, timely offloading of stocks, and a stable and predictable trade policy. 8.64 Strengthening agricultural statistics with reliable and timely availability of forecasts of agricultural crops is also an immediate need as the gaps in agricultural statistics will hamper agricultural development planning and policymaking. 8.65 With these and other improvements, it should be possible to sustain the 4 percent growth target set for agriculture and allied sectors in the Twelfth Five Year Plan.
Industrial Performance
9
CHAPTER
After recovering to a growth of 9.2 per cent in 2009-10 and 2010-11, growth of value added in industrial sector, comprising manufacturing, mining, electricity and construction sectors, slowed to 3.5 per cent in 2011-12 and to 3.1 percent in the current year. The manufacturing sector, the most dominant sector within industry, also witnessed a decline in growth to 2.7 per cent in 2011-12 and 1.9 per cent in 2012-13 compared to 11.3 per cent and 9.7 per cent in 2009-10 and 2010-11, respectively. The growth in electricity sector in 2012-13 has also moderated. The growth of the mining sector in 2012-13 is estimated at 0.4 per cent, though it showed an improvement over a negative growth of 0.63 per cent recorded in 2011-12. With improved business sentiments and investor perception and a partial rebound in industrial activity in other developing countries, industrial growth is expected to improve in the next financial year.
9.2 The index of industrial production (IIP) with 2004-5 as base is the leading indicator for industrial performance in the country. Compiled on a monthly basis, the current IIP series based on 399 products/ product groups is aggregated into three broad groups of mining, manufacturing, and electricity. The IIP as an index shows both the level of production and growth. Overall industrial performance, as reflected by the IIP continued to moderate from Q1 of 2011-12 with growth turning negative in Q1 of 2012-13, before improving to 2.1 per cent in Q3 of 2012-13. The Mining sector production has contracted in the last six quarters. The contraction in the current year was largely because of decline in natural gas and crude petroleum output. Manufacturing, which is the dominant sector in industry, also witnessed deceleration in growth, as did the electricity sector (Table 9.1). There was, however, a sharp pick-up in growth in October 2012 with manufacturing growth improving to 9.8 per cent, the highest recorded since June, 2011. Growth, however, turned negative in November and December, 2012 and was placed at (-) 0.8 per cent and (-) 0.6 per cent respectively. http://indiabudget.nic.in
9.3 In terms of the use- based classification of industries, the capital goods sector sustained negative growth in the last six quarters. Growth in the consumer durable sector continued to fluctuate, turning negative in Q4 of 2011-12, 0.7 per cent in Q2 and 3.2 per cent in Q3 of 2012-13. Pickup in growth in October was generally broad based with consumer goods, capital goods, and intermediates showing improvement in performance. The growth of consumer durables 16.9 per cent was the highest in the last 20 months (Figure 9.1). 9.4 Industrial growth was volatile across all sectors in this period. The seasonally adjusted annualized rate of growth of the IIP, which had shown a nearly flat trajectory, indicates a downward momentum. This suggests that the IIP growth may perhaps remain sluggish (Figure 9.2). 9.5 The IIP also provides data for 22 sub-groups of the manufacturing sector. Cumulatively during AprilDecember 2012, four manufacturing sub groups with a weight of 14.5 per cent in the IIP recorded a growth in excess of 5 per cent. Seven sub- groups with a
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Table 9.1 : Growth Rate (per cent)
Weight 2010-
2011-
2011-12
2012-13
11
12
Q1
Q2
Q3
Q4
Q1
Q2
Q3
General
100.0
8.23
2.89
6.98
3.18
1.18
0.63
-0.28
0.41
2.13
Mining
14.16
5.23
-1.97
0.65
-4.06
-4.22
-0.37
-1.53
-0.69
-3.25
Manufacturing
75.53
8.95
3.00
7.72
3.36
1.09
0.35
-0.84
0.25
2.61
Electricity
10.32
5.55
8.16
8.26
10.54
9.57
4.53
6.40
2.83
4.40
Basic goods
45.68
5.97
5.48
7.47
7.00
4.36
3.41
3.31
2.21
2.72
8.83
14.75
-3.97
16.99
-5.84 -16.17
-6.85 -20.08
-8.06
-0.95
Intermediate goods
15.69
7.39
-0.62
1.83
-0.83
-2.90
-0.51
0.83
1.47
2.35
Consumer goods
29.81
8.56
4.37
4.46
4.77
7.72
1.05
3.93
1.40
2.48
8.46
14.16
2.60
2.71
7.87
4.91
-4.13
8.04
0.07
3.17
21.35
4.26
5.86
5.93
2.05
10.09
5.28
0.58
2.61
1.92
Capital goods
Consumer durables Consumer non-durables Source : CSO
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Economic Survey 2012-13
weight of 37.0 per cent had a positive growth and eleven sub-groups with a weight of 24.0 per cent had a negative growth, the highest negative growth of 14.6 per cent being shown by electric machinery and apparatus. Negative growth has persisted in tobacco products, office accounting and computing machinery and wood and wood products. On the positive side, however, growth in some of the labourintensive industries particularly textile has shown improvement in the last three quarters. Growth has
also turned significantly positive for leather and food products in the Q3. Growth, as with the broad groups of the IIP, has varied across manufacturing subgroups and over time (Table 9.2). 9.6 Momentum of the IIP manufacturing more or less mirrors the path of overall IIP. The seasonally adjusted annualised series indicates a downward trajectory till recently, and a slow pick up (Figure 9.3).
Table 9.2 : Manufacturing Growth Rate (in per cent) Weight 2010- 201111 12 Full Year
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
-0.9
0.9
6.7
-5.9 -11.1
-4.2
Food products and beverages
7.28
7.0
15.4
17.4
12.3
22.1
11.0
Tobacco products
1.57
2.0
5.4
4.1
-5.0
16.7
7.2
Textiles
6.16
6.7
-1.3
-2.3
-0.3
-4.7
1.8
9.0
Wearing apparel
2.78
3.7
-8.5
-4.9
-9.4
0.0 -18.2
Luggage, handbags, saddlery, harness & footwear
0.58
8.1
3.7
5.4
7.7
0.2
1.7
Wood and products of wood
1.05
-2.2
1.8
-8.1
1.7
9.2
Paper and paper products
1.00
8.6
5.0
6.7
4.2
Publishing, printing & reproduction of recorded media
1.08
11.2
29.6
10.7
Coke, refined petroleum products & nuclear fuel
6.72
-0.2
3.5
Chemicals and chemical products
10.06
2.0
2.02
10.6
Rubber and plastics products Other non-metallic mineral products
5.4
6.2
-6.4
5.4
-0.4
8.8
-0.4
9.8
4.8
-2.2
-3.5
-15.3
5.4
3.8
0.6
1.4
0.3
7.4
41.9
55.9
13.6
16.7
-14.3
6.0
4.7
1.8
1.7
1.6
7.9
13.1
-0.4
3.5
-2.1
-0.5
-2.3
-1.2
6.4
3.0
-0.3
-2.5
-0.1
-2.5
3.9
6.9
-2.1
-0.2
4.31
4.1
4.8
-0.5
6.2
8.4
5.2
7.5
-0.2
-4.3
11.34
8.8
8.7
15.6
13.6
4.6
2.4
2.3
0.2
5.0
Fabricated metal products, except machinery & equipment
3.08
15.3
11.2
15.8
12.1
12.9
6.2
2.9
0.6
-9.7
Machinery and equipment n.e.c.
3.76
29.4
-5.8
-1.7
-2.0
-3.8 -13.2
2.4
Office, accounting & computing machinery
0.31
-5.3
1.6
28.2
0.1
Electrical machinery & apparatus
1.98
Radio, TV and communication equipment & apparatus
0.99
12.7
4.3
-6.7
16.5
11.6
-5.0
18.3
4.1
Medical, precision & optical instruments, watches and clocks
0.57
6.8
10.9
-2.2
-1.9
36.0
12.2
15.5
7.4 -17.7
Motor vehicles, trailers & semi-trailers
4.06
30.2
10.8
20.1
8.0
7.6
9.0
0.3
-5.6
-4.2
Other transport equipment
1.82
23.2
11.9
19.1
16.3
11.1
3.1
0.7
-4.7
0.4
Furniture; other manufacturing
3.00
-7.5
-1.8
-0.1
-0.5
-6.4
-0.6
-8.2
-9.2
7.7
Basic metals
Source : CSO
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2.8 -22.2
-5.3
-9.5
-3.8 -10.4
-1.8 -21.5
-14.7
25.5 -27.7 -49.5 -26.4 -43.7 -10.5
33.2 4.5
Industry
Why has growth moderated? 9.7 The moderation in industrial growth, particularly in the manufacturing sector, is largely attributed to sluggish growth of investment, squeezed margins of the corporate sector, deceleration in the rate of growth of credit flows and the fragile global economic recovery.
Investment in the industrial sector 9.8 Gross capital formation (GCF) in the industrial sector comprising mining, manufacturing, electricity and construction recorded an average growth of 13.2
195
per cent during 2004-5 to 2011-12. Growth turned negative during 2008-9 and again in 2011-12. The combined industry sector in 2007-8 accounted for 55 per cent of total GCF (excluding valuables) in the country, which declined 44.4 per cent in 2011-12 (Table 9.3). 9.9 The decline in overall share of GCF in industry in the total GCF for the economy and overall negative annual growth during 2008-09 and 2011-12 was largely due to a negative growth in GCF in the registered and unregistered manufacturing sector. Share of the registered manufacturing sector in overall
Table 9.3 : GCF in Industry 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Rate of growth of GCF in Industry (per cent)
46.7
18.3
22.0
24.7
-24.5
24.2
22.3
-10.8
3.7
4.4
4.4
4.3
3.6
3.6
3.8
3.8
Manufacturing
34.1
34.2
34.8
38.1
26.8
32.9
34.7
27.9
Registered Manufacturing
24.3
29.0
27.9
32.5
24.1
27.8
29.7
24.9
Unregistered Manufacturing
9.7
5.3
6.9
5.6
2.7
5.1
5.1
3.0
Electricity
5.3
5.5
5.6
5.4
6.3
6.2
6.6
6.8
Construction
5.4
4.9
7.0
7.2
5.7
4.8
5.3
6.0
Share of Industry in GCF
48.4
49.0
51.8
54.9
42.5
47.5
50.4
44.4
Share of GCF in industry as per cent of GDP of this sector
59.0
63.6
69.2
78.7
56.9
64.7
72.5
62.4
Share of GCF in manufacturing as per cent of GDP in manufacturing
76.0
81.1
83.2
97.3
64.1
78.3
86.8
68.6
Share of Sectors of Industry in overall GCF (per cent) Mining
Source : CSO
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Economic Survey 2012-13
GCF declined from a peak of 38.1 per cent in 20078 to 27.9 per cent in 2011-12. As percentage of GDP originating from industry, the share of GCF reached 78.7 per cent in 2007-8, though it moderated to 62.4 per cent in 2011-12. The GCF of the registered manufacturing sector in 2008 had reached a level of over 97 per cent income of this sector. 9.10 Investment in industry has generally been buoyant and witnessed an increase in its share in overall GCF of the economy. The share peaked to reach 56.2 per cent of total GCF in the economy in 1995-6 in the post reform period. The rate of growth of GCF, however, moved with the rate of growth of industry. This sector has continued to allocate a significantly high share of its income to the capital formation (Fig 9.4).
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9.11 Together with a deceleration in growth of investment (investment in the overall industry sector actually declined in 2011-12), excess capacity in aggregate appears to have persisted. Figure 9.5, which depicts de-trended growth of the IIP and capacity utilization clearly indicates that with moderation in IIP growth, there has also been a decline in capacity utilization. Capacity utilization as measured by the 19th round of the Order Books, Inventories and Capacity Utilization Survey (OBICUS) of the Reserve Bank of India (RBI) shows a continuous decline until Q1 of 201213 and a moderately upward trend in Q2. There is a broad co-movement between capacity utilization and de-trended IIP.
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Table 9.4 : Deployment of Credit to Industrial Sector ` billion) (` 2010-11 2011-12
Industries Manufacturing Mining Electricity Construction Others
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
14461
17656
16541
17121
17964
18999
19772
19890
20752
9169
11106
10296
10771
11315
12040
12617
12498
12994
198
283
263
273
285
309
356
367
393
2317
3032
2865
2966
3080
3216
3264
3537
3745
453
523
504
496
531
561
581
593
566
2323
2714
2613
2616
2752
2873
2954
2895
3054
Share in credit disbursed (per cent) Manufacturing Mining Electricity Construction Others
63.41
62.90
62.25
62.91
62.99
63.37
63.81
62.84
62.61
1.37
1.60
1.59
1.59
1.59
1.63
1.80
1.85
1.89
16.02
17.17
17.32
17.32
17.15
16.93
16.51
17.78
18.05
3.13
2.96
3.05
2.89
2.96
2.95
2.94
2.98
2.73
16.06
15.37
15.80
15.28
15.32
15.12
14.94
14.56
14.72
Rate of growth of credit flow ( per cent) Industries
26.48
22.10
24.82
22.57
21.21
20.24
19.54
16.17
15.52
Manufacturing
19.39
21.12
19.90
22.92
21.08
20.62
22.54
16.04
14.83
Mining
27.97
42.43
41.54
42.16
41.40
44.42
35.08
34.42
37.94
Electricity
48.19
30.83
41.44
34.15
27.06
23.30
13.94
19.26
21.58
Construction
16.30
15.45
14.71
11.04
20.16
15.90
15.35
19.64
6.60
Others
41.20
16.82
29.74
10.98
14.33
14.34
13.06
10.66
10.96
Source: RBI
Credit flow to the industrial sector 9.12 Moderation in investment was largely because of two factors: decline in profitability and deceleration in the rate of growth of credit to the industrial sector. Overall rate of growth of credit flow to industry moderated from 26.48 per cent on an average in 201011 to an average15.52 per cent in Q3 of 2012-13. The moderation in the growth was even shaper for the construction sector with overall growth in credit disbursement declining from 16.3 per cent in 201011 to 6.6 per cent in Q3 of 2012-13. Mining and electricity sectors also suffered a decline in the growth of credit disbursement (Table 9.4). 9.13 The momentum of credit growth to the industrial sector based on seasonally adjusted annualized rate indicates a downward trajectory suggesting that credit pick up may be slow (Figure 9.6). 9.14 Within manufacturing, which had a share of over 60 per cent in total credit of disbursement to the industrial sector, decline in growth was not http://indiabudget.nic.in
distributed across all the sectors, though most of sectors did witness moderation in growth. The chemicals and petroleum products segment, which had a share of over 16 per cent in total outstanding credit in 2010-11 witnessed an increase in the rate of growth of credit in the current year equipments, gems and jewellery and other miscellaneous industries witnessed a sharp decline in the rate of growth of credit flow. 9.15 The aggregate resource flow to industry comprising credit flows, non-SLR investment by banks and flow from non-banking channels, however, is showing cause for optimism. The total flow of financial resources to the commercial sector for the financial year so far (up to 11 January, 2013) has been higher compared with the corresponding period of the previous year in Table 9.5. The increase in flow has been accounted for by both bank and nonbank sources, though the latter played a dominant role. Among the domestic sources, non-food credit and non-statutory liquidity ratio (SLR) investment by scheduled commercial banks (SCBs), net issuance
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Economic Survey 2012-13
Table 9.5 : Resource Flow to the Commercial Sector (` billion) April-March
April 1 to Jan 11
2009-10 2010-11 2011-12 A. B.
C.
2011-12
2012-13P
Adjusted non-food bank credit and non SLR investment
4786
7110
6764
3953
4397
Flow from non-banks (b1+b2)
5850
5341
5338
4154
5232
b1.
Domestic sources
3652
3011
3034
1913
2951
b2.
Foreign sources
2198
2330
2304
2241
2281
Total flow of resources
10,636
12,451
12,102
8107
9629
Source : RBI;
Note: P: provisional
of commercial paper, net credit by housing finance companies witnessed large increase compared to the corresponding period of the previous year. Foreign sources of funding (up to December 2012), also recorded marginal increase compared to the previous year, mainly on account of a higher external commercial borrowings
Corporate Performance 9.16 Sluggish industrial performance also affected corporate performance. The rate of growth of sales of the corporate sector particularly in respect of listed manufacturing companies for the private sector, declined from an average of 28.8 per cent in Q1 of 2010-11 to 11.4 per cent in Q2 of 2012-13, the latest quarter for which comparable set of data are available. There was a significant increase in the rate of growth of interest expenditure with year on year growth peaking at 41.5 per cent in Q2 of 201112. Together with a deceleration in the rate of growth of sales, the ratio of net profit to sales also
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moderated. The ratio of profit to sales which averaged 8 per cent in the first two quarters of 2010-11 has also moderated to 3.6 per cent in Q3 of 2011-12 and has been in the range of 5 to 6 per cent in the last three quarters (Table 9.6).The growth of interest payments moderated to 10 per cent in Q2 of 201213, reflecting stabilization of the interest rate with repo rates remaining unchanged from April, 2012 to January, 2013. Consequently, profit in Q2 2012-13 grew somewhat, in part also because of a sharp increase in other incomes. As has already been indicated in Chapter 4, the corporate sector has only had limited pricing power, with inflation for non-food manufacturing recording a sharper deceleration than headline inflation. Inflation for capital goods remained relatively low.
Capital goods sector continues to be a drag on manufacturing performance 9.17 The lower corporate profitability and moderation in the growth of credit flow to industry
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Table 9.6 : Growth in Sales and Expenditure of Listed Manufacturing Companies in the Private Sector Items
2010-11 Q1
No. of companies
1900
2011-12
2012-13
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
1933
1961
1953
1935
1922
1910
1887
2003
1954
13.0
11.4
Growth rates ( Y-o-Y in per cent) Sales Change in stock-in-trade Expenditure of which
28.8
21.2
19.0
23.3
24.9
19.7
19.5
15.2
354.0
-46.5
89.0
214.9
-42.8
-24.0
117.7
-53.6
-40.1 224.3
34.5
22.5
21.1
26.5
25.0
23.2
25.9
16.2
15.6
12.5
Raw material
40.6
21.9
20.9
30.5
28.8
23.8
26.0
17.0
13.4
14.7
Staff cost
16.9
20.4
21.1
18.2
17.5
15.3
13.5
10.8
13.2
12.5
Power & fuel
13.1
15.6
22.9
20.7
27.9
23.3
25.5
24.4
19.1
15.9
-28.5
69.5
10.3
-30.5
45.8
-3.0
40.4
72.3
15.8
71.1
10.9
7.8
13.7
23.1
20.5
41.5
38.6
30.0
38.2
10.0
8.2
10.9
14.6
7.1
9.6
-18.3
-43.9
-9.8
-18.1
28.7
8.0
8.1
7.7
7.4
6.8
5.4
3.6
6.1
5.0
6.3
Other income Interest expenditure Net profit Ratio (in per cent) Net profit to sales Source : RBI
also had its impact of the performance of capital goods sector, which in turn affected overall industrial growth. Post global financial crisis, the IIP-based growth rate of the capital goods sector was robust at 14.8 per cent in 2010-11, thereafter the sector has continued to experience a sustained recession. The output of the capital goods sector contracted by 10.1 per cent during April-December 2012. Turning to sub-sectors of capital goods, we see persistent negative growth in machinery and equipment, electrical machinery and transport segments (Table 9.7). Major individual products falling under the capital goods sector and registering negative growth during
the current financial year are computers, UPS, transformers, cable insulated, turbines and construction machinery. 9.18 Deceleration in investment, import substitution in the machinery and electrical machinery segments, and a decline in the number of new projects adversely impacted the capital goods sector. The dip in the transport segment after robust growth in 2009-2011 has mainly been due to the decline in domestic demand for commercial vehicles and three wheelers. During 2010-11 and 2011-12 imports of capital goods increased by 28 per cent
Table 9.7 : IIP-based Growth Rate Of the Capital Goods Sector and its Constituents (in per cent) 2009-10
2010-11
2011-12
April-Dec. 2012-13
Fabricated metal products
10.2
15.3
11.2
-2.4
Machinery & equipment
15.8
29.4
-5.8
-3.8
3.8
-5.3
1.6
-12.5
-13.5
2.8
-22.2
-14.6
Motor vehicles, etc
29.8
30.2
10.8
-3.2
Other transport equipments
27.7
23.2
11.9
-1.2
Capital goods
1.0
14.8
-4.0
-10.1
Manufacturing
4.8
9.0
3.0
0.7
Office, accounting & comp. machinery Electrical machinery
Source : CSO
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Table 9.8 : Rate of Growth of Imports of Capital Goods valued in US$ (per cent) 2009-10
2010-11
2011-12
2012-13 (April-Dec.)
-27.6
36.1
32.7
-3.6
-9.4
21.0
26.6
-6.7
1.
Machine tools
2.
Machinery other than electrical
3.
Electrical machinery
-16.1
23.4
24.1
-6.5
4.
Transport equipment
-11.5
-2.1
19.2
4.5
5.
Project goods
47.9
30.8
42.1
-15.4
6.
Manufactures of metals
-26.1
38.5
27.5
3.1
7.
Electronic goods
-10.7
26.8
23.0
-8.2
8.
Computer Soft. physical form
32.0
-32.5
44.3
-60.8
Source : Department of Commerce, Ministry of Commerce and Industry
and 32 per cent respectively. Imports of machinery, electrical machinery, machine tools and project goods saw a major spurt. However, due to depreciation of the rupee and depressed domestic demand during the current financial year, the import of key capital goods has declined. The share of capital goods in overall imports during 2010-11, 201112 and 2012-13 (Apr-Dec) ranged between 18-20 per cent. Total import of capital goods during AprilDecember 2012-13 was about $68.35 billion out of the total imports of $365 billion (Table 9.8). 9.19 Analysis of the quarterly trend of capital goods imports and domestic production of capital goods shows a sudden spurt in imports of capital goods during 2011-12 and these impacted domestic segments of heavy machinery, construction machinery and electrical machinery. But during the current financial year there has been a sharper
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deceleration in the imports of capital goods especially during Q2 (Fig 9.7). As the IIP-based capital goods sector output declined by 20.1 per cent (in Q1), 8.1 per cent (in Q2) and 1.0 (in Q3) of the current financial year, deceleration in capital goods output is also due to slowdown in domestic investment and project expenditure.
Is industrial slow down bottoming out? 9.20 Notwithstanding a pick-up in industrial growth observed in October 2012, there are mixed signals on whether the slowdown phase has bottomed out or the current sluggishness would persist a little longer. There are at least two factors which suggest some optimism on industrial front. The data on frequency distribution of products/product groups which constitute the IIP indicate the number of products with a negative growth has declined from
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Table 9.9 : Frequency Distribution of Products in Terms of Their Growth 2010-11 2011-12
2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2 Oct-Nov
No.of products/product groups Negative 0-5 6 to 20 20 and above
102
163
151
168
179
182
175
188
160
82
92
74
65
81
77
60
67
75
137
109
105
103
89
80
101
83
97
81
38
72
66
53
63
66
64
70
402
402
402
402
402
402
402
402
402
Negative
22.22
28.60
28.53
36.96
39.53
41.64
45.01
41.38
29.33
0-5
20.86
29.79
16.69
18.10
18.57
27.73
11.42
27.62
34.74
6 to 20
42.58
33.16
41.25
32.44
31.58
23.38
38.01
21.74
24.36
20 and above
14.34
8.44
13.52
12.50
10.33
7.25
5.57
9.25
11.57
100.00 100.00 100.00 100.00 100.00 100.00 100.00
100.00
Total commodities Weights ( per cent)
Total weight
100.00
Note: The IIP has 399 products/product groups and treats electricity and mining as one product each. Mining sector has been divided into crude petroleum, coal, natural gas and others, as the first three products are covered in the core industries.
182 in Q4 of 2011-12 to 160 in October-November, 2012. The weight of the products with a negative growth has declined to 29.3 per cent in OctoberNovember, 2012 from an average of 40-45 per cent in Q2 of 2011-12. Number of products and their weights which have been witnessing a growth in excess of 20 per cent are showing a mild upward trend (Table 9.9). 9.21 The second set of data making for the optimism is the RBI's business expectation index, which recorded moderately positive growth in Q3 of 2012-13, after persistent negative growth for the previous six quarters. The business
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expectation index tracks IIP growth fairly closely and this suggests a possible bottoming out of IIP growth moderation (Figure 9.8). Globally also there has been a pick-up in industrial activity. Initiatives taken by the government, both with regard to confidence building and other measures to boost manufacturing should also facilitate industrial recovery (Box 9.2). Downward momentum of IIP, IIP manufacturing and credit growth to industry based on SAAR, however, indicate that the data taken together, should be seen as mixed, and it is a little early to call a bottom to the industrial sector slowdown.
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Box 9.1 : Comparative Picture of India and World Manufacturing Production India is one of the top ten manufacturing countries though its share in total manufacturing value added (MVA) is only about 1.8 per cent. The impact of the post-crisis slowdown on industrial growth has been relatively mild on developing countries including India yet the downward trend in MVA has been significant. The intensity of the slide did vary across countries as shown in Figure in the box. The growth rate of world MVA had declined from 5.4 per cent in Q1 of 2011-12 to 2.2 per cent in Q2 of 2012-13. During the same period China's MVA growth rate declined from 14.3 per cent to 7.3 per cent but the deceleration rate has been sharper in the case of India as the rate of growth dipped from 7.3 per cent to 0.2 per cent. Analysis of the sub-group level MVAs shows sharp differences between India vis -a -vis other major manufacturing countries. The production of machinery and equipment, one of the key segments of the capital goods sector, has been growing at faster rate in the United States, Canada, China, Malaysia as compared to the deceleration in India's case. A similar pattern is observable in other capital goods segments and high technology sectors. The reason is India's competitive disadvantage owing to lowlevel technology, higher input costs and poor quality infrastructure. A long term trend analysis from 1995 to 2009 shows that India has lagged behind in increasing its share in MVA of sophisticated products. It has fared better in medium-low technology products in labour-intensive sectors such as textiles, wearing apparel and leather products. Even in these three sectors India's share was low as compared to China, which dominates all three sectors. A two-digit industry level analysis of world manufacturing shows that in recent years the five fastest- growing sectors were - office accounting and computing; radio, TV and communication equipment; electrical machinery and apparatus, other transport; and basic metal. Other than basic metal all these sectors are medium and high technology activities. India's performance in recent years has been dismal in some of these fast moving sectors. In contrast, China accounted for more than 50 per cent of the developing economies total MVA in 15 out of the 22 industrial sectors -- India's share was significant only in a few of these sectors. The latest competitive industrial performance index (CIP) compiled by the United Nations Industrial Development Organization (UNIDO), ranks India 42nd out of 118 countries the same as in 2005. China is ranked 5th.
Organized manufacturing 9.22 The Ministry of Statistics and Programme Implementation on 31st December, 2012 released the provisional results of the Annual Survey of Industries (ASI) for 2010-11. The ASI is the most comprehensive survey of organized manufacturing employing 10 or more workers. These industries recorded a growth of 19.5 per cent in gross value added (GVA) in 2010-11 indicating a sharp increase compared to a growth of 10.6 per cent in 2008-9 and 14.1 per cent in 2009-10. Another positive feature is an increase in number of persons engaged. The total number of persons engaged in these industries has shown continuous increase since 2001-2. Overall employment in these industries recorded a growth of 7.8 per cent in 2010-11. The total number of http://indiabudget.nic.in
persons engaged in organized manufacturing industries reached 12.7 million in 2010-11 as compared to employment of 7.8 million in 2001-2. The employment growth in organized manufacturing is in sharp contrast to the decline in overall number of persons engaged in manufacturing as per the 200910 National Sample Survey Organization (NSSO) survey on employment. Industry has become conscious of its fuel efficiency. Fuel consumption as a percentage of total output has shown continuous decline to stand at 4.2 per cent in 2010-11, organized manufacturing has remained resource intensive. The share of GVA in their total value of output has gradually declined from a peak of 24.9 per cent in 1996-97 to 17.8 per cent in 2010-11, indicating an increase in resource intensity, particularly of raw materials and other non-fuel inputs. (Figure 9.9).
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Box 9.2 : Government's key initiatives to Boost Manufacturing Apart from the government's recent steps to uplift overall business sentiment and boost investment, several specific initiatives have been initiated to strengthen industry and in particular the manufacturing sector in the country. The Twelfth Five Year Plan document lays down broad strategies for spurring industrial growth and recommends sector specific measures covering micro, small, medium and large industries in the formal as well as informal sector. Some of major initiatives that can change the manufacturing landscape of the country are announcement of National Manufacturing Policy (NMP), implementation of the Delhi Mumbai Industrial Corridor (DMIC) Project (see Chapter 2) and policy reforms to promote foreign direct investment (FDI) and an e-Biz project. National Manufacturing Policy (NMP) The NMP was approved by the government in October, 2011. The major objectives of the policy are enhancing the share of manufacturing in gross domestic product (GDP) to 25 per cent and creating an additional 100 million additional jobs over a decade or so. The Policy also provides special focus to industries that are employment intensive, those producing capital goods, those having strategic significance, small and medium enterprises, and public sector enterprises besides industries where India enjoys a competitive advantage. The NMP provides for promotion of clusters and aggregation, especially through the creation of national investment and manufacturing zones (NIMZs). Out of twelve NIMZs so far announced, eight are along the DMIC. Besides, four other NIMZs have been given in-principle approval (i) Nagpur in Maharashtra, (ii) Tumkur in Karnataka, (iii) Chittoor district in Andhra Pradesh, and (iv) Medak district in Andhra Pradesh. DMIC Project Industrial development initiatives under DMIC project presently cover eight industrial cities that are proposed to be developed along the railway corridor. The Master Planning for the investment regions and industrial areas taken up initially to be developed as new cities in Gujarat, Madhya Pradesh, Haryana, Rajasthan and Maharashtra have been completed and master planning in Uttar Pradesh has started. The State governments have initiated the process of obtaining land for the new industrial regions/areas as well as for the Early Bird Projects. Environmental impact assessment (EIA) studies have been initiated for five industrial cities. Details of the overall DMIC project have been discussed in Chapter 2. FDI Policy initiatives As a part of policy reform process, the FDI policy is being progressively liberalized on an ongoing basis in order to allow FDI in more industries under the automatic route. Some recent changes in FDI policy, besides consolidation of the policy into a single document include FDI in multi-brand retail trading up to 51 per cent subject to specified conditions; increasing FDI limit to 100 per cent in single-brand retail trading; FDI up to 49 percent in civil aviation and power exchanges; FDI up to 49 percent in broadcasting sector under the automatic route and FDI above 49 percent and up to 74 percent under the Government route both for teleports and mobile TV. Setting up of the e-Biz Project to promote ease of doing business The government has announced the setting up of -'Invest India'-, a joint-venture company between the Department of Industrial Policy and Promotion and FICCI, as a not-for-profit, single window facilitator, for prospective overseas investors and to act as a structured mechanism to attract investment. In addition, the Government has initiated implementation of the e-Biz Project, a mission mode project under the National e-Governance Plan (NeGP) for promoting an online single window at the national level for business users. The objectives of setting up of the e-Biz portal are to provide a number of services to business users, covering the entire life cycle of their operation. The project aims at enhancing India's business competitiveness through a service oriented, event-driven G2B interaction.
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Higher resource intensity not only has implications for internal accruals but also for research and development (R&D).
Characteristics of Organized Manufacturing 9.23 A higher intensity of resource use has made the profitability of organized manufacturing considerably dependent on wages and interest rates. Total emoluments as a percentage of output have consistently declined from 40.6 per cent in 1980-81 to 22 per cent in 2010-11. The share of emoluments in total output has remained in the range of 19-22 per cent in the last seven years. There has also been a decline in the share of interest to output, from 28.4 per cent in 1991-92 to 9.0 per cent in 200607, increasing thereafter to 10.6 per cent in 201011. The increase in profitability of the organized manufacturing has depended on the reduction in these two ratios and improved from 18.5 per cent in 1991 to 53.8 per cent in 2007-08 before moderating to 47.8 per cent in 2010-11. Interest rates structure therefore becomes one of the important factors for internal accruals of the organized manufacturing sector. Unorganised manufacturing with relatively less access to institutional capital may in fact be even more vulnerable to interest rate increases (Figure 9.10).
MICRO, SMALL AND MEDIUM ENTERPRISES (MSME) SECTOR 9.24 The MSME sector covers both the registered and informal sectors. The classification of micro, small and medium enterprises at present is based
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on the criterion of investment in plant and machinery by each enterprise. Detailed information for the registered MSMEs on the various economic variables such as employment, investment, products, gross output, and exports is available based on the Fourth Census of MSME (2006-07). The size of the registered MSMEs was estimated to be about 15.84 lakh units with sub-sector wise composition in the proportion of 94.9 per cent micro enterprises, 4.89 per cent small and 0.17 per cent medium enterprises. The total registered MSME sector comprised of 67.1 per cent manufacturing enterprises and 32.9 per cent services enterprises. About 45 per cent of these registered enterprises were located in rural areas. More detailed information based on the Fourth Census on the unorganized sector units, constituting about 94 per cent of the entire MSME sector is awaited. 9.25 In the recent past the Prime Minister's Task Force on MSMEs and the Twelfth Plan Working Group on MSMEs have discussed issues related to the MSME sector. The Twelfth Five Year Plan policy framework is guided by the recommendations of these key committees. The Plan covers various aspects of the MSME sector and its key recommendations fall under six broad verticals, viz. 1) finance and credit (ii) technology (iii) infrastructure (iv) marketing and procurement (v) skill development and training, and (vi) institutional structure. The Plan has a separate set of recommendations for the khadi and village industries and the coir sector. In order to boost the MSME sector, several schemes are under operation including the following ones. 1. Procurement Policy: The government has notified a Public Procurement Policy for Goods
Industry Produced and Services rendered by Micro & Small Enterprises (MSE) order, 2012 effective from 1st April, 2012. The policy mandates that all the central ministries / departments / central public sector undertakings (CPSUs) shall procure a minimum of 20 per cent of their annual value of goods / services required by them from MSEs. Further, policy has earmarked a subtarget of 4 per cent procurement out of this 20 per cent from MSEs owned by scheduled caste/ scheduled tribe (SC / ST) entrepreneurs. 2. MSE- Cluster Development Programme (MSECDP): The Ministry of MSME has adopted a cluster approach for holistic development of MSE in a cost effective manner. To build capacity of MSMEs for common supportive actions, soft interventions are undertaken in the existing clusters/new industrial areas/ estates or existing industrial areas/estates. To ensure transparency and speedy implementation of the MSE-CDP, office of the Development Commissioner, MSME has started an online application system from 1 April 2012. Hard interventions are taken up to create/upgrade infrastructure facilities and setting up of common facility centres in new/ existing industrial estates/clusters. 3. Credit Guarantee Scheme: The Government is implementing the Credit Guarantee Fund Scheme for MSEs with the objective of facilitating flow of credit to the MSEs, particularly to micro enterprises by providing guarantee cover for loans upto ` 100 lakh without collateral / third party guarantees. For making the scheme more attractive to both lenders as well as borrowers, several modifications have been undertaken which, inter alia, include: (a) enhancement in the loan limit to `100 lakh; (b) enhancement of guarantee cover from 75 per cent to 85 per cent for loans upto ` 5 lakh; (c) enhancement of guarantee cover from 75 per cent to 80 per cent for MSEs owned/operated by women and for loans in north eastern region (NER); (d) reduction in one-time guarantee fee from 1.5 per cent to 1 per cent and annual service charges from 0.75 per cent to 0.5 per cent for loans upto ` 5 lakh and (e) reduction in one-time guarantee fee for NER from 1.5 per cent to 0.75 per cent. 4. Credit Linked Capital Subsidy Scheme for Micro and Small Enterprises (CLCSS) for MSEs: The scheme aims at facilitating technology upgradation of MSEs by providing 15 per cent capital subsidy (limited to maximum ` 15 lakh) http://indiabudget.nic.in
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for purchase of plant & machinery. Maximum limit of eligible loan for calculation of subsidy under the scheme is ` 100 lakh. Presently, 48 well established and improved technologies/sub sectors have been approved under the scheme. The CLCSS is implemented through 11 nodal banks/agencies including the Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD) and Tamil Nadu Industrial Investment Corporation (TICC), Chennai (TIIC) and National Small Industries Development Corporation (NSIC) Ltd.
Central Public sector Enterprises 9.26 Central Public Sector Enterprises (CPSEs) are an important constituent industry. There were altogether 260 CPSEs under the administrative control of various ministries/departments as on 31 March 2012. Of these, 225 were in operation and 35 under construction. The share of industrial CPSEs in the total investment in CPSEs in terms of gross block, stood at 77.46 percent during the year. The latest complete results are available for the year 2011-12. CPSEs in the mining sector registered the highest increase in net profit (29.45 per cent) in 201112. CPSEs in manufacturing sector recorded a decline of 22.65 per cent in net profit in 2011-12 despite 27.73 per cent increase in their turnover. The electricity sector recorded growth of 16 per cent in turnover and 13.42 per cent in profit (Table 9.10). 9.27 The government set a target of raising ` 40,000 crore by way of disinvestment in various CPSEs during 2011-12 and raised ` 13,854 crore, which included disinvestment by way of 'offer for sale' (OFS) in Oil and Natural Gas Commission(ONGC) amounting to ` 12,749.50 crore. The disinvestment target in Budget 2012-13 has been set ` 30,000 crore.
Foreign Direct Investment (FDI) 9.28 The government has put in place an investorfriendly policy on FDI, under which equity participation of up to 100 per cent, is permitted through the automatic route, in many sectors/activities. FDI policy is reviewed on an ongoing basis, with a view to making it more investor friendly. For ease of reference, all press notes/circulars issued since 1991 have been consolidated into a single document which is available in the public domain on the website of Department of Industrial Policy and Promotion (www.dipp.nic.in). Significant changes have been made in the FDI policy regime in recent times, to
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Table 9.10 : Performance of Industrial CPSEs, 2011-12 (` ` crore) SI. No. Sector I.
II.
III.
2010-11
2011-12
Per cent change
Manufacturing (28.31 per cent) @ 1.1)
Turnover
947,411.7
1,210,087.6
27.7
1.2)
Net Profit
30,668.2
23,720.5
(22.7)
Mining (23.53 per cent) @ 2.1)
Turnover
15,968.3
188,011.1
17.7
2.2)
Net Profit
47,594.8
61,610.6
29.5
Electricity (25.62 per cent) @ 3.1)
Turnover
84,032.4
97,623.0
16.2
3.2)
Net Profit
18,727.5
21,239.9
13.4
Source : Department of Public Enterprises Note : @ shows the percentage share, in total investment in terms of gross block;
ensure that India remains increasingly attractive and investor-friendly. Some of the changes made to the policy during 2012 are as follows: (i)
(ii)
(iii)
Significant changes effective from 10.4.2012 include: (i) mandating FIPB approval only for investment made under the FDI scheme in commodity exchanges (ii) clarification that the activity of 'leasing and finance', covers only 'financial leases' and not 'operating leases' ( (iii) clarification that raising of the aggregate limit of 24 per cent, to the sectoral cap/statutory ceiling, would be subject to prior intimation to RBI. Reviewing the policy relating to calculation of downstream investments by a banking company incorporated in India, which is owned and/or controlled by non-residents/ a non-resident entity/non-resident entities, the government has exempted downstream investments made by such companies, under corporate debt restructuring (CDR), or other loan restructuring mechanism, or in trading books, or for acquisition of shares due to defaults in loans, from being counted as indirect foreign investment. The government amended the policy on singlebrand retail trading, amending the conditions relating to : (i) the foreign investor being the owner of the brand: it has been specified that, henceforth, only one non-resident entity, whether owner of the brand or otherwise, shall be permitted to undertake single brand product retail trading, for the specific brand,
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through a legally tenable agreement, with the brand owner and (ii) mandatory sourcing of at least 30 per cent of the value of products to be done from Indian 'small industries/ village and cottage industries, artisans and craftsmen', applicable in respect of proposals involving FDI beyond 51 per cent: It has been specified that, sourcing of 30 per cent of the value of goods purchased, will be done from India, preferably from MSME, village and cottage industries, artisans and craftsmen, in all sectors. (iv)
The government has decided to permit FDI up to 51 per cent, with FIPB approval, in multibrand retail trading, subject to specified conditions.
(v)
In the civil aviation sector, the government has decided to permit foreign airlines also to invest, in the capital of Indian companies, operating scheduled and nonscheduled air transport services, up to the limit of 49 per cent of their paid-up capital.
(vi)
The government has decided to permit foreign investment up to 49 per cent, in power exchanges, registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010. The foreign investment would be in compliance with Securities and Exchange Board of India (SEBI) Regulations; other applicable laws/ regulations; security and other conditionalities.
Industry (viii) The government has decided to permit NBFCs (i) having foreign investment above 75 per cent and below 100 per cent and (ii) with a minimum capitalisation of US$ 50 million, to set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital.
FDI inflows 9.29 During April-November 2012-13, FDI inflow (including equity inflows, reinvested earnings and other capital) was US$ 24.65 billion (Table 9.11). FDI equity inflows were US$ 15.85 billion showing a decline of 43 percent as compared to the corresponding period of the previous year. Cumulative FDI inflow from April 2000 to November 2012 stood at US$ 277.86 billion. 9.30 During April-October 2012, services, hotels and tourism, metallurgical industries, automobile industry, construction, drugs and pharmaceuticals, industrial machinery were the sectors that attracted maximum FDI inflows. Sector-wise FDI inflows into industry and infrastructure is given in Table 9.12. 9.31 In FDI equity investments, Mauritius tops the list of first ten investing countries, followed by Singapore, the UK, Japan, the US, the Netherlands, Cyprus, Germany, France, and the UAE. The United Nations Conference on Trade and Development (UNCTAD) World Investment Report, 2012 in its analysis of the global trends and sustained growth of FDI inflows continues to report India as the third most attractive location for 2012-14.
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Industry- Environment linkages 9.32 The development of a diversified industrial structure in India, based on a combination of large and small-scale industries and growing urban and rural population have produced pressures on the environment as reflected in the growing incidence of air water, and land degradation. Industrial pollution is concentrated in industries like petroleum refineries, textiles, pulp and paper, industrial chemicals, iron and steel, and non-metallic mineral products. Small scale industries, especially foundries, chemical manufacturing, and brick making, are also significant polluters. In the power sector, thermal power, which constitutes the bulk of installed capacity for electricity generation, is an important source of air pollution. Choice of policies and investment has, therefore to be such which encourages more efficient use of resources, substitution away from scarce resources and adoption of technologies and practices that minimize environment impact.
Labour relations 9.33 Due to constant endeavour of the industrial relations machineries of both the centre and states, the industrial relations climate has generally remained peaceful and cordial. While the number of incidences of strikes and lockouts reported during 2007 were 389, this figure was 189 in 2011 (provisional) and stood at 194 (provisional) up to October 2012. The number of strikes has exhibited a declining trend over the period. Similarly the figures for mandays lost were 27.17 million in 2007 and 2.03 million (provisional) up to October, 2012 (Table 9.13).
Table 9.11 : Foreign inflows (US$ billion) Financial year
As per international
Percentage
FDI equity
Percentage
practices
growth
inflow
growth
2003-4
4.32
(-) 14
2.19
(-) 19
2004-5
6.05
(+) 40
3.22
(+) 47
2005-6
8.96
(+) 48
5.54
(+) 72
2006-7
22.83
(+) 146
12.49
(+) 125
2007-8
34.84
(+) 53
24.58
(+) 97
2008-9
41.87
(+)20
31.40
(+)28
2009-10 (P)
37.75
(-)10
25.83
(-)18
2010-11 (P)
34.85
(-)08
21.38
(-)17
2011-12(P)
46.55
(+)34
35.12
(+)64
2012-13 (P) (Apr-Nov)
24.65
Source : DIPP;
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P : provisional
15.85
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Table 9.12 : Sector-wise FDI flows into Industry and Infrastructure (US $ million) 1991-2000 Food products
2000-10
707.4
Fermentation industries Textiles Wood products Paper Leather Chemicals
1237.3
2010-11 246.9
2011-12 239.7
April-Oct April-Oct 2011-12
2012-13
122.3
368.4
24
770.1
57.7
69.7
53.1
43.7
241.8
828.6
129.8
164.7
74.3
91.3
0.0
18.8
1.6
29.6
8.1
28.7
250.5
716.9
44.0
454.7
29.6
3.1
33.5
42.6
9.3
8.3
5.6
34.7
1480.9
4446.1
2690.2
7534.1
7007.6
789.4
90.3
2953.6
573.6
2217.4
2097.8
476.3
Rubber, plastic & petroleum Products (including oil exploration) Non Metallic Minerals
261.1
2263.6
657.3
310.0
203.4
189.7
Metals and metal products
186.2
3143.2
1098.1
1786.1
1436.9
1215.1
Machinery and equipment
2043.1
15670.4
1836.3
4147.5
2894.2
1171.2
0
4603.2
1299.4
923.0
563.7
743.2
1761.6
5705.6
1495.6
850.5
625.7
206.3
0
730.9
79.5
142.7
135.0
15.9
Power*
1038.9
5220.9
1486.2
2104.6
1440.8
771.0
Telecommunication
1089.4
8915.9
1664.5
1997.2
1964.1
48.4
Total
9208.7
57267.7
13369.9
22979.7
18662.0
6196.4
Transport equipment Others manufacturing Mining (including mining services)
Source : Office of the Economic Adviser, DIPP Note : Total excludes inflows to services sector and other NRI schemes*includes non-conventional energy
As regards spatial/industry-wise dispersions of incidences of strikes and lockouts, there exist widespread variations among different states/UTs. Wage and allowance, bonus, personnel, indiscipline Table 9.13 : Strikes and Lockouts (man-days lost) Year
Strikes Lockouts
Total Mandays lost
2007
210
179
2,71,66,752
2008
240
181
1,74,33,721
2009(P)
205
187
1,33,64,757
2010(P)
261
168
1,79,32,345
2011(P)
106
29
66,71,179
2012 (Jan.-October) (p)
173
21
20,29.439
Source: Labour Bureau, Ministry of Labour & Employment Note : P = provisional
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and violence and financial stringency have been stated to be the major reasons for these strikes and lockouts.
CHALLENGES
AND
OUTLOOK
9.34 Industrial production remained sluggish in 2011-12 and the moderation continued during the current financial year. Industrial growth still remains vulnerable to several domestic factors and external shocks. Infrastructure and energy constraints, decline in demand for India's exports, and fragile recovery in investment are the risk factors. The latest lead indicators suggest mixed signals about whether a growth upturn is underway. The policy initiatives taken by the government in the recent months made the business sentiment buoyant and have generated some optimism. The latest seasonally adjusted annualised growth of industrial output indicate that the growth of the sector could remain moderately positive at around 3 per cent for the current year.
Industry 9.35 In the short run, revival of investment in industry and key infrastructure sectors is the key challenge. Industrial sector has been hit hard by the deceleration in investment for the second successive year. As per the latest first revised estimates of GDP, gross capital formation in the manufacturing sector in 2011-12 (at 2004-05 prices) had declined by 18.8 per cent as compared to 2010-11. Lower foreign direct investment inflows in key industry and infrastructure sectors during April-October 2012 at $ 6.19 billion as against the inflow of $18.66 billion during the same period of the previous year have further constrained investment in these sectors. Investment intentions indicated in the industrial entrepreneur memorandum (IEMs) filed, which are lead indicators of likely investment flows to industry, also declined in 2011 and 2012. Notwithstanding a marginal pickup in the gross bank credit deployment into industrial sector in recent months, year on year increase in gross bank credit deployment as on end December 2012 has been 13.8 per cent as compared to 19.8 per cent a year ago. 9.36 Apart from weak investment climate, industrial sector performance remained subdued due to infrastructure bottlenecks. Industrial growth rate moderated due to sharp decline in output of natural gas; subdued performance of the coal sector and its resultant impact on thermal power generation; and slow pace of project implementation in rail, road, and ports sectors. In the medium term it is therefore crucial to accelerate the output of core sectors and speed up implementation of crucial big ticket projects. 9.37 As discussed in detail in the earlier sections, the key underpinning cause of the recent industrial slowdown has been the manufacturing sector. India's manufacturing value-added (MVA) as share of GDP, has remained sticky at around 15 per cent. As per the latest competitive industrial performance index (CIP) compiled by UNIDO for the year 2009, India was placed 42nd out of the 118 countries. India's low CIP ranking hints at the underlying weaknesses and vulnerabilities despite being one of the top ten
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manufacturing nations. India's manufacturing sector therefore needs to acquire dynamism and technological sophistication to become one of the leading manufacturers. From the long term point of view, low level of R&D and inadequate availability of skilled manpower would adversely affect India's competitiveness and the manufacturing growth. 9.38 India has not improved significantly in terms of the ease of doing business and ranks very low in comparison to other industrial peers. The MSME sector in particular faces multiple approval and operational restrictions. The process of setting up and exiting business is time consuming and complicated requiring expensive third party assistance. Since states have the major role in administering MSME sector, the prevailing ecosystem therefore varies from state to state. Exit rules as per the Companies Act, 1956 are complex and costly and do not permit reaping the benefits from reallocation of resources. 9.39 Sourcing of finance at competitive cost is another major constraint for both the organized and the unorganized MSME enterprises. Financing other than internal accruals is costly and prohibitive. The Prime Minister's Task Force on MSMEs had recommended a 20 per cent year-on-year growth in credit to micro and small enterprises to ensure enhanced credit flow. It had also recommended allocation of 60 per cent of the micro and small enterprises advances to the micro enterprises to be achieved in a phased manner. The resource flow, however, needs to improve. Research and technology upgradation activities also need to be scaled up. Presently only a small number of incubators operates in the country which is very low relative to other countries. New incubators will need to be set up on a Public-Private Partnership basis. To attract more investment and talent, incubators need to be allowed to distribute profits back to investors. With some of these changes indutrial growth could become steadier.
Services Sector
10 CHAPTER
India’s services sector expanded quickly with double-digit growth in the second half of the 2000s. As the Euro-zone crisis has worsened, growth has slowed, though the sector is still growing at a much higher rate than the other two sectors of the economy.
10.2 The services sector covers a wide array of activities ranging from services provided by the most sophisticated sectors like telecommunications, satellite mapping, and computer software to simple services like tehose performed by the barber, the carpenter, and the plumber; highly capital-intensive activities like civil aviation and shipping to employment-oriented activities like tourism, real estate, and housing; infrastructure-related activities like railways, roadways, and ports to social sectorrelated activities like health and education. Thus, there is no one-size–fits- all definition of services resulting in some overlapping and some borderline inclusions. The National Accounts classification of the services sector incorporates trade, hotels, and restaurants; transport, storage, and communication; financing, insurance, real estate, and business services; and community, social, and personal services. In the World Trade Organization (WTO) list of services and the Reserve Bank of India (RBI) classification, construction is also included.
SERVICES SECTOR : INTERNATIONAL COMPARISON 10.3 In world GDP of US$70.2 trillion in 2011, the share of services was 67.5 per cent, more or less the same as in 2001. Interestingly the top 15 countries in terms of services GDP are also the same in overall GDP in 2011. This list includes the major developed countries and Brazil, Russia, India, http://indiabudget.nic.in
and China. Among the top 15 countries with highest overall GDP in 2011, India ranked 9th in overall GDP and 10th in services GDP. A comparison of the services performance of the top 15 countries in the eleven-year period from 2001 to 2011 shows that the increase in share of services in GDP is the highest for India (8.1 percentage points) followed by Spain. While China’s highest services compound annual growth rate (CAGR) of 11.1 per cent was accompanied by marginal change in its share of services for this period, India’s very high CAGR (9.2 per cent) which was second highest was also accompanied by the highest change in its share. This is also a reflection of the domination of the industrial sector along with services in China in its growth, while India’s growth has been powered mainly by the services sector (also see Chapter 2). Despite the higher share of services in India’s GDP and dominance of industry over services in China, in terms of absolute value of services GDP as well as growth in services ( both decadal and annual in 2001, 2010, and 2011) China is still ahead of India. (Table 10.1) 10.4 Country estimates for 2012 show a deceleration in services growth in some major countries. For example, in 2012 it decelerated to 0.5 per cent from 0.9 per cent (in 2011) in the USA; 8.1 per cent in 2012 from 9.4 per cent (in 2011) in China; and 6.6 per cent in FY 2012-13 from 8.2 per cent (in FY 2011-12) in India. In Brazil, the services sector grew by a 1.4 per cent in Q3 of 2012 compared to 2.1 per cent in the corresponding period of the previous year.
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211
Table 10.1 : Performance in Services : International comparison Country
Rank
Overall GDP (US$ billion)
At At Overall Services current constant GDP GDP Prices Prices 2011 2011 1
US
1
1 14991.3
2
China
2
3
3
Japan
3
4
Germany
5
Share of services Change ( percent of GDP) in Share 2011 over 2001 2001 2010 2011
Services growth rate ( per cent) CAGR 200111 2001
2010
2011
13225.9
77.0
78.3
78.4
1.4
2.9
2.5
5.1
2.1
7203.8
4237.0
40.6
41.9
41.7
1.1
10.4
9.9
8.9
11.1
2
5870.4
4604.1
70.6
69.9
70.5
-0.1
1.8
1.1
0.6
0.4
4
4
3604.1
3048.7
70.0
70.8
70.0
0.0
2.5
1.0
1.9
1.3
France
5
5
2775.5
2240.5
76.8
79.0
79.2
2.4
1.8
1.9
2.1
1.4
6
Brazil
6
8
2476.7
1126.4
65.4
66.2
66.5
1.1
1.8
5.0
3.1
3.8
7
UK
7
6
2429.2
2381.1
74.0
76.4
76.0
2.0
3.8
1.1
1.2
2.3
8
Italy
8
7
2195.9
1773.1
70.9
73.1
73.1
2.2
2.6
1.4
0.7
0.6
9
India
9
10
1897.6
1322.7
50.1
56.8
58.2
8.1
7.5
9.4
7.4
9.2
10 Russia
10
13
1857.8
947.2
56.3
62.4
62.1
5.8
3.3
3.9
3.6
5.5
11 Canada
11
9
1736.9
1233.5
65.0
69.9
69.7
4.7
3.5
2.6
2.2
2.7
12 Australia
12
11
1515.5
894.5
67.9
69.0
69.2
1.3
3.9
2.3
3.6
3.3
13 Spain
13
12
1478.2
1183.8
63.7
69.8
70.0
6.3
3.6
1.2
1.2
2.8
14 Mexico
14
14
1155.2
956.8
61.4
63.8
64.2
2.8
1.2
5.4
5.0
2.9
15 South Korea
15
15
1116.2
1056.1
60.5
57.0
56.6
-3.9
4.4
3.9
2.7
3.5
70201.9
52667.7
68.2
67.6
67.5
-0.7
2.8
2.9
3.6
2.6
World
Source : Computed from UN National Accounts Statistics accessed on 4 January 2013. Note : Rank is based on current prices, shares are based on constant prices(US$), growth rates are based on constant prices(US$), CAGR is estimated for 2001-11, construction sector is excluded in services GDP.
10.5 While the share of services in employment for many developed countries is very high and in many cases higher than the share of services in incomes, the gap between these shares is relatively less. Except China and India, all the other BRICS countries also have a similar pattern. In the Indian and Chinese cases, there is a wide gap between the two, with gap being wider for India. China’s share of services in both income and employment is relatively low due to the domination of the industrial sector, but the gap is also narrower than that of India. 10.6 World services export growth (CAGR) reached a high of 12.6 per cent during 2000 to 2008 compared to 6.6 per cent in the 1990s. Growth of world exports of services which declined to - 11.1 per cent due to the global economic crisis of 2008, quickly rebounded in 2010 and grew by 10 per cent. However, the pre-crisis (2008) level of US $ 3.84 trillion was reached and surpassed only after a lag of two http://indiabudget.nic.in
years in 2011 when world services exports reached US $ 4.17 trillion with a growth of 11 per cent. The Euro-zone crisis and the global slowdown in 2012 affected services trade as well. Mirroring the trends in world GDP growth and merchandise trade, world exports of commercial services started decelerating from Q4 of 2011 with 5 per cent growth followed by 4 per cent in Q1 of 2012, zero per cent in Q2 of 2012 and - 2 per cent in Q3 2012. 10.7 World services-sector FDI rebounded in 2011 after falling sharply in 2009 and 2010, to reach around US $570 billion, registering a growth of 15 per cent over the previous year. FDI in non-financial services, which accounted for 85 per cent of the total, rose modestly, on the back of increases in FDI, targeting electricity, gas, and water as well as transportation and communications. Financial services registered a 13 per cent increase in the value of FDI projects in 2011 reaching US$80 billion, though still 50 per cent below the pre-crisis average (2005-2007). FDI projects
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in banking remained subdued in the wake of the global financial crisis. European banks, which had been at the forefront of international expansion through FDI, were largely absent, with a number of them remaining under government control. In 2012, United Nations Conference on Trade and Development (UNCTAD) estimates indicate a fall in global FDI by 18 per cent to US $ 1.3 trillion, while forecasting a moderate recovery in 2013-14.
INDIA’S SERVICES SECTOR 10.8 India’s services sector has emerged as a prominent sector in terms of its contribution to national and states incomes, trade flows, FDI inflows, and employment.
Services GDP 10.9 The growth story overall and services of world and India in the 2000s began from almost the same level of around 4-5 per cent in 2000. But over the years, India’s overall and services growth rates have outpaced those of the world. Interestingly, unlike world services growth, which has been moving in tandem with its overall growth with mild see-saw movements over the years, India’s services growth has been consistently above its overall growth in the last decade except for 2003 (when the former was marginally lower than the latter). Thus, for more than a decade, this sector has been pulling up the growth of the Indian economy with a great amount of stability (Figure 10.1). 10.10 The share of services in India’s GDP at factor cost (at current prices) increased from 33.3 per cent
in 1950-1 to 56.5 per cent in 2012-13 as per Advance Estimates (AE). Including construction, the share would increase to 64.8 per cent in 2012-13. With an 18.0 per cent share, trade, hotels, and restaurants as a group is the largest contributor to GDP among the various services sub-sectors, followed by financing, insurance, real estate, and business services with a 16.6 per cent share. Both these services showed perceptible improvement in their shares over the years. Community, social, and personal services with a share of 14.0 per cent is in third place. Construction, a borderline services inclusion, is at fourth place with an 8.2 per cent share (Table 10.2). 10.11 The CAGR of the services sector GDP at 10 per cent for the period 2004-5 to 2011-12 has been higher than the 8.5 per cent CAGR of overall GDP during the same period. However in 2011-12 and 2012-13, there has also been a deceleration in growth rate of services sector at 8.2 per cent and 6.6 per cent respectively. Among the major broad categories of services, ‘financing, insurance, real estate, and business services’, which continued to grow robustly both in 2010-11 and 2011-12 decelerated to 8.6 per cent in 2012-13. While in 2011-12 growth in ‘trade, hotels, and restaurants’ and ‘transport, storage, and communication’ slowed down to 6.2 per cent and 8.4 per cent respectively, in 2012-13 ‘trade, hotels, and restaurants’ and ‘transport, storage, and communication’ combined grew by an estimated 5.2 per cent. 10.12 Sub-sector wise, among commercial services, in terms of shares, the major services are trade, transport by other means (i.e. excluding
Source : Based on UN National Accounts Statistics accessed on 2 February 2013.
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213
Table 10.2 : Share and Growth of India’s Services Sector (at factor cost) (per cent) 2000- 200501 06
200607
200708
200809
200910^
201011@
201112*
201213**
Trade, hotels, & restaurants
14.6 16.7 (5.2) (12.2)
17.1 (11.1)
17.1 (10.1)
16.9 (5.7)
16.5 (7.9)
17.2 (11.5)
18.0 (6.2)
25.1# (5.2)
Trade
13.3 (5.0)
15.1 (11.6)
15.4 (10.8)
15.4 (9.8)
15.3 (6.7)
15.1 (8.5)
15.7 (11.5)
16.6 (6.5)
Hotels & restaurants
1.3 1.6 (7.0) (17.4)
1.7 (14.4)
1.7 (13.0)
1.5 (-3.3)
1.4 (1.9)
1.5 (10.8)
1.5 (2.8)
Transport, storage, & communication
7.6 (9.2)
8.2 (11.8)
8.2 (12.6)
8.0 7.8 7.7 (12.5) (10.8) (14.8)
7.3 (13.8)
7.1 (8.4)
Railways
1.1 (4.1)
0.9 (7.5)
0.9 (11.1)
1.0 (9.8)
0.9 (7.7)
0.9 (8.8)
0.8 (5.9)
0.7 (7.5)
Transport by other means
5.0 (7.7)
5.7 (9.3)
5.7 (9.0)
5.6 (8.7)
5.5 (5.3)
5.3 (7.3)
5.3 (8.2)
5.4 (8.6)
Storage
0.1 (6.1)
0.1 (4.7)
0.1 (10.9)
0.1 (3.4)
0.1 (14.1)
0.1 (19.3)
0.1 (2.2)
0.1 (9.4)
1.5 1.6 (25.0) (23.5)
1.5 (24.3)
1.4 (24.1)
1.4 1.4 (25.1) (31.5)
1.1 (25.4)
0.9 (8.3)
14.5 (12.6)
14.8 (14.0)
15.1 15.9 (12.0) (12.0)
15.8 (9.7)
16.0 (10.1)
16.6 (11.7)
5.4 5.4 (-2.4) (15.8)
5.5 (20.6)
5.5 5.6 (16.7) (14.0)
5.4 (11.4)
5.6 (14.9)
5.7 (13.2)
Real estate, ownership of , dwellings & business services
8.7 9.1 (7.5) (10.6)
9.3 (9.5)
9.6 (8.4)
10.3 (10.4)
10.4 (8.3)
10.4 (6.0)
10.8 (10.3)
Community, social, & personal services
14.8 (4.6)
13.5 (7.1)
12.8 (2.8)
12.5 (6.9)
13.3 (12.5)
14.5 (11.7)
14.0 (4.3)
14.0 (6.0)
Public administration & defence
6.6 (1.9)
5.6 (4.3)
5.2 (1.9)
5.1 5.8 6.6 (7.6) (19.8) (17.6)
6.1 (0.0)
6.1 (5.4)
Other services
8.2 (7.0)
7.9 (9.1)
7.6 (3.5)
7.4 (6.3)
7.8 (7.2)
7.9 (8.0)
7.9 (6.5)
Construction
6.0 7.9 (6.1) (12.8) 50.8 53.1 (5.4) (10.9)
8.2 (10.3) 52.9 (10.1)
8.5 8.5 8.2 (10.8) (5.3) (6.7) 52.7 53.9 54.5 (10.3) (10.0) (10.5)
8.2 (10.2) 54.4 (9.8)
8.2 (5.6) 55.7 (8.2)
8.2 (5.9) 56.5 (6.6)
56.8 (5.5)
61.0 (11.1)
61.0 (10.1)
61.2 (10.3)
62.6 (9.8)
63.9 (7.9)
64.8 (6.5)
100.0 (4.3)
100.0 (9.5)
100.0 (9.6)
100.0 (9.3)
100.0 (9.3)
100.0 (6.2)
100.0 (5.0)
Communication Financing, insurance, real estate, & business services Banking & insurance
Total Services Total Services (incl. Construction) Total GDP
13.8 (4.5)
7.5 (7.4)
62.4 62.7 (9.4) (10.0) 100.0 (6.7)
100.0 (8.6)
17.2 (8.6)
14.3 (6.8)
Source : Central Statistics Office (CSO). Notes :Shares are in current prices and growth in constant prices; Figures in parenthesis indicate growth rate; * first revised estimates, @ second revised estimates, ^ third revised estimates, ** Advance Estimate (AE); # includes the shares and growth of both trade, hotels, & restaurants and transport, storage, & communication only for 2012-13.
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railways), banking, and insurance, and real estate ownership of dwellings, and business services, besides construction. In 2011-12, though the growth of ‘trade’ decelerated to 6.5 per cent, its share improved to 16.6 per cent. The share of ‘transport by other means’ at 5.4 per cent was almost at earlier levels, while its growth was at 8.6 per cent. Banking and insurance with marginal improvement in its share to 5.7 per cent was the most dynamic sector in 2011-12 with a growth of 13.2 per cent on the top of high growths in the preceding years. ‘Real estate, ownership of dwellings, and business services’ with a share of 10.8 per cent, which is marginally higher than that of the previous year, also had robust growth of 10.3 per cent. ‘Other services’ with a share of 7.9 per cent both in 2010-11 and 2011-12 grew at a slower pace of 6.5 per cent in 2011-12. Among ‘other services’, the two major items are community services, of which education, medical, and health, are the major items; and personal services. Interestingly some items among community services like coaching centres and membership organizations have high growth rates with small shares which are rising. Construction, the borderline services sector, has been the most vulnerable to global events. With a share of 8.2 per cent as in the previous two years, it has been growing unevenly since the global crisis.
State-wise Comparison of Services 10.13 A comparison of the share of services in the gross state domestic product (GSDP) of different states and union territories (UTs) in 2011-12 shows
that the services sector is the dominant sector in most states of India (Figure 10.2). States and UTs such as Chandigarh, Delhi, Kerala, Mizoram, West Bengal, Tamil Nadu, Maharashtra, Nagaland, and Karnataka have higher than all-India shares. Chandigarh tops the list with a share of 85 per cent followed by Delhi with 81.8 per cent. Other than Arunachal Pradesh (33.8 per cent), Chhattisgarh (36.7 per cent), and Sikkim (37.0 per cent), the share of services in the GSDP in all other states is more than 40 per cent. In 2011-12, in tune with the general moderation in overall services growth, services growth rates in many states also moderated. But some states continued to register high growth rates with the highest being in Himachal Pradesh at 17.3 per cent followed by Bihar at 16.6 per cent. Among UTs with high services share in GSDP, Delhi with11.5 per cent growth tops the list. While the services revolution in India is becoming more broad-based, with even the hitherto backward states piggy-backing on the good performance of this sector, the initial momentum seems to have slowed down for some north-eastern states like Arunachal Pradesh, Mizoram, and Nagaland after the advantage of base effect is over.
FDI in the Services Sector 10.14 The growth of the services sector is closely linked to the FDI inflows into this sector and the role of transnational firms. While the ambiguity in classifying the different activities under the services sector continues, the combined FDI share of financial
Source : Computed from CSO data. Notes : Data in the case of Gujarat and Mizoram are from 2010-11. Shares at current prices, growth rate at constant (2004-5) prices.
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Services Sector and non-financial services, construction development, telecommunications, computer hardware and software, and hotel and tourism can be taken as a rough estimate of the FDI share of services, though it could include some non-service elements. This share is 47 per cent of the cumulative FDI equity inflows during the period April 2000November 2012. The five service sectors are also the sectors attracting the highest cumulative FDI inflows to the economy with financial and nonfinancial services topping the list at US$ 36.04 billion during the period April 2000-November 2012. This is followed by other service sectors—construction development (US$21.77 billion), telecommunication (US $12.62 billion), and computer software and hardware (US $ 11.54 billion). If the shares of some other services or service-related sectors like trading (1.96 per cent), information and broadcasting (1.65 per cent), consultancy services (1.11 per cent), construction (infrastructure) activities (1.06), ports (0.88 per cent), agriculture services (0.80 per cent), hospital and diagnostic centres (0.82 per cent), education (0.36 per cent), air transport including air freight (0.24 per cent), and retail trading (0.02 per cent) are included then the total share of cumulative FDI inflows to the services sector would be 56.08 per cent. 10.15 In 2011-12, FDI inflows to the services sector (top five sectors including construction) grew robustly at 57.62 per cent to US $ 12.14 billion compared to the growth of overall FDI inflows at 33.6 per cent. However, in 2012-13 (April-November), overall FDI inflows fell by 43.3 per cent to US$ 15.85 billion from US$ 27.93 billion in the corresponding period
Source : Computed from WTO data.
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215
of the previous year. Following this trend, FDI inflows in the top five services also fell by 9.7 per cent to US $ 8.19 billion. Among them, while FDI inflows to the top four services sectors fell in the range of 14 to 97 per cent, FDI inflows to the hotel and tourism sector increased by a very high 328 per cent over the corresponding period in the previous year. 10.16 The government has taken many policy initiatives to liberalize the FDI policy for the services sector. These include liberalizing the policy on foreign investment for companies operating in the broadcasting sector, like increasing the foreign investment limit from 49 per cent to 74 per cent in teleports (setting up up-linking HUBs/teleports) and direct to home (DTH) and cable networks, and permitting foreign investment (FI) up to 74 per cent in mobile TV; permitting foreign airlines to make foreign investment, up to 49 per cent in scheduled and non-scheduled air transport services; permitting FDI, up to 51 per cent, in multibrand retail trading, (also see Box 10. 2); and amendment of the existing policy on FDI in single-brand product retail trading.
India’s Services Trade 10.17 India’s share of services exports in the world exports of services, which increased from 0.6 per cent in 1990 to 1.0 in 2000 and further to 3.3 per cent in 2011, has been increasing faster than the share of merchandise exports in world exports. The growth rates of exports of services of India and the world show two distinct phases, the first till 1996 when the two growths had a scissor-like movement and the second phase after 1996 when the growth of India’s services exports was higher than that of the
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Economic Survey 2012-13
world in almost all the years except 2009. In this second phase, the former was much above the latter in upswings but almost converged with the latter during downswings. (Figure 10.3) (also see Chapter 7: ‘International Trade’).
(including construction) and 242 in the industrial sector. Construction; trade, hotels, and restaurants; and public administration, education, and community services are the three major employment-providing services sectors.
10.18 The overall openness of the economy reflected by total trade including services as a percentage of GDP shows a higher degree of openness at 55.0 per cent in 2011-12 compared to 38.1 per cent in 2004-5. The openness indicator based only on merchandise trade is at 43.2 per cent in 2011-12 compared to 28.3 per cent in 2004-5.
10.20 Studies show that the tertiary employment share has strong upward slopes in all the income quintiles both in rural and urban areas with higher income quintiles having higher shares in each successive NSSO round (Figure 10.4). Thus tertiary employment growth is steadily moving from being an absorber of low income labour to provider of high income jobs.
Services employment in India
PERFORMANCE SERVICES
10.19 The pattern of sectoral share of employment has changed over the last two decades with the share of agriculture falling from 64.75 per cent in 1993-4 to 53.2 per cent in 2009-10 and of industries (excluding construction) falling from 12.43 per cent to 11.9 per cent. The shares of the services and construction sectors in employment, on the other hand, increased in the same period from 19.70 per cent to 25.30 per cent and 3.12 per cent to 9.60 per cent respectively. As per the National Sample Survey Office’s (NSSO) report on Employment and Unemployment Situation in India 2009-10, on the basis of usually working persons in the principal and subsidiary statuses, for every 1000 people employed in rural India, 679 people are employed in the agriculture sector, 241 in the services sector (including construction), and 80 in the industrial sector. In urban India, 75 people are employed in the agriculture sector, 683 in the services sector
OF
SOME MAJOR
10.21 The performance of the different services based on the different indicators shows that sectors like telecom, tourism, and railways have done well in 2011-12 (Table 10.3). Shipping and ports show poor performance reflecting the effects of the global slowdown. The performance and outlook for the different services sectors based on limited firm-level data, based on estimates and forecasts, show a mixed picture for this year, though there are some grounds for optimism in the coming year (Box 10.1). 10.22 The important commercial services for India based on their significance in terms of GDP, employment, exports, and future prospects, have been dealt with in detail in this section. Care has been taken to avoid duplication to the extent possible of services covered in other chapters like Infrastructure, Financial Intermediation, and Social
Source : D. Mazumdar, S. Sarkar and B.S. Mehta, ‘Inequality in India’, part of IHD Research Programme on Globalisation and Labour funded by ICSSR. (forthcoming). Note : APCE : Average per capita expenditure; UPS : Usual principal status.
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Services Sector
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enabled services (ITeS), research and development (R&D) services, legal services, and accounting and audit services.
Sectors. The important services for India include trade, tourism, shipping and port services, real estate services, business services including IT and IT
Table 10.3 : Performance of India’s Services Sector: Some Indicators Sector
2008-09 2009-10
Period 2010-11
2011-12
2012-13
Aviation Airline passengers (domestic and international) Million
49.5 (a) 54.5 (a)
64.5 (a)
70.2(a)
67.5(a)
Telecom Telecom connections (wireline and wireless)
4297.25
8463.2
9513.4
8955.1(b)
Tourism Foreign tourist arrivals Million 5.28 (a) 5.17 (a) 5.78 (a) 6.31 (a) Foreign exchange earnings from tourist arrivals US $ million 11832 (a) 11136(a) 14193 (a) 16564(a)
6.65 (a) 17737(a)
Shipping Gross tonnage of Indian shipping No. of ships
11.06(c) 1122 (c)
10.45(d) 1158(d)
911.68
455.77(e)
Ports
Indicators
Unit
Lakh
Million GT Numbers
Port traffic
6212.8
9.28 925
9.69 1003
10.45 1071
Million tonnes 744.02
850.03
885.45
Railways Freight traffic by railways Net tonne kilometers of railways
Million tonnes 833.31 Million 538226
887.99 584760
832.75 444515
969.78 735.32(c) 639768 470956(c)
Storage Storage capacity No. of warehouses
Lakh MT Numbers
105.98 487
102.47 479
100.85 468
105.25 499
101.60 469
Sources : Directorate General of Civil Aviation, Telecom Regulatory Authority of India, Ministry of Tourism, Ministry of Shipping, Ministry of Railways and Central Warehousing Corporation (Compiled by EXIM Bank of India). Notes : (a) calendar years, for example 2007-8 for 2007. (b) As on 31st December, 2012, (c) AprilDecember, (d) As on 31 January 2013, (e) April-September. GT is gross tonnage; MT is metric tonnes.
Box 10.1 : Performance of Services Firms : A Sectoral Analysis The Centre for Monitoring Indian Economy’s (CMIE) analysis of the sector-wise performance of services activities based on firm-level data show that the performance of sectors such as transport logistics, aviation and construction in the year 2012-13 is subdued in comparison to with the previous year. High negative PAT in hotel sector continued. The health services and telecom sectors are projected to have rebounded in the year 2012-13. Overall the year 2013-14 is projected to be better for most of the sectors, except retail trading, which is projected to have negative growth in profitability. This negative growth is contributed by two factors—one is the base effect with high profit after tax (PAT) growth in the year 2012-13; and the other is an expected shrinking of margins in 2013-14 due to increase in operating costs and price cuts driven by high competition (Table 1). Table 1: Performance of Select Services Firms Annual Growth ( per cent change over previous year) Sector
Sales
PAT
2011-12 2012-13* 2013-14* Transport logistics
Expenditure
2011-12 2012-13* 2013-14*
2011-12
2012-13*
2013-14*
13.4
3.1
10.8
11.0
1.8
11.9
5.8
-2.5
16.3
Shipping
9.3
12.9
4.2
-78.5
63.7
84.0
23.0
9.5
0.0
Aviation
10.6
-0.2
8.0
-
-
-
21.0
-4.2
7.5
-10.3
10.6
12.3
24.9
169.6
-59.4
-2.5
7.8
12.3
16.6
21.1
19.5
-22.0
52.4
24.7
18.8
20.0
17.8
Retail trading Health services Hotel
9.2
9.5
11.0
-77.5
-76.2
-11.7
16.4
12.9
10.9
Telecom
8.9
9.5
11.8
-71.0
39.9
56.2
13.0
12.6
11.4
Software
21.3
19.3
10.7
16.2
19.6
5.2
26.0
18.5
11.8
Construction
18.6
12.1
17.2
-2.6
0.4
19.3
21.6
13.6
16.4
Source: CMIE Industry Analysis (Compiled by Exim Bank of India). Note: * Forecast.
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Economic Survey 2012-13
Trade 10.23 Trade with a share of above 15 per cent in India’s GDP in the last seven years (16.6 per cent in 2011-12) and a CAGR of 9.3 per cent during 2004-5 to 2011-12, has grown to ` 8,10,585 crore in 201112. As per the A.T. Kearney, Global Retail Development Index 2012 report, India ranked at 5th place remains a high-potential market with accelerated retail market growth of 15 to 20 per cent expected over the next five years. While the overall retail market contributes 14 per cent of India’s GDP, organized retail penetration remains low, indicating room for growth. Brazil tops the ranks with retail sales accounting for 70 per cent of Brazil’s consumer spending, followed by Chile, China, and Uruguay. In India, the food and beverages segment is seeing increased activity from foreign players, and grocery remains India’s largest source of retail sales. Hypermarkets and supermarkets continue to dominate the organised retail market, but cash-and-
carry is growing fast, with significant expansion planned from Bharti Wal-Mart, Metro Group, and Carrefour. Apparel is expected to grow by 9 to 10 per cent annually for the next five years. Players such as Zara, Marks & Spencers, and Mango are actively scouting locations to open more stores across the country. The luxury retail sector saw 20 per cent growth last year, with luxury malls becoming entrenched in Delhi, Mumbai, and Bangalore. 10.24 Since 2006, India allowed FDI in single-brand retail to the extent of 51 per cent. In January 2012, the government removed restrictions on FDI in the single-brand retail sector, allowing 100 per cent FDI and from September 2012. FDI in multibrand retail has been allowed up to 51 per cent under the government route and subject to specified conditions (Box 10.2). While agricultural products could get vastly improved access to markets with the growth of modern retail trade, the revenue to the government could also increase, as at present the retail sector is largely unorganized and has low tax compliance.
Box 10.2 : FDI in Multibrand Retail Trading FDI in multibrand retail trading has been permitted subject to specified conditions like the following: •
Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery, and meat products, may be unbranded; ·
•
Minimum amount to be brought in as FDI by the foreign investor, would be US $ 100 million;
•
At least 50 per cent of total FDI brought in shall be invested in ‘backend infrastructure’ within three years of the first tranche of FDI;
•
At least 30 per cent of the value of procurement of manufactured/ processed products purchased shall be sourced from Indian ‘small industries’ which have a total investment in plant and machinery not exceeding US $ 1million;
•
Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per Census 2011and may also cover an area of 10 km around the municipal/urban agglomeration limits of such cities;
•
Government will have the first right to procurement of agricultural products.
State governments/UTs would be free to take their own decisions in regard to implementation of the policy as retail trade is a state subject. Eleven states/UTs, viz. Andhra Pradesh, Assam, Delhi, Haryana, Jammu and Kashmir, Maharashtra, Manipur, Rajasthan, Uttarakhand, Daman and Diu, and Dadra and Nagar Haveli have agreed to permit establishment of retail outlets under this policy. Constitution of a high-level group under the Minister of Consumer Affairs has also been announced to look into various aspects relating to internal trade and to make recommendations on internal trade reforms to the government, whenever required. FDI in multibrand retail trade would benefit stakeholders across the entire span of the supply chain. Farmers stand to benefit from the significant reduction in post-harvest losses expected to result from the strengthening of the backend infrastructure, which would enable the farmers to obtain a remunerative price for their produce. Small manufacturers will benefit from the conditionality requiring at least 30 per cent procurement from Indian small industries, as this would enable them to get integrated with global retail chains. This in turn will enhance their capacity to export products from India. As far as small retailers are concerned, organized retail already coexists with small traders and the unorganized retail sector. Studies indicate that there has been a strong competitive response from the traditional retailers to these organized retailers, through improved business practices and technological upgradation. Global experience also indicates that organized and unorganized retail coexist and grow. Consumers stand to gain the most, first, from the lowering of prices that would result from supply-chain efficiencies and secondly, through improvement in product quality due to the combined effect of technological upgradation, efficient grading, sorting and packaging, testing and quality control, and product standardization. Implementation of the policy is also likely to lead to greater FDI inflows, quality employment, and adoption of global best practices. Source: Based on Inputs from the Department of Industrial Policy and Promotion (DIPP)
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Services Sector
Tourism, including hotels and restaurants 10.25 Tourism accounts for around 6-7 per cent of global employment (direct and indirect) and 5 per cent of global income as per the United Nations World Tourism Organization (UNWTO), Tourism Highlights 2012 edition. It is one of the largest generators of employment across the world and women account for 70 per cent of the workforce in the travel and tourism industry. Hence it generates more inclusive growth than other sectors. According to the UNWTO, international tourist arrivals surpassed the 1 billion mark for the first time in history in 2012, reaching a figure of 1.04 billion from 996 million in 2011 with 4 per cent growth despite the volatility around the globe, particularly in Europe which accounts for over half of international tourist arrivals worldwide. Emerging economies, with 4.1 per cent growth regained the lead over advanced economies with 3.6 per cent growth, with Asia and Pacific showing the strongest growth at 7 per cent. In 2013 growth is expected to decelerate slightly and fall in the range of 3-4 per cent with prospects stronger for Asia and Pacific (5-6 per cent). In 2011 international tourism receipts grew by 11 per cent (3.9 per cent in real terms) to an estimated US$ 1030 billion, setting new records in most destinations despite economic challenges in many source markets. Available data on international tourism receipts and expenditure for 2012 covering at least the first nine months of the year confirm the positive trend in arrivals. In a significant number of destinations including India (22 per cent) receipts from international tourism increased by 15 per cent or more. According to the UNWTO, the number of international tourist arrivals worldwide is expected to increase by 3.3 per cent a year on an average from 2010 to 2030, resulting in around 43 million more arrivals every year, to reach a total of 1.8 billion arrivals by 2030. As in the past, emerging economy destinations are set to grow faster than advanced economy destinations. As a result, the market share of emerging economies which has increased from 30 per cent in 1980 to 47 per cent in 2011 is expected to reach 57 per cent by 2030, equivalent to over one billion international tourist arrivals. 10.26 As per Tourism Satellite Account (TSA) data 2009-10, the contribution of tourism to India’s GDP was 6.8 per cent (3.7 per cent direct and 3.1 per cent indirect) and its contribution to total employment generation was 10.2 per cent (direct 4.4 per cent
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and indirect 5.8 per cent). As per the Twelfth Five Year Plan approach paper, India’s travel and tourism sector is estimated to create 78 jobs per million rupees of investment compared to 45 jobs per million rupees in the manufacturing sector. Foreign tourist arrivals (FTAs) in India grew by 9.2 per cent in 2011. However, due to the Euro-zone crisis and global slowdown, FTA growth moderated to 5.4 per cent to reach 66.48 lakh arrivals in 2012. As a result, foreign exchange earnings (FEEs) growth in dollar terms that was 16.7 per cent in 2011 moderated to 7.1 per cent to reach US $ 17.74 billion in 2012. The share of India in international tourist arrivals was just 0.64 per cent (rank 38) in 2011. India’s share in the international tourism receipts was relatively higher at 1.61 per cent in 2011 (rank 17), though it is very low compared to countries like the US (11.3 per cent) and even China (4.7 per cent). 10.27 Domestic tourism is also an important contributor to the growth of this sector with a 14.34 per cent CAGR of domestic tourist visits from 1991 to 2011. During 2011, there were 851 million domestic tourists, with the top five states, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, Karnataka, and Maharashtra, cumulatively accounting for around 69 per cent of the total domestic tourist visits in the country. The hotels and restaurants sector with a 1.5 per cent share in India’s GDP in 2011-12 is also an important sub-component of the tourism sector. There are also many new tourism products that hold significant potential for India like wellness tourism, golf tourism and adventure tourism. 10.28 To promote tourism, the government has taken many policy initiatives including a five-year tax holiday for 2, 3, and 4 star category hotels located around all United Nations Educational, Scientific, and Cultural Organization (UNESCO) World Heritage sites (except Delhi and Mumbai) for hotels which start operating w.e.f. 1 April 2008 to 31March 2013; an investment-linked deduction under Section 35 AD of the Income Tax Act extended to new hotels of 2 star category and above anywhere in India, allowing 100 per cent deduction in respect of the whole or any expenditure of capital nature excluding land, goodwill, and financial instruments incurred during the year; and inclusion of 3 star or higher category classified hotels located outside cities with population of more than 10 lakh in the harmonized list of the infrastructure subsector. The Government of India has also taken the initiative of identifying,
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Economic Survey 2012-13
diversifying, developing, and promoting the nascent/ upcoming niche products of the tourism industry to overcome the ‘seasonality’ aspect and promote India as a 365 days destination, attract tourists with specific interests, and ensure repeat visits for products in which India has comparative advantage. A committee has been constituted for promotion of golf tourism and wellness tourism and specific guidelines have been formulated to support golf, polo, and wellness tourism. The government has also formulated a set of guidelines on safety and quality norms for adventure tourism. A scheme of Approval of Adventure Tour Operators which is a voluntary scheme open to all bonafide adventure-tour operators has been announced. To attract foreign tourists coming to India for medical treatment, a new ‘medical visa’ category has been introduced. The government has also formulated guidelines to address various issues governing wellness centres, covering the entire spectrum of the Indian systems of medicine. 10.29 The Economic Surveys 2010-11 and 201112 have highlighted various challenges that need to be addressed to develop this sector. Some of the challenges still remain as hindrances to the growth of this sector. One of them is the multiple taxes on hospitality- and tourism-related activities which make the tourism product expensive in the form of high hotel rates and high fares; another is the luxury tax which is imposed by state governments leading to high tariffs and low occupancy in hotels. Luxury tax on hotels in some states is very high and varies from 5 per cent to 12.5 per cent and in some cases it is applicable on printed room rates whereas the actual hotel rates offered to guests are much lower. Tourism infrastructure is another area which needs immediate attention where there is plenty of scope for public private partnerships (PPP). User fees could be levied if monuments or tourist sites are developed by the private sector or through PPP. Thus significant opportunities still remain relatively untapped and for faster, sustainable, and more inclusive growth, as envisaged in the Twelfth Five Year Plan, the tourism sector holds a lot of promise.
Some Transport-related Services Shipping 10.30 Shipping plays an important role in merchandise trade. The fortunes of the former depend on the growth of the latter and the prospects of the latter depend on the efficiency of the former. About
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95 per cent of India’s trade by volume and 68 per cent in terms of value is transported by sea. As on 31 January 2013, India had a fleet strength of 1158 ships with GT of 10.45 million, with the public-sector Shipping Corporation of India having the largest share of 32.60 per cent. Of this, 356 ships with 9.37 million GT cater to India’s overseas trade and the rest to coastal trade. The gross foreign exchange earnings/ savings of Indian ships in 2011-12 were ` 10,666.45 crore. Despite one the largest merchant shipping fleets among developing countries, India ranks 18th among the 35 flags of registration with the largest registered dead weight tonnage (DWT) with a share of only 1.05 per cent in total world DWT as on 1 January 2012. Leaving aside flags of convenience, Hong Kong has the highest DWT, with a share of 7.6 per cent, while China’s share is 3.79 per cent. In 2011 as per UNCTAD, India was ranked 8th among developing countries in terms of container ship operations with 9.95 million twenty foot equivalent units of container (TEUs), with a world share of 1.74 per cent. India is one of the major ship-breaking destinations. In 2011, with a world share of 28.7 per cent (in terms of DWT), it topped the list of shipscrapping nations, scrapping 203 ships of 13.87 million DWT as per ISL Shipping Statistics and Market Review September/October 2012. India is also one of the major countries supplying seafarers. 10.31 As a result of the global slowdown, the turbulence experienced by the global shipping industry continued in 2012. The Baltic Dry Index, the barometer of merchandise trade as well as shipping services, has been in the red since the global crisis of 2008, though there were small upswings at the lower end of the index (Also see Chapter 7: ‘International Trade’). Like shipping companies worldwide, Indian shipping companies also faced problems of restricted cash inflows due to very low charter hire and freight rates in all segments of shipping. Going by the rough assimilation of various Very Large Crude Carrier (VLCC) fixtures, the average rate tumbled from US$ 13,605 a day in the first quarter of FY 2012-13 to US$ 835, US$ 776, and US$ 1296 in the next three months. 10.32 There has been a sharp decline in the share of Indian ships in the carriage of India’s overseas trade from about 40 per cent in the late 1980s to 10.4 per cent in 2011-12 with 17.05 per cent share in India’s oil imports. Given the relatively low participation of Indian ships in India’s trade and given
Services Sector the fact that Indian ships are ageing, with the average age of the Indian fleet increasing from 15 years in 1999 to 16.83 years as on 31 December 2012 (with 41.59 per cent of the fleet over 20 years and 11 per cent in the age group 16-20 years), there is urgent need to increase the shipping fleet so that it is adequate atleast to meet India’s trade volumes. This is also an opportune time to increase our depleting shipping fleet to reasonable size as ship prices which had peaked in the middle of 2007-8 have dropped to historical lows in the subsequent years and the trend is continuing even now as on December 2012. A large and modernized shipping fleet will not only lead to higher growth, employment and higher earning/ saving of foreign exchange, but also increase our bargaining power with foreign liners who carry Indian cargo as per their schedule and also discriminate in the rates.
Port Services 10.33 Port services are closely connected to shipping services and merchandise trade. The performance of the latter two is also dependent on the efficiency of ports. The total capacity of Indian ports has reached approximately 1245.3 million tonnes as on 31st March 2012. During 2011-12, total traffic handled at all ports at 911.7 million tonnes, grew by 3 per cent over the previous year. Though there was a decline in traffic at major ports, which accounted for more than 60 per cent of total traffic, the 11.5 per cent growth achieved by non-major ports contributed to the overall traffic growth handled by all ports. In the first half of 2012-13 (April-September),
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traffic handled by Indian ports grew by 1.8 per cent over the corresponding period of the previous year, with the growth of non-major ports (10.3 per cent) compensating for the decline in growth of major ports. 10.34 As per the World Shipping Council, Shanghai port ranked at the top in terms of total cargo volume handled with 31.74 million TEUs in 2011. Singapore with 29.94 million TEUs was in second position. The Jawaharlal Nehru Port Trust (JNPT) is ranked 30th in terms of total cargo volume handled with 4.53 million TEUs in 2011. The three port-related performance indicators show improvement in both 2011-12 and April-September 2012 over corresponding previous period. The average output per ship-berth-day improved to 13,374 tonnes for all major ports during 2012-13 (April-September) compared to 12,825 tonnes in corresponding period of 2011-12.The average turnaround time at major Indian ports improved to 4.15 days in 2012-13 (April-September) compared to 5.29 and 5.05 in 2010-11 and 2011-12 respectively and ranged between 1.54 days at Cochin Port to 6.27 days at Kandla Port. The average preberthing detention time (PBDT) for all major ports declined from 2.32 days in 2010-11 to 2.04 in 201112. While at first sight this indicates greater efficiency of ports, it could also be due to the lower volumes handled by ports with the global downturn. Even the average turnaround time has been higher in 2011-12 compared to 2008-09. Thus except for average output per ship berth day, the other two indicators have not shown much improvement over the years. Thus efficiency of our ports needs to be improved further (Table 10.4).
Table 10.4 : Some Performance Indicators of Ports in India April to September 2011-12 Indicators
Change in 2011-12 over 2008-09
Change in 2012-13 (Apr.-Sept.) over previous Year
199091
200001
200809
200910
201011
201112P
201112
201213
8.10
4.24
4.20
4.63
5.29
5.05
4.80
4.15
0.85
-0.65
2.16
1.19
1.63
2.16
2.32
2.04
-
-
0.41
-
3372
6961
9669
9215
9140
13073 12825
13374
3404
549
Average turnaround Time (days) Average pre- berthing detention time (days) Average output per shipberth-day (in tonnes)
Source : Transport Research Wing, Ministry of Shipping based on data of Major Ports/Indian Port Association(IPA). P stands for provisional
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10.35 The government has been following the strategy of increasing investment in infrastructure through a combination of public investment and PPP. The Twelfth Five Year Plan with an outlay of ` 3,057.47crore (gross budgetary support) for the port sector envisages an increase in capacity of major ports to 1229.29 million tonnes by the end of 201617 from the pre-Plan base level of 696.5 million tonnes with 12 per cent average annual growth in capacity addition. While efforts are being made to improve port infrastructure, there is need to upgrade the facilities at existing ports with regard to cargo handling, stevedoring, pilotage services, bunker services, and warehousing facilities; increase the drafts to facilitate trans-shipment of Indian cargo which otherwise takes place outside the country; and rationalize the different port charges to make them comparable with best practice levels. The Maritime Agenda 2010-20 covers some of these issues like full mechanization of cargo handling and movements, having draft of not less than 14 m in major ports and 17 m in hub ports, and shifting of trans-shipment of Indian containers from foreign ports to Indian ports.
Real Estate Services and Housing 10.36 Real estate and dwellings has a share of 5.9 per cent in India’s GDP and a growth of 7.2 per cent in 2011-12. The growth of the real estate services in particular has been impressive consistently at over 25 per cent since 2005-6 with 26.3 per cent growth in 2011-12. Housing is a basic necessity for human life and is the second largest generator of employment, next only to agriculture. Housing activities have both forward and backward linkages in nearly 300 sub-sectors such as manufacturing (steel, cement, and builders’ hardware), transport, electricity, gas and water supply, trade, financial services, and construction which contribute to capital formation, income opportunities, and generation of employment. 10.37 In 2012-13 property prices have moderated. As per the National Housing Bank (NHB) RESIDEX index for the quarter July-September 2012 compared to April-June 2012 (covering 20 cities, with 2007 as base year), there is a general decline in prices of residential properties in some smaller towns, while the increase in other cities is mostly marginal. In view of increased urbanization, the housing requirements in urban areas have been witnessing increases over the years. The Eleventh Five Year http://indiabudget.nic.in
Plan (2007-12) estimated housing requirement of 24.7 million units in urban areas of which 99 per cent was in the economically weaker sections/lower income groups (EWS/LIG) segment. As per the estimation of the Task Force on Housing Requirements in Urban Areas during the Twelfth Five Year Plan Period (2012-17), the housing requirement in urban areas is 18.7 million units of which 18.5 million are for the EWS/LIG segment. As per a McKinsey Report, the demand for affordable housing will be 38 million by 2030. 10.38 To support the growth of the housing and real estate sector, many institutions have been set up especially for financing. While these institutions largely cater to the formal sector, access to finance by the informal market segment largely remains untapped. As this untapped market segment is significant and growing, the Government of India has announced various measures like the Interest Subsidy Scheme for Housing for the Urban Poor and setting up of the Credit Risk Guarantee Fund Trust for Low Income Housing. With support from lending institutions, housing credit has grown substantially over the years, resulting in increased market penetration. The housing loan portfolio of scheduled commercial banks and housing finance companies – the major institutional players – stood at ` 6.10 lakh crore as in end-March 2012. However, due to limited housing finance solutions, the gap between housing demand and supply is widening. Besides the mortgage market in India is also underdeveloped. Though mortgages as a percentage of GDP have risen from 3.4 per cent in 2001 to 9 per cent in 201112, the share is relatively lower than in many other countries – such as China (12 per cent), Thailand (17 per cent), Malaysia (29 per cent), Hong Kong (40 per cent), and the USA (65 per cent). 10.39 While advanced countries like the US were rattled by the sub-prime crisis, Indian banks have demonstrated a great amount of maturity in their lending for the housing sector. The government has also taken many policy measures for this sector. In Union Budget 2012-13, a number of incentives were given for promoting affordable housing like allowing external commercial borrowings (ECB) for low cost affordable housing projects, increase in investmentlinked deduction of capital expenditure incurred in the affordable housing projects, exemption from service tax payments for construction services related to residential dwellings, and low cost mass
Services Sector housing up to an area of 60 sq. m under the Scheme of Affordable Housing in Partnership. A Credit Risk Guarantee Fund Trust has been established since 1 May 2012, which will be managed by the NHB, and provide default guarantee for housing loans up to ` 5 lakh sanctioned and disbursed by the lending institutions without any collateral security or thirdparty guarantees and for new borrowers in the EWS/ LIG category in urban areas. The NHB has also floated a joint-venture mortgage guarantee company – the India Mortgage Guarantee Corporation Pvt. Ltd—which will offer mortgage guarantees against borrower defaults on housing loans from mortgage lenders which will help expand access to housing in India. Renting of residential units has been included in the negative list of services that are exempt from payment of service tax. In order to develop strategic policy intervention to promote rental housing as a viable alternative for addressing the housing shortage, the Government of India has also set up a task force for rental housing. The Rajiv Awas Yojana (RAY), also provides support to states for creation of affordable housing stock and assigning property rights to slum dwellers.
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‘Affordable Housing for All’ is another challenge as the demand for housing by the EWS/LIG segment has increased.
Some Business Services 10.41 Business services include services like computer-related services, R&D, accounting services and legal services, and renting of machinery in order of importance (shares) as per India’s National Accounts. The share of business services in India’s GDP, has risen over the years, and these are also the dynamic services with a combined growth rate of 13.5 per cent in 2011-12. They grew at around 20 per cent during 2005-6, 2006-7 and 2008-9 but growth decelerated in the next two years due to the global economic situation.
IT and ITeS 10.42 India’s IT and ITeS services with exponential growth are a unique export-led success story which has put India on the global map. While India has achieved a brand identity in this sector, other developing countries are trying to emulate India’s example. Besides its impact on growth (both direct and indirect), it is also a provider of skilled employment both in India and abroad, generating direct employment for nearly 2.8 million persons and indirect employment of around 8.9 million in 201112. The IT-ITeS industry has four major subcomponents: IT services, business process outsourcing (BPO), engineering services and R&D, and software products.
10.40 India’s housing and real estate sector faces many challenges. While India is among the top countries in terms of housing and workspace needs, it ranks 182nd in construction permission processes according to the World Bank’s Doing Business 2013 report. There are 34 procedures and the average time taken is 196 days, which increases the sale value by 40 per cent. Rapid increase in land prices, absence of a long-term funding and lending market at fixed rates, limited developer finance, the Urban Land Ceiling Regulations Act (ULCRA) continuing in some states, existing lower floor area ratio in cities, high stamp duties and difficulties in land acquisition are some other issues which need to be addressed.
10.43 The global slowdown has impacted the revenues of the IT-Business Process Management (BPM) sector, the growth of which decelerated from 15 percent in 2011-12 to an estimated 8.4 percent reaching US$95.2 billion in 2012-13 as per NASSCOM. The deceleration in growth of the
Table 10.5 : Overall Growth Performance of the IT-BPM Sector Year
Value (US $ Billion)
Growth rate (per cent)
2007-
2008-
2009-
2010-
2011-
2012-
2013-
2011-
2012-
2013-
08
09
10
11
12
13E
14P
12
13E
14P
Total IT-BPM Services Revenue
52.1
59.9
64.0
76.3
87.7
95.2 106-111
15.0
8.4
13-15
Exports
40.4
47.1
49.7
59.0
68.8
75.8
84-87
16.5
10.2
12-14
Domestic
11.7
12.8
14.3
17.3
19.0
19.3
22-24
9.7
1.9
13-15
Source : NASSCOM Note : Data excludes Hardware;
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E: Estimates;
P: Projections
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Economic Survey 2012-13
dominant export sector (80 percent share) was from 16.5 percent in 2011-12 to 10.2 percent in 2012-13, while domestic revenue growth decelerated from 9.7 percent to a 1.9 per cent (due to currency effect) during these years. In Indian rupee terms domestic revenues have grown at 14.1 per cent in 2012-13 compared to 16.6 per cent in 2011-12. NASSCOM estimate of growth for 2013-14 are 13-15 percent for total IT-BPM revenue, 12-14 percent for exports and 13-15 percent for domestic sector. As a proportion of national GDP, IT and Business Process Management (BPM) sector revenues have grown from 1.2 per cent in 1997-98 to an estimated nearly 8 per cent in 2012-13. (Table 10.5) 10.44 While the global slowdown, increasing competition from new countries, and rising protectionist measures in the wake of job losses in developed countries have slightly dimmed the prospects for exports of IT and ITeS services, a great opportunity is waiting in India’s domestic market with increasing technology adoption within the government sector and the small and medium business (SMB) sector. The Twelfth Five Year Plan aims to harness the potential of the software and services sector to contribute to the country’s
development and growth, particularly in terms of investment, exports, employment generation, and contribution to GDP and to retain India’s leadership position as a global IT-BPO destination, consolidate and grow in both mature and emerging markets. The government has also announced the National Policy on Information Technology 2012 which aims to maximally leverage the power of ICT to help address the economic and developmental challenges the country faces. Under the National e-Governance Plan (NeGP), the government focuses on making critical public services available electronically and promoting rural entrepreneurship. Of the 31 Mission Mode Projects (MMP), 24 have been approved by the Government of India (with 22 MMPs having gone live). At central level these are: MCA 21,a complete egovernance project of Ministry of Corporate Affairs, pensions, income tax, central excise and customs, banking, insurance, passport, e-Office, National Population Register (NPR) and UID, India Post, immigration visa, and foreigners’ registration and tracking. Some of the issues and challenges related to this sector are the growing competition from developing countries with lower costs, rising protectionist sentiments in developed countries, and transfer pricing issues (See Box 10.3).
Box 10.3 : Growing competition to India’s IT and ITeS Services The IT and ITeS sector has started facing competition from many developing countries. While the EU has the highest share in computer and information services exports, followed by India and the USA, many new competitors like China, Israel and the Philippines have emerged in recent years. Between 2005 and 2011, the annual average growth of computer services was 69 per cent in the Philippines, 28 per cent in Sri Lanka, 59 per cent in Ukraine, 27 per cent in the Russian Federation, 37 per cent in Argentina and 35 per cent in Costa Rica. Even if in some cases the export values are relatively low, the average annual growth of computer services in these economies is well above the average of the top exporters. In the BPO sector, countries such as the Philippines, Malaysia and China in the Asian continent; Egypt and Morocco in North Africa; Brazil, Mexico, Chile and Columbia in Latin America; and Poland and Ireland in Europe are emerging as attractive destinations for voice contracts, posing a significant threat to Indian firms. According to NASSCOM, in the last five years, India has lost about 10 per cent market share to the rest of the world in the world BPO space, most of which is in the voice contract segment. Though China faces challenges, such as language proficiency, the country is spending large amounts in mission mode to increase English proficiency, and thus may eventually emerge as a threat to India. Though the Philippines, the second largest destination for outsourcing, is currently facing the challenge of appreciating currency, it is a serious competitor having developed both the hardware and software segments of IT. Outsourcing has also become a national issue in several developed countries, like the USA and the UK, who are supporting the local BPO industry through various means. According to industry sources, the BPO industry in the UK employs 800,000 British workers and is emerging as a vital part of the economy. In such a situation, the Indian BPO industry needs to gear up to address the challenges. Information campaigns to dispel the myths and fears about outsourcing needs to be undertaken by the industry in the developed economies. India should also move up the value chain in software services. Equally important is the need to focus on the large domestic sector where there is a huge opportunity which, if tapped could also lead to lower costs due to scale economies. To address the rising wages in the urban BPO space, there is a need to move more towards rural areas, for which skill development, and English language training with American and different European accents is necessary. Source : Based on WTO Report and inputs of NASSCOM and EXIM Bank of India.
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Services Sector
R&D Services 10.45 Among business services, R & D occupies the second position in India’s GDP with growth being consistently high at near 20 per cent in the last few years with growth in 2011-12 at 20.5 per cent. Until recently, the competitive advantage in R&D was almost exclusively with the developed economies. Of late, emerging countries are increasingly involved in R&D and innovation, with active involvement of both public and private sectors. Factors such as low cost, access to new markets, availability of knowledge-oriented manpower, favourable regulatory environment, and fiscal benefits play a major role in driving R&D investments towards emerging economies. These countries are also encouraging innovation through legal, regulatory, and policy support. 10.46 The US $ 1.5 trillion global gross expenditure on R&D (GERD) for 2013 projected by Battelle and R&D magazine is expected to grow by more than US$ 50 billion over the previous year. In this enormous activity, India’s share is 3 per cent with GERD in PPP (purchasing power parity) terms projected at US $ 45.2 billion which is around five times lower than that of China. As a percentage of GDP also it is low at 0.9 per cent. This is partly because the size of the R&D base and absorption capacity is not commensurate with requirements. As per the report, the share of basic research in India’s R&D is estimated to be 26 per cent, applied research 36 per cent, development research 32 per cent, and
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other research 6 per cent. Government funding of R&D accounts for two-thirds of the total funding. Industry contribution to R&D has been steadily increasing over the years but is still less than a third of the total. Government support for R&D in India tends to focus on classical objectives for public R&D funding such as nuclear energy, defence, space, health, and agriculture. 10.47 India is ranked 64th in the global innovation index (GII) in 2012 according to a joint report published by the Institut Européen d’Administration des Affaires i(INSEAD) and World Intellectual Property Organization (WIPO). Though India is ranked better in terms of market sophistication, knowledge and technology outputs, and creative outputs, the country has scored relatively poorly in terms of institutional support, human capital and research, infrastructure and business sophistication for innovation. According to the Global Competitiveness Report 2012-13, India’s capacity for innovation has been lower than that of other BRICS countries except Russia. Though India scores better than China, Brazil, and Russia on the quality of scientific research institutions, the research undertaken in such institutions is not percolating down for commercial usage. This is exhibited through its poor score on university–industry collaboration on R&D as compared to other BRICS nations except Russia. Though India scores better than all BRICS nations on availability of scientists and engineers, as compared to the population, the country has one
Table 10.6 : Global Competitiveness Index : Innovation Capacity Country
Capacity for innovation
Score
Quality of scientific research institutions
Rank Score
Company spending on R&D
Rank Score
University Availability PCT patents – Industry of scientists granted/ collaboration and million on R&D engineers population
Rank Score
Rank Score
Rank Score Rank
India
3.5
42
4.4
39
3.5
37
3.8
51
5.0
16
1.2
63
China
4.1
23
4.2
44
4.1
24
4.4
35
4.4
46
6.5
38
South Africa
3.5
41
4.6
34
3.5
39
4.5
30
3.4
122
6.8
37
Brazil
3.7
34
4.1
46
3.6
33
4.1
44
3.5
113
2.8
48
Russia
3.3
56
3.6
70
3.0
79
3.4
85
3.8
90
5.4
44
South Korea
4.5
19
4.9
24
4.9
11
4.7
25
4.9
23
161.1
9
UK
5.0
12
6.2
3
4.8
12
5.8
2
5.1
12
93.0
18
USA
5.2
7
5.8
6
5.3
7
5.6
3
5.4
5
137.9
12
Source : Global Competitiveness Report 2012-13, World Economic Forum. Note : PCT—Patent Cooperation Treaty.
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Economic Survey 2012-13
of the lowest ratios of scientists and engineers per million people. Part of this shortage is attributed to the lack of quality higher education institutions. The Report estimates that even with large population base, India is estimated to have 25 per cent shortage of engineers in the country by 2025 (Table 10.6). 10.48 In Budget 2012-13, the government has extended the weighted deduction of 200 per cent for R&D expenditure in an in-house facility beyond 31 March 2012 for a period of five years to promote investment in R&D. In this Budget a sum of ` 200 crore has been set aside for incentivizing agricultural research with awards. India has declared 2010-20 as the ‘decade of innovation’. The government has stressed the need to enunciate a policy for synergizing science, technology, and innovation and has also established the National Innovation Council. A Science, Technology, and Innovation Policy 2013 has been announced in furtherance of these pronouncements. Increasing GERD to 2 per cent of GDP, from the present level of less than 1 per cent has been set as a national goal.
Legal Services 10.49 Legal services have been growing at a steady rate of 8.2 per cent in each of the years from 2005-6 to 2011-12. The Indian legal profession today consists of approximately 1.2 million registered advocates, around 950 law schools, and approximately 4 to 5 lakh law students across the country. Every year, approximately 60,000–70,000 law graduates join the legal profession in India. India is ranked 45, with a score of 4.5, in terms of judicial independence by the Global Competitiveness Report 2012-13, an improvement from 51st rank in 2011-12. As regards efficiency of the legal framework in settling disputes, India is ranked 59, with a score of 3.8, an improvement from 64th rank a year before. India is ranked at 52nd position when it comes to the efficiency of the legal framework in challenging regulations, with a score of 3.9, a marginal declined from 51st position in the previous year. Though India's rankings are better than most of the South Asian and some South East Asian countries in all the three parameters, there is a need for further improvement particularly in speeding up disposal of cases. The economic growth in our country has inevitably led to complex laws and regulations and it is important that lawyers across India have access to the necessary tools to keep pace with the change.
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10.50 The practice of law has however changed drastically in the past few decades due to liberalization and associated economic growth in India. With industrialization and FDI inflows, the corporate legal sector in India has been witnessing tremendous growth, as also legal process outsourcing (LPO). In India the practice of law is governed by the Advocates Act of 1961. Under this Act, foreign law firms are not allowed to engage in practice of law in India. Many foreign legal firms have set up liaison offices (currently permitted under the law), while a few have established referral relationships with Indian firms. Given that India has benefited from opening up to foreign competition in many other areas, and given that Indian lawyers are offering services across the world (see below), India should explore allowing foreign law firms greater access to the Indian market. 10.51 The global financial crisis has not only increased recession-related litigations in developed countries but also encouraged legal outsourcing to cut down costs. India is regarded as one of the best LPO destinations in view of the low cost of legal professionals (50 per cent to 80 per cent more cost competitive than that of the USA and UK), geographical advantage (Indian time zone is distinct from that of the USA and Britain, allowing it to offer legal services round the clock), language proficiency (emphasis on English education), and the legal system (which is inspired by the legal systems of the USA and UK). Technologically too, the Indian LPO industry has made rapid strides as Indian service providers can make use of advanced means of communication technology. Indian legal service providers offer legal support in the form of research document reviews, drafting of documents, making applications for patents, and various paralegal and administrative tasks. 10.52 The National Legal Services Authority (NALSA) has been constituted under the Legal Services Authorities Act 1987 to monitor and evaluate implementation of legal aid programmes and to lay down policies and principles for making legal services available under the Act. Free legal services include payment of court fee, process fees and other charges incurred in legal proceedings, services of lawyers, obtaining and supply of certified copies of orders and other documents in legal proceedings and preparation of appeal, paper book, etc. During the period from 1 April 2012 to 31 October 2012, more
Services Sector
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than 7.82 lakh persons have benefited through legal aid services in the country. Of them, there were more than 23,000 persons belonging to the scheduled castes and about 20,000 persons from the scheduled tribes. More than 37,000 women and about 5900 children also benefited. During this period more than 54 thousand Lok Adalats have been organized and these Lok Adalats settled more than 17.30 lakh cases. A Para-Legal Volunteers (PLVs) project has been developed by NALSA for the purpose of imparting legal awareness to various target groups. As on 31 December 2012, 73,555 PLVs have been trained in the country and have started functioning, bridging the gap between common people and legal services institutions.
availability of high-quality experts in tax, insurance, and pension laws of the US and other countries and encouraging setting up of back offices of foreign firms in India. Tie-ups of domestic firms with foreign firms can help gain expertise and markets which would otherwise not be individually available for small domestic accountancy firms. This would also need relaxation in some domestic regulations and obtaining due recognition to Indian qualifications through mutual recognition agreements (MRAs). As with legal services, FDI in accounting services will help improve the competitiveness of the Indian market, and link it better to global markets.
Accounting and Audit Services
Telecom and Related Services
10.53 Accounting, auditing, and book-keeping services are a part of ‘business services’. Accounting services have been growing at around 6-7 per cent since 2005-6 with 7.1 per cent growth in 2011-12. The accounting profession in India is highly developed with the potential to play a greater role internationally. As per WTO data, in the US $ 44.5 billion ‘other business services’ exports of India in 2010, the legal, accounting, management, and public relations services with a value US$ 8.6 billion had a share of 19.3 per cent. This is around five times less than the US exports of US $ 39.1 billion and three times less than China’s exports of US$22.8 billion.
10.55 Telecom services is another sunrise sector in which India has made a mark with the second largest telephone network in the world, after only China. Teledensity, which is an important indicator of telecom penetration, increased from 18.22 per cent in March 2007 to 73.34 per cent as on 31 December 2012, with urban teledensity at 149.55 per cent and rural at 39.90 per cent. (See Chapter 11 for further details.)
10.54 The accountancy service providers in India are self-regulated through a combination of statutory bodies like the Institute of Chartered Accountants of India (ICAI), the Institute of Cost and Work Accountants of India, and the Institute of Company Secretaries of India (ICSI). There are 53,197 active CA firms as of 27 December 2012. Indian accounting firms are increasingly getting integrated and are providing associated services such as management consultancy, corporate finance, and advisory services in addition to their core business of accounting, auditing, and tax services. Given the high potential for accounting and audit services both domestically and in exports through the outsourcing mode, there is need to revamp the professional development framework to expand the talent pool, deepen the expertise, and enhance the flow of high quality accountancy professionals. Tapping the outsourcing market of the US and other developing countries in niche areas like actuarial and accountancy services would depend on the
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Communication Services
Postal Services 10.56 Postal services, a traditional mode of communications all over the world, have also been a popular mode in India, especially rural India. Department of Posts has the largest postal network in the world with 1,54,822 post offices in the country as on 31March 2012. Of these, 1,39,086 are in rural areas and 15,736 in urban. In order to expand the network and further improve people’s access to postal services, India Post is also adopting the franchisee model. It has so far opened 1,670 franchisee outlets in areas where it was not possible to open post offices. The Department of Posts has launched ‘Project Arrow’ as a quality improvement initiative to transform India Post into a vibrant and responsive organization. 10.57 With tough competition from courier services offered by the private sector, and emergence of alternate modes of communications such as telecom and information technology, the postal service is diversifying into new areas like e-commerce, B to C address/addresse verification, M to M money transfer, web-based money transfer, social security disbursement and some other social sector-related
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Box 10.4 : An Indicative list of domestic restrictions and regulations in some services in India One major issue in services is the domestic barriers and regulations. Domestic regulations in strict WTO terms include licensing requirements, licensing procedures, qualification requirements, qualification procedures, and technical standards but here other restrictions and barriers are also considered. While there are many domestic regulations in our major markets which deny market access to us and therefore need to be negotiated at multilateral and bilateral levels, there are also many domestic regulations in India which hinder the growth of this sector. Since domestic regulations perform the role of tariffs in regulating services, there is need to list the domestic regulations in India which need to be curbed to help growth of the sector and its exports, while retaining those which are necessary for regulating the sector at this stage. An indicative list of some important domestic regulations in India which need to be examined for suitable policy reforms in the services sector is as follows: Trade and Transport services: Some constraints in these sectors include restrictions on inter-state movement of goods which could ease with the adoption of the model Agriculture Produce and Marketing Committee (APMC) Act by many states; the Multimodal Transportation of Goods Act 1993 which needs revision to ease the existing restrictions on transportation and documentation through different modes of transport, particularly restrictions in the Customs Act which do not allow seamless movement of goods; and restrictions on free movement of cargo between Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Ports. Construction: In construction, bottlenecks result from continuation of restrictions under the Urban Land Ceiling and Regulation Act (ULCRA) in some states namely Andhra Pradesh, Assam, Bihar, and West Bengal which have not yet repealed it and the confusion in the process required for clearance of buildings even after the repeal of ULCRA by passing of the Urban Land(Ceiling and Regulations) Repeal Act 1999 by the other states. There is also lack of clarity on the role of states as facilitators in the land acquisition policy resulting in increasing number of court litigations adding to risk profile of builders/projects thereby restricting lenders from extending finance to such builders/ projects. There are also restrictions on floor area ratio (FAR) in many states; and other restrictions like the application of bye laws/regulations and its exemptions e.g. increase in FAR which varies from project to project and is sometimes discriminatory. Obtaining environment clearance is another major hindrance. Accountancy services: While the accountancy professionals were hitherto allowed to operate either as a partnership firm or as a sole proprietorship firm or in their own name since the Indian regulations do not permit exceeding 20 professionals under one firm, the emergence of Limited Liability Partnership (LLP) structure is likely to address this impediment. However, the number of statutory audits of companies per partner is restricted to 20. FDI is also not allowed in this sector and foreign service providers are not allowed to undertake statutory audit of companies as per the provisions of the laws in India. There are also domestic regulations like prohibition on the use of individual logos for partnership and single proprietorship accounting firms. These regulations need to be relaxed and streamlined to facilitate tie-ups and penetrate foreign markets given the potential for exporting these services by the outsourcing mode. Legal services: In legal services FDI is not permitted and international law firms are not authorized to advertise and open offices in India. Foreign service providers can neither be appointed as partners nor sign legal documents and represent clients. The Bar Council is opposed to entry of foreign lawyers/law firms in any manner. Indian advocates are not permitted to enter into profit-sharing arrangements with persons other than Indian advocates. Education Services: These come under the concurrent list with multiple controls and regulations by central and state governments and statutory bodies. Regulations of minimum of 25 acres of land to establish a medical college restricts the setting up of medical colleges in cities like Delhi. Patient load factor regulations related to establishment of new medical colleges also need to be in tune with present day equipment-intensive patient care and modern practices and procedures of medical education. Source : Based on Dr H.A.C. Prasad and R. Sathish (2010), working paper No. 1/2010-DEA on ‘Policy for India’s Services Sector’ with updates from concerned Departments and Institutions.
activities. Besides the already existing instant money order, the Department of Posts launched mobile money remittance services on 15 November 2012 in 18 selected post offices in each of four circles, viz. Kerala, Bihar, Delhi, and Punjab. The Department of Posts has also been given the responsibility of
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disbursing wages to Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) beneficiaries through post office savings bank accounts. At present, MGNREGS wages are disbursed through 5.55 crore NREGS accounts in 96,895 post offices. During the current financial year
Services Sector (April-November 2012) wages to the tune of ` 9,812 crore have been disbursed. Post offices also have a significant role in disbursement of benefits under various schemes such as pensions and conditional cash transfers to women. The wide reach of post offices is also being utilized for collection of data to compute the rural consumer price index every month in rural areas. While the postal sector is entering into new areas of activity, it has not only to shed its role in some of the traditional activities and areas, but also trim its size and release the resources both physical and human for use in other areas.
CHALLENGES
AND
OUTLOOK
Outlook 10.58 The growth of the steadily growing services sector did not fall even during the post 2008 crisis period This was primarily due to higher government spending with the high weighted community, social, and personal services at 19.8 per cent and 17.6 per cent in 2008-09 and 2009-10 respectively, which is more than the rate in 2007-08 and around eight to ten times the rate of 2006-07. This was supported by the good growth in the other two major sectors, ‘financial, insurance, real estate, and business services’ and ‘transport, storage, and communication’. While these two sectors along with ‘trade, hotels, and restaurants’ were the major contributors to growth before the crisis, during the crisis years of 2008-9 and 2009-10, ‘community, social and personal services’ assumed a greater role in stabilizing the growth of the services sector. However, the growth of these services decelerated in 2010-11 and was low in 2011-12 due to deceleration in growth of public administration and defence. This, coupled with the lower growth of trade (internal and external) reflected in fall in growth of transport and related activities, led to a relatively lower growth of the services sector and even construction sector. In 2011-12, among the broad services sub-sectors, the highest point contribution to total GDP growth at 34.0 per cent was that of ‘financing, insurance, real estate, and business services’ followed by ‘trade, hotels, and restaurants’ (16.9 per cent). In 2012-13, with growth of even ‘trade, hotels & restaurants’ and ‘financing, insurance, real estate and business services’ decelerating, overall services growth has also decelerated. 10.59 Moving forward in the coming years, the shipping sector continues to be in the red with fall in http://indiabudget.nic.in
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external trade and the aviation sector has been rattled by sudden eruption of problems in some airlines. Following the growth moderation in FTAs and the resultant FEEs, growth in tourism and related services like hotels is expected to be moderate. On the other hand with the recent announcement of reform measures at regular intervals including mild relaxation in the monetary and credit policy, sectors like retail, construction, and telecom are expected to perform better. With the slight improvement in the global economic situation, software, financial, and fair-weather business services are also expected to perform better. With no major cuts in community and social expenditure expected, services sector growth could recover, the downside risks, however, being any downswings in the global economic situation.
Challenges 10.60 The immediate challenge for the services sector covering myriad activities and areas is growth revival. India’s growth has been basically a servicesled growth pulling up overall growth of the economy. While this could be through a business-as-usual approach, a more targeted approach with focus on big-ticket services could lead to exponential gains for the economy. While software and telecom services have led by example, there are some other important services like tourism including medical tourism and shipping and logistics. Tourism is a bigticket item which can not only lead to higher growth but also more inclusive growth. With world tourist arrivals expected to increase by 43 million every year on an average from 2010 to 2030 and FTAs in emerging countries expected to grow faster than in advanced economies, a goldmine of opportunity in tourism is waiting for India which at present has a paltry share of 0.64 per cent in world tourist arrivals. India has an assorted list of destinations having different types of weather and catering to different types of tourists. However, an image change for Indian tourism is needed with higher investment in tourism infrastructure including through PPP mode. Even user charges could be levied if monuments or tourist sites are developed by the private sector or through PPP. There is urgent need to address issues like high luxury taxes on hotels by states and ensure greater cleanliness and safety for tourists which can help in giving a big boost to this sector. Refunding VAT as done in countries like Thailand and Singapore
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Economic Survey 2012-13
can also help the tourism sector with ripple effects on sectors like textiles and leather manufacturing, as it can lead to high purchase of these items in which India is price competitive. Shipping services is another major area where the growth impact can be high. With the share of shipping services in India’s overseas cargo falling from 40 per cent in the 1980s to just 10.4 per cent in 2011-12, measures to augment the ageing shipping fleet of India are necessary. With global prices at an all-time low, the time is opportune for such purchases which can help in greater foreign exchange earnings/savings in the future through shipping services which have forward linkage effect even in the export sector and also increase our bargaining power with the foreign liners. Super specialty healthcare is another potential sector with India being one of the cheapest destinations offering quality services. 10.61 The other major challenge is to retain and expand our competitive advantage in those services where we have already made a mark. The present advantage in services may not continue forever, with new competitors from other developing countries making rapid strides even in areas where we had the initial advantage as in the case of software services. Further expansion of established services
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like software and telecom into new markets and greater usage of these services domestically can not only increase services growth but also propel growth in other sectors with greater efficiency in these sectors using knowledge- and technology-based services. 10.62 Removing or easing domestic regulations is the third challenge. While removal of market barriers in the form of domestic regulations in other countries depends on multilateral and bilateral negotiations, the myriad restrictions and regulations in the different services domestically as indicated in Box 10.4 need immediate attention. Removing or easing them can lead to dynamic gains for the Indian economy. 10.63 The services sector is an uncharted sea throwing up many daunting challenges as well as opening up many exciting opportunities. While many hitherto non-tradable services including those in the government and social sectors are becoming domestically tradable, many services hitherto confined within national borders (like telemedicine) have become internationally tradable. Addressing the challenges of the diverse services sectors and seizing the new opportunities can lead to multiple gains for the services sector and the economy.
Energy, Infrastructure and Communications
11 CHAPTER
T he
Twelfth Five Year Plan lays special emphasis on development of the infrastructure sector including energy, as the availability of quality infrastructure is important not only for sustaining high growth but also ensuring that the growth is inclusive. The total investment in the infrastructure sector during the Twelfth Five Year Plan, estimated at ` 56.3 lakh crore (approx. US$1trillion), will be nearly double that made during the Eleventh Five Year Plan. This step up in investment will be feasible primarily because of enlarged private-sector participation that is envisaged. Unbundling of infrastructure projects, public private partnerships (PPP), and more transparent regulatory mechanisms have induced private investors to increase their participation in infrastructure sectors. Their share in infrastructure investment increased from 22 per cent in the Tenth Five Year Plan to 38 per cent in the Eleventh Plan and is expected to be about 48 per cent during the Twelfth Five Year Plan. Yet, more than half of the resources required for infrastructure would need to come from the public sector, from the government, and the parastatals. This would require not only the creation of the fiscal space but also use of a rational pricing policy. Further, scaling up private-sector participation on a sustainable basis will require redefining the contours of their participation for the development of infrastructure sector in a transparent and objective manner with a comprehensive regulatory mechanism in place. This chapter summarizes recent developments in the infrastructure sector, particularly the energy scenario in India, and the challenges and opportunities in the context of the targets and milestones envisaged in the Twelfth Five Year Plan.
OVERVIEW
OF
PERFORMANCE
11.2 Infrastructure projects take a long time to plan and implement. Delays in the execution of projects not only lead to shortfalls in achieving targets but widen the availability gaps. Time overruns in the implementation of projects continue to be one of the main reasons for underachievement in many infrastructure sectors. The status report of major central-sector projects costing ` 150 crore and above for the month of September 2012 shows that out of the 566 projects, five were ahead of schedule, 226 on schedule, and 258 had been delayed with respect to their latest scheduled date of completion. The remaining projects do not have http://indiabudget.nic.in
fixed dates of commissioning. Delays in land acquisition, municipal permission, supply of materials, award of work, operational issues, etc. continued to drag down implementation of these projects. Sector-wise, in the coal sector 21 projects were delayed out of 51, in the petroleum sector 37 out of 71, in the power sector 45 out of 98, in the railways 40 out of 127, and in the road sector 86 out of the total 146 projects. The overall cost overrun amounted to 16.8 per cent of the original cost and till September 2012 only 45.5 per cent of the anticipated cost of the projects had been incurred. 11.3 Major sector-wise performance of core industries and infrastructure services shows a mixed
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Economic Survey 2012-13
trend so far in the current financial year. Production of coal, cement, petroleum refinery was marginally higher during the current year as compared to the corresponding period of the previous year while steel and power-sector production was comparatively lower. Fertilizer, crude oil, and natural gas production also declined during the first nine months of this financial year. Among the infrastructure services, growth in freight traffic by railways has been comparatively higher so far, while the civil aviation sector and cargo handled at major ports have witnessed negative growth. In the road sector the National Highways Authority of India (NHAI) achieved 17.3 per cent growth during the current financial year upto November 2012 (Table 11.1).
ENERGY 11.4 During the Eleventh Five Year Plan, nearly 55,000 MW of new generation capacity was created,
yet there continued to be an overall energy deficit of 8.7 per cent and peak shortage of 9.0 per cent. Resources currently allocated to energy supply are not sufficient for narrowing the gap between energy needs and energy availability. Indeed, this may widen as the economy moves to a higher growth trajectory. India's success in resolving energy bottlenecks therefore remains one of the key challenges in achieving the projected growth outcomes. Further, India's excessive reliance on imported crude oil makes it imperative to have an optimal energy mix that will allow it to achieve its long-run goal of sustainable development.
Reserves and potential for energy generation 11.5 The potential for energy generation depends upon the country's natural resource endowments and the technology to harness them. India has both
Table 11.1 : Growth in core industries and infrastructure services (in per cent) Sl.
Sector
Unit
2009-10
2010-11
2011-12
2011
No. 1 2 3 4 5 6
7 8 9
10 11
2012 (April-Dec.)
Power Coal Finished steel Fertilizers Cement Petroleum: a) Crude oil b) Refinery c) Natural gas Railway revenue-earning freight traffic Cargo handled at major ports Civil aviation: a) Export cargo handled b) Import cargo handled c) Passengers handled at international terminals d) Passengers handled at domestic terminals Telecommunications: Cell phone connections Roads: Upgradation of highways@ i) NHAI ii) NH(O) & BRDB
Bill Unit MT MT MT MT
6.8 8 3.2 13.2 10.1
5.7 0 9.6 1 4.3
8.1 1.3 8.5 -0.1 6.4
9.3 -2.7 9.1 -0.5 5.8
4.6 5.7 3.6 -3.4 6.1
MT MT MT
0.5 -0.4 44.8
11.9 3 9.9
1 3.2 -8.9
1.9 4 -8.8
-0.4 6.9 -13.3
MT MT
6.6 5.7
3.8 1.6
5.2 -1.7
4.2* 1.3*
4.7* -2.9*
10.4 7.9
13.4 20.6
-2.2 -1.6
-1.3* 1.8*
-1.0* -9.7*
Lakh
5.7
11.5
7.6
7.5*
2.8*
Lakh
14.5
16.1
15
18.5*
-5.5*
Thousand lines
47.3
18
-52.7
-49.6*
-
Kms
30.9
21.4
-33.3
2.9*
17.3*
Kms
17.3
4
-6.8
-32.4*
-2.8*
Tonnes Tonnes
Source: Ministry of Statistics and Programme Implementation (MOSPI) and O/o The Economic Adviser, DIPP Notes : NH(O) stands for National Highways Organization and BRDB for the Border Roads Development Board(BRDB). @ Includes Widening to four lanes and two lanes and strengthening of existing weak pavement only. *Data pertain to April-November 2011 and 2012 respectively; MT is million tonnes.
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Energy, Infrastructure and Communications non-renewable reserves (coal, lignite, petroleum, and natural gas) and renewable energy sources (hydro, wind, solar, biomass, and cogeneration bagasse). As on March 2011, India's estimated coal reserves were about 286 billion tonnes, lignite 41 billion tonnes, crude oil 757 MT, and natural gas 1241 billion cubic metres (BCM). Estimated hydro potential (above 25 MW) is about 145 gigawatts (GW). The total potential for renewable power generation from various sources other than large hydro projects was 89,760 MW. The estimated reserves of non-renewable and the potential from renewable energy resources change with the research and development of new reserves and the pace of their exploration.
Energy production 11.6 The trend in production of the primary sources of conventional energy such as coal, lignite, crude
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petroleum, natural gas, and electricity shows that in last four decades, i.e. from 1970-1 to 2010-11, the compound annual growth rate (CAGR) of production of coal, lignite, crude petroleum, natural gas, and electricity (hydro and nuclear) generation was 5.0 per cent, 6.1 per cent, 4.3 per cent, 9.1 per cent, and 4.0 per cent respectively (Figure 11.1). In terms of energy equivalent of all the primary energy sources in 2010-11, the share of coal and lignite, electricity (hydro and nuclear), and natural gas was 52 per cent, 28 per cent, and 11 per cent respectively.
Consumption pattern of conventional energy 11.7 Trends in consumption of energy from conventional sources in India show that during the last four decades, i.e from 1970-1 to 2010-11, consumption of coal, lignite, crude oil in terms of refinery throughput, and electricity (thermal, hydro,
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and nuclear) increased at a CAGR of 5.30 per cent, 6.05 per cent, 11.25 per cent, and 6.63 per cent respectively. Growth of total energy consumption from all conventional sources in terms of peta joules was 6.04 per cent during 1970-1 to 2010-11 (Figure 11.2). Per capita energy consumption grew at an average annual rate of 5.30 per cent during this period. The elasticity of energy use ( Kwh per rupee), defined as the amount of energy consumed for generating one unit of gross domestic production (GDP), has, however, been less than one. The consumption pattern of energy by primary sources expressed in terms of peta joules shows that electricity generation accounted for about 51 per cent of the total consumption of all primary sources of energy during 2010-11, followed by coal and lignite (25 per cent) and crude petroleum (20 per cent).
Energy scenario during the Twelfth Five Year Plan and beyond 11.8 The Twelfth Plan has projected a total domestic energy production of 669.6 million tons of oil equivalent (MTOE) in 2016-17 and 844 MTOE in 2021-2. This will meet around 71 per cent and 69
per cent of expected energy consumption, with the balance to be met from imports, projected to be about 267.8 MTOE in 2016-17 and 375.6 MTOE in 2021-2. Import dependence in case of crude oil and coal is projected to be about 78 per cent and 22.4 per cent respectively by 2016-17. Coal and lignite will continue to dominate the energy scenario and by 2021-2 the share of these two fuel products will be about 66.8 per cent in total commercial energy produced and about 56.9 per cent in total commercial energy supply by 2021-2. The share of crude oil in production and consumption is expected to be 6.7 per cent and 23 per cent respectively. Energy exploration and exploitation, capacity additions, clean energy alternatives, conservation, and energy sector reforms will, therefore, be critical for energy security. Box 11.1 gives a picture of energy pricing in India.
POWER Generation 11.9 Electricity generation by power utilities during 2012-13 was targeted to go up by 6.05 per cent to
Box 11.1 : Energy Pricing The government appreciates the economic role of rational energy pricing. Rational energy prices provide the right signals to both the producers and consumers and lead to a demand-supply match, providing incentives for reducing consumption on the one hand and stimulating production on the other. Aligning domestic energy prices with the global prices, especially when large imports are involved, may be ideal option as misalignment could pose both micro- and macroeconomic problems. At microeconomic level, underpricing of energy to the consumer not only reduces the incentive for being energyefficient, it also creates fiscal imbalances. Leakages and inappropriate use may be the other implications. Underpricing to the producer reduces both his incentive and ability to invest in the sector and increases reliance on imports. Over the years, India's energy prices have become misaligned and are now much lower than global prices for many products. The extent of misalignment is substantial, leading to large untargeted subsidies. The government has taken several initiatives for rationalizing the energy prices in different sectors. The Integrated Energy Policy has outlined the broad contours of the pricing system for coal. The pricing of coal is done now on gross calorific value (GCV) basis with effect from 31 January 2012, replacing the earlier system of pricing on the basis of useful heat value (UHV) which takes into account the heat trapped in ash content also, besides the heat value of carbon content. The revision in the GCV is likely to increase the prices of domestic coal to some extent, but this is a desirable adjustment because domestic thermal coal, adjusted for quality differences, continues to be underpriced. In case of petroleum products pricing, the government dismantled the Administered Pricing Mechanism in 2002. This decision, however, was not fully implemented and domestic pass through of global price increases remained low for petrol, diesel, kerosene, and LPG. On 25 June 2010, the government announced that the price of petrol was fully deregulated and the oil companies were free to fix it periodically. However, diesel price deregulation was deferred. In January 2013, the government announced the new roadmap providing for a gradual price increase for reducing diesel under-recoveries. Admissibility of subsidized number of liquefied petroleum gas (LPG) cylinders and prices of LPG have also recently been revised. Pricing of gas is presently done under the New Exploration Licensing Policy (NELP). The government provides the operator freedom to sell the gas produced from the NELP blocks at a market-determined price , subject to the approval of pricing formula. The government is reviewing pricing under the price sharing contract (PSC) to clarify the extent to which producers will have the freedom to market the gas.
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Energy, Infrastructure and Communications
235
Table 11.2 : Power Generation by Utilities (Billion KWh) Category
April-December 20011-12
2011-12
2012-13
Growth (per cent)
Power Generation
876.887
580.664
683.753
4.55
Hydroelectric#
130.510
100.178
92.543
(-)13.9
Thermal
708.806
454.404
561.879
8.55
Nuclear
32.286
21.183
24.653
3.54
5.285
4.898
4.677
(-)7.49
Bhutan import Source : Ministry of Power;
Note : #Includes generation from hydro stations above 25 MW.
930 billion units. The growth in power generation during April to December, 2012 was 4.55 per cent, as compared to about 9.33 per cent during April to December, 2011 (Table 11.2). 11.10 In the thermal category, growth in generation from coal, lignite, and gas-based stations was of the order of 13.90 per cent, 19.81 per cent, and (-) 25.49 per cent respectively. The overall plant load factor (PLF), a measure of efficiency of thermal power stations, during April to December 2012 declined to 69.63 per cent as compared to the PLF of 71.94 per cent achieved during April to December 2011(Table 11.3). 11.11 The sector-wise and region-wise break-ups of the PLF of thermal power stations from 2009-10 to 2012-13 (April to December 2012) show change over time as well as regional variation (Table 11.4). During the current year, while the PLF for centraland state-sector utilities moderated, PLF for privatesector utilities witnessed improvement. The PLF of state-sector utilities remained lower than that of private- and central-sector utilities. The deficit in power supply in terms of peak availability and total energy availability declined during the Eleventh Five Year Plan. While the energy deficit decreased from Table 11.3 : Thermal power generation during April-December 2012 Components
Coal
Generation
Growth
(Billion KWh)
(%)
PLF (in per cent) Apr.Dec. 2011
Apr.Dec. 2012 69.49
488.92
13.90
72.23
Lignite
23.40
19.81
67.05
73.47
Gas Turbine
53.87
-25.49
62.01
43.62
1.69
-6.44
-
-
561.80
8.6
71.94
69.63
Diesel Thermal Total
Source : Ministry of Power.
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Table 11.4 : PLF of Thermal Power Stations (per cent) Category
i)
2011-12
State sector
ii) Central sector
2011-12 2011-12 (Apr.Dec.)
2012-13 (Apr.Dec.)
66.75
68.00
66.50
65.01
85.12
82.12
80.16
78.80
76.70
76.19
78.10
79.03
78.75
77.48
77.19
69.67
75.26
72.04
71.19
69.00
iii) Private sector (Utilities) REGIONS i) Northern region ii) Western region iii) Southern region
80.04
82.19
79.39
80.77
iv) Eastern region
66.21
63.51
61.37
61.99
0
0
0
0
75.08
73.32
71.94
69.63
v) North-eastern region All India
Source : Ministry of Power.
9.6 per cent in the terminal year of the Tenth Plan (2006-7) to 8.7 per cent during April to December 2012, peak deficit declined from 13.8 per cent in 2006-7 to 9.0 per cent during the current financial year (up to December 2012).
Capacity Addition 11.12 The Eleventh Five Year Plan initially envisaged a capacity addition of 78,000 MW, of which 19.9 per cent capacity was hydro, 75.8 per cent thermal, and the rest nuclear. At the time of the Mid Term Appraisal (MTA) of the Eleventh Plan, the target was revised to 62,374 MW with the thermal, hydro, and nuclear segments contributing 50,757 MW, 8,237 MW, and 3,380 MW respectively. A capacity addition of 54,964 MW has been achieved during the Eleventh Plan. The capacity addition during the Twelfth Plan period is estimated at 88,537 MW comprising 26,182 MW in the central sector, 15,530
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Economic Survey 2012-13
Table 11.5 : Sector-wise and Fuel –wise capacity addition during April-December 2012 (MW) Sector
Thermal
Hydro
Nuclear
Total
Per cent
Target
Actual
Target
Actual
Target
Actual
Target
Actual
to target
4023.3
2660
645
264
2000
0
6668.3
2924
43.8
State
3951
1350
87
15
0
0
4038
1365
33.8
Private
7180
5495
70
70
0
0
7250
5565
76.8
15154.3
9505
802
349
2000
0 17956.3
9854
54.87
Central
All India
Source : Ministry of Power.
MW in the state sector, and 46,825 MW in the private sector respectively. The capacity addition target for the year 2012-13 was set at 17,956 MW. As against it, a capacity of 9,854 MW has been added till 31 December 2012 (Table 11.5).
Development of Hydro Power 11.13 As per a re-assessment study carried out by the Central Electricity Authority (CEA), the Table 11.6 : Exploitation of Hydroelectric Potential No of projects/ schemes
Capacity (MW)
180
39324
Under construction
51
13619
Approved by CEA Approved by CEA and yet to
57
29443
be taken up for construction
32
19259
Survey & investigation
97
20436
377
103019
Under operation
Total Source : Ministry of Power
identified hydroelectric potential of the country (having installed capacity above 25 MW) is 1,45,320 MW. As of now, 434 hydropower projects/schemes (Table 11.6) are at different stages of operation/ approval/investigation.
Ultra Mega Power Project Initiatives 11.14 The Ministry of Power launched an initiative for development of coal-based super critical Ultra Mega Power Projects (UMPP) of about 4000 MW capacity each. Four UMPPs, viz. Sasan in Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, and Tilaiya in Jharkhand have already been transferred to the identified developers and are at different stages of implementation. Three
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units of Mundra UMPP each of 800 MW have been commissioned in March, July, and October 2012. The fourth and fifth units are expected to achieve commercial operation in May and September 2013. Other awarded UMPPs are expected to come up in the Twelfth Plan (except the last unit of the Tilaiya UMPP, which is likely to come up in the Thirteenth Plan).
Transmission, Trading, Access, and Exchange National Grid 11.15 An integrated power transmission grid helps to even out supply-demand mis-matches. The existing inter-regional transmission capacity of 27,750 MW connects the northern, western, eastern, and north-eastern regions in a synchronous mode operating at the same frequency and the southern region asynchronously operating in the same mode. This has enabled inter-regional energy exchanges of about 48,896 million units (MUs) during April-December 2012, thus contributing to better utilization of generation capacity and improvement in power supply position. Synchronous inter-connection of the southern region with other regions is expected to be established by Q1 of 2014.
Open access 11.16 Competition in the electricity sector has been augmented through open access, allowing a buyer to choose the supplier and a seller to choose the buyer. Open access at inter-state level is now fully functional. The facilitative framework created through the Central Electricity Regulatory Commission [CERC] (Open Access in Inter-State Transmission) Regulations 2008 has provided regulatory certainty for the sellers and buyers through market access and also the security of payment against default by buyers. During 2011-12,
Energy, Infrastructure and Communications 24,111 inter-state short-term open access transactions (including bilateral and collective) were approved for sale of 66,987 MU. During 2012-13 (up to November 2012), sale of 48,008 MU has been approved through 21,185 inter-state bilateral and collective short-term open access transactions. The CERC also notified the regulations concerning grant of connectivity, long-term access, and medium-term open access in inter-state transmission in 2009 and regulations for approvals for execution of the interstate transmission scheme in 2010 to ensure development of an efficient, reliable, coordinated, and economical inter-state electricity transmission system based on the long-term access sought by generation developers.
Trading of Electricity 11.17 Trading in electricity is enabled through electricity traders and power exchanges. It optimizes generation resources by facilitating trade and flow of electricity across the country. It has helped in sale of surplus power by distributing utilities and captive power plants on one hand and purchase of power by deficit utilities on the other hand to meet sudden increases in demand. The short-term markets also provide generators with an alternative to sell power other than through long-term power purchase agreements (PPAs). The CERC has granted 61 inter-state trading licences, 45 of which were in existence as on 30 November 2012. There is a cap on trading margins to be charged by traders under the regulations. For short-term contracts with the per unit price of electricity being less than ` 3 (Rupees Three), the trading margin is 4 (four) paise per unit and for per unit price of electricity higher than ` 3, the trading margin is capped at 7 (seven) paise per unit.
Aggregate Technical and Commercial losses and Restructured APDRP 11.18 The focus of the Restructured Accelerated Power Development Reforms Programme (R-APDRP) is on actual, demonstrable performance in terms of reduction in aggregate technical and commercial (AT&C) losses. Projects under the scheme are taken up in two parts in urban areas and cities with population of more than 30,000 (10,000 in case of special category states). Part-A of the scheme includes projects for establishment of baseline data and information technology (IT) application for energy accounting/auditing and IT-
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237
based consumer service centres. Part-B of the scheme includes regular distribution-strengthening projects. So far (as on 30.11.2012) under Part-A(IT), projects worth ` 5,196 crore covering all the eligible towns (1,402) in 29 states/union territories(UTs), and under Supervisory Control and Data Acquisition, and projects worth ` 1,442 crore covering 63 towns in 15 states have been covered. Under Part-B, 1,132 projects worth ` 25,684 crore in 20 states have been sanctioned. Cumulatively an amount of ` 6,304 crore (as on 30.11.2012) has been disbursed under the R-APDRP for implementation of sanctioned projects. A proposal for continuing the R-APDRP during the Twelfth Plan for completing the ongoing works is under consideration in the Ministry of Power.
Rural Electrification 11.19 The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) was launched in April 2005 with the objective of providing all rural households access to electricity through the creation of an appropriate rural electricity infrastructure. Below poverty line (BPL) households are provided connections free of cost. The Government of India provides 90 per cent capital subsidy for projects under the scheme. The scheme was initially approved with a capital subsidy of ` 5,000 crore for the last two years of the Tenth Plan period ending March 2007. During the Eleventh Plan, 341 projects covering 46,141 un-electrified census villages, 2,37,981 partially electrified census villages, and free connections to 152.11 lakh BPL households were sanctioned. The revised cost of these projects is ` 20,906 crore. During 2011-12, an additional 72 projects covering 1,909 un-electrified census villages, 53,505 partially electrified census villages, and free connections to 45.59 lakh BPL households were sanctioned with a revised cost of ` 8,103 crore. As on 30 November 2012, electrification works in 1,06,116 un-electrified villages and intensive electrification in 2,73,328 partially electrified villages have been completed and free electricity connections to 202.60 lakh BPL households have been released. Capital subsidy of ` 26,664 crore has so far been utilized under the scheme.
PETROLEUM 11.20 In order to meet the burgeoning demand for petroleum products in the country, the government has taken several measures to enhance exploration
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Economic Survey 2012-13
and exploitation of petroleum resources including natural gas and coal bed methane (CBM), apart from improved distribution, marketing, and pricing of petroleum products. During financial year 2011-12, crude oil production was 38.09 million metric tonnes (MMT), with the share of national oil companies at 72.4 per cent. The projected crude oil production in 2012-13 is 42.31 MMT which is about 11.1 per cent higher than that in 2011-12. The increase in production is expected mainly on account of higher crude oil production from Barmer Fields, Rajasthan. Crude oil production by Cairn Energy India Pvt. Ltd. in Rajasthan started with effect from 29 August 2009 and reached 5.77 MMT during April-November 2012 against 4.26 MMT during the same period of 201112. Overall crude oil production during AprilNovember 2012-13 at 25.39 MMT, however, shows a negative growth of 0.54 per cent over the same period of the previous year. 11.21 The average natural gas production in the year 2011-12 was 130 million metric standard cubic metre per day (MMSCMD) which was about 9 per cent lower than the previous year mainly due to lower production from the KG D6 deep-water block. The projected natural gas production in 2012-13 is about 117.8 MMSCMD, which is about 9 per cent lower than production in the previous year. Natural Gas production during April- November 2012-13 was 28.05 billion cubic metre (BCM) as compared to 32.28 BCM during the same period of the previous year.
Exploration of Domestic Oil and Gas 11.22 The NELP was adopted in 1999. India has an estimated sedimentary area of 3.14 million sq. km, comprising 26 sedimentary basins. Prior to adoption of the NELP, only 11 per cent of Indian sedimentary basins were under exploration. Since the operationalization of the NELP in 1999, the government has awarded an area of 47.3 per cent of Indian sedimentary basin for exploration. So far, 117 oil and gas discoveries have been made in 39 NELP blocks. As on April 2012, about 737 MMT of oil equivalent hydrocarbon reserves have been added under the NELP. The investment made by Indian and foreign companies until April 2012 was of the order of US$ 20.2 billion, of which US $12.1 billion was on hydrocarbon exploration and US$ 8.1 billion on development of discoveries. With a view to further accelerating the pace of exploration, in the ninth round of the NELP (NELP-IX), 34 exploration blocks http://indiabudget.nic.in
were offered. These include 8 deep-water blocks, 7 shallow-water blocks, 11 on-land blocks, and 8 Type-S on-land blocks. Nineteen production-sharing contracts have already been signed with the awardees. A total of 254 production-sharing contracts have been signed under the NELP so far.
Domestic Exploration of other Gaseous Fuel CBM 11.23 India has the fourth largest proven coal reserves in the world and holds significant prospects for exploration and exploitation of CBM. Under the CBM policy, 33 exploration blocks have been awarded in Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tamil Nadu, and West Bengal. Out of the total available coal-bearing area of 26,000 sq. km for CBM exploration in the country, exploration has been initiated in about 17,000 sq. km. The estimated CBM resources in the country are about 92 trillion cubic feet (TCF), out of which only 8.92 TCF has so far been established. Commercial production of CBM in India has now become a reality with current production of about 0.28 MMSCMD.
Shale Gas 11.24 Shale Gas can emerge as an important new source of energy in the country. India has several shale formations which seem to hold shale gas. The shale gas formations are spread over several sedimentary basins such as Cambay, Gondwana, Krishna-Godawari on-land, and Cauvery. The Director General Hydrocarbans (DGH) has initiated steps to identify prospective areas for shale gas exploration. A multi-organizational team (MOT) of the DGH, Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL), Gas Authority of India Limited (GAIL) has been formed by the government to examine the existing data set and suggest a methodology for shale gas development in India. Further, a memorandum of agreement (MoU) between the Department of State, USA and Ministry of Petroleum and Natural Gas has been signed for assessment of shale gas resources in India, imparting training to Indian geo-scientists and engineers, and assistance in the formulation of regulatory frameworks. A draft Shale Oil /Gas Policy was placed in the public domain by the government for inviting comments. The views/comments received from various stakeholders/ agencies are under examination.
Energy, Infrastructure and Communications
Equity Oil and Gas from abroad 11.25 In view of an unfavourable demand-supply ratio of hydrocarbons in the country, acquiring equity oil and gas assets overseas is an important strategy for enhancing energy security. The government is encouraging national oil companies to aggressively pursue equity oil and gas opportunities overseas. ONGC Videsh Limited (OVL) has produced about 8.753MMT of oil and equivalent gas during the year 2011-12 from its assets abroad in Sudan, Vietnam, Venezuela, Russia, Syria, Brazil, South Sudan, and Colombia. The estimated crude oil and natural gas production in 2012-13 is about 6.865 MMT. The reasons for lower overseas production are geopolitical problems in South Sudan and Syria. Oil public-sector units (PSU), viz. OVL, India Oil Corporation (IOC), OIL, Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), and GAIL have acquired exploration and production (E&P) assets in more than 20 countries.
Refining Capacity 11.26 The total refining capacity in the country increased from 187.4 MMT (as on 1.4.2011) to 215.1 MMT (as on 1.1.2013) and is projected to reach 218.4 MMT by the end of 2012-13 and 239.6 MMT in 2013-14 with capacity augmentation of existing refineries and commissioning of the Paradip Refinery. Refinery production (crude throughput) during 201112 was 211.4 MMT (including the Jamnagar Refinery under special economic zone [SEZ] by Reliance Industry Ltd.) showing an increase of 2.6 per cent compared to a production of 206.15 MMT in 201011. During the current financial year (April-November 2012-13), refinery production (crude throughput) is 141.45 MMT. The country is not only self- sufficient in refining capacity for its domestic consumption but also substantially exports petroleum products. During 2011-12, the country exported 60.84 MMT of petroleum products worth ` 2,66,486 crore.
Pipeline Network and City Gas Distribution 11.27 There has been substantial increase in the pipelines network in the country with 32 product pipelines with a length of 11,274 km and capacity of 70.688 MMT at present. There are also 16 crude pipelines spreading over 8,558 km with capacity of 106.45 MMT. In addition, there are LPG pipelines of 2,313 km with 3.94 MMT capacity and gas pipelines of 13,428 km with 355MMSCMD capacity. The gas http://indiabudget.nic.in
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pipeline infrastructure is being augmented with about 14,889 km of pipeline network with additional capacity to transport 264 MMSCMD of gas by 201516. In addition, around 4,300 km of pipeline network has been authorized by the Petroleum and Natural Gas Regulatory Board (PNGRB) which will further add capacity to transport 184 MMSCMD of gas. 11.28 With increased availability of gas in the country, the city gas distribution (CGD) network has been enlarged to cover various cities supplying gas for domestic consumers, public transport, and commercial/ industrial entities. At present, there are a total of 588 compressed natural gas (CNG) stations across the country. Vision- 2015 envisages providing piped natural gas (PNG) to more than 200 cities across the country. The current consumption of gas in the CGD network is around 14 MMSCMD, of which 6.63 MMSCMD is from regasified liquefied natural gas (RLNG). At present, there are a number of entities operating in 43 geographical areas (GAs). The PNGRB has recently invited bids for authorization of CGD in these cities. The CGD sector comprises CNG and PNG customers. The PNGRB has envisaged a rollout plan of CGD network development through competitive bidding in more than 300 possible GAs on the basis of expressions of interest (EOI) submitted to the Board.
Rajiv Gandhi Gramin LPG Vitaran Yojna 11.29 The 'Vision-2015' adopted for the LPG sector inter alia focuses on raising the LPG population coverage in rural areas and areas where LPG coverage is low. The Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY) for small-size LPG distribution agencies has been launched in 2009. Under this scheme 75 per cent population is to be covered by 2015 by releasing 5.5 crore new LPG connections. To ensure that growth of LPG usage is evenly spread, public-sector oil marketing companies (OMCs) are assessing/identifying locations in a phased manner under the RGGLVY. OMCs have undertaken to set up 5,261 LPG distributors in 29 states. Out of this 1,591 LPG distributors had already been commissioned as on November 1, 2012. Selection for the rest of the locations is in progress as per policy.
Direct Transfer of Cash- LPG Scheme 11.30 In order to check leakages, adulteration, and inefficiency resulting from the current system of delivery of subsidized products, the Government of
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Economic Survey 2012-13
India set up a task force for evolving a suitable mechanism for direct transfer of subsidies to individuals/families, who are entitled to subsidized kerosene, LPG, and fertilizers. A pilot project was launched at Mysore. So far details of 35,000 customers have been collected. Of these, nearly 18,000 have authenticated Aadhaar numbers. As on 25 November 2012, OMCs had completed more than 35,000 successful biometric-authenticated deliveries. Modalities on subsidy payment as token amount (` 10) have been finalized with sponsor bank and participating banks using the Aadhaar Payment Bridge. It has now been decided to close the Mysore Pilot Project as Mysore is one of the 51 districts selected for roll-out under the wider direct benefit transfer scheme.
COAL 11.31 The production of coal was estimated at 540 MT in 2011-12. The production of raw coal during April-December 2012 was estimated to be 384.1 MT (including coking grade coal of 35.3 MT) compared to 359.6 MT (including 33.2 MT of coking grade coal) during the corresponding period of the previous year. Domestic production however was inadequate and had to be supplemented with imports of 102.85 MT in 2012-13 (up to December 2012). Coal is largely sold through a notified price. At the same time, under the e-auction system (which enables price discovery through a market-based process), Coal India Ltd. (CIL) and Singareni Collieries Company Limited (SCCL) sold 57.27 MT and 2.91 MT of coal (spot and forward) respectively in 2011-12. During April-December 2012, CIL sold 33.84 MT of coal through e-auction at an average price which was 48.65 per cent above the notified price. Average e-auction price was nearly 80 per cent higher than the notified price for SCCL for its 2.61 MT of coal sales through e-auction. 11.32 During the Twelfth Plan period, the demand for coal is projected to reach 980 MT, whereas domestic production is expected to touch 795 MT in the terminal year (2016-17). Even though the demand gap will need to be met through imports, domestic coal production will also need to grow at an average rate of 8 per cent compared to about 4.6 per cent in the Eleventh Five Year Plan. It is envisaged that even as public-sector companies, particularly the CIL will continue to play a major role in achieving the domestic coal-production targets, investment by the private sector including http://indiabudget.nic.in
investment in new coal blocks for captive end users will be necessary. 11.33 In order to achieve the necessary impetus, the focus is on addressing both the short-run constraints on mining and evacuation of coal as also on long-term measures for enhancing production capacity. As an immediate measure, the government has issued specific guidelines for granting environment clearance for one-time production capacity expansion of up to 25 per cent in existing mines. In order to attract greater investment in coal mining, the pace of exploration and drilling will need to be scaled up. Apart from emphasis on coal production, efforts are also under way to increase the capacity for coal washing, CBD, underground coal gasification, and clean coal technologies. The positive aspect of the large investment requirements in the coal sector is the spin-off effects that it would have on associated sectors such as equipment manufacturing, supply, maintenance, project design, and execution.
TRANSPORT
SECTORS
Railways 11.34 The Twelfth Five Year Plan (2012-2017) has envisaged an integrated approach for the transport sector as a whole. The vision for transport is to be guided by a modal mix that will lead to an efficient, sustainable, economical, safe, reliable, environmentfriendly, and regionally balanced transport system. In line with the objectives of the Plan, Indian Railways aims at developing a strategy to build up the rail network to be part of an effective multi-modal transport system.
Freight Performance of the Indian Railways 11.35 Freight loading by Indian Railways during the fiscal 2011-12 increased to 969.1 MMT against 921.7 MMT in 2010-11, registering an increase of 5.1 per cent. The freight traffic target for the year 2012-13 was fixed at 1,025 MMT (Budget Estimates [BE]). During April-November 2012, Indian Railways carried 647.1 MMT of revenue-earning freight traffic (an increase of 4.7 per cent) compared to 618.05 MMT carried during the corresponding period of the previous year. The moderate growth in freight traffic may be attributed not only to the overall slowdown in the economy but also to other factors like a ban on iron ore exports from Karnataka and reduced imports of fertilizers.
Energy, Infrastructure and Communications
Rationalization of Railway Freight and Passenger Fare 11.36 While Indian Railways' input costs increased by 10.6 per cent per annum between 2004-5 and 2010-11, passenger fares remained unchanged or were even reduced in lower classes thereby constraining internal resource generation, essential for replacement /renewal of assets, operation and maintenance activities, and critical safety and passenger amenity works. Further, cross-subsidy through the freight business was no longer viable due to fast evolving competition from other modes of transport. Keeping these factors in mind, an increase in passenger fares was announced on 9 January 2013, effective from the midnight of 21-22 January 2013. While second class ordinary (suburban) fares were raised by 2 paise per km, second class ordinary (non-suburban) fares were increased by 3 paise per km and second class (mail/ express) fares by 4 paise per km. For the sleeper class the increase was 6 paise per km; For AC chair car, AC 3-tier, and AC first class, fares were hiked by 10 paise per km, while for first class and AC 2-tier, the increase was 3 paise and 6 paise per km respectively. A rationalized freight tariff structure was also brought into effect from 6 March 2012.
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Upgradation of Passenger Amenities 11.37 The Adarsh stations scheme was introduced in 2009. Adarsh stations are provided with basic facilities such as drinking water, functioning toilets, catering services, waiting rooms and dormitories especially for lady passengers, and better signage. A total of 976 stations have been identified for development as Adarsh stations, of which 616 have so far been developed. The Computerised Unreserved Ticketing System (UTS) was made available at 5,560 locations with 10,172 counters by end-November 2012. About 250 additional automatic ticket-vending machines (ATVMs) were commissioned during 2012-13 taking the total tally of installed ATVMs to 808. The Freight Operation Information System (FOIS) gives an account of all demands, number of loads/rakes/trains and their pipelines, freight locos, and stock at aggregate level. The Rake Management System (RMS) module of FOIS has been implemented at 246 locations and it covers all major yards/lobbies and control offices at various divisions and zones of Indian Railways. Box 11.2 discusses the Dedicated Freight Corridor Project initiative of Indian Railways.
New Initiatives by Indian Railways ď Ź
Kisan Vision Project: To encourage setting up of cold storage and temperature-controlled perishable cargo centres through PPP mode,
Box 11. 2 : Dedicated Freight Corridor Project The Eastern and Western Dedicated Freight Corridors (DFC) are a mega rail transport project being undertaken to increase transportation capacity, reduce unit costs of transportation, and improve service quality. The Eastern DFC (1839 route kilometres [RKM]) extends from Dankuni near Kolkata to Ludhiana in Punjab, while the Western DFC (1499 RKM) extends from the Jawahar Lal Nehru Port (JNPT) in Mumbai to Dadri /Rewari near Delhi. A special purpose vehicle, the Dedicated Freight Corridor Corporation of India Limited has been set up to implement the project. Out of 10,703 ha of land to be acquired for the project, 7,768 ha (73 per cent) has already been awarded under the Railway Amendment Act (RAA) 2008. The Eastern and Western DFC projects are being funded through a mix of bilateral/multilateral loans, gross budgetary support (GBS), and PPP. The Western DFC is being funded by the Japan International Cooperation Agency (JICA) up to 77 per cent of the total cost. Funding has been tied up and award of civil contract of 900 km is in process. The remaining portion of the project construction cost will be borne by the Ministry of Railways as equity funding. The Ludhiana to Mughalsarai section (1183 km) of the Eastern DFC is being funded by the World Bank up to 66 per cent of the project cost. Funding for the first sector, viz. Khurja-Kanpur (343 km), has been tied up and award of civil contract is under way. Funding tie up with the World Bank for the remaining sectors is also in process. The Mughalsarai-Sonnagar sector (122 km) will be funded by Indian Railways' own resources. Civil construction work of this sector is in progress. The Dankuni-Sonnagar section (534 km) of the Eastern DFC will be implemented through PPP mode. Apart from the Eastern and Western DFCs, a feasibility study has also been undertaken on four future freight corridors, viz. East-West Corridor (Kolkata-Mumbai), North-South Corridor (Delhi-Chennai), East Coast Corridor (KharagpurVijayawada) and Southern Corridor (Goa-Chennai). A pre-feasibility study of the Chennai-Bangalore Freight Corridor is also being proposed. After commissioning of the Eastern and Western DFCs, it is planned to upgrade the speed of passenger trains to 160-200 kmph on the existing routes. A feasibility study for upgradation of speed of passenger trains to 160-200 kmph on the existing Delhi-Mumbai route has been undertaken with co-operation from the Government of Japan in 2012-13.
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logistics based PSUs including the Container Corporation of India Limited, Central Warehousing Corporation, and Central Rail-side Warehouse Company Limited have been asked to provide infrastructure at six Indian Railways locations under a pilot project--the Kisan Vision Project. Of the six locations, so far Singur (West Bengal) and Nasik (Ojhar in Maharashtra) are in operation, while New Jalpaiguri (West Bengal), Dankuni (West Bengal), and New Azadpur (Adarsh Nagar, Delhi) are under process and will shortly be completed. Macheda (West Bengal) being not a remunerative project, was not found to be a potential location for setting up a perishable cargo shed.
High-speed passenger trains: Indian Railways is adopting a multi-pronged strategy to provide safer, faster, cleaner, and more comfortable passenger trains. Seven corridors have been identified for conducting pre-feasibility studies for running high-speed trains (popularly referred to as bullet trains) at speeds above 350 kmph. These corridors will be set up through PPP route. Initially, the Mumbai-Ahmedabad corridor has been taken up for which the pre-feasibility study has been completed. Work is in progress in respect of the remaining corridors. A study is also being done on the Delhi-Mumbai route for raising the speed of passenger trains from 160 kmph to 200 kmph, i.e. for running semi-high speed trains. Induction of LHB Coaches: Linke Holfmann Busch (LHB) coaches are being inducted in train services including existing and certain important Rajdhani and mail/express trains. Till December 2012, LHB coaches had been inducted in about 14 Rajdhani, 12 Shatabdi, and 11 AC Duronto services. LHB coaches have higher carrying capacity, better riding comfort, higher-speed potential, longer life, upgraded amenities, provision of control discharge toilet system, lower maintenance requirement, enhanced safety features, and aesthetic interiors. A rail coach factory at Palakkad has been sanctioned in PPP mode for production of such coaches. Introduction of bio-toilets: With a commitment to providing hygienic environment to its passengers and staff, Indian Railways along with the Defence Research and Development Organization (DRDO) has developed
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environment-friendly bio-toilets for its passenger coaches. Eight trains are running with 436 biotoilets. A complete switch-over to bio-toilets in new coaches has been planned by 2016-17 and Indian Railways has targeted elimination of direct discharge passenger coach toilet systems by the end of the Thirteenth Five Year Plan (2021-22).
Roads 11.38 National Highway Development Projects: As of now about 24 per cent of the total length of National Highways (NHs) is single lane/intermediate lane, about 51 per cent is two-lane standard, and the balance 25 per cent is four-lane standard or more. In 2012-13, the achievement under various phases of the National Highways Development Project (NHDP) up to December 2012 has been about 1,605 km and projects have been awarded for a total length of about 878 km (Table 11.7). Financing of NHDP 11.39 A part of the fuel cess imposed on petrol and diesel is allocated to the National Highways Authority of India (NHAI) for funding the NHDP. The NHAI leverages the cess resources to borrow additional funds from the debt market. Till date, such borrowings have been limited to funds raised through 54 EC (capital gains tax exemption) bonds, taxfree bonds, and short-term overdraft facility. The government has also taken loans for financing projects under the NHDP from the World Bank (US$ 1965 million), Asian Development Bank (ADB) (US$ 1605 million), and Japan Bank for International Cooperation (32,060 million yen) which are passed on to the NHAI partly in the form of grants and partly as loan. The NHAI has also taken a direct loan of US$ 149.78 million from the ADB for the Manor Expressway Project (Table 11.8). Initiatives taken by the NHAI for speeding up the roads programme are summarized in Box 11.3.
Development of Roads in Left Wing Extremism)-affected areas 11.40 The government on 26 February 2009 approved the Road Requirement Plan (RRP) for upgrading of 1,126 km NHs and 4351 km state roads (total 5,477 km) to two-lane at a cost of ` 7,300 crore in 34 districts affected by left-wing extremism (LWE) in Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha,
Energy, Infrastructure and Communications
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Table 11.7 : NHDP Projects as on December 2012 Sl. NHDP No. components
Total Length km)
Completed 4/6 Lane (km)
Under implementation
Balance for Award of Civil Work (km)
Length (km)
No. of Contracts
1
GQ
5846
5846
0
8
-
2
NS-EW
7142
6053
722
59
367
380
368
12
3
0
1390
964
406
4
20
3
Port Connectivity
4
Other NHs
5
SARDP-NE
388
49
63
2
276
6
NHDP Phase III
12109
4602
5734
90
1773
7
NHDP Phase IV
20000
62
4300
31
15638
8
NHDP Phase V
6500
1276
2804
28
2420
9
NHDP Phase VI
1000
-
-
-
1000
10 NHDP Phase VII
700
19
22
2
659
5.5
-
5.5
1
-
55460.5
19239
14068.5
228
22153
11 NH 34 Total
Source : Ministry of Road Transport and Highways (MoRT&H). Notes : GQ—Golden Quadrilateral connecting Delhi, Mumbai, Chennai, and Kolkata; NS-EW—North-South and East-West corridor; SARDP-NE—Special Accelerated Road Development Programme in the North-Eastern Region.
Table 11.8 : Financial Structure of NHAI (` ` crore) Year
Cess Fund
External assistance Grant
Loan
Ploughing
Borrowings
Budgetary
back of funds
54-EC
Support
deposited by
Bonds
NHAI in CFI 2005-06
3269.70
2350.00
600.00
1289.00
802.00
2006-07
6407.45
1582.50
395.50
1500.00
570.67
2007-08
6541.06
1776.00
444.00
305.18
559.00
2008-09
6972.47
1515.00
378.80
1630.74
159.00
2009-10
7404.70
272.00
68.00
1153.63
200.00
2010-11
8440.94
320.00
80.00
1623.00
2160.10
843.00
2011-12
6187.00
-
-
2692.89
12511.52 #
1212.21
2012-13*
6003.00
1777.00
1868.85
550.00
Source : MoRT&H. Notes : #including tax-free bonds of ` 10,000 crore; * up to December 2012; CFI—Construction Federation of India.
and Uttar Pradesh for inclusive growth of these areas. The Ministry of Road Transport & Highways (MoRT&H) entrusted with the responsibility of developing these roads, has set up a LWE division under the Chief Engineer for sanctioning and implementing the above programme through respective PWDs. Detailed estimates for 5,419 km length have been sanctioned at an estimated cost of ` 7,699 crore and works on 5,049 km
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length costing ` 6,853 crore have been awarded. Development of 1,960 km length had been completed up to December 2012 with a cumulative expenditure of ` 2,494 crore incurred so far. The development of roads under the programme is scheduled to be completed by March 2015. RRPII covering a length of 5,624 km at an estimated cost of ` 9,400 crore is under consideration of the government.
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Box 11. 3 : Initiatives taken by the Government to expedite projects under NHDP
The NHAI Board has approved formation of a High Level Expert Settlement Advisory Committee for one-time settlement of old cases pending in courts. The claims shall be resolved as one-time settlement and strategy would vary based on commonality of issues across contracts or could be based on optimum settlement with firms or groups with significant stakes collectively through appraisal of merits, risks, and settlement through stages of negotiations.
As a new initiative for promoting highway development, the mode of engineering procurement and construction (EPC) contracts is being brought in. Projects that are not viable under BOT (toll) mode, such as those in far-flung areas, would have to be undertaken under EPC mode. To overcome the economic slowdown in this sector, the MoRT&H has finalized a proposal for awarding projects under new modified turnkey EPC mode under 100 per cent government funding in cases where there are no takers under BOT (toll) mode. This mode of delivery will also take care of cost and time overruns.
In order to remove the bottlenecks and ensure seamless movement of traffic and collection of toll as per the notified rates, the government had decided to introduce passive radio frequency identification (RFID) based on electronic toll collection.
In order to relax the condition of mandatory environment clearance (EC) for areas less than 5 hectare, the Ministry of Environment and Forests (MoEF) has been requested not to insist on EC for the earth/soil because all highway projects commence only after obtaining necessary environment clearance for the project whereby the conditions stipulated by the MoEF for borrow areas are adhered to by the concessionaires.
The NHAI has recently taken up award of select highway projects to private-sector players under an operate, maintain, and transfer (OMT) concession. Till recently the tasks of toll collection and highway maintenance were entrusted to tolling agents/ operators and subcontractors, respectively.
State governments have been requested to constitute high-level committees under their Chief Secretaries (as Nodal Officers) with the NHAI's Regional Officer as Member-Secretary, for monitoring pre-construction activities for NHAI projects. Most states have constituted the committees.
In order to speed up the implementation of projects mandated to the NHAI by the government and for ensuring better and closer liaison with the state governments for expediting the pre-construction activities of the projects, it was decided to establish 17 Regional Offices headed by Chief General Managers CGMs at various locations in the country. Substantial financial powers have been delegated to Regional Officers for facilitating speedy processing/approvals for acquisition of land.
Prime Minister's Reconstruction Plan for J&K 11.41 The Hon'ble Prime Minister announced a Reconstruction Plan (PMRP) for Jammu and Kashmir during his visit to the state on 17 and 18 November 2004. Construction of Mughal Road, widening of Domel-Katra road (NH-1C), double-laning of Batote-Kishtwar-Sinthanpass-Anantnag Road (NH-1B), upgrading of Srinagar-Uri Road (NH-1A), construction of Khanabal--Pahalgam Road, construction of Narbal-Aangmarg Road and doublelaning of Srinagar-Kargil-Leh Road (NH-1D) are the seven works under this project amounting to ` 3,300 crore. An expenditure of around ` 2,708 crore has already been incurred. Besides, ` 178.6 crore has been allocated to the State of J&K for work being executed on NHs through the BRO. Under the Central Road Fund (CRF) another ` 113.58 crore has been allocated for work on state and other district roads (ODR).
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Civil Aviation Air Passenger and Cargo Traffic 11.42 Domestic passenger traffic handled at Indian airports reached 106 million during January to November 2012. This is marginally lower than the domestic passenger traffic throughput of 108 million for the same period during 2011. International passenger traffic handled at Indian airports was placed at 37.8 million during JanuaryNovember 2012 as against 36.20 million during the corresponding period of the previous year. International cargo throughput at Indian airports during January-November 2012 was 1.30 MMT as compared to 1.37 MMT during the previous year. Domestic cargo throughput during JanuaryNovember 2012 stood at 0.73 MMT, almost the same as in the corresponding period of the previous year.
Energy, Infrastructure and Communications
Air India 11.43 The Government of India approved a Turn Around Plan (TAP) and a Financial Restructuring Plan (FRP) for improving the operational and financial performance of Air India (AI) in April 2012. The company has taken several initiatives towards cost cutting and revenue enhancement during the year 2011-12, covering route rationalization, phasing out and grounding of old fleet, freezing of employment in non-operational areas, leveraging assets of the company to increase MRO (maintenance, repair, and overhaul) revenue and revenue from the company's real estate properties. The TAP also included operationalization of subsidiary companies in ground handling and MRO and transfer of manpower and equipment so that these could be treated as independent profit centres. An Oversight Committee in the Ministry of Civil Aviation has been constituted to closely monitor the performance of AI vis-Ă -vis milestones set in the TAP. For the first half of the year, performance has been in line with the target set in the TAP. AI has registered an allround enhanced performance such as on-time performance at 85 per cent, passenger load factor at 70.9 per cent, and yield at ` 4.31 per revenue passenger kilometre. It is expected that the company will achieve positive EBIDTA (earnings before income, taxes, depreciation and Amoritization) in the results for the Financial Year 2012-13.
Airport Infrastructure 11.44 The Airports Authority of India (AAI) is a major airport operator managing 125 airports across the country and also entrusted with the sovereign function of providing air traffic services in India. To
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enhance airport infrastructure in India, modernization of existing airport infrastructure in metro and nonmetro cities and construction of greenfield airports were contemplated. The Twelfth Five Year Plan (2012-17) envisages an investment of ` 65,000 crore at Indian airports, of which a contribution of about ` 50,000 crore is expected from the private sector. The AAI has completed expansion and upgradation of two metro airports at Kolkata and Chennai at the cost of ` 2,325 crore and ` 2,015 crore respectively. In addition, restructuring and modernization of Delhi and Mumbai airports has also been undertaken at a cost of about ` 25,000 crore with state-of-the-art facilities. Expansion of Bangalore International Airport Ltd. (BIAL) has been undertaken at an estimated cost of ` 1,479 crore. 11.45 Development of 35 selected non-metro airports has been undertaken by the AAI which have been identified based on regional connectivity, development of regional hubs, places of major tourist attraction, and potential for development as business hubs. Projects at 28 airports have been completed.
Ports 11.46 Cargo Traffic at Indian Ports: During the first half (April-September) of 2012-13 major and nonmajor ports in India accomplished a total cargo throughput of 455.8 million tonnes reflecting an increase of only 1.8 per cent over the same period of 2011-12. This is mainly attributable to a decline of 3.3 per cent in the cargo handled at major ports. In contrast, non-major ports' growth increased to 10.3 per cent in the first half of 2012-13 compared to 8.2 per cent in the corresponding period of 201112 (Table 11.9). During first six months of 2012-13, Ennore port recorded the highest growth in traffic
Table 11.9 : Traffic Handled at Indian Ports (Thousand Tonnes) Major/NonMajor Ports
Traffic Handled 2010-11
2011-12
Growth over previous year/period
April-September 2011-12
2010-11
2011-12
2012-13
April-September 2011-12
2012-13
(P) Major Ports Non-Major Ports All Ports
570086
560134
279880
270561
(64.4)
(61.4)
(62.5)
(59.4)
315358
351545
167969
185206
(35.6)
(38.6)
(37.5)
(40.6)
885444
911679
447849
455767
(100)
(100)
(100)
(100)
1.6
-1.7
3.2
-3.3
9.1
11.5
8..2
10.3
4.2
3.0
5.0
1.8
Source : Indian Ports Association Note : Figures within parenthesis indicate percent share in total cargo traffic for Major and Non Major ports respectively. (P) : Provisional
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(22.5 per cent) followed by Mumbai (8.0 per cent), Kandla (7.5 per cent), NMPT (4.3 per cent) and Cochin Port (3.9 per cent). Negative traffic handling was reported by Mormugao (-22.9 per cent) Haldia Dock Complex (HDC) (-17.9 per cent), Vishakhapatnam (-16.0 per cent), Paradip (-8.5 per cent), Chennai Port (-7.3 per cent) and Kolkata Dock System (KDS) (-7.8 per cent). 11.47 Commodity-wise Cargo Traffic at Major Ports : At a broad commodity level, during the first six months of 2012-13, coal, container cargo, other cargo, and petroleum oil and lubricant (POL) traffic posted growth of 3.8 per cent, 2.7 per cent, 2.4 per cent and 0.5 per cent respectively. The traffic in iron ore was affected during April-September 2012, recording a negative growth of 43.1 per cent primarily due to ban on mining of iron ore. Fertilizer and FRM traffic during April-September 2012 also declined by 5.2 per cent over the corresponding period of the previous year. In terms of the composition of cargo traffic handled at major ports during April-September 2012, the largest commodity group (in terms of percentage share in total cargo handled) was POL (34 per cent) followed by container traffic (22 per cent), other cargo (19 per cent) and coal (15 per cent). Total container traffic at major ports increased both in terms of tonnes and twenty foot equivalent units [TEUs] by 2.7 per cent and 1.3 per cent respectively during April-September 2012 and Jawahar Lal Nehru Port (JNPT) emerged as the leading container-handling port with a 48 per cent share in terms of tonnage and 55 per cent in terms of TEUs.
TELECOMMUNICATION 11.48 The telecom sector has been one of the fastest growing sectors in recent years. It is now the second largest telephone network in the world, after only China. A series of reform measures by the government, wireless technology, and active participation by the private sector played an important role in the exponential growth of the telecom sector in the country. Tele-density, which shows the number of telephones per 100 persons, was 76.75 per cent at the end of October 2012. With the growth of mobile telephony due to easy access and affordability, the number of landline telephones has declined from 32.17 million as on end March 2012 to 30.95 million as on 31 October 2012. Wireless telephones now account for 96.7 per cent of all telephones. The share of the private sector, in terms of number of subscribers, has increased from 86.3 per cent to 86.6 per cent during the period from April to June 2012 and is currently placed at 86.1 per cent (end- October 2012) (Table 11.10). Broad features of the National Telecom Policy-2012 (NTP-2012) are summarized in Box 11.4. 11.49 Since the announcement of the Broadband Policy in 2004, several measures have been taken to promote broadband penetration in the country. As a result, there were 22.86 million internet subscribers including 13.79 million broadband subscribers at the end of March 2012. Broadband subscribers increased to 14.81 million by the end
Table 11.10 : Telephone Connections & Tele-density At the end of March (in million)
Total telephones
2010
2011
2012
As on 31st Oct. 12
621.28
846.33
951.35
935.18
Landline telephones
36.96
34.73
32.17
30.95
Wireless telephones
584.32
811.60
919.17
904.23
Rural telephones
200.77
282.29
330.83
344.49
Urban telephones
420.51
564.04
620.52
590.68
Telephones of Private Sector ( % share)
515.41
720.32
821.08
805.21
(82.96%)
(85.11%)
(86.31%)
(86.10%)
105.87
126.01
130.27
129.97
Telephones of Public Sector( % share)
(17.04%)
(14.89%)
(13.69%)
(13.90%)
Rural tele-density in%
24.31
33.83
39.26
40.66
Urban tele-density in %
119.45
156.93
169.17
159.15
Overall tele-density in %
52.74
70.89
78.66
76.75
Source : Department of Telecom (DOT).
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Energy, Infrastructure and Communications
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Box 11.4 : NTP-2012 The Government approved National Telecom Policy (NTP) 2012, which addresses the vision, strategic direction, and the various medium- and long-term issues related to the telecom sector, on 31 May 2012. NTP-2012 is aimed at maximizing public good by making affordable, reliable, and secure telecommunication and broadband services available across the country. The objectives of NTP-2012 include the following:
Provide secure, affordable, and high-quality telecommunication services to all citizens.
Strive to create One Nation-One Licence across services and service areas.
Achieve One Nation-Full Mobile Number Portability and work towards One Nation-Free Roaming.
Increase rural tele-density from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020.
Recognize telecom, including broadband connectivity, as a basic necessity like education and health and work towards 'Right to Broadband'.
Provide affordable and reliable broadband-on-demand by the year 2015 and to achieve 175 million broadband connections by the year 2017 and 600 million by the year 2020 at minimum 2 Mbps download speed and make available higher speeds of at least 100 Mbps on demand.
Provide high-speed and high-quality broadband access to all village panchayats through a combination of technologies by the year 2014 and progressively to all villages and habitations by 2020.
Recognize telecom as an infrastructure sector to realize the true potential of information communication technology (ICT) for development
Address right-of-way (RoW) issues in setting up of telecom infrastructure.
Mandate an ecosystem for ensuring setting up of a common platform for interconnection of various networks for providing non-exclusive and non-discriminatory access.
Strive for enhanced and continued adoption of green policy in telecom and incentivize use of renewable resources for sustainability
Achieve substantial transition to the new Internet Protocol (IPv 6) in the country in a phased and time-bound manner by 2020 and encourage an ecosystem for provision of a significantly large bouquet of services on the IP platform.
of October 2012. Special efforts are being made to increase the penetration of broadband, especially in rural and remote areas. The government has approved a project at a cost of ` 20,000 crore for creating a National Optical Fiber Network (NOFN) which will provide broadband connectivity to 2.5 lakh gram panchayats for various applications like ehealth, e-education, and e-governance. The project is being funded under the Universal Service Obligation Fund (USOF).
USOF 11.50 With the objective of promoting rural telephony, the government formed a Universal Service Obligation Fund (USOF). Under the Shared Mobile Infrastructure Scheme of USOF 7,310 towers were set up by the end of November 2012 and 15,971 base transceiver stations commissioned by service providers at these towers for provisioning of mobile services. Under another scheme for village public telephones (VPTs), at the end of November 2012 a total of 5,81,572 (97.97 per cent) villages had been covered. VPTs are likely to be provided in the remaining inhabited revenue villages by March 2013 through the ongoing USOF scheme for provision of
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VPTs in newly identified uncovered villages as per Census 2001. 11.51 For providing broadband connectivity to rural and remote areas, the USOF signed an agreement with Bharat Sanchar Nigam Limited on 20 January, 2009 under the Rural Wireline Broadband Scheme to provide wire-line broadband connectivity (with a speed of at least 512 kbps, always on) to rural and remote areas by leveraging the existing rural exchanges infrastructure and copper wire-line network. As on 31 August 2012, a total of 3,91,245 broadband connections had been provided and 10,076 kiosks set up in rural and remote areas.
URBAN INFRASTRUCTURE Urban Infrastructure and Governance 11.52 The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was launched by the Ministry of Urban Development for a seven-year period (i.e. up to March 2012) to encourage cities to initiate steps for bringing improvements in a phased manner in their civic service levels. The government has extended the tenure of the Mission
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for two years, i.e. from 1 April 2012 to 31 March 2014. The components under the sub-mission Urban Infrastructure and Governance (UIG) include urban renewal, water supply (including desalination plants), sanitation, sewerage and solid waste management, urban transport, development of heritage areas, and preservation of water bodies. Revised allocation for the UIG for the Mission period is ` 31,500 crore. A sum of ` 6,340 crore (BE) has been provided for the year 2012-13. The JNNURM has also emphasized the implementation of three key mandatory pro-poor reforms to enhance the capacity of urban local bodies (ULBs): ď Ź
Internal earmarking within local body budgets for basic services to the urban poor.
ď Ź
Earmarking of at least 20-25 per cent of developed land in all housing projects (both public and private agencies) for the economically weaker sections (EWS)/ low income groups (LIG) category.
ď Ź
Implementation of a seven-point charter for provisioning of seven basic entitlements/ services.
11.53 All the selected 65 cities under the UIG component of the JNNURM have prepared comprehensive city development plans (CDPs), charting their long-term vision and goals in urban governance and development. These plans include investment plans, with a focus on provision of citywide urban services such as water supply, sanitation, drainage, and provision of basic services to the urban poor. During the Mission period, highest priority has been accorded to water supply, sanitation, and storm-water drainage sectors that directly benefit the urban poor. As on December 2012, more than 91 per cent of the seven-year additional central assistance (ACA) allocation of ` 31,500 crore had been committed. 11.54 A total of 551 projects (as on 31 December 2012) have been sanctioned at an approved cost of ` 61,772.9 crore for the listed 65 mission cities across 31 states/ union territories (UTs). The ACA committed for these projects including assistance for the buses sanctioned under the second stimulus package is ` 30,689.7 crore. As on 31 December 2012, a sum of ` 20,145.2 crore had been released as ACA. During April-December 2012 ` 1326.7 crore was released as ACA for the projects sanctioned under the JNNURM. Out of these 551 projects
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approved under the UIG, 165 are reported to have been completed. 11.55 The JNNURM has also undertaken an exercise for assessment of finances and creditworthiness of the Mission ULBs through a process of credit rating. This is intended to trigger the process of leveraging debt for JNNURM projects and provide a platform for the ULBs and financial institutions to engage on issues related to project financing. Presently 65 ULBs in the Mission cities have been assigned final ratings that have been made public. As a follow up, surveillance rating has been initiated to affirm the rating and assess improvements undertaken. So far, 62 ULBs have undergone surveillance rating.
Urban Infrastructure Development Scheme for Small and Medium Towns 11.56 The Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) is a sub-component of the JNNURM for development of infrastructure facilities in all towns and cities other than the 65 Mission cities covered under its UIG sub-mission. For obtaining assistance under the UIDSSMT, states and ULBs need to sign memorandums of agreement committing to the implementation of the reforms. From its inception in December 2005 till December 2012, 807 projects across 672 towns and cities at a cost of `14,021 crore had been sanctioned under the UIDSSMT. Committed ACA for the approved projects is ` 11,358.3 crore, against which ` 9465.2 crore had been released till 31 December 2012. 305 projects are reported to have been completed.
Urban Transport 11.57 Urban transport is one of the key elements of urban infrastructure. In order to provide better transport, proposals for bus rapid transit system (BRTS) were approved for Ahmedabad, Bhopal, Indore, Jaipur, Pune-Pimpri-Chinchwad, Rajkot, Sutrat, Vijayawada, Vishakhapatnam, and Kolkata under the JNNURM, covering a total length of 467.4 km at an estimated cost of ` 5,211.6 crore with admissible central financial assistance of ` 2,373.4 crore. In addition, BRTS is also planned in Naya Raipur and Hubli-Dharwar with loan from the World Bank. Purchase of 15,260 buses at a total cost of ` 4,724 crore has been approved under the scheme, with admissible ACA amounting to
Energy, Infrastructure and Communications ` 2,092.1 crore. Till November 2012, more than 12,620 modern intelligent transport system (ITS)enabled low-floor and semi-low-floor buses have been delivered to the states/cities.
Metro Rail Projects 11.58 In order to give proper legal cover to metro/ mono-rail projects, the Metro Railways Amendment Act 2009 was brought into effect in September 2009, providing as umbrella 'statutory' safety cover for metro rail work in all the metro cities of India. The Act has been extended to the National Capital Region, Bengaluru, Mumbai, Chennai, Hyderabad, Kochi, and Jaipur metropolitan areas. The Bangalore Metro Rail Project of 42.3 km length is targeted for completion by December 2013. The first leg of 7 km has already been commissioned on 20 October 2011. The government had earlier approved the implementation of the East-West Metro Corridor of 14.67 km length in Kolkata by Kolkata Metro Rail Corporation Ltd. (KMRCL). The project is targeted for completion by 31 January 2015. The Chennai Metro Rail Project of 46.5 km length by Chennai Metro Rail Ltd. (CMRL) at a total estimated cost of ` 14,600 crore is targeted for completion by 31 March 2015. Recently the 103.5 km Phase III of Delhi Metro at a total cost of ` 35,242 crore has also been approved and is targeted for completion by 2016. The metro extension to Faridabad has also been sanctioned. In addition, the government has also approved the extension of Delhi Metro from Dwarka to Najafgarh (5 km), Yamuna Vihar to Shiv
Vihar (2.7 km), and Mundka to Bahadurgarh (11.50 km) as part of Delhi Metro Phase III, this year. The Kochi Metro Rail Project of 25.6 km by Kochi Metro Rail Limited (KMRL)at a completion cost of ` 5,181.8 crore has also been approved. In addition, metro rail projects have been taken up in Mumbai on PPP basis for Versova- Andheri-Ghatkopar (11.07 km) and Charkop to Mankhurd via Bandra (31.87 km) and in Hyderabad (71.16 km) with viability gap funding (VGF) from the Government of India. Presently the Government of Rajasthan is implementing 7 km of metro rail with funding entirely from the state government.
Credit flow to infrastructure sector 11.59 The India Infrastructure Finance Company Limited (IIFCL) was set up in 2006 for providing longterm financing for infrastructure projects that typically involve long gestation periods. The IIFCL provides financial assistance up to 20 per cent of the project cost both through direct lending to project companies and by refinancing banks and financial institutions. The IIFCL raises funds from both domestic and overseas markets on the strength of government guarantees. It has sanctioned loans aggregating ` 40,373 crore for 229 projects involving a total investment of ` 3,52,047 crore and disbursed ` 20,377 crore till 31 March 2012. The IIFCL is expected to graduate in the Twelfth Plan from the existing role of a normal lender to that of a catalyst mobilizing additional resources for financing of infrastructure. This could be achieved by the IIFCL (` ` crore)
Table 11.11 : Sectoral share and growth rate of credit- Infrastructure 2010-11 2011-12
Infrastructure Power Telecommunications Roads Other Infrastructure Share Power Telecommunications Roads Other Infrastructure Growth rate Infrastructure Power Telecommunications Roads Other Infrastructure
4640.08 5745.35 2317.28 3031.76 898.51 930.43 818.37 1048.02 605.92 735.13
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2011-12
2012-13
Q1
Q2
Q3
Q4
Q1
Q2
Q3
5477.70 2864.55 973.58 976.03 663.53
5581.83 2965.78 903.76 1023.90 688.39
5832.68 3080.25 918.46 1068.86 765.10
6089.19 3216.48 925.93 1123.29 823.50
6218.46 3263.97 966.70 1142.40 845.39
6431.96 3536.92 894.66 1204.62 795.75
6799.16 3745.00 917.66 1262.44 874.06
49.94 19.36 17.64 13.06
52.77 16.19 18.24 12.80
52.29 17.77 17.82 12.11
53.13 16.19 18.34 12.33
52.81 15.75 18.33 13.12
52.82 15.21 18.45 13.52
52.49 15.55 18.37 13.59
54.99 13.91 18.73 12.37
55.08 13.50 18.57 12.86
44.60 48.19 76.57 33.27 16.05
23.82 30.83 3.55 28.06 21.32
35.61 41.44 41.01 29.42 16.50
22.19 34.15 -5.55 29.26 13.17
20.72 27.06 -4.84 28.99 24.69
18.90 23.30 -5.67 25.00 30.25
13.52 13.94 -0.71 17.04 27.41
15.23 19.26 -1.01 17.65 15.60
16.57 21.58 -0.09 18.11 14.24
Source : RBI
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PPP initiatives
providing guarantees for bonds issued by private infrastructure companies rather than expanding its direct lending operations. This would enable mobilization of insurance and pension funds, external debt, and household savings. The IIFCL would also make subordinated debt available as an additional source of finance. Further, it may also substitute its take-out financing scheme with an Infrastructure Debt Fund.
11.62 The government is promoting PPPs as an effective tool for bringing private-sector efficiencies in creation of economic and social infrastructure assets and delivery of quality public services. According to a World Bank Report on Private Participation in Infrastructure (PPI), India has been the top recipient of PPI activity since 2006 and has implemented 43 new projects which attracted total investment of US$20.7 billion in 2011. India alone accounted for almost half of the investment in new PPI projects implemented in developing countries during the first semester of 2011. The Report maintained that India remained the largest market for PPI in the developing world. In the South Asian region, India attracted 98 per cent of regional investment and implemented 43 of the 44 new projects in the region. Details of PPP initiatives are provided in Box.11.5.
11.60 The latest available data on gross deployment of bank credit to major infrastructure sectors shows that the rate of growth of bank credit moderated from an average of 35.61 per cent in Q1 of 2011-12 to 13.52 per cent in Q1 of 2012-13, before marginally improving to 16.57 per cent in Q3 of the current year. Within infrastructure, power had over 50 per cent share in total credit flow to infrastructure. The rate of growth of this sector, after moderating to 13.94 per cent in Q1 of 2012-13 improved to 21.58 per cent in Q3. The telecom sector witnessed consecutive decline in the last six quarters (Table 11.11)
CHALLENGES
AND
OUTLOOK
11.63 From a macroeconomic perspective, a high level of investment in the infrastructure sector is essential for the overall revival of investment climate which may finally lead to sustainable growth in an economy. However, in the current macroeconomic environment, to achieve this objective, there is need to address sector-specific issues over the mediumto long-term horizon in India.
11.61 Continued global risks and moderated business sentiment have affected FDI inflows to key infrastructure during the current financial year. The total FDI inflows into major infrastructure sectors during April-November 2012 have dipped significantly registering a contraction of 97.8 per cent. The major decline has been in the power sector (-68 per cent), petroleum and natural gas (-89 per cent), and telecommunications (-96 per cent) (Table 11.12). Regulatory uncertainties, slower growth, and delays in acquisition of land were some of the reasons for decline in FDI inflows in the infrastructure sector in the current year.
11.64 There is an overall shortage of power in the country both in terms of energy deficit and peak shortage. At present, overall energy deficit is about 8.6 per cent and peak shortage of power is about 9.0 per cent. The Eleventh Plan added 55,000 MW
Table 11.12 : FDI Flows to infrastructure (US$ million) Sector Power
2009-10
2010-11
1,437.3
1271.77
Non-conventional energy
497.9
214.40
Petroleum & natural gas
272.1
556.43
Telecommunications
2011-12 1652.38
Apr.-Nov. 2011
2012
1436.75
456.00
452.17
241.62
443.08
2029.98
1971.97
210.73
2554.0
1664.50
1997.24
1987.18
70.46
Air transport *
22.6
136.00
31.22
27.50
13.72
Sea transport
284.9
300.51
129.36
99.42
36.23
65.4
10.92
0.00
0.00
0.00
Ports Railway-related components Total (of above)
34.2
70.66
42.27
35.16
17.79
5,168.40
4,225.19
6,334.62
5,799.60
1,248.01
Source : Department of Industrial Policy and Promotion. Notes : *Air transport including air freight. Variation in data is due to reclassification of some sectors.
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Box 11.5 : PPP initiatives in India The Government of India is promoting PPPs as an effective tool for bringing private-sector efficiencies in creation of economic and social infrastructure assets and for delivery of quality public services. India in recent years has emerged as one of the leading PPP markets in the world, because of several policy and institutional initiatives taken by the central government. By end December 2012 there were over 900 PPP projects in the infrastructure sector with total project cost (TPC) of ` 5,43,045 crore as compared to over 600 projects with TPC of ` 333,083 crore on 31 March 2010. These projects are at different stages of implementation, i.e. bidding, construction, and operational. Approval of Central-sector PPP projects Since its constitution in January 2006, the Public Private Partnership Appraisal Committee (PPPAC) has approved 307 central project proposals with TPC of ` 2,97,856.58 crore. These include NHs (242 proposals), ports (29 proposals), airports (2 proposals), tourism infrastructure (1proposal), railways (1 proposal), housing (27 proposals), and sports stadia (5 proposals). VGF for PPP Projects Under the Scheme for Financial Support to PPPs in Infrastructure (Viability Gap Funding Scheme), 145 projects have been granted approval with TPC of ` 80,203.28 crore and VGF support of ` 1,56,72.68 crore and ` 902.96 VGF crore has been disbursed. Thirteen new sub-sectors have been included in the list of sectors eligible for VGF support under the Scheme. These include: i. Capital investment in the creation of modern storage capacity including cold chains and post-harvest storage. ii. Education, health, and skill development. iii. Internal infrastructure in National Investment and Manufacturing Zones. iv. Oil/gas/liquefied natural gas (LNG) storage facility [includes City Gas distribution (CGD) network]; oil and gas pipelines (includes CGD network); irrigation (dams, channels, embankments, etc); telecommunication (fixed network) (includes optic fibre/ wire/cable networks which provide broadband /internet); telecommunication towers; terminal markets; common infrastructure in agriculture markets; and soil-testing laboratories. Support for Project Development of PPP Projects The India Infrastructure Project Development Fund (IIPDF) was launched in December 2007 to facilitate quality project development for PPP projects and ensure transparency in procurement consultants and projects. So far, 51 projects have been approved with IIPDF assistance of ` 64.51 crore of which ` 25.00 crore has been disbursed. Capacity Building and Strengthening of State and Central Institutions The National PPP Capacity Building Programme was launched by the Finance Minister in December 2010, and was rolled out last year in 15 States and two central training institutes, viz. the Indian Maritime University and Lal Bahadur Shastri National Academy of Administration. A comprehensive curriculum has been prepared and 11 training programmes conducted to train 154 trainers, who have trained over 1975 public functionaries, who deal with PPPs in their domain. Online toolkits for PPP projects for five sectors were developed and were launched by the Finance Minister. These are available on this Department's website on PPPs, i.e. www.pppinindia.com. The PPP toolkit is a web-based resource that has been designed to help improve decision-making for infrastructure PPPs in India and to improve the quality of the infrastructure PPPs that are implemented in India. In the past one year, 720 national and international users have availed of this one-of-a-kind web-based resource to structure better PPP projects. PPP Rules and PPP Policy: Following the recommendations of the Committee on Public Procurement, the Prime Minister's announcement regarding transparency and accountability in procurement, and preparation of the Public Procurement Bill, and to ensure that PPP projects are procured and implemented by following laid down processes and observing principles of transparency, competitive bid process, affordability, and value for money, the draft PPP Rules and PPP Policy have been prepared. These have undergone extensive consultation process at central and state government levels for finalization. Global experience indicates that PPPs work well when they combine the efficiency and risk assessment of the private sector with the public purpose of the government sector. They work poorly when they rely on the efficiency and risk assessment of the government sector and the public purpose of the private sector. India should be careful not to undertake PPPs that do not apportion risks and responsibilities sensibly. Moreover flexibility needs to be built into arrangements so that the contract can be withdrawn and put up for rebid when the private party underperforms. The government needs to study the PPP experience and build some central capacity to help ministries, authorities, and states structure contracts and renegotiate troubled ones.
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Box 11.6 : Financial Restructuring of State Distribution Companies The government in September 2012 approved the scheme for Financial Restructuring of State Distribution Companies (Discoms). The salient features of the scheme are as follows: a.
50 per cent of the outstanding short-term liabilities up to 31 March 2012 to be taken over by state governments. This shall be first converted into bonds to be issued by Discoms to participating lenders, duly backed by state government guarantee.
b.
Takeover of liability by state governments from Discoms in the next two to five years by way of special securities and repayment and interest payment to be done by state governments till the date of takeover.
c.
Restructuring the balance 50 per cent short-term Loan by rescheduling loans and providing moratorium on principal.
d.
The restructuring/reschedulement of loan is to be accompanied by concrete and measurable action by the Discoms/ states to improve their operational performance.
e.
Central government will provide incentive by way of grant equal to the value of the additional energy saved by way of accelerated AT&C loss reduction beyond the loss trajectory specified under the RAPDRP and capital reimbursement support of 25 per cent of principal repayment by the state governments on the liability taken over by the state governments under the scheme.
of generation capacity which was more than twice the capacity added in the Tenth Plan. The Twelfth Plan aims to add another 88, 000 MW. Delivery of this additional capacity would critically depend on resolving fuel availability problems, especially when about half the generated capacity is expected to come from the private sector. The private developers may not be able to finance the projects if coal linkages are not resolved and there are delays in finalization of fuel supply agreements (FSAs).While some decisions have been taken for restructuring Discoms' finances (Box 11.6), these may need to be monitored and implemented in spirit. 11.65 Although India has large coal reserves, demand for coal is substantially outpacing its domestic availability, with Coal India not being able to meet its coal production targets in the Eleventh Plan. Domestic coal supplies are therefore not assured for coal-based power projects planned during the Twelfth Plan. Hence it is essential to ensure that domestic production of coal increases from 540 million tonnes in 2011-12 to the target of 795 million tonnes at the end of the Plan. This increase of 255 million tonnes assumes an increase of 64 million tonnes of captive capacity with the rest being met by Coal India Limited. However, even with this increase, there will be a need to import 185 million tonnes of coal in 2016-17 which may further add to the financing cost of power projects. More effort must be made for improving competition and efficiency in the coal sector, which may entail structural reforms. Problems like delays in obtaining environmental clearances, land acquisitions, and
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rehabilitation need to be suitably addressed in fasttrack mode to achieve the Twelfth Plan targets for coal production while maintaining a balance between growth needs and environmental concerns. Progress of road projects has also suffered on account of similar factors. The creation of a High-Level Cabinet Committee on Investment to quicken the pace of decision making in critical infrastructure projects by the government is expected to resolve any issues involving inter-ministerial coordination. 11.66 Of late, financing of road projects has also run into difficulty as leveraged companies implementing road projects are unable to raise more debt in the absence of fresh equity. In current market conditions, these firms are unable to raise new equity. Exit route needs to be eased so that promoters can sell equity positions after construction, passing on all benefits and responsibilities to entities that step in. Promoters can then use the equity thus released for new projects. Steps are also needed to up-scale projects in PPP mode for achieving the targets envisaged for the development of roads in the Twelfth Plan. 11.67 The process of extending transparent policies and mechanisms for allocation of scarce natural resources to private companies for commercial purposes has also been initiated. The Mines & Mineral (Development and Regulation) Bill 2011 aims at providing a simple and transparent mechanism for grant of mining lease or prospecting licence through competitive bidding in areas of known mineralization and on first-in-time basis in areas where mineralization is not known. However,
Energy, Infrastructure and Communications in order to meet the objective of revenue maximization in an open, transparent and competitive manner, this should be preceded by detailed geological mapping of the mineral wealth of the country. Further, any policy prescription regarding the use of natural resources must ensure that the process of selection is fair, reasonable, nondiscriminatory, transparent, and aimed at promoting healthy competition and equitable treatment. 11.68 Owing to a number of external and internal factors, viability of airline operations in India has come under stress. A high operating cost environment owing to high and rising cost of aviation turbine fuel (ATF) coupled with rupee depreciation is making operations unviable for carriers in India. The Expert Report of Nathan Economic Consulting India Private Ltd. (Nathan India) which went into the question of pricing and the tax regime governing ATF concluded that ATF prices in India are significantly higher (at least 40 per cent) than in competing hubs in the region such as Singapore, Hong Kong, and Dubai. Therefore, there is need to rationalize the tax regime particularly value added tax on ATF which is in the range of 20-30 per cent in most of the states. The Ministry of Civil Aviation is of the view that ATF should be included under the declared category of goods under the relevant provision of the Central Sales Tax Act so that a uniform levy of 5 per cent is achieved. Equally important is the need for a transparent pricing regime for ATF in India. A high tax regime for aviation in general and ATF in particular will reduce the wider economic benefits available from aviation, resulting in a negative impact on economic growth and overall government revenue bases.
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11.69 Development of capability in Railways is another urgent priority for the Twelfth Plan. Capacity in Railways has lagged far behind what is needed, especially given the requirement of shifting from road transport to rail in the interests of improving energy efficiency and reducing carbon footprints in development. The funding pattern of the Twelfth Plan clearly shows that the modernization of Indian Railways cannot be achieved by simply relying on GBS as about 62 per cent of the resources would have to be generated through non-GBS sources and nearly 20 per cent through private-sector investment. There is a need to draw up clear strategies to generate resources by identifying segments where Indian Railways can adopt a low-cost policy by playing on volumes and taking advantage of economies of scale and segments where it can adopt a differentiation approach by providing high quality services and command premium prices. 11.70 As mentioned in the Twelfth Plan document, a GDP growth rate of about 8 per cent requires a growth rate of about 6 per cent in total energy use from all sources. Unfortunately, the capacity of the economy to expand domestic energy supplies to meet this demand is severely limited. The country is not well-endowed with energy resources, except coal, and the existence of policy distortions makes management of demand and supply more difficult. Accordingly, the short-run action needed to remove impediments to implementation of projects in infrastructure, especially in the area of energy, includes ensuring fuel supply to power stations, financial restructuring of Discoms, and clarity in terms of the NELP. At the same time, the long-term strategy should focus on issues like coal production, petroleum price distortion, natural gas pricing, and effective management of the urbanization process.
Sustainable Development and Climate Change
12 CHAPTER
The year 2012 may arguably be considered a high water mark in the field of
environment and sustainable development initiatives. The global community met at the UN Conference on Sustainable Development that took place in Rio in June 2012, also marking the 20th anniversary of the landmark first Earth Summit held in 1992. The Conference reviewed the progress made, identified implementation gaps, and assessed new and emerging challenges, which resulted in a political outcome called the 'The Future We Want'. In India, the Twelfth Five Year Plan was launched with a focus on sustainable growth. This along with sustainable development policies and programmes which are being followed signalled to citizens at home and the world at large that India is committed to sustainable development with equal emphasis on its three dimensions - social, economic, and environmental. A global comparative opinion survey shows that people in India and indeed all countries, have a marked and rising concern about sustainable development and climate change. However, the challenges are also formidable, especially in the context of finding the matching resources of the required magnitude given the economic conditions. Climate science has rightly taken up an important position in the public debate. Even as the science of climate change grapples with uncertanities the world is witnessing more extreme events. The urgency for action is felt more than ever before. In contrast, though the Doha Gateway on climate change agreed upon in December 2012 ensured that there is continuation of a multilateral and rule-based regime to reduce emissions, the emission pledges on the table by the developed country Parties lacked ambition. Now the Fifth Assessment Report of the Inter-governmental Panel on Climate Change (IPCC) is in the final stages of completion. With rising extreme events, and rising citizen demand, the world has little option but to listen to the voice of evolving science and respond adequately with strategies and policy rooted in the principles of multilateralism with equitable and fair burden sharing.
INTRODUCTION 12.2 Sustainable Development and Climate Change was introduced as a chapter in the Economic Survey last year for the first time. These topics remained headline news with extreme weather events both at home and abroad. Efforts to arrive at a consensus on what to do at home and abroad gathered momentum, even as they sailed through some rough waters and fickle seas in many respects. In 2012 science and nature voiced a sense http://indiabudget.nic.in
of urgency for action. Yet the relevant statistics have a mixed story to tell: it strongly accepts science but weakly reflects on the corresponding multilateral actions, suggesting that a lot remains to be done on the latter. 12.3 A volatile mix of erratic weather, natural disasters, and enormous pressures on the availability of clean air, water, and energy together with the problems of poverty and hunger continues to be of great concern for policymakers particularly
Sustainable Development and Climate Change in the developing countries. There was building of the forward momentum both globally and domestically with three high-profile events in the global arena in 2012 and launch of the Twelfth Five Year Plan at home. The Earth Summit in Rio also popularly known as Rio + 20 celebrated its 20th anniversary, next the 11th session of the Conference of Parties (COP 11) to the Convention on Bio Diversity (CBD), hosted by India in Hyderabad, and finally the year closed with the 18th session of the COP to the United Nations Framework Convention on Climate Change (UNFCCC) in Doha in December. These international collaborations came out with balanced packages though short on ambition but proceeding on efforts. At home we launched the Twelfth Five Year Plan whose explicit theme was a 'faster, more inclusive and sustainable growth' process. It is the first time that a five year plan has sustainability as a prominent focus. The Twelfth Plan outlined lower carbon growth strategies adding momentum to the ongoing policies and programmes of the government on environment and climate change (Box 12.1). To add to this, State Action Plans on Climate Change (SAPCC), a recent initiative, will tune national initiatives on the National Action Plan
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on Climate Change (NAPCC) to regional, socioeconomic and ecological conditions. The SAPCC is expected to take off as part of the plan scheme for states (Box 12.2). With these developments, it is clear that sustainable development and climate change issues are being addressed on a priority basis. 12.4 The world population crossed the 7 billion mark but with continued decline in population growth rates. Urbanization continues to grow with more demand for resources. A United Nations Environment Programme (UNEP) study, 'Keeping Track of Our Changing Environment: From Rio to Rio + 20 (19922012)', tells the story of where the world collectively stands today on the sustainability and environment front. According to this study, both global gross domestic product (GDP) and the human development index (HDI increased by 2.5 per cent per year) continue to increase but variation and inequalities between regions still exist. The study also points to the growing pressure on agriculture, water, fisheries, and land resources. Pressure on natural resources reflected in per capita global use of natural resource materials has increased around 27 per cent between 1992 and 2005 though there has been a decline in
Box 12.1 : Twelfth Five Year Plan Approaches for Sustainable Development and Lower Carbon Strategies The Twelfth Plan strategy suggests that there are significant 'co-benefits' for climate action with inclusive and sustainable growth. India as a large responsible player with very low income has also to ensure that these efforts are matched by equitable and fair burden sharing among countries, taking into account the historical responsibilities for emissions. These issues are being discussed in the UNFCCC. India's approach to a lower-carbon growth strategy explicitly recognizes that policies have to be inclusive and differentiated across sectors according to national priorities, so as to lower the transaction costs of implementing the policy, and conform with a nationally fair burden-sharing mechanism. An Expert Group on Low Carbon Strategies appointed by the Planning Commission has outlined the lower carbon strategies for major potential carbon mitigation sectors: (i) Power : On the supply side, adopt super-critical technologies in coal-based thermal power plants; use gas in combined heat and power systems; invest in renewable technologies; and develop hydropower in a sustainable manner. On the demand side, accelerate adoption of super-efficient electrical appliances through market and regulatory mechanisms; enhance efficiency of agricultural pump sets and industrial equipment with better technology; modernize transmission and distribution to bring technical and commercial losses down to world average levels; universalize access to electricity; and accelerate power-sector reforms. (ii) Transport : Increase the share of rail in overall freight transport; improve the efficiency of rail freight transport; make it price competitive by bringing down the levels of cross-subsidization between freight and passenger transport; complete dedicated rail corridor; improve share and efficiency of public transport system; and improve fuel efficiency of vehicles through both market-based and regulatory mechanisms. (iii) Industry : Greenfield plants in the iron and steel and cement sectors adopt best available technology; existing plants, particularly small and medium ones, modernize and adopt green technology at an accelerated pace, with transparent financing mechanisms. (iv) Buildings : Evolve and institutionalize green building codes at all levels of government. (v) Forestry : 'Green India Mission' to regenerate at least 4 million ha of degraded forest; increase density of forest cover on 2 million ha of moderately dense forest; and overall increase the density of forest and tree cover on 10 million ha of forest, waste, and community lands.
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Box 12.2 : SAPCC Since the launch of the NAPCC, there have been serious efforts to dovetail national programmes of action to regional and local levels consistent with varying socio-economic and ecological conditions. At the Conference of State Environment Ministers held on 18 August 2009, the Prime Minister of India requested all state governments to prepare SAPCCs. The State Action Plans took their lead from National Mission documents while formulating mitigation/ adaptation strategies. So far, 21 states have prepared documents on the SAPCC focused on approaches that are sectoral but with regional ramifications. The State Action Plans include strategies and a list of possible sectoral actions that would help the states achieve their adaptation and mitigation objectives. The common threads that bind these State Plans together are the principles of territorial approach to climate change, sub-national planning, building capacities for vulnerability assessment, and identifying investment opportunities based on state priorities. This framework provides a broad, systematic, and step-wise process for the preparation of SAPCCs and advocates a participatory approach so that states have enough ownership of the process and final plan. The major sectors for which adaptation strategies envisaged are agriculture, water, forests, coastal zone, and health.
emissions and energy and material use per unit of output, indicating improvement in efficiency levels. At the same time global greenhouse gas (GHG) emissions have continuously been rising (Figure 12.1). GHG emissions measured in million metric tons of CO2 equivalent (MtCO2e) from 1990 to 2005 register an increase of 25.9 per cent (World Resources Institute). 12.5 Positive and rising trends in global efforts are competing against mixed trends in the state of the environment. In 2011, global investment in the renewable energy sector, went up 17 per cent to $257 billion hitting another record. In terms of new capacity added in 2011, renewable power (excluding large hydro) accounted for 44 per cent of the total new generation capacity added worldwide up from 34 per cent in 2010 (Frankfurt School of Finance and Management 'Global Trends in Renewable Energy investment 2012') .The global community is now working upon a set of Sustainable Development
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Goals (SDGs) possibly to be integrated with Millennium Development Goals (MDGs) for the post 2015 global policy architecture. Simultaneously the world over the past decade has entered into many new environmental agreements. Together with the governments the private sector has been forthcoming. However, multilateral and bilateral funding dedicated to environmental purposes fluctuated and was faced with unmet promises to a great extent.
SUSTAINABLE DEVELOPMENT AND CLIMATE CHANGE IN THE INDIAN CONTEXT 12.6 The key environmental challenges in India have been sharper in the past two decades. The State of the Environment Report by the MoEF clubs the issues under five key challenges faced by India, which are climate change (Box 12.3), food security, water security, energy security, and managing urbanization. Climate change is impacting the natural
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Box 12.3 : Understanding Climate Change at a Glance Ever since the industrial revolution, manmade activities have added significant quantities of GHGs into the atmosphere. Climate change is a global negative externality primarily caused by the building up of GHG emissions in the atmosphere. The efforts needed to address the climate change include mitigation of GHG emissions on the one hand and building of adaptive capacities to cope with the adverse impacts of climate change on the other. From a developing country perspective, adaptation is of utmost importance as they are the ones who are most vulnerable to the adverse impacts of climate change. The incremental impact of a ton of GHG on climate change is independent of where in the world it is emitted. These emissions impose a cost on both the present and future generations, which are not fully recouped from the emitters of these emissions. This formed the starting point for a globally coordinated policy action and the need for an international climate change negotiating regime. UNFCCC, set up in 1992, although global in scope, differentiates the commitments/responsibilities of Parties on the basis of historic responsibilities, economic structures, and on the basis of the principle of 'equity' and CBDR which is at the core of the climate change debate. The largest share of historical and current global emissions of GHGs has originated in developed countries. Scientists attribute the global problem of climate change not to the current GHG emissions but to the stock of historical GHG emissions. Most of the countries, particularly the industrialized countries, having large current emissions are also the largest historic emitters and the principal contributors to climate change. The Convention therefore lays down legally binding commitments for the developed countries, taking into account their historical responsibilities and also squarely puts the responsibilities on developed countries for providing financial resources, including for the transfer of technology, needed by the developing countries. The Convention also acknowledges that climate change actions taken by developing countries are contingent on the resources made available to them.
ecosystems and is expected to have substantial adverse effects in India, mainly on agriculture on which 58 per cent of the population still depends for livelihood, water storage in the Himalayan glaciers which are the source of major rivers and groundwater recharge, sea-level rise, and threats to a long coastline and habitations. Climate change will also cause increased frequency of extreme events such as floods, and droughts. These in turn will impact India's food security problems and water security. As per the Second National Communication submitted by India to the UNFCCC, it is projected that the annual mean surface air temperature rise by the end of the century ranges from 3.5째C to 4.3째C whereas the sea level along the Indian coast has been rising at the rate of about 1.3 mm/year on an average. These climate change projections are likely to impact human health, agriculture, water resources, natural ecosystems, and biodiversity. 12.7 Wary of the threats imposed by climate change and pressures on natural resources, sustainability and environment are increasingly taking centrestage in the Indian policy domain. India has been part of 94 multilateral environmental agreements. India has also voluntarily agreed to reduce its emission intensity of its GDP by 20-25 http://indiabudget.nic.in
per cent over 2005 levels by 2020, and emissions from the agriculture sector would not form part of the assessment of its emissions intensity. Indian economy is already moving along a lower carbon and sustainable path in terms of declining carbon intensity of its GDP which is expected to fall further through lower carbon strategies. It is estimated that India's per capita emission in 2031 will still be lower than the global per capita emission in 2005 (in 2031, India's per capita GHG emissions will be under 4 tonnes of carbon dioxide equivalent (CO2eq.) which is lower than the global per capita emissions of 4.22 tonnes of CO2eq. in 2005). 12.8 Along with the national efforts in different sectors, India also recognizes that rural areas are equally prone to stress and pressures from natural resource exploitation. In this context, schemes for rural development and livelihood programmes are very relevant. A vast majority of the works under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) are linked to land, soil, and water. There are also programmes for nontimber forest produce-based livelihood, promotion of organic and low-chemical agriculture, and increased soil health and fertility to sustain agriculture-based livelihoods. These schemes help mobilize and
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develop capacities of community institutions to utilize natural resources in a sustainable manner and their potential can be further developed. 12.9 Together with efforts to incorporate sustainability in the rural development process, India is increasingly making efforts to integrate the three pillars of sustainable development into its national policy space. In fact, environment protection is enshrined in our Constitution (Articles 48 A and 51 A [g]). Various policy measures are being implemented across the domains of forestry, pollution control, water management, clean energy, and marine and coastal environment. Some of these are policies like Joint Forest Management, Green Rating for Integrated Habitat Assessment, Coastal Zone Regulation Zone, eco labelling and energy efficiency labelling, fuel efficiency standards etc . Over a period of time, a stable organizational structure has been developed for environment protection. The country has been making fast progress in increasing its renewable energy capacity and has displayed the fastest expansion rate of investment of any large renewables market in the world in 2011, with a 62 per cent increase to $12 billion (Frankfurt School of Finance and Management 'Global Trends in Renewable Energy investment 2012'). The Twelfth Five Year Plan with a prominent focus on sustainability makes provision and provides for many more opportunities like these. 12.10 Working on the social and economic pillars of sustainable development policies, programmes and targeted schemes have been introduced to eradicate poverty. This is done either through a direct focus on economic indicators like employment generation, youth mobilization, and building up assets of the poor, or indirectly through social indicators of human development with emphasis on health, education, and women's empowerment. Many parameters on this front have shown improvement. The poverty head-count ratio declined by 7.3 percentage points from 2004-5 to 2009-10, maternal mortality rate (MMR) dropped from 301 per 100,000 live births in 2001-3 to 212 in 2007-9; literacy rates have been constantly rising and are estimated to be 82.14 per cent for men and 65.46 per cent for women as per the 2011 Census of India. However, India is still not on target to meet some key MDGs by 2015. 12.11 Over the years arguments in favour of looking beyond the conventional measure of GDP and taking into account the environmental damage http://indiabudget.nic.in
caused by production of goods and services received attention. An expert group under the chairmanship of Prof Sir Partha Dasgupta has been set up to develop a framework for 'Green National Accounts' for India. In fact, the Central Statistics Office (CSO) under the Ministry of Statistics & Programme Implementation (MOSPI) has been publishing comprehensive environment statistics since 1997. The process of putting in place a system for natural resources accounting was initiated by MOSPI way back in 2002. 12.12 Despite all these efforts, the reality that confronts us on the environmental front continues to be harsh and complex. Increasing population, urbanization, and growing demand for water and land resources have severely impacted the quality and availability of water and soil resources. Rising energy needs is another area of concern. Besides, rapid growth will require corresponding growth in energy supply. Presently a large share of our energy demand is met through coal and oil and this trend will continue, given the unprecedented surge in energy demand and resource constraints. Energy issues become more complex with existing energy poverty and rise in energy prices. There is considerable scope for increasing efficiency in the use of energy and water in India together with other development indicators like infant mortality rate, MMR, sanitation facilities, and public health services. Economic instruments, regulatory measures, and market mechanisms can play an important role in helping to achieve development and growth in a sustainable manner.
INTERNATIONAL COLLABORATION AND EFFORTS 12.13 Admitting the well-founded concerns on the need to redress environmental problems, there were global calls for cooperation, action, and innovation. World leaders in 2012 continued to engage and deliberate in international forums dedicated to climate and environment and also in forums like the G20 where sustainable development and climate change were an integral part of the discussions. Ambition or goal setting to reach targets, provision of finance and technology for developing countries, and institutions and mechanisms for capacity building were the common threads of negotiations running through all these forums. Some of the high-profile events which the world was watching are discussed in the following paragraphs.
Sustainable Development and Climate Change
Rio + 20 12.14 The United Nations Conference on Sustainable Development (UNCSD), was held in June 2012 at Rio de Janeiro, Brazil, (also known as Rio+20) and was attended at the heads of states level. 12.15 The objective of the Rio+20 Conference was to secure renewed political commitment for sustainable development, review progress made and identify implementation gaps, and assess new and emerging challenges since the UNCSD held 20 years ago in Rio de Janeiro in 1992. Towards this end, the Conference had two themes, viz. (a) green economy in the context of sustainable development & poverty eradication; and (b) institutional framework for sustainable development. The most significant outcomes of the Rio Summit have been the restoration of the principles of equity and of common but differentiated responsibilities (CBDR) in the global environmental discourse and placing poverty eradication at the centre of the global development agenda. The outcome also ensures the required domestic policy space to countries on a green economy and launched four processes/ mechanisms, i.e. developing SDGs, financing strategy, technology transfer, and defining the format and organizational aspects of the proposed highlevel political forum to follow up on the implementation of sustainable development. 12.16 'Fairness' as an issue received attention. It is a matter of satisfaction and achievement for India that the Rio outcome document reaffirms equity and the principle of CBDR among other Rio principles. India together with other developing countries played an instrumental role in this. CBDR is especially important for developing countries, as it implies that while all countries should take sustainable development actions, the developed countries have to take the leading role in environmental protection, as they have contributed the most to environmental problems. Also they should support developing countries with finance and technology in their sustainable development efforts. India has always held that the eradication of poverty should be the overarching goal of sustainable development. This was given due recognition in the deliberations at the Rio Summit and in the outcome document. 12.17 On the issue of Green economy, the outcome document affirms that there are different approaches, visions, models, and tools available to http://indiabudget.nic.in
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each country, in accordance with its national circumstances and priorities, for achieving sustainable development. It identifies green economy in the context of sustainable development and poverty eradication as one of the important tools for achieving sustainable development but specifies that while it could provide options for policy-making it should not be a rigid set of rules. The outcome document clearly states what green economy policies should result in and what they should not. It is a matter of satisfaction that the document firmly rejects prescriptive policies, unilateral measures, and trade barriers as well as unwarranted conditionality on official developmental assistance (ODA) in this context. 12.18 The Rio+20 Conference will also be remembered for kick-starting the process on developing SDGs. The SDGs would address and incorporate in a balanced way, all the three dimensions of sustainable development and their inter-linkages. The SDGs would be universal, global, and voluntary. Since the SDGs are expected to become a part of the post-2015 UN development agenda, they would hopefully guide the international community towards inclusive sustainable development. 12.19 From India's point of view, SDGs need to bring together development and environment into a single set of targets. The fault line, as ever in global conferences, is the inappropriate balance between environment and development. Developing countries do not want any bindings on their efforts towards poverty eradication or any agreement that comes with such a price tag. Therefore, we could also view the SDGs and the post 2015 agenda as an opportunity for revisiting and fine-tuning the MDG framework and sustainably regaining focus on developmental issues. India and many developing countries are slow or off track in achieving targets under some of the MDGs, which have concrete areas of overlap between environment and development. This is another reason why these MDGs should continue to be a part of the post 2015 global policy architecture. 12.20 The Rio Summit did not lead to any specific commitments on the finance and technology front. The developed countries, having obligations and responsibilities, need to commit to provision of adequate public funds including for transfer of technology and capacity building to developing
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countries. There has been no mention of provision of new and additional financial resources by developed countries, something that India would have wanted to see. Any new green economy and sustainable development goals would be meaningless without new money and technology commitments on the table. Nevertheless, we may hope that the follow up process of Rio + 20 on both finance and technology will keep these issues alive leading to some new strategies and mechanisms.
million during India's Presidency to strengthen institutional mechanisms and capacity building in developing countries. The Prime Minister unveiled a commemorative pylon in Hyderabad to mark COP11. It has been decided to establish a biodiversity museum and a garden on this site. At national level, efforts will be made to strengthen the implementation of the Biological Diversity Act and provide support to the State Biodiversity Boards and at local level prepare Peoples Biodiversity Registers.
12.21 While developing countries remain disappointed with the outcome document on means of implementation, they managed to secure many of their key positions and demands in the negotiations. It says a lot about the current international situation that a reaffirmation of principles made 20 years ago is a sign of success.
Doha Climate Change Conference 2012
Convention on Biological Diversity 12.22 Global concerns about biodiversity found expression in the CBD adopted in 1992. The objectives of the Convention are: conservation of biodiversity, sustainable use of its components, and the fair and equitable sharing of benefits arising from the use of genetic resources. The Convention has near universal membership with 193 countries. The USA is the only major country that is not a Party. Following the ratification of the CBD, India also enacted the Biological Diversity Act in 2002 and notified the Rules in 2004 to give effect to the provisions of the CBD. 12.23 Being committed to the cause, India successfully hosted the COP 11 to the CBD, and the sixth Conference of the Parties serving as Meeting of the Parties (CoP/MoP-6) to the CBD's Cartagena Protocol on Biosafety in Hyderabad from 8-19 October 2012. The event provided India an opportunity to consolidate, scale up, and showcase its initiatives and strengths on biodiversity. One of the most important outcomes is the commitment of the Parties to doubling the total biodiversity-related international financial resource flows to developing countries by 2015 and at least maintaining this level until 2020. This will translate into additional financial flows to the developing countries to the tune of about US $ 30 billion over the next eight years. 12.24 The Prime Minister of India, during COP 11 announced India's ratification of the Nagoya Protocol on Access and Benefit Sharing under the CBD and also launched the 'Hyderabad Pledge' of US $ 50
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12.25 The 18th session of the COP to the UNFCCC, that started on 26 November and concluded on 8 December 2012 in Doha, Qatar has resulted in a set of decisions (clubbed together as 'Doha Climate Gateway') aimed at advancing the implementation of the UNFCCC and its Kyoto Protocol (KP). 12.26 The key issues for the Doha conference were: amending the KP to implement the second commitment period under the Protocol; successfully concluding the work of the Bali Action Plan (BAP) within which there was urgent need for a clear path to climate finance; and planning the work under the Durban Platform (DP) for enhanced action. The Conference addressed all three issues and came out with a package which balanced the interests and obligations of various countries (Box 12.4). 12.27 At the Doha Conference, the three issues of equity, technology-related IPRs, and unilateral measures raised by India resounded in the decisions. These outstanding or unresolved issues under the BAP are now part of the planned or continuing work of various bodies of the Convention. At Doha, India also ensured that no hasty decision is taken on aspects related to mitigation in agricultural sector at global level as agriculture is a sensitive sector for developing countries. The Conference has explicitly recognized that the action of Parties will be based on equity and CBDR including the need for equitable access to sustainable development. The Conference also recognized that issues relating to global peaking that could place a cap on emissions of developing countries and restrict their development space were controversial and best avoided at this stage of development. 12.28 At the same time, in an effort to cater to the interest of all countries and come up with a balanced package, some elements of the package required
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Box 12.4 : Key Doha Outcomes
It has been agreed that the KP, as the only existing and binding agreement under which developed countries commit to cutting emissions of GHGs, will enter a second commitment period that will run for eight years.
Governments have agreed to speedily work toward a climate change agreement under DP applicable to all countries from 2020, to be adopted by 2015. Further governments have decided to find ways to scale up efforts before 2020 to meet the gap in global ambition for emissions reduction.
Governments have launched a robust process to review the long-term temperature goal. This will start in 2013 and conclude by 2015 and is a reality check on the advance of the climate change threat and the possible need to mobilize further action.
The Work Programme on Long term Finance launched last year has been extended for another year to contribute to the ongoing efforts to scale up mobilization of climate finance. Developed countries have reiterated their commitment to deliver on promises of mobilizing US$100 billion both for adaptation and mitigation by 2020.
Decision also encourages developed countries to increase efforts for providing finance between 2013 and 2015, and at least to the average annual level provided during the 2010-2012 fast-start finance period.
Finance pledges of about $ 6 billion for period upto 2015 announced by Germany, the UK, France, Denmark, Sweden and the EU Commission.
The selection of the Republic of Korea by the Board of the Green Climate Fund (GCF) to host the GCF has been endorsed.
The unresolved issues of Technology-related Intellectual Property Rights (IPRs) and the Unilateral Measures under the BAP are now part of the planned or continuing work of various bodies of the Convention. Based on the decisions, the Technology Executive Committee (TEC) will initiate exploration of issues relating to enabling environments and barriers, including IPRs in its future work-plan. The TEC has already identified IPRs as one of the key messages on which further work is necessary. Similarly, a decision has been taken for facilitating discussion on the issue of unilateral measures under the existing forum on implementation of response measures.
compromise or deferral. In many cases, ambitious and strong demands were collectively made by developing countries, but in the act of balancing, countries were made to accept the mellowed down and subtle versions of their demands. Among the key concerns which the Conference could not address were those relating to financing commitments of developed countries and sectoral actions. No specific targets for mid-term financing (2013-2020) were adopted. While the Conference stopped short of giving a mandate to the International Civil Aviation Organization (ICAO) or International Martine Organization (IMO) to initiate steps for curtailing emissions in their respective sectors, the absence of a decision on sectoral framework for such actions has left open the possibility of such actions being initiated in such sectors by the respective international organizations. Considering the fact that some of the leading members of ICAO prefer a global market based mechanism to be the vehicle of such actions, the framework and the principles on the basis of which such actions will be taken are likely to be a bone of contention for quite sometime. Also, despite vociferous demand from vulnerable countries, there could be no satisfactory agreement on a compensation mechanism for loss and damage resulting from climate change. http://indiabudget.nic.in
12.29 On the positive side, the Doha Conference succeeded in carrying out amendments to the KP to ensure a second commitment period. The second commitment period will last for a period of eight years as of 1 January 2013. This decision has ensured that there will be no gap between the first commitment period under the KP ending on 31 December 2012 and the second one commencing on 1 January 2013. With the exception of Russia, New Zealand, Japan, and Canada, all other countries that were part of the first commitment period entered into the second round, with some new countries joining as well. It has been agreed that the KP Parties will revisit their targets in 2014 with a view to increasing their ambition. The emission reduction obligations undertaken by the KP Parties are not as ambitious as required by science; however, they provide a relative degree of certainty to the carbon markets. The EU will reduce its emissions by 20 per cent by 2020 compared to 1990 (Table 12.1). Governments also agreed to speedily work under the DP to evolve a new set of arrangements for mitigation commitments and actions applicable to all countries from 2020, and to adopt it by 2015. In a significant and positive advancement, it has been agreed that the work of the DP will be based on the principles of the Convention.
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Discussions under G20
FINANCING CLIMATE CHANGE
12.30 G20--the group of twenty major economies of the world--took up the agenda of inclusive green growth during the Mexican Presidency in 2011-12. The aim of introducing inclusive green growth into the G20 agenda was to support the transition of developing countries, in particular the low income countries, towards becoming lower carbon economies as well as to enable countries to become more resilient to climate change. As of now, the G20 ministers have agreed to voluntarily self-report in 2013 on their respective country's efforts to follow inclusive green growth and sustainable development policies under their structural reform agendas. Leaders at the G20 last year also collaborated to form a Climate Finance Study Group to consider ways of effectively mobilizing resources taking into account the objectives, provisions, and principles of the UNFCCC.
12.32 The idea of a global budget for carbon and its corresponding financing stems from the objective of stabilizing the GHG concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. There has already been a 0.8째C increase in global mean temperature. It is widely believed that we are fast approaching the 2째C temperature rise within which the global community is striving to limit itself. This indicates that only a small and fast closing window of opportunity exists for the international community to take actions and ensure that we avoid reaching this point.
A Look at CO2 Emissions of the G 20 Countries 12.31 As CO 2 is the predominant GHG, an analysis of its emissions across countries in per capita terms in 2009, compared to 2005 presents an interesting picture. Although the G20 is referred to as a group, there are stark disparities on the ground between member countries in terms of incomes, stages of development as well as respective per capita CO2 emissions. In 2005, the USA had the highest CO2 emissions in metric tons per capita at 19.7, followed by Australia (18.0). The lowest per capita emitters in 2005 were Brazil (1.9), Indonesia (1.5), and India (1.2) who continued to be the bottom three in 2009 as well. In 2009, Australia ranked first within the G20, followed by the USA (Figure 12.2).
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12.33 Yet the question remains: How to finance actions to achieve this target. A UNFCCC paper (2007) estimated a requirement of US$ 200-210 billion in additional annual investment in 2030 to return GHG emissions to current levels. Further, additional investment needed worldwide for adaptation was estimated to be annually US$ 60-182 billion in 2030. However, with the passage of time and inadequate action, these estimates are being revised upwards. Most recent estimates presented at the UNFCCC's workshop on Long-term Finance (July 2012) point to an even more enormous scale of funds, in the range of $600-$1500 billion a year, that would be needed by developing countries for mitigation and adaptation. 12.34 This amount is at least 5-10 times the prospective financing flows of US$100 billion per year by 2020 agreed upon as the goal under the UNFCCC. Representatives from the International Energy Agency reported at this workshop that annual
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Table 12.1 : Emission Reduction Commitments by Kyoto Parties in the Second Commitment Period Country
Australia Austria Belgium Bulgaria* Croatia* Czech Republic* Denmark Estonia* European Union Finland France Germany Greece Hungary* Iceland Ireland Italy Latvia* Liechtenstein Lithuania* Luxembourg Monaco Netherlands Norway Poland* Portugal Romania* Slovakia* Slovenia* Spain Sweden Switzerland Ukraine* United Kingdom Belarus* Malta Kazakhstan Cyprus
Emission reduction commitment in the second period 2013-2020 (% of base year 1990)
Emission reduction commitment in the first period 2008-2012 (% of base year 1990)
Actual change in GHG emissions from 1990 to 2010 (%)
Deviation from Kyoto target of 1st commitment period as in 2010 (%)
(-0.5) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-16) (-20) (-20) (-22) (-20) (-16) (-20) (-20) (-20) (-20) (-20) (-20) (-20) (-15.8) (-24) (-20) (-12) (-20) (-5) (-20)
8 (-8) (-8) (-8) (-5) (-8) (-8) (-8) (-8) (-8) (-8) (-8) (-8) (-6) 10 (-8) (-8) (-8) (-8) (-8) (-8) (-8) (-8) 1 (-6) (-8) (-8) (-8) (-8) (-8) (-8) (-8) 0 (-8)
30.0 8.2 –7.6 –52.0 –9.1 –28.9 –10.5 –49.6 –15.4 6 –6.0 –24.8 12.6 –40.9 29.7 11.2 –3.5 –54.5 1.1 –56.9 –5.9 –18.7 –0.9 8.2 –28.9 17.5 –57.6 –35.9 –3.5 25.8 –9.0 2.2 –58.8 –22.6
22 16.2 0.4 (-44) (-4.1) (-20.9) (-2.5) (-41.6) (-7.4) 14 2 (-16.8) 20.6 (-34.9) 19.7 19.2 4.5 (-46.5) 9.1 (-48.9) 2.1 (-10.7) 7.1 7.2 (-22.9) 25.5 (-49.6) (-27.9) 4.5 33.8 (-1) 10.2 -58.8 (-14.6)
Source: UNFCCC (The latest available data of actual emissions available upto 2010 only) Notes: Kazakhstan, Cyprus, Malta, and Belarus did not have reduction commitments for 2008-2012 under the KP. Canada, Japan, New Zealand’ and Russia are not Parties to the second commitment period to the Kyoto protocol. :*Countries that are undergoing the process of transition to a market economy. For any representative country say for Australia, the table shows that in the first commitment period, Australia could collectively increase emissions by 8 per cent between 2008-2012 (taking the base year as 1990), whereas for the second KP round, Australia would need to reduce its emissions by 0.5 per cent collectively between 2013- 2020. The last two columns of the table measure progress towards the first KP target which shows that Australia’s actual emissions increased by 30 per cent between 2008-10. This indicates that for the period between 2010-2012, Australia’s emission should have been reduced by 22 per cent for it to be within the target
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global investments for power generation alone, in a 20C temperature rise scenario, would involve $370 billion from 2010 to 2020; $630 billion between 2020 and 2030; and $760 billion between 2030 and 2050.
Domestic Resources and Mechanisms 12.35 The assessment and quantification of the costs of adaptation and mitigation is a difficult task. However, it is clear that these costs are significant and will likely be higher in the future as initiatives are taken in line with the goals outlined in the NAPCC. The preliminary estimates indicate a sum of ` 230,000 crore to fulfill the mission objectives under the NAPCC alone, let alone other lower carbon strategies and environment policies and programmes of the government. 12.36 The most obvious source of financing for climate change action is government budgetary support. Most of it would come as sectoral finance since some of the resources for adaptation and mitigation are built into the ongoing schemes and programmes. Although mitigation is sometimes an important co-benefit, the deployment of resources for such purposes is largely guided by the overall availability of resources. The Finance Bill 2010-11 created a corpus called the National Clean Energy Fund (NCEF) out of a cess at the rate of ` 50 per tonne of coal to invest in entrepreneurial ventures and research in the field of clean energy technologies. The government expects to collect ` 10,000 crore
under the NCEF by 2015. Governments have a range of policy instruments and variables at their disposal to use for generating the enormous resource requirements in this field. This includes a set of price signals, direct and indirect taxes, subsidies, and export and import levies. Theoretically, environmentrelated taxes have an important role to play in funding green initiatives. At the same time, any government must use these policy tools after serious consideration and analysis as they may have serious repercussions on other sectors of the economy. Preliminary modelling studies by the Ministry of Environment and Forests indicate that even a modest revenue-neutral economy-wide carbon tax of US$10 per ton of GHG emissions in India would result in a GDP loss of around US$ 632 billion at 2005 prices. At the same time, the government continues to use subsidies to promote the environment (Box 12.5). 12.37 Relying solely on carbon taxes and subsidy may not be the most viable policy option. Therefore, India is experimenting with a careful mix of market mechanisms together with fiscal instruments and regulatory interventions. On one hand, where the cess on coal is a type of carbon tax being levied in India, Perform Achieve and Trade (PAT) and Renewable Purchase Obligation (RPO) are examples of cap and trade market mechanisms promoting energy efficiency and the use of renewable energy respectively in India (Box12.6).
Box 12.5 : Carbon Taxes and Environmental Subsidies Results of Preliminary Modeling Studies by MoEF on Carbon Taxes and GDP Loss
A Look at the Expenditure on Some Environment Promoting Subsidies by Government Environment-promoting subsidies Sewerage & sanitation Soil & water conservation
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26.04 221.52
Forestry & wildlife
696.36
Special areas development prog.
Carbon tax is revenue positive when it involves no adjustment to other tax rates in the economy. It is revenue neutral when other tax rates are adjusted so that the revenue inflow from carbon tax is exactly balanced by an equal reduction in yields from reduced taxes.
1236.06
Fisheries Agricultural research & education
Undiscounted cumulative GDP loss
Exp. in 2008-9 ` crore) (`
365.11 1560.29
Flood control & drainage
175.28
Non-conventional energy
477.21
Ecology & environment
473.80
Total
5231.67
Source: A Technical Paper on 'Environmental Subsidies in India: Role and Reforms' by the Madras School of Economics(January 2012).
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Box 12.6 : PAT and RPO PAT is a scheme for trading energy-efficiency certificates in large energy-intensive industries under the National Mission for Enhanced Energy Efficiency. Identified industries are required to improve their specific energy consumption (SEC) within the specified period of three years or face penalty provisions. At the same time this mechanism facilitates efficient industries to trade their additional certified energy savings (that go beyond the assigned target) with other designated consumers who could use these certificates to comply with their SEC-reduction targets. In the Twelfth Five Year Plan, the PAT scheme is likely to achieve about 15 million tonnes oil equivalent of annual savings in coal, oil, gas, and electricity (including 6.686 million ton of oil-equivalent energy savings of first phase) Similarly, the RPO is creating domestic markets for renewable energy through regulatory interventions at state level. The RPO is the minimum level of renewable energy (out of total consumption) the obligated entities (DISCOMs, Captive Power Plants, and Open Access Consumers) are entitled to purchase in the area of a distribution licensee. The obligation is mandated by the State Electricity Regulatory Commission (SERC). Since the renewable energy sources are not evenly spread across India, SERCs cannot specify a linear level of RPOs for all states. Renewable Energy Certificates (RECs) under the RPO mechanism is an instrument that enables the obligated entities to meet their Renewable Purchase Obligation by trading surplus or deficit RECs among themselves with the owner of the REC being able to claim to have purchased renewable energy.
12.38 In the particular context of the Twelfth Plan, lower carbon strategies will require capital finance for improvements in technology and enhanced deployment of renewable and clean energy technologies. Some of these objectives may be met through regulatory interventions and use of market mechanisms, in which case the required budgetary support may be small. In other cases, adequate financial outlays will be needed to implement policies and measures that can achieve specific mitigation outcomes in the individual sectors. So far, three grants of ` 5,000 crore each, for forest cover, renewable energy, and the water sector, have been recommended by the 13th Finance Commission for the state governments. 12.39 Considering the large resource requirement, arguments in favour of setting up a National Green Fund to finance public- and private-sector projects/ activities aimed at protecting environment in accordance with the Twelfth Plan objectives have found support. The Fund could also be a vehicle for receiving international support through agreed bilateral and multilateral sources and can finance actions not only at national level but also at state level for agreed priorities and thrust areas. 12.40 Carbon offsetting and its requisite financing require global effort and process. Markets that are operating take signals from international negotiations. Domestic markets and mechanisms alone are neither sufficient for generating resources of the required scale nor efficient enough for reaching the set level of targets and therefore rely heavily on international policy architecture. The second commitment period of the KP has brought some
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respite and certainty to the carbon markets; however, due to lack of ambition the future of carbon markets could still be in an indeterminate state. India's actions for climate change will, therefore, need to be financed from a pool of resources consisting of domestic resources, international carbon finance, and multilateral funds.
International Sources and Issues 12.41 Primarily out of its own concerns, India has chalked out ambitious plans and policies to tackle climate change and environment issues that reflect India's strong will to address this global public good. However, given the scarcity of resources and competing demands, finding the matching resources is a challenge. The Expert Group on Low Carbon Strategies has also stated in its Interim Report that aggressive mitigation cannot be achieved without substantial international financial support, both in terms of financial resources and technology transfer. The Prime Minister also echoed similar sentiment in his Rio+20 Summit speech: 'Many countries could do more if additional finance and technology were available. Unfortunately, there is not enough evidence of support from the industrialised countries in these areas.' 12.42 In the recent past, in the context of making finances available to developing countries, much of the talks under the UNFCCC revolved around two numbers, namely US$ 30 billion between 2010 and 2012 as Fast Start Finance (FSF) and US$ 100 billion annually by 2020 as long-term finance. These were the two finance figures that the developed world collectively pledged as climate change finance in
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Box 12.7 : Assessing the US$ 30 Billion FSF Commitment (2010-2012) As FSF came to an end in 2012, many studies echoed serious concerns on the way FSF was implemented. There are lessons to be learnt so that these issues are addressed when we implement long-term finance by 2020. As a part of the FSF assessment, an Oxfam study 'The Climate Fiscal Cliff' reveals five numbers that speak for themselves on the delivery of funds under FSF. 1.
Only 33 per cent of FSF appears to be new money
2.
Only 24 per cent of public finance was additional to existing aid promises
3.
Only 21per cent went for supporting adaptation in spite of promises to balance it with mitigation
4.
Only 43 per cent was provided as grants and the rest as loans
5.
Only 23 per cent was channeled through multilateral funds
Almost all assessments on FSF point to the core problems as being a) that it was recycled money either diverted from ODA or made up of funds delivered or planned before the Copenhagen promise in 2009; b) that the most vulnerable were not prioritized, with minimal funds spent on adaptation and c) net transfer of resources to developing countries was not even half the amount promised as more than 50 per cent was in the form of loans that have to be repaid. Therefore, an important takeaway in the context of the long-term finance flows are lessons on transparency, coherence, and consistency in reporting and verifying climate finance flows.
2009. These pledges need to be new and additional. The term 'new and additional' in the context of provision of finances by developed countries can be traced right from the text of the Convention to various COP decisions. In this sense 'new and additional' refers to provision of financial resources that represent new commitment, rather than those that are diverted from flows that have already been earmarked for some other form of development assistance. However, in the absence of an agreed definition of additionality in climate finance, the developed and developing countries have diverging views. In the backdrop of these differences together with great uncertainty in finance flows, complex web of channels, and lack of transparency and reporting practices, the actual additionality on FSF turned out to be a matter of great contention (Box 12.7). These differences more recently led to demand from developing countries on the need for a mechanism to measure, report, and verify (MRV) climate finance flows. 12.43 As a part of the finance package in the Doha Conference, the MRV of finance was an important element of the deal. It is satisfying that elements of MRV will be taken up by the Standing Committee on Finance under the COP. The Committee will consider ways of strengthening methodologies for reporting, measuring, and tracking climate finance. Talking about other finance elements, the Conference did not take ambitious or meaningful decisions especially on the demand for finance for the period between 2013 and 2020. The final decision encourages developed country Parties to increase http://indiabudget.nic.in
efforts for at least maintaining the average annual 2010-2012 level of finance between 2013 and 2015. On the other hand, it is reassuring that the work programme on long-term finance started in COP17 in Durban has been extended with a view to continuing discussion on likely sources of finance in the long term. To sum up, finance negotiations and outcomes at Doha were in the nature of small slow steps rather than big strides. 12.44 Simultaneously, there have been efforts to build the requisite infrastructure for enabling and facilitating the flows of climate finance under the Convention. This is because only scaling up of finance will not suffice. The money should be put to efficient use and generate results. To this effect work on operationalizing the GCF progressed. The Republic of Korea has been selected as the host country to house its secretariat. The GCF is expected to be instrumental in channelling a significant share of the US$ 100 billion expected annually to be mobilized to developing countries by 2020 for addressing climate change. The vision, structure, and strategy of the Fund to carry out its function are a crucial priority on the agenda of the GCF Board. The Board should not rush with the 'standard' solutions sometimes proposed by outside interests but focus on ultimate goals and results on the ground with accountability and transparency. 12.45 Meanwhile, there are other Funds under the UNFCCC which continue to function. Collectively, the Climate focal area of Global Environment Facility (GEF), the Special Climate Change Fund, the Least
Sustainable Development and Climate Change Developed Countries Fund, and the Adaptation Fund disburse around less than US$ 1 billion per year (Report on the workshop of the work programme on long-term finance 2012). The GEF, which is also an operating entity of the financial mechanism of the UNFCCC like the GCF, provides project grants for addressing global environmental issues while supporting national development initiatives. Till date, India has accessed about US$ 438 million of GEF grant of which US$ 269.5 million is for projects under the climate change focal area. At the same time, the Climate Investment Fund (CIF)-- a collaborative effort among the multilateral development banks--is offering its funds to be used for climate action on the basis of agreed terms and conditions. India has agreed 'in principle' to accessing the CIF, provided it is not treated as part of the climate change finance flows under the Convention and no GHG emission reduction related conditionalities are associated with the funds. The Trust Fund Committee in May 2012 has approved the allocation of the first tranche amounting to US $ 263 million for four projects contained in India's Investment Plan.
Private Sector and Carbon Markets 12.46 Disappointed with the Doha outcomes on finance, many observers warned that we are heading towards a climate fiscal cliff. In this context, the private sector and global carbon markets are being increasingly emphasized. While not sufficient in themselves, the private sector and carbon markets have shown significant potential in mobilizing finance for climate change especially for mitigation action. According to the UNFCCC report on long-term finance, of the estimated current international climate financial flows, US$ 55 billion per year was generated from the private sector. Likewise carbon markets help developing countries to find financial resources to proceed on their sustainability efforts. The CDM---the KP's market mechanism--as the world's largest carbon market has helped mobilize more than US$ 215 billion collectively so far in investments in developing countries (CDM Policy Dialogue Report). India has been an active player in the CDM, with over 2000 projects having been accorded host country approval, which has the potential of facilitating an overall inflow of approximately US $ 7.07 billion if all the projects get registered. 12.47 At the same time, both these sources have serious limitations in terms of predictability and adequacy of flows. It is absolutely clear that they http://indiabudget.nic.in
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will not deliver on the hardest things: equity, public goods, and adaptation such as climate resiliency in agriculture or off -grid distributed renewables for poor regions. They will instead prove useful for marketled goods and services for the better off, such as grid-based solar and wind power, where public subsidies in one form or another will be demanded. Also private sector investment is guided by risk return. This explains the strong inclination of the private sector towards mitigation projects. Adaptation financing continues to be a concern for all developing countries with insignificant private participation as adaptation usually does not yield returns on investment. Carbon markets on the other hand are volatile, where success is contingent on the level of collective mitigation ambition of nations. End of the first phase of the KP saw the CDM market collapsing with carbon prices declining around 70 per cent in the past year alone. Moreover, unilateral restrictions imposed by the authorities in some of the major carbon markets such as EU on carbon credits from major developing countries such as India have not helped matters. The prices of carbon credits are likely to remain in a trap until the global ambition improves and new market mechanisms emerges to take into account the pledge based emissions. Both the carbon markets and private money need clear and targeted signals from public policies to address the institutional and market barriers confronting them.
CHALLENGES
AND
OUTLOOK
12.48 Though multilateral efforts on sustainable development and climate change have led to several positive outcomes, there are still areas of concern where further work is needed to safeguard the interests of developing countries in future deliberations. Some of the challenges and deliverables from India's point of view are: follow up and action on the Rio + 20 outcome document, and the four processes/mechanisms part of it, especially on developing SDGs and the processes on the financing strategy and technology transfer. Also taking forward the climate change discussions at Doha, the key question to be addressed is to articulate equity in the evolving arrangements that will be applicable to all in the post 2020 period. We have to ensure that domestic goals continue to be nationally determined even as we contribute to the global efforts according to the principle of CBDR and respective capabilities.
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12.49 We should take concrete decisions on the sectoral framework for such actions closing the possibility of both unilateral measures and actions being initiated in sectors by the respective international organizations like ICAO or IMO on their own. More importantly, equity, fair burden sharing, and equitable access to global atmospheric resources have to be protected and addressed more adequately under the DP. India will have to fight for its fair share of carbon and development space. The sources and channels of providing long-term finance by developed countries have not yet been clearly identified. With no certainty on funding in the coming years, it is absolutely necessary to expeditiously mobilize finance and provide initial capital to the GCF for its operations. 12.50 Based on historic emissions and responsibilities, developed countries should take the lead. However, according to a June 2011 study by the Stockholm Environment Institute, 'Comparison of Annex 1 and non-Annex 1 pledges under the Cancun Agreements', developing countries are pledging greater cuts in their GHG emissions than developed countries. India is also proactive in this regard with its intentions and ambition firmly in place in its policies and programmes. One may rightly argue that with the Twelfth Plan's focus on
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'environmental sustainability', India is on the right track with the right enabling environment and has a number of achievements to its credit. However, the challenge while India is growing is to identify the key drivers and enablers of growth, be it infrastructure, transportation sector, housing, or agriculture and to make these sectors grow sustainably. This leads us to the next and most vital issue: of finding and raising new and additional resources for meeting economic well-being needs with greater environmental sustainability. More often, it is the resource crunch which is the stumbling block for developing countries like India. While it makes efforts to efficiently and expeditiously bring price signals and other policy instruments into play, India could do much more if new and additional finance and technology are made available through multilateral processes. 12.51 Be it national or global, environmental decline and global warming occurred gradually over decades and centuries, picking up pace with time. We must remember that the clock is now ticking on the needed global action to combat and contain this decay. This action should be fair, just and equitable for all countries so that the future we want will be a future in which there is ecological and economic space for sustainable development for all.
Human Development
13 CHAPTER
E
conomic growth though important cannot be an end in itself. Higher standards of living as well as of development opportunities for all, stemming from the greater resources generated by economic growth, are the ultimate aim of development policy. This implies the need to bridge regional, social and economic disparities, as well as the empowerment of the poor and marginalized, especially women, to make the entire development process more inclusive. The draft Twelfth Five Year Plan's subtitle 'Faster, More Inclusive and Sustainable Growth', puts the growth debate in the right perspective. The government's targeted policies for the poor, with the prospect of fewer leakages, can help better translate outlays into outcomes.
13.2 The global economic and financial crisis which has persisted for the last five years has not only exposed the vulnerability of almost all the countries over the globe to external shocks, but also has lessons for development planning. Countries need to have inbuilt social safety nets for facing such eventualities, which affect the weak and vulnerable the most, and wipe out the fruits of growth for years. India with its focus on inclusive development and timely interventions has, however, been able to weather the crisis better than many other countries. 13.3 India is on the brink of a demographic revolution with the proportion of working-age population between 15 and 59 years likely to increase from approximately 58 per cent in 2001 to more than 64 per cent by 2021, adding approximately 63.5 million new entrants to the working age group between 2011 and 2016, the bulk of whom will be in the relatively younger age group of 20-35 years. Given that it is one of the youngest large nations in the world, human development assumes great economic significance for it as the demographic dividend can be reaped only if this young population is healthy, educated, and skilled (See chapter 2). The emphasis on human development also gains significance in the light of our major social indicators in the recent past being less encouraging than those http://indiabudget.nic.in
of our neighbours like Bangladesh and Sri Lanka. Therefore policy planners in India have, over the years, engaged themselves in making more inclusive growth and development policies, focusing on human development. This approach has been reflected in the substantial enhancement in budgetary support for major social-sector programmes during 2012-13 like the Pradhan Mantri Gram Sadak Yojana (PMGSY), Backward Regions Grant Fund, Right to Education (RTE)-Sarv Shiksha Abhiyan (SSA), Rashtriya Madhyamik Shiksha Abhiyan, National Rural Health Mission (NRHM), and rural drinking water and sanitation schemes.
HUMAN AND GENDER DEVELOPMENT: INTERNATIONAL COMPARISON 13.4 As per the latest available Human Development Report (HDR) 2011 published by the United Nations Development Programme (UNDP) (which estimates the human development index [HDI] in terms of three basic capabilities: to live a long and healthy life, to be educated and knowledgeable, and to enjoy a decent economic standard of living), the HDI for India was 0.547 in 2011 with an overall global ranking of 134 (out of
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Table 13.1 : India’s Global Position in Human Development 2011 HDI Country
Value
Rank
Average annual HDI growth rate (per cent) 199020002011 2011
GNI per GNI per capita capita (constant rank 2005 minus PPP $) HDI rank
Nonincome HDI value
GII Value
Rank
Norway
0.943
1
0.53
0.29
47,557
6
0.975
0.075
6
Australia
0.929
2
0.30
0.23
34,431
16
0.979
0.136
18
Brazil
0.718
84
0.86
0.69
10,162
-7
0.748
0.449
80
China
0.687
101
1.62
1.43
7476
-7
0.725
0.209
35
Sri Lanka
0.691
97
0.81
0.80
4943
12
0.768
0.419
74
Thailand
0.682
103
0.89
0.78
7694
-14
0.714
0.382
69
Philippines
0.644
112
0.58
0.62
3478
11
0.725
0.427
75
Egypt
0.644
113
1.24
0.88
5269
-6
0.686
NA
NA
Indonesia
0.617
124
1.19
1.17
3716
-2
0.674
0.505
100
South Africa
0.619
123
0.03
0.05
9469
-44
0.604
0.490
94
Vietnam
0.593
128
1.50
1.06
2805
8
0.662
0.305
48
India
0.547
134
1.38
1.56
3468
-10
0.568
0.617
129
Pakistan
0.504
145
1.12
1.33
2550
-7
0.526
0.573
115
0.5
146
1.69
1.55
1529
11
0.566
0.550
112
0.66
0.66
10,082
0.683
0.492
Bangladesh World
0.682
Source : World HDR 2011. Note : NA: Not Available, Data refer to 2011 or the most recent year available; PPP is purchasing power parity.
187 countries) compared to 119 (out of 169 countries) in HDR 2010. The growth rate in average annual HDI of India between 2000-11 is among the highest, a finding also corroborated by the India Human Development Report (IHDR) 2011 brought out by the Institute of Applied Manpower Research and the Planning Commission. According to the IHDR, HDI between 1999-2000 and 2007-8 has increased by 21 per cent, with an improvement of over 28 per cent in education being the main driver. India is ranked 129 in terms of the gender inequality index(GII) which captures the loss in achievement due to gender disparities in the areas of reproductive health, empowerment, and labour force participation, with values ranging from 0 (perfect equality) to 1 (total inequality). A lot more needs to be done as our GII is higher than the global average of 0.492. Even neighbours like Pakistan (115), Bangladesh (112), and Sri Lanka (74), have performed better in terms of this indicator (Table 13.1). The gross national income (GNI) per capita ranking minus HDI ranking for India is -10 indicating that India is better ranked by GNI than by non-income HDI. As a corollary, India is worse off in its performance of non-income HDI value computed from life expectancy and education. http://indiabudget.nic.in
INCLUSIVE DEVELOPMENT 13.5 This section and the one that follows examine the major dimensions of inclusive development like poverty alleviation, employment generation, health, education, women's empowerment, and social welfare besides reviewing the progress of important government programmes in these sectors. 13.6 Inclusive development includes social inclusion along with financial inclusion and in most cases the socially excluded are also financially excluded. Many segments of the population like landless agricultural labourers, marginal farmers, scheduled castes (SCs), scheduled tribes (STs), and other backward classes (OBCs) continue to suffer social and financial exclusion. The government's policies are directed towards bringing these marginalized sections of the society into the mainstream as is also reflected in social-sector expenditure by the government.
Trends in India's social-sector expenditure 13.7 Central support for social programmes has continued to expand in various forms although most
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Human Development Table 13.2 : Central Government Expenditure (Plan and non-Plan) on Social Services and Development ITEM
2007-8 Actual
1. Social service a. Education,sports,youth affairs 4.02 b. Health & family welfare 2.05 c. Water supply, housing, etc. 2.02 d. Information & broadcasting 0.22 e.Welfare of SCs/STs, and OBCs 0.36 f. Labour & employment 0.27 g. Social welfare & nutrition 0.82 h. North-eastern areas 0.00 i. Other social services 1.29 Total 11.06 2. Rural development 2.80 3. Pradhan Mantri Gram Sadak Yojana (PMGSY) 0.91 4. Social services, rural development and PMGSY 14.77 5. Total central government expenditure 100.00
(as per cent of total expenditure) 2008-9 2009-10 2010-11 2011-12 2012-13 Actual Actual Actual RE BE
4.27 2.09 2.54 0.23 0.41 0.28 1.15 0.00 1.55 12.52 4.56 0.88 17.95 100.00
4.15 2.00 2.39 0.20 0.43 0.22 0.87 0.02 1.67 11.94 3.77 1.11 16.82 100.00
4.56 1.98 2.35 0.21 0.58 0.24 1.01 0.02 1.66 12.61 3.51 1.87 18.00 100.00
4.38 1.90 1.93 0.19 0.64 0.23 1.19 1.65 0.21 12.31 2.97 1.52 16.79 100.00
4.52 2.06 2.08 0.17 0.61 0.28 1.25 1.88 0.19 13.04 2.74 1.61 17.39 100.00
Source : Budget Documents. Note : RE-Revised Estimates; BE- Budget Estimates.
Table 13.3 : Trends in Social Services Expenditure by General Government (Central and State Governments combined) (` crore) Items
2007-8
2008-9
2009-10
2010-11
2011-12 RE
2012-13 BE
1315283
1599677
1852119
2145145
2518825
2835873
294583 129366 63226 101991
380628 162008 74273 144347
446382 197070 88054 161258
529398 244156 100576 184666
617939 291378 115711 210850
710759 331524 136296 242939
26.37 5.91
28.41 6.76
As percentage to GDP 28.59 27.52 6.89 6.79
28.07 6.89
28.28 7.09
of which: i) Education ii) Health iii) Others
2.59 1.27 2.05
2.88 1.32 2.56
3.25 1.29 2.35
3.31 1.36 2.42
Expenditure on social services
22.4
As percentage to total expenditure 23.8 24.1 24.7 24.5
25.1
10.1 4.6 9.0
11.6 4.6 8.4
11.7 4.8 8.6
As percentage to social services expenditure 42.6 44.1 46.1 47.2 19.5 19.7 19.0 18.7 37.9 36.1 34.9 34.1
46.6 19.2 34.2
Total expenditure Expenditure on social services of which: i) Education ii) Health iii) Others Total expenditure Expenditure on social services
of which: i) Education ii) Health iii) Others
9.8 4.8 7.8
i) Education ii) Health iii) Others
43.9 21.5 34.6
3.04 1.36 2.49
10.6 4.8 8.7
3.13 1.29 2.37
11.4 4.7 8.6
Source : RBI as obtained from Budget Documents of union and state governments. BE: Budget Estimates; RE: Revised Estimate.
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social-sector subjects fall within the purview of the states. Central government expenditure on social services and rural development (Plan and non-Plan) has increased from 14.77 per cent in 2007-8 to 17.39 per cent in 2012-13 (Budget Estimates [BE]) with an all-time high of 18 per cent in 2010-11 due to the combined effect of higher expenditure under the Pradhan Mantri Gram Sadak Yojana (PMGSY) and education (Table 13.2). 13.8 Expenditure on social services by the general government (centre and states combined) has also shown increase in recent years reflecting the higher priority given to this sector (Table 13.3). Expenditure on social services as a proportion of total expenditure increased from 22.4 per cent in 2007-8 to 24.7 per cent in 2010-11 and further to 25 .1 per cent in 201213 (BE). Among social services, the share of expenditure on education has increased from 43.9 per cent in 2007-8 to 46.6 per cent in 2012-13 (BE), while that on health has fallen from 21.5 per cent to 19.2 per cent. As a proportion of the gross domestic product (GDP), expenditure on social services increased from 5.91 per cent in 2007-8 to 6.79 per cent in 2010-11 and further to 7.09 per cent in 201213(BE). While expenditure on education as a proportion of GDP has increased from 2.59 per cent in 2007-8 to 3.31 per cent in 2012-13 (BE), that on health has increased from 1.27 per cent in 2007-8 to 1.36 per cent in 2012-13 (BE). Table 13.4 : Expenditure on Health in Developed and Emerging Economies (as percentage of GDP) Country
Expenditure on health (2010 or latest available year) Public
Private
Total
Australia
6.2
2.9
9.1
Norway
8.1
1.4
9.4
United Kingdom
8.0
1.6
9.6
United States
8.5
9.1
17.6
Mexico
2.9
3.3
6.2
Indonesia
1.3
1.3
2.6
Brazil
4.2
4.8
9.0
Russian Federation
3.2
1.9
5.1
India
1.2
2.9
4.1
China
2.7
2.4
5.1
South Africa
3.9
5.0
8.9
Source: OECD Factbook 2013: Environmental and Social Statistics.
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Economic,
13.9 However, India's expenditure on health as a per cent of GDP is very low compared to many other emerging and developed countries. Unlike most countries, in India private-sector expenditure on health as a percentage of GDP is higher than public expenditure and was more than double in 2010. Despite this the total expenditure on health as a percentage of GDP is much lower than in many other developed and emerging countries and the lowest among BRICS (Brazil, Russia, India, China and South Africa) countries (Table13.4).
POVERTY 13.10 The Planning Commission estimates poverty using data from the large sample surveys on household consumer expenditure carried out by the National Sample Survey Office (NSSO) every five years. It defines poverty line on the basis of monthly per capita consumption expenditure (MPCE). The methodology for estimation of poverty followed by the Planning Commission has been based on the recommendations made by experts in the field from time to time. The Expert Group headed by Professor Suresh D. Tendulkar which submitted its report in December 2009 has computed the poverty lines at all India level as MPCE of ` 447 for rural areas and ` 579 for urban areas in 2004-5. After 2004-5, this survey has been conducted in 2009-10. The Planning Commission has updated the poverty lines and poverty ratios for the year 2009-10 as per the recommendations of the Tendulkar Committee using NSS 66th round (2009-10) data from the Household Consumer Expenditure Survey. It has estimated the poverty lines at all India level as an MPCE of ` 673 for rural areas and ` 860 for urban areas in 2009-10. Based on these cut-offs, the percentage of people living below the poverty line in the country has declined from 37.2 per cent in 2004-5 to 29.8 per cent in 2009-10. Even in absolute terms, the number of poor people has fallen by 52.4 million during this period. Of this, 48.1 million are rural poor and 4.3 million are urban poor. Thus poverty has declined on an average by 1.5 percentage points per year between 2004-5 and 2009-10. The annual average rate of decline during the period 2004-5 to 2009-10 is twice the rate of decline during the period 1993-4 to 2004-5 (Table13.5). 13.11 Infant mortality rate (IMR) which was 58 per thousand in the year 2005 has fallen to 44 in the year 2011. The number of rural households provided toilet facilities annually have increased from 6.21 lakh in 2002-3 to 88 lakh in 2011-12. Similarly MPCE (at
273
Human Development Table 13.5 : Number and Percentage of Poor* Year
Number of poor (million)
Poverty ratio (%)
Rural
Urban
Total
Rural
Urban
Total
1993-4
328.6
74.5
403.7
50.1
31.8
45.3
2004-5
326.3
80.8
407.1
41.8
25.7
37.2
2009-10
278.2
76.5
354.7
33.8
20.9
29.8
Annual Average Decline : 1993-4 to 2004-5 (percentage points per annum)
0.75
0.55
0.74
Annual Average Decline : 2004-5 to 2009-10 (percentage points per annum)
1.60
0.96
1.48
Source : Planning Commission, * Estimated by Tendulkar Method.
constant prices) has also increased from ` 558.78 and ` 1052.36 during 2004-5 to ` 707.24 and ` 1359.75 in 2011-12 in rural and urban areas respectively. The improvement in these social indicators is also a reflection of fall in deprivation. The Planning Commission has also constituted an Expert Group under the Chairmanship of Dr C. Rangarajan to 'Review the Methodology for Measurement of Poverty' in June 2012. (Also see inter-state comparison of poverty in Table 13.8).
INEQUALITY 13.12 HDR measures inequality in terms of two indicators. The first indicator is the income Gini coefficient which measures the deviation of distribution of income (or consumption) among the individuals within a country from a perfectly equal distribution. For India, the income Gini coefficient was 36.8 in 2010-11. In this respect, inequality in India is lower than many other developing countries e.g. South Africa (57.8), Brazil (53.9), Thailand (53.6), Turkey (40.8), China (41.5), Sri Lanka (40.3), Malaysia (46.2), Vietnam (37.6), as well as countries like USA (40.8), Hong Kong (43.4), Argentina (45.8), Israel (39.2), Bulgaria (45.3) etc., which are otherwise
ranked very high in terms of human development index. The second indicator is the quintile income ratio, which is a measure of average income of the richest 20 per cent of the population to that of poorest 20 per cent. The quintile income ratio for India was 5.6 in 2010-11. Countries like Australia (7.0), the USA (8.5), New Zealand (6.8), Singapore (9.8), the UK (7.8), Argentina (12.3), Mexico (14.4), Malaysia (11.4), Philippines (9.0), Vietnam (6.2) had higher ratios. This implies that the inequality between the top and bottom quintiles in India was lower than a large number of countries. 13.13 To estimate the rural-urban gap, the monthly per capita expenditure (MPCE) defined first at household level to assign a value that indicates the level of living to each individual or household is used. According to the provisional findings of the 68th round (2011-12) of the NSS, average MPCE (Uniform Reference Period [URP] based) is `1281.45 and ` 2401.68 respectively for rural and urban India indicating rural-urban income disparities. However, monthly per capita rural consumption rose by 18 per cent in real terms in 2011-12 over 2009-10, while monthly per capita urban consumption rose by only 13.3 per cent. Thus the rate of increase in the MPCE of rural areas is higher than that of urban areas,
Table 13.6 : Average MPCE (Uniform Reference Period) (in ` ) NSS Round
Year
Constant prices (2004-5)
Current prices (2011-12)
Rural
Urban
Rural
Urban
68th Round
July 2011-June 2012
707.24
1359.75
1281.45
2401.68
66 Round
July 2009-June 2010
599.06
1200.01
927.70
1785.81
61 Round
July 2004-June 2005
558.78
1052.36
558.78
1052.36
th st
Source: NSSO Press release 1 August 2012 (The results of 68th round of NSS data are provisional).
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indicating a bridging of the rural-urban gap (Table 13.6). Out of the MPCE, the share of food as per 66th round NSS data (2009-10) is ` 600 (57 per cent) and ` 881(44 per cent) for rural and urban India respectively, showing a higher share for food in rural compared to urban India.
EMPLOYMENT 13.14 The last decade, i.e. 1999-2000 to 2009-10, witnessed an employment growth of 1.6 per cent per annum based on usual principal and subsidiary status (UPSS). Employment growth in second half of the decade was relatively modest. This as per NSSO survey, 2009-10 was largely on account of a lower labour force participation rate (LFPR), across all ages in 2009-10 vis-Ă -vis 2004-5. Labour force participation rate, which reflects the persons who express their willingness to work declined from 430 per thousand persons in 2004-5 to 400 per thousand persons in 2009-10. The LFPR declined particularly for rural females. The growth of those in labour force declined possibly on account of greater number of persons opting for education/skill development. Studies using NSS data show that there has been a steady increase in the ratio of students to total population from 20.5 per cent in 1993-4 to 24.3 per cent in 2004-5 and further to 26.6 per cent in 200910 (Jayan Jose Thomas, EPW, December 22, 2012) and this largely explains the modest growth in employment in second half of 2000-10. The students to population ratio increased faster in rural areas and more so for females. It may, however, be mentioned that the unemployment rate, according to UPSS criteria, in fact declined between 2004-5 and 2009-10, both in rural and urban areas, implying that relatively larger proportions of persons who were willing to work, were actually employed. 13.15 An increased intensity of employment is also reflected by an overall increased availability of employment to workers based on current daily status (CDS). The CAGR of employment on CDS basis for the period 2004-5 to 2009-10 is 1.11 per cent per annum which is significantly higher than the growth of employment in UPSS terms. One development of interest is the loss in female employment in rural areas using both UPSS and CDS methods and loss in female employment in urban areas on UPSS basis. One of the reasons for this is a significant number of women (137 million in 2009-10) opted not to work to
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continue education. But total employment (rural and urban combined of males and females combined) is positive on both methods.
Unemployment 13.16 The unemployment rate increased at a slow pace on UPSS basis and at a relatively higher pace on CDS basis from 1993-4 to 2004-5. However, in 2009-10 there was a fall in the unemployment rate which was relatively more on CDS basis (See Figure 13.1 and Table 13.8). Despite negligible employment growth, the unemployment rate (CDS method) fell from 8.2 per cent in 2004-5 to 6.6 per cent in 200910. The decline in CDS unemployment rate implies a decline in unemployed persondays. The total number of unemployed persondays declined by 6.5 million persons, from around 34.5 million in 2004-5 to 28 million in 2009-10. 13.17 The fall in unemployment despite marginal growth in employment in 2009-10 could be due to the demographic dividend, as an increasing proportion of the young population opts for education rather than participating in the labour market. This is reflected in the rise in growth in enrolment of students in higher education from 49.25 lakh in 1990-91 to 169.75 lakh in 2010-11. Similarly gross enrolment ratio in class I-VIII has risen from 93.54 in 2004-5 to 104.3 in 2010-11. Enactment of the Right to Education and programmes like the Sarva Shiksha Abhiyan could also have contributed to this.
Employment in the Organized Sector 13.18 Employment growth in the organized sector, public and private combined, has increased by 1.0 per cent in 2011, as against 1.9 per cent in 2010 (Table 13.7). The annual growth rate of employment in the private sector in 2011 was 5.6 per cent whereas that in the public sector was negative. The share of women in organized-sector employment was around 20.5 per cent during 2009-11 and has remained nearly constant in recent years.
Employment Situation in 2011-12 as Per Quarterly Survey Reports 13.19 The Fifteenth Quarterly Quick Employment Survey by the Labour Bureau to assess the impact of the economic slowdown on employment in India indicates that the upward trend in employment since July 2009 has been maintained (Box 13.1).
Human Development
275
Source : Second Annual Report to the People on Employment 2011 (Ministry of Labour & Employment).
Table 13.7 : Overall Employment in Public and Private Sectors Sector
Employment (in lakh) as on 31 March
Percentage change 2010/2009
Percentage change 2011/2010
2009
2010
2011
Public
177.95
178.62
175.48
0.4
-1.8
Private
103.77
108.46
114.52
4.5
5.6
Total
281.72
287.08
289.99
1.9
1.0
55.80
58.59
59.54
Women
Source: Annual Employment Review, 2011 (Directorate General of Employment and Training). Note: 1) Excludes Sikkim, Arunachal Pradesh, Dadra & Nagar Haveli, and Lakshadweep. 2) Industry-wise break-up may not tally with public sector, private sector and grand total due to noninclusion of data as per National Industrial Classification (NIC) -1998, in respect of J&K, Manipur, and Daman & Diu in 2011.
Box 13.1 : Fifteenth Quarterly Survey Report on Effect of Economic Slowdown on Employment in India April to June 2012 The results for selected sectors, i.e. textiles including apparel, leather, metals, automobiles, gems and jewellery, transport, information technology (IT) / business process outsourcing (BPO) and handloom/powerloom are as follows:
Overall employment in June, 2012 over June, 2011 has increased by 6.94 lakh, with the highest increase recorded in IT/BPO (4.44 lakh) sector followed by 1.70 lakh in Textiles including Apparels, 0.45 lakh in Transport, 0.26 lakh in Metals, 0.19 lakh in Gems and Jewellery and 0.11 lakh in Automobiles sectors during the period. On the other hand, employment in handloom/powerloom and leather sectors has marginally declined during this period.
In export oriented units, employment at the overall level has increased by 5.81 lakh whereas in the non-exporting units, it has increased by 1.10 lakh during the period June, 2012 over June, 2011.
During the quarter March to June 2012, employment increased in respect of only Textiles including Apparels followed by IT/BPO and Gems & Jewellery. There was no growth in employment in the Leather, Transport and Handloom/Powerloom sectors, while sectors like Metals and Automobiles registered negative growth. Overall employment has increased by 0.73 lakh during this quarter.
The results of the15th quarterly survey reveal that there has been a sustained and consecutive increase in employment in the sectors covered at overall level during the last eleven quarters with a total addition of 30.73 lakh employment during this recovery period.
Source : Labour Bureau (Ministry of Labour & Employment).
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Table 13.8 : Socio-Economic Profiles & Inter-State comparison of some Major States of India S. No.
Socio-economic Indicators/Items
1
Population Related Census 2011 (Provisional) * Percentage Decadal Growth of Population (2001-11) Sex-ratio (No. of Females per 1000 Males)
2
3
4
5
6
7
8
9
Andhra Pradesh
Assam
Bihar
Gujarat
11.10 992
16.93 954
25.07 916
19.17 918
Growth Related at constant prices 2004-5 (as on 14 August 2012) # GSDP Growth 2011-12 GSDP Growth 2005-6 to 2011-12 Growth in Per Capita Income 2011-12
6.72 8.90 5.75
8.42 6.05 7.24
16.71 10.17 15.44
8.20 9.98 8.65^
Poverty Headcount Ratio (per cent)*** 2009-10 (Rural) 2009-10 (Urban) 2009-10(Total) 2004-5 (Rural) 2004-5 (Urban) 2004-5 (Total)
22.8 17.7 21.1 32.3 23.4 29.9
39.9 26.1 37.9 36.4 21.8 34.4
55.3 39.4 53.5 55.7 43.7 54.4
26.7 17.9 23.0 39.1 20.1 31.8
Rual-Urban Disparity 2009-10## Average MPCE MMRP (Rural) (`) Per cent Share of Food (Rural) Average MPCEMMRP (Urban)(`) Per cent Share of Food (Urban)
1234 58.1 2238 44.8
1003 64.4 1755 52.9
780 64.7 1238 52.9
1110 57.7 1909 46.2
12 31
39 52
20 73
8 18
Health Related Male (Life expectancy at birth 2006-10)$ Female (Life expectancy at birth 2006-10)$ Infant Mortality Rates(per 1000 live births) 2011* Birth Rate (per 1000) 2011 * Death Rate(per 1000) 2011*
63.5 68.2 43 17.5 7.5
61.0 63.2 55 22.8 8.0
65.5 66.2 44 27.7 6.7
64.9 69.0 41 21.3 6.7
Education Related 2010-11 $$ GER (6-13 years) Pupil-Teacher Ratio (Primary/ Jr.Basic School) Pupil-Teacher Ratio (Middle/Sr. Basic School)
92.0 31 25
84.0 28 21
102.9 76 51
107.2 NA 35
Financial Inclusion (In per cent) Decadal Growth Rate of Bank Branches (&) Households availing Banking Services in 2011*
35.4 53.0
16.5 44.1
14.4 44.4
25.3 57.9
1183
548
612
437
58
26
38
38
57.79 249013 10.08
24.87 143770 5.82
Unemployment Rates 2009-10 (per 1000) according to usual status (adjusted) ## Rural Urban
Key Social-sector Programmes No.of 24x7 PHCs, Additional PHCs, CHCs & other sub-districts facilities under NRHM $ Average persondays per Household under Mahatma Gandhi NREGA 2011-12 @ Percentage Share of Women in Employment under MGNREGA 2011-12 Indira Awas Yojana (IAY) Houses constructed during 2011-12(Nos.) @ Percentage share of total houses constructed during 2011-12 under IAY
Source: * *** $$ ##
Office of Registrar General of India(RGI); Planning Commission; $ M/O H & FW; M/O HRD; # CSO; NSS(66th round); NA Not Available. MMRP Modified mixed reference period @ DMU/MPR of M/O RD; (&) Study on Financial Inclusion by Justice K S Hegde Institute; ^ Growth rate in per capita income of Gujarat for 2010-11 is repeated.
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28.82 46.54 469885 111999 19.01 4.53
Haryana Himachal KarnatPradesh aka
Kerala
Madhya MaharaPradesh shtra
Odisha
Punjab
Rajasthan
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277
Tamil Uttar Nadu Pradesh
West Bengal
All India
19.90 877
12.81 974
15.67 968
4.86 1,084
20.30 930
15.99 925
13.97 978
13.73 893
21.44 926
15.60 995
20.09 908
13.93 947
17.64 940
7.88 9.39 6.18
7.59 8.29 5.76
7.52 8.37 6.69
7.80 8.31 7.13
11.98 8.77 10.48
8.54 9.97 8.73
7.18 8.52 4.64
5.68 7.11 4.24
5.41 7.78 3.72
7.37 9.68 6.72
6.04 7.04 4.17
6.55 6.94 5.67
6.48 8.34 5.16
18.6 23.0 20.1 24.8 22.4 24.1
9.1 12.6 9.5 25.0 4.6 22.9
26.1 19.6 23.6 37.5 25.9 33.4
12.0 12.1 12.0 20.2 18.4 19.6
42.0 22.9 36.7 53.6 35.1 48.6
29.5 18.3 24.5 47.9 25.6 38.2
39.2 25.9 37.0 60.8 37.6 57.2
14.6 18.1 15.9 22.1 18.7 20.9
26.4 19.9 24.8 35.8 29.7 34.4
21.2 12.8 17.1 37.5 19.7 29.4
39.4 31.7 37.7 42.7 34.1 40.9
28.8 22.0 26.7 38.2 24.4 34.2
33.8 20.9 29.8 41.8 25.7 37.2
1510 54.0 2321 43.1
1536 NA 2654 NA
1020 56.5 2053 42.3
1835 45.9 2413 40.2
903 55.8 1666 41.7
1153 54.0 2437 41.0
818 61.9 1548 48.4
1649 48.2 2109 44.3
1179 54.8 1663 48.0
1160 54.7 1948 45.0
899 57.9 1574 46.3
952 63.5 1965 46.2
1054 57.0 1984 44.4
18 25
16 49
5 27
75 73
7 29
6 32
30 42
26 48
4 22
15 32
10 29
19 40
16 34
67.0 69.5 44 21.8 6.5
67.7 72.4 38 16.5 6.7
64.9 69.7 35 18.8 7.1
71.5 76.9 12 15.2 7.0
61.1 63.8 59 26.9 8.2
67.9 71.9 25 16.7 6.3
62.2 63.9 57 20.1 8.5
67.4 71.6 30 16.2 6.8
64.7 68.3 52 26.2 6.7
67.1 70.9 22 15.9 7.4
61.8 63.7 57 27.8 7.9
67.4 71.0 32 16.3 6.2
64.6 67.7 44 21.8 7.1
90.5 51 38
111.0 15 14
99.3 17 27
96.2 23 25
122.6 38 39
100.0 29 32
104.8 33 26
103.1 26 15
99.3 46 26
112.0 27 32
109.5 79 69
90.1 45 49
104.3 43 33
59.5 68.1
29.2 89.1
28.5 61.1
30.6 74.2
21.2 46.6
28.1 68.9
27.9 45.0
39.8 65.2
25.5 68.0
31.3 52.5
26.9 72.0
18.4 48.8
28.8 58.7
407
156
1332
660
651
645
394
407
1500
1844
903
596
13835
39
53
42
45
43
50
33
26
47
48
36
27
43
59.48 45.71 6019 26965 0.24 1.09
92.76 54499 2.21
42.48 45.95 98447 141479 3.98 5.72
38.60 141398 5.72
36.44 17282 0.70
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43.17 69.20 16622 125642 0.67 5.08
73.36 16.98 91631 307012 3.71 12.42
32.46 47.98 186224 2471421 7.54 100.00
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SOCIO-ECONOMIC PROFILE OF STATES AND INTER-STATE COMPARISONS Human Development: comparisons
with Odisha's situation improving considerably in 2009-10. Lowest poverty is in Himachal Pradesh (9.5 per cent) followed by Kerala (12 per cent).
Inter-state
13.20 Narrowing inter-state and inter-regional disparities is also one of the objectives of inclusive development. Inter-state comparisons of socioeconomic development of selected major states based on available indicators from different sources show some interesting results (Table 13.8).
Rural-Urban Disparity:
Population Related:
Bihar has the highest decadal (2001-11) growth rate of population (25.07 per cent), while Kerala has the lowest rate (4.86 per cent). Some big states like Gujarat, Haryana, Madhya Pradesh, Rajasthan, and Uttar Pradesh also have high decadal growth of population.
Unemployment:
In 2011, Kerala has the highest sex ratio with 1084 females per 1000 males, followed by Tamil Nadu (995), while Haryana is at the bottom (877). Interestingly, the sex-ratios in some of the developed states like Gujarat and Maharashtra are also low at 918 and 925 respectively.
Growth Related:
The best performers in terms of growth during 2011-12 are Bihar (16.71 per cent) followed by Madhya Pradesh and Maharashtra. The growth of these states is much above the all India average. The worst performers are Rajasthan (5.41 per cent) followed by Punjab and Uttar Pradesh. States with the highest growth rate for the period 2005-6 to 2011-12 are Bihar (10.17 per cent) followed by Gujarat and Maharashtra. In terms of growth in per capita income, the best performer is Bihar (15.44 per cent) followed by Madhya Pradesh and Maharashtra due to high growth in gross state domestic product (GSDP) in 2011-12 and despite their high decadal growth in population. Per capita income growth is the lowest in Rajasthan (3.72 per cent), followed by Uttar Pradesh, Punjab, and Odisha which are all below the all India per capita income growth.
The poverty estimates indicate that the highest poverty headcount ratio (HCR) exists in Bihar at 53.5 per cent as against the national average of 29.8 per cent. In 2009-10 compared to 2004-5, Bihar has displaced Odisha as the poorest state, http://indiabudget.nic.in
As per usual status(adjusted) NSS 66th round 2009-10, the unemployment rate (per 1000) among the major states is the lowest in Gujarat(18) and highest in Kerala(73) and Bihar(73) in urban areas and the lowest in Rajasthan (4) and again highest in Kerala (75) in rural areas. The low unemployment rate in rural areas in Rajasthan may partly be due to high absorption of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) funds in the state. Kerala, which has performed well in terms of most indicators, performs less well in terms of unemployment (both rural and urban). This may be due to the higher level of education in Kerala resulting in people not opting for manual jobs as observed by some studies.
Health:
Poverty:
Bihar has the lowest MPCE both in rural and urban areas at ` 780 (with 65 per cent food share) and `1238 (with 53 per cent food share) respectively. In comparison, Kerala has the highest in both rural and urban areas at `1835 (with 46 per cent food share) and ` 2413 (with 40 per cent food share) respectively. It is obvious that poorer states spend a greater proportion of income on food in total consumption expenditure.
Kerala is the best performer in terms of life expectancy at birth for both males (71.5 years) and females (76.9 years) whereas Assam is the worst performer for both males (61 years) and females (63.2 years) during 2006-10. Infant mortality rate (IMR) in 2011 is the lowest in Kerala (12) and highest in Madhya Pradesh (59) against the national average of 44. Birth rate is lowest in Kerala (15.2) and highest in Uttar Pradesh (27.8) against the national average of 21.8. Death rate is lowest in West Bengal (6.2) and highest in Odisha (8.5) against the national average of 7.1.
Education:
Madhya Pradesh has the highest gross enrolment ratio (GER) (6-13 years) in 2010-11
Human Development while Assam has the lowest. Pupil-teacher ratios in primary and middle/basic schools are the lowest in Himachal Pradesh and high in states like Uttar Pradesh and Bihar.
Financial Inclusion: ď Ź
In terms of decadal growth rate in bank branches, Haryana (59.5 per cent) has the highest growth and Bihar the lowest (14.4 per cent). Even a north-eastern state like Assam (16.5 per cent) is better placed than Bihar. Himachal Pradesh (89.1 per cent) has the highest percentage households availing of banking services while Assam (44.1 per cent) is the lowest followed by Bihar (44.4 per cent). Thus in terms of both these financial inclusion indicators, Bihar's performance is among the worst.
Key Social-sector Programmes: ď Ź
ď Ź
While there are state-wise indicators for some social-sector programmes, it is not possible to evaluate the performance of states based just on numbers. The average persondays per household under the MGNREGA in 2011-12 is the highest in Andhra Pradesh (58 days) followed by Himachal Pradesh (53 days) and lowest in Assam and Punjab (both 26 days) against the national average of 43 days. While the share of women's employment under the MGNREGA is the highest in Kerala (92.76 per cent) followed by Tamil Nadu (73.36 per cent), it is the lowest in Uttar Pradesh (16.98 per cent). While the stipulation of one-third women's participation has been maintained at the all India level, in states like Uttar Pradesh, Assam, and Bihar, it has been below the stipulated level. Progress in terms of 24x7 primary health centres (PHCs), additional PHCs, CHCs and other subdistricts health facilities under the NRHM is the highest in Tamil Nadu and lowest in Himachal Pradesh. Under the Indira Awas Yojana (IAY), Bihar has the highest share followed by Uttar Pradesh and Andhra Pradesh whereas Himachal Pradesh has the lowest.
13.21 Thus the inter-state comparison of performance of states based on different indicators shows that while some states have performed well in terms of growth indicators, they have performed poorly in terms of other indicators like poverty, ruralurban disparity, unemployment, education, health and financial inclusion. This calls for a rethink on the criteria used for devolution of funds to states
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279
under Finance Commissions where criteria like income distance (12th Finance Commission) or fiscal capacity distance (13th Finance Commission) along with population are given high weightage and none of the human development indicators or financial inclusion indicators are used. Similarly the criteria used for awarding special category status to states (hilly and difficult terrain, low population density and/ or sizable share of tribal population, strategic location along borders with neighbouring countries, economic and infrastructural backwardness, and non-viable nature of state finances) need to be revisited.
POVERTY ALLEVIATION AND EMPLOYMENT GENERATION PROGRAMMES 13.22 The government is following a focused approach through various flagship schemes in the areas of poverty alleviation and employment generation to achieve inclusive development. As the last exercise conducted in 2002 to identify people living in poverty in rural areas had several limitations, the Dr. N. C. Saxena Committee was constituted to advise on the methodology for conducting a below poverty line (BPL) census. Consequently, a Socio Economic and Caste Census (SECC) has commenced in June 2011 through a door-to-door enumeration across the country, which after due deliberation will form the basis of targeting beneficiaries under various social-sector progarmmes (Box.13.2). 13.23 Some important poverty alleviation and employment generation programmes are as follows: Mahatma Gandhi NREGA: This flagship programme of the government aims at enhancing livelihood security of households in rural areas by providing at least one hundred days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work with the stipulation of one-third participation of women. The MGNREGA provides wage employment while also focusing on strengthening natural resource management through works that address causes of chronic poverty like drought, deforestation, and soil erosion and thus encourage sustainable development. The MGNREGA is implemented in all districts with rural areas. Out of total a outlay of ` 33,000 crore approved for 201213, ` 25,894.03 crore has been released and the total fund available with the states including the opening balance of ` 10,009.09 crore is ` 41,788.74
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Box 13.2 : Socio Economic and Caste Census (SECC) For the success of any targeted approach, the identification of the real beneficiaries is of paramount importance. In line with this approach the Dr. N. C. Saxena Committee was constituted to advise on the methodology for a BPL census in rural areas. Since June 2011, for the first time through a comprehensive door-to-door enumeration in both rural and urban India, authentic information is being made available on the socio-economic condition and educational status of various castes and sections through the SECC. This exercise will help better target government schemes to the right beneficiaries and ensure that all eligible beneficiaries are covered, while all ineligible beneficiaries are excluded. Households identified as highly deprived will have the highest inclusion priority under government welfare schemes. Use of the Aadhar number in various beneficiary-oriented social sector programmes will also check duplications. The SECC 2011 is being conducted simultaneously for rural and urban areas by the respective states, with technical and financial support from the Government of India. Enumeration is to be done with the help of about 6 lakh enumerators, who are accompanied by an equal number of technically qualified and computer literate Data Entry Operators (DEO) selected by the country's premier IT majors. The Ministry of Rural Development in association with the Ministry of Housing and Urban Poverty Alleviation, Office of the Registrar General of India (RGI) and the states have shouldered the responsibility of training the enumerators, supervisors, verifiers, and state officials engaged in the census operation. The SECC process ensured transparency and people's participation. Before finalizing the outcomes, the household data, except caste data, will be placed in the public domain for scrutiny and go through a two-stage appeal procedure in the 'claims and objections' stage. In rural areas, the Gram Sabha will also mandatorily scrutinize the data in a specially convened meeting. Enumeration under SECC 2011 has been completed in 2,339,926 enumeration blocks (EBs) comprising 94.26 per cent of the total EBs of all the states as on 31 December 2012. The government has constituted an Expert Committee under the chairpersonship of Professor Abhijit Sen, Member Planning Commission, to examine the SECC indicators and the data analysis and recommend appropriate methodologies for determining classes of beneficiaries for different rural development programmes. It will consult states, experts, and civil society organizations while arriving at these methodologies. Source : Ministry of Rural Development
crore. Of this, ` 28,073.51 crore has been utilized (as on 31.01.2013) and about 4.39 crore households have been provided employment of 156.01 crore persondays of which 82.58 crore (53 per cent) were availed of by women, 34.56 crore (22 per cent) SCs, and 24.90 crore (16 per cent) by STs. At national level, with the average wage paid under the MGNREGA increasing from ` 65 in FY 2006-7 to ` 115 in FY 2011-12, the bargaining power of agricultural labour has increased as even private sector wages have increased as shown in many studies (See MGNREGA Sameeksha 2012). Improved economic outcomes, especially in watershed activities, and reduction in distress migration are its other achievements. Wages under the MGNREGA are indexed to the consumer price index for agricultural labour (CPI-AL). While some initiatives have been taken recently (Box.13.3), with better planning of project design, capacity building of panchayati raj institutions (PRIs), skill upgradation for enhanced employability, and reduction of transaction costs, gaps in implementation could be plugged to a greater extent and the assets so created could make a much larger contribution to increasing land productivity. National Rural Livelihood Mission (NRLM)- Aajeevika: The Swarnjayanti Gram Swarozgar Yojana (SGSY)/ NRLM a self-employment programme implemented http://indiabudget.nic.in
since April 1999 aims at lifting the assisted rural poor families (swarozgaris) above the poverty line by providing them income-generating assets through a mix of bank credit and government subsidy. The rural poor are organized into self-help groups (SHGs) and their capacities built through training and skill development. The scheme is implemented with active involvement of PRIs. Since the inception of the SGSY 42.05 lakh SHGs have been formed, of which approximately 60 per cent are women SHGs. Total
Box 13.3 : Major recent initiatives under the MGNREGA
The basket of permissible activities has been expanded to make it more meaningful.
Electronic fund management system (eFMS) in all states has been initiated in a phased manner to reduce delay in payment of wages.
Additional employment over and above 100 days per household in notified drought-affected talukas/ blocks is now permissible.
Provision has been made for seeding in Aadhaar into the MGNREGA Workers records to prevent leakage.
Convergence of the MGNREGA with the Total Sanitation Campaign (TSC) has been undertaken.
Source : Ministry of Rural Development
Human Development investment under the SGSY is ` 42,168.42 crore comprising ` 28,824.53 crore as credit and ` 13,343.89 crore as subsidy. Approximately 168.46 lakh swarozgaris have been assisted with bank credit and subsidy. The SGSY now restructured as the NRLM has been renamed Aajeevika and implemented in mission mode across the country since 2011. The main features of Aajeevika are: a) one woman member from each identified rural poor household to be brought under the SHG network, b) ensuring 50 per cent of the beneficiaries from SC/STs, 15 per cent from minorities, and 3 per cent persons with disability while keeping in view the ultimate target of 100 per cent coverage of BPL families, c) training for capacity building and skill development, d) ensuring revolving fund and capital subsidy, e) financial inclusion, f) provision of interest subsidy, g) backward and forward linkages, and h) promoting innovations. Swarna Jayanti Shahari Rozgar Yojana (SJSRY): The SJSRY launched on 1 December 1997 aims at providing gainful employment to the urban unemployed and underemployed, by encouraging them to set up self-employment ventures or creating wage employment opportunities. The scheme has been revamped w.e.f. April 2009. The annual budgetary provision for the SJSRY for the year 201213 is ` 838 crore and of this ` 516.77 crore had been released up to 7 February 2013. A total of 4,06,947 people have benefited from this scheme during 2012-13.
SOCIAL PROTECTION PROGRAMMES 13.24 The coverage of social security schemes has been expanded to provide a minimum level of social protection to workers in the unorganized sector and ensure inclusive development. Such schemes include the following: Aam Admi Bima Yojana (AABY): The Janashree Bima Yojana (JBY) has now been merged with the AABY to provide better administration of life insurance cover to the economically backward sections of society. The scheme extends life and disability cover to persons between the ages of 18 and 59 years living below and marginally above the poverty line under 47 identified vocational/occupational groups, including 'rural landless households'. It provides insurance cover of a sum of ` 30,000 on natural death, ` 75,000 on death due to accident, ` 37,500 for partial permanent disability due to accident, and ` 75,000 on death or total permanent disability due to accident. The scheme also provides an add-on
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benefit of scholarship of ` 100 per month per child paid on half-yearly basis to a maximum of two children per member studying in Classes 9 to 12 (including ITI courses). The total annual premium under the scheme is ` 200 per beneficiary of which 50 per cent is contributed from the Social Security Fund created by the central government and maintained by the Life Insurance Corporation of India (LIC). The balance 50 per cent is contributed by beneficiary/state governments/union territory (UT) administrations. The scheme is being implemented through the LIC. A total of 289.94 lakh lives under the JBY and 178.67 lakh lives under the AABY had been covered till December 2012. Rashtriya Swasthya Bima Yojana (RSBY): The scheme provides smart card-based cashless health insurance cover of ` 30,000 per family per annum on a family floater basis to BPL families in the unorganized sector with the premium shared on 75:25 basis by central and state governments. In case of states of the north-eastern region and Jammu and Kashmir, the premium is shared in the ratio of 90:10. The scheme provides for portability of smart card by splitting the card value for migrant workers. As on 31 December 2012, the scheme is being implemented in 27 states/ UTs with more than 3.34 crore smart cards issued. The Unorganized Workers Social Security Act 2008 and National Social Security Fund: The Act provides for constitution of a National Social Security Board and State Social Security Boards which will recommend social security schemes for unorganized workers. The National Social Security Board was constituted in August 2009. It has made some recommendations regarding extension of social security schemes to certain additional segments of unorganized workers. A National Social Security Fund with initial allocation of `1000 crore to support schemes for weavers, toddy tappers, rickshaw pullers, beedi workers, etc. has also been set up. Social Security Agreements (SSAs): SSA, a bilateral instrument to protect the interests of Indian professionals as well as self-employed Indians working in foreign countries, was initiated by signing an SSA between India and Belgium on 3 November 2006. So far India has signed 15 SSAs with Belgium, Germany, Switzerland, France, Luxembourg, Netherlands, Hungary, Denmark, Czech Republic, Republic of Korea, Norway, Finland, Canada, Sweden, and Japan. These SSAs facilitate mobility of professionals between two countries by exempting
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them from double payment of social security contributions and enables them to enjoy the benefits of exportability and totalization.
RURAL INFRASTRUCTURE AND DEVELOPMENT 13.25 Rural infrastructure and development programmes for achieving a higher degree of ruralurban integration and an even pattern of growth and opportunities for the poor and disadvantaged sections of society include the following: Bharat Nirman: Bharat Nirman, launched in 2005-6 by the government to provide basic amenities and infrastructure to rural India has six components: irrigation, roads, housing, water supply, electrification, and telecommunication connectivity. Indira Awas Yojana (IAY): The IAY is one of the six components of Bharat Nirman. During 2012-13, as against a physical target of 30.10 lakh houses, 25.35 lakh houses were sanctioned and 13.88 lakh had been constructed as on 31 December 2012. The unit assistance provided to rural households for construction of a dwelling unit under the IAY is being revised w.e.f. I April 2013 from ` 45,000 to ` 70,000 in plain areas and from ` 48,500 to ` 75,000 in hilly/ difficult areas/Integrated Action Plan (IAP) districts. Eighty-two left-wing extremism (LWE)-affected districts have been made eligible for a higher rate of unit assistance of ` 48,500 to ` 75,000 (w.e.f. 1.4.2013). Since the inception of this scheme till 31 December 2012, 301 lakh houses have been constructed. Under the Homestead Scheme, the unit assistance for purchase/acquisition of house sites for those rural BPL households who have neither land nor a house site will be enhanced from ` 10,000 to ` 20,000 w.e.f. 1 April 2013 to be shared by the centre and states in a 50:50 ratio. Since the inception of the Homestead Scheme, funds amounting to ` 347.46 crore have been released to the states for purchase of land and ` 1395.06 crore as incentive for additional houses for providing homestead sites. For effective monitoring of the IAY, MIS software 'Awaasoft' has been put in place. Pradhan Mantri Gram Sadak Yoyana (PMGSY): The PMGSY was launched in December 2000 as a fully funded centrally sponsored scheme with the objective of providing connectivity to the eligible unconnected habitations in the core network with a population of 500 persons and above (as per Census 2001) in plains areas and 250 persons and above in hill states,
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tribal areas, desert areas, and in the 82 selected tribal and backward districts under the IAP. Since inception, projects totalling about 4,74,528 km of road to connect 1,26,176 habitations have been cleared with an estimated cost of ` 1,42,946 crore including upgradation. A sum of ` 1,02,658 crore had been released to the states and about ` 96,939 crore spent by December 2012. A total of 3,63,652 km road length has been completed and new connectivity has been provided to over 89,382 habitations by the states. Work on a road length of about 1,07,739 km is in progress. Rural Drinking Water: About 73.91 per cent of rural habitations are fully covered under the provision of safe drinking water in rural areas as measured by habitations with the provision of at least 40 litres per capita per day (lpcd) of safe drinking water. The rest are either partially covered or have chemical contamination in drinking water sources. As against the target of 7,98,967 habitations to be covered during the Eleventh Five Year Plan, the coverage up to 31 March 2012 was 6,65,052 (83.23 per cent). The financial outlay for rural drinking water supply increased considerably under Bharat Nirman from ` 4,098 crore in 2005-6 to ` 10,500 crore in 2012-13. All uncovered habitations have been reported as being covered on 1 April 2012. Census 2011 reported that 84.2 per cent rural households as having improved drinking water sources with tap water, hand pumps, and covered wells constituting the major sources. Therefore ensuring safe drinking water for the remaining 15.8 per cent of rural households with unimproved sources and 22.1 per cent of rural households that have to fetch water from beyond 500 m is the major challenge. In the Twelfth Five Year Plan period, the focus is on increasing the service level from 40 lpcd to 55 lpcd and provision of drinking water through piped water supply schemes and household tap connections. Rural Sanitation—Total Sanitation Campaign (TSC) : According to Census 2011, only 32.7 per cent of rural households have latrine facilities. The TSC renamed the Nirmal Bharat Abhiyan (NBA) aims to transform rural India into 'Nirmal Bharat' by adopting a community saturation approach and achieve 100 per cent access to sanitation for all rural households by 2022. NBA projects have been sanctioned in 607 rural districts with a total outlay of ` 22,672 crore, with a central share of ` 14,888 crore. Allocation for the NBA has increased from ` 1500 crore in 2011-12 to ` 2500 crore in 2012-13. Under the NBA, the provision of incentives for individual household latrine
Human Development units has been widened to cover all above poverty line (APL) households that belong to/are SCs, STs, small and marginal farmers, landless labourers with homesteads, physically challenged, and women headed along with all BPL households. Since 1999, over 8.97 crore toilets have been provided to rural households under the TSC/NBA. A total of 12.57 lakh school toilet units and 4.24 lakh Anganwadi toilets have also been constructed. With increasing budgetary allocations and focus on rural areas, the number of households being provided toilets annually has increased from 5.96 lakh in 2002-3 to 88 lakh in 2011-12. In the year 2012-13 (up to November 2012), more than 27 lakh toilets have been provided to rural households. A total of 28,002 gram panchayats, 181 intermediate panchayats, and 13 district panchayats have been awarded the Nirmal Gram Puruskar (NGP) in the last seven years.
URBAN INFRASTRUCTURE, HOUSING, AND SANITATION 13.26 The central government has been assisting state governments by way of various centrally sponsored schemes through national financial institutions providing better urban infrastructure, housing, and sanitation in the country. Some of the initiatives in this area are as follows: Jawahar Lal Nehru Urabn Renewal Mission (JNNURM): The JNNURM, a flagship programme for urbanization launched in December 2005, provides substantial central financial assistance to cities for infrastructure, housing development, and capacity development. The two out of four components under the JNNURM devoted to shelter and basic service needs of the poor residing in urban areas are: Basic Services to the Urban Poor (BSUP) for 65 select cities and the Integrated Housing and Slum Development Programme (IHSDP) for other cities and towns. The Mission period has been extended for two years till March 2014 for completion of projects sanctioned till March 2012. About 1.57 million houses had been sanctioned by 6 February 2013 and 1610 projects with outlay of more than ` 41,723 crore approved. A central share of ` 22,370.82 crore (96.5 per cent of the seven-year allocation for 2005-12) has been committed. More than 1.57 million houses have been sanctioned, of which more than 6.60 lakh have been completed and 4.37 lakh occupied. Additional central assistance of ` 14,661.16 crores has also been released.
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Rajiv Awas Yojana (RAY): The RAY was launched on 2 June 2011 with the vision of creating a slumfree India. Phase I of the RAY (preparatory phase) is for a period of two years from the date of approval of the scheme and is currently under implementation. Phase II of the RAY shall be for the remaining period of the Twelfth Five Year Plan. An amount of ` 50 crore has been allocated for the year 2012-13. Integrated Low Cost Sanitation Scheme (ILCS): The ILCS aims at conversion of individual dry latrines into pour flush latrines thereby liberating manual scavengers from the age-old, degrading practice of manually carrying night soil. The allocation for the scheme for 2012-13 is ` 25 crore.
SKILL DEVELOPMENT 13.27 Education and skill development play a pivotal role in economic development and growth of any country as they provide an environment for creating jobs and help in reduction of poverty and other related social fallouts. A new strategic framework for skill development for early school leavers and existing workers has been developed since May 2007 in close consultation with industry, state governments, and experts. During AprilDecember 2012, the National Skill Development Corporation (NSDC) approved 24 training projects for imparting skill training in a wide array of sectors like healthcare, tourism, hospitality and travel, banking, financial services and insurance (BFSI), retail, IT, electronics, textiles, leather, handicrafts and automotive, agriculture, cold chains and refrigeration, tailoring, carpentry, and masonry. Besides formation of Skill Councils for seven sectors, proposals related to food processing, telecom, agriculture, plumbing, logistics, capital goods, and construction sectors have also been approved during this period. During this period, NSDC partners had skilled around 1,39,305 people and placed approximately 97,116 of them, thereby achieving placement of 70 per cent. Special skills training initiatives of the NSDC have been helping youth in Jammu and Kashmir and the north-eastern states join the mainstream. The NSDC has been able to get some of India's biggest corporate groups interested in the private sector-led skills training programme for graduates and post-graduates in Jammu and Kashmir called Udaan. Scaling up of this initiative is targeted to make 40,000 people in Jammu & Kashmir skilled and placed in jobs over a five-year span. In the north-east region, the NSDC is
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partnering the Ministry of Youth Affairs and Sports in the Youth Employability Skills (YES) project. Till 3 December 2012, NSDC partners had established a presence in 25 states and three UTs and covered 312 districts.
UNIQUE IDENTIFICATION OF INDIA (UIDAI)
AUTHORITY
13.28 After successfully completing Phase I enrolments, the UIDAI is actively engaged in Phase II in which 40 crore residents are to be enrolled before end 2014. As of December 2012, 24.93 crore Aadhaars had been generated and approximately 20 crore Aadhaar letters dispatched. The UIDAI has also established infrastructure to generate 10 lakh Aadhaars per day and process 10 million authentication transactions a day. Apart from meeting targets related to enrolments, significant amount of effort has been spent on enabling service delivery of government schemes with Aadhaar online authentication and Aadhaar-enabled benefits transfers to bank accounts of beneficiaries. The government has decided to initiate direct transfer of subsidy under various social schemes into beneficiaries' bank accounts. The transfer will be enabled through a payments bridge known as Aadhaar Payment Bridge (APB) wherein funds can be transferred into any Aadhaar-enabled bank account on the basis of the Aadhaar number. This eliminates chances of fraud/ error in the cash transfer process. The Aadhaar number will be linked to the beneficiary database so that ghosts/ duplicates are weeded out from the beneficiary list. 13.29 To make withdrawal of money by the beneficiaries easier and more accessible and friendly, micro ATMs will be set up by banks/ post offices throughout the country in an open manner particularly with the help of SHGs, community service centres (CSCs), post offices, grocery stores, petrol pumps, etc. in rural areas and accessible pockets. This is being done initially in 51 pilot districts across the country from 1 January 2013. Pilots on direct benefit transfer (DBT) have also been successfully conducted in the states of Jharkhand, Tripura, and Maharashtra to transfer monetary benefits related to rural employment, pension, the IAY, and other social welfare schemes. An important pilot is the fair price shops in East Godavari and Hyderabad districts of Andhra Pradesh which are being enabled to carry out online Aadhaar authentication. In another important pilot with oil marketing companies (OMCs) in Mysore, delivery of LPG gas cylinders is being http://indiabudget.nic.in
done only after Aadhaar online authentication of customers.
EDUCATION 13.30 To reap the benefits of the demographic dividend to the full, India has to provide education to its population and that too quality education. The draft Twelfth Plan focuses on teacher training and evaluation and measures to enforce accountability. It also stresses the need to build capacity in secondary schools to absorb the pass outs from expanded primary enrolments.
Elementary and Secondary Education 13.31 Many schemes have been initiated by the government for elementary and secondary education. Some are as follows: Sarv Shiksha Abhiyan (SSA)/Right to Education (RTE): The Right of Children to Free and Compulsory Education (RTE) Act 2009, legislating Article 21A of the Constitution of India, became operational in the country on 1 April 2010. It implies that every child has a right to elementary education of satisfactory and equitable quality in a formal school which satisfies certain essential norms and standards. The achievements till September, 2012 include opening of 3,34,340 new primary and upper primary schools, construction of 2,84,032 school buildings, 16,42,867 additional classrooms, 2,17,820 drinking water facilities and 6,18,089 toilets, supply of free textbooks to 8.32 crore children, appointment of 12.46 lakh teachers, and imparting of in-service training to 18.64 lakh teachers. Significant reduction in the number of out-of-school children on account of SSA interventions has been noted. The number of out-of-school children has come down from 134.6 lakh in 2005 to 81.5 lakh in 2009 as per an independent study conducted by the Social and Rural Research Institute (SRI)-International Marketing Research Bureau (IMRB). Mid-day Meals (MDM): Under the MDM, cooked midday meals are provided to all children attending Classes I-VIII in government, local body,governmentaided, and National Child Labour Project (NCLP) schools. Education Guarantee Scheme (EGS)/ alternate and innovative education centres including madarsas /maqtabs supported under the SSA across the country are also covered under this programme. At present the cooked midday meal provides an energy content of 450 calories and protein content of 12 grams at primary stage and an energy content
Human Development of 700 calories and protein content of 20 grams at upper primary stage. Adequate quantity of micronutrients like iron, folic acid, and vitamin A are also recommended for convergence with the NRHM. During 2011-12, the budget allocation for this programme was ` 10,380 crore against which the total expenditure incurred was ` 9901.91 crore. About 10.54 crore children (7.18 crore in primary and 3.36 crore in upper primary stages) benefited under the programme during 2011-12. The MDM-MIS has been launched to monitor the scheme and annual data entries for about 11.08 lakh schools have been completed. The MDM-MIS will be integrated with the Interactive Voice Response System (IVRS) meant to capture the information from the schools within a span of 1 hour on daily basis to monitor the scheme. Rashtriya Madhyamik Shiksha Abhiyan (RMSA): The RMSA was launched in March 2009 with the objective of enhancing access to secondary education and improving its quality. An amount of ` 3124 crore was allocated to the scheme in 2012-13, of which ` 2264.81 crore (as on 31.12.12) had been released to 22 states for construction of new school buildings and to existing secondary schools for strengthening of infrastructure, salary of teachers and staff sanctioned under the RMSA, learning enhancement programmes, equity interventions, etc. Model Schools Scheme: A scheme for setting up of 6000 high quality model schools as a benchmark of excellence at block level at the rate of one school per block was launched in November 2008 to provide quality education to talented rural children. The scheme has two modes of implementation, viz. (i) 3500 schools are to be set up in as many EBBs through state governments and (ii) the remaining 2500 schools are to be set up under PPP mode in blocks which are not educationally backward. The state government component has been operational from 2009-10. Implementation of the PPP component has been initiated from 2012-13. Under the state government component of this scheme, till 31December 2012 setting up of 2266 model schools in 22 states had been approved. Financial sanctions had been accorded for setting up of 1880 schools in 21 states and an amount of ` 2215.58 crore released as the central share. Out of these, 473 schools had become functional in Punjab, Karnataka, Chhattisgarh, Tamil Nadu, Gujarat, Madhya Pradesh, and Jharkhand and ` 57.88 crore as recurring expenditure had also been released till 31 December 2012. http://indiabudget.nic.in
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Saakshar Bharat (SB)/ Adult Education: The National Literacy Mission, recast as SB, reflects the enhanced focus on female literacy. The target of the Eleventh Five Year Plan was to achieve 80 per cent literacy but as per Census 2011, only 74.04 per cent literacy has been achieved. However, the literacy rate improved sharply among females as compared to males with the latter increasing by 6.9 per cent points from 75.26 per cent to 82.14 per cent and the former by 11.8 per cent points from 53.67 per cent to 65.46 per cent. Literacy levels remain uneven across states, districts, social groups, and minorities. The government has taken focused measures for reducing the disparities in backward areas and target groups. By March 2012, the programme had reached 372 districts in 25 states and one UT covering over 161,219 gram pachayats. By the end of March 2012, about 16 lakh literacy classes enrolling about 174 lakh learners were functioning. By the end of November 2012, 372 out of 410 eligible districts had been covered under the programme comprising 4386 blocks and 161,219 gram panchayats. Since the Mission has been envisaged as a people's programme, stakeholders, especially at grassroots level i.e. PRIs, have due say and role in its planning and implementation. Despite the efforts of the government to provide primary and elementary education, there is a lot more to be done in terms of quality. The Annual Status of Education Report (ASER) 2012 by Pratham, an NGO, in its annual survey of rural children conducted in 567 districts, highlights many positives as well as negatives (Box 13.4). The declining levels of educational achievement are a cause for concern, though it is unclear how much of the decline is because of lower levels of learning, and how much is because schools are reaching out to enroll students with lower preparation than they did earlier.
Higher and Technical Education 13.32 The Indian higher education system is one of the largest in the world in terms of the number of colleges and universities. While at the time of Independence, there were only 20 universities and 500 colleges with 0.1 million students, their number has increased to 690 universities and university-level institutions and 35,539 colleges upto 2011-12. Of the 690 universities, 44 are central universities, 306 state universities, 145 state private universities, 130 deemed universities, 60 institutes of national importance plus other institutes, and 5 institutions established under State Legislature Acts.
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Box 13.4 : Main Findings of ASER 2012 Some Positives or status quo maintained Rising enrollment: In 2012, 96.5 per cent of all 6-14 year olds in rural India are enrolled in schools. This is the fourth consecutive year that enrollment levels have been 96 per cent or more. In 2006, in eight major states, more than 11 per cent girls in the age group of 11 to 14 years were not enrolled in school. By 2011, this figure had dropped to less than 6.5 per cent in 3 of these states (Jharkhand, Gujarat and Odisha) and less than 5 per cent in 3 others (Bihar, Chhattisgarh and West Bengal).The situation in these states remained more or less unchanged in 2012. However in Rajasthan and Uttar Pradesh, the proportion of out of school girls (age 11-14) has increased from 8.9 per cent and 9.7 per cent respectively in 2011 to more than 11 per cent in 2012. Private school enrollment is rising in most states: Private school enrollment of 6 to 14 year olds has risen steadily since 2006 from 18.7 per cent in 2006 to 28.3 per cent in 2012. Increase in private school enrollment is seen in almost all states, with the exception of Kerala, Nagaland, Manipur, Meghalaya and Tripura (where private school enrollment was over 40 per cent even last year). There was of more than 40 per cent enrollment in Jammu & Kashmir, Punjab, Haryana, Rajasthan, Uttar Pradesh and Meghalaya in private schools. This percentage is 60 per cent or more in Kerala and Manipur. Since 2009, private school enrollment in rural areas has been rising at an annual rate of about 10 per cent. If this trend continues, by 2018 India will have 50 per cent children in rural areas enrolled in private schools. Better provision of girls' toilets: The proportion of schools without toilets (girls + boys) has fallen from 12.2 per cent in 2011 to 8.4 per cent in 2012. The proportion of schools having toilets usable separately by the girls has improved from 32.9 in 2011 to 48.2 percent in 2012. More libraries in schools and more children using them: The proportion of schools without libraries has declined from 28.7 per cent in 2011 to 23.9 percent in 2012. Children were seen using the library in more schools as well - up from 37.9 per cent in 2010 to 43.9 per cent in 2012. Compliance on pupil-teacher ratio and Classroom-teacher ratio: At the All India level, there has been a consistent rise in the proportion of schools complying with RTE norms on pupil-teacher ratio, from 38.9 per cent in 2010 to 42.8 percent in 2012. In 2012, Nagaland stands out with 93.0 per cent of schools in compliance ahead of Kerala (92.0 percent) which was the highest last year. In Jammu & Kashmir, Mizoram, Manipur and Tripura, more than 80 per cent schools are in compliance with these norms. No major changes in buildings, playgrounds, boundary walls or drinking water: About 61.1 per cent of visited schools had a playground in 2012 compared to 62.8 percent in 2011. However, there has been marginal increase of 0.8 percent in the proportion of all schools that have a boundary wall in 2012 from the last year. Nationally, the proportion of schools with no provision for drinking water remained almost the same at 17 per cent in 2010, 16.7 per cent in 2011 and 16.6 percent in 2012. The proportion of schools with a useable drinking water facility has remained steady at about 73 per cent.
Some Negatives Teacher Classroom ratio is declining: There has been a decline in the proportion of schools with at least one classroom per teacher, from 76.2 per cent in 2010 to 74.3 per cent in 2011 and further to 73.7 percent in 2012. However, departing from the national pattern, in states like Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Kerala, Maharashtra, Meghalaya, Nagaland, Tamil Nadu, Tripura, Uttarakhand and West Bengal there has been an increase in teacher classroom ratio this year. Declining basic reading levels: In 2010, 46.3 per cent of all children in std V could not read a std II level text, which has increased to 52.3 percent in 2012. Arithmetic levels also show a decline across most states: Basic arithmetic levels estimates show a decline. For example, nationally, 29.1 per cent of Std V children could not solve simple two digit subtraction problem with borrowing in 2010 which increased to 39 per cent in 2011 and further to 46.5 per cent in 2012. Barring Andhra Pradesh, Karnataka and Kerala, every major state shows signs of substantial drop in arithmetic learning levels. Children's attendance has declined: Children's attendance (for std I-V) shows a decline from 74.3 per cent in 2009 to 71.3 per cent in 2012 in rural primary schools. However, children's attendance in some states shows an increase over time. For example, in primary schools of Bihar, average attendance of children increased from 57.0 per cent in 2007 to 58.3 per cent in 2012, in Karnataka from 88.0 per cent in 2009 to 89.1 per cent in 2012, in Kerala it has increased from 91.9 percent in 2009 to 94.4 percent in 2012 and in Odisha from 74.1 per cent in 2009 to 77.5 per cent in 2012. More than half of all Std 2 and Std 4 classes sit together with another class: Nationally, in rural government primary schools, students who sit in multi-grade classrooms is rising. Source : ASER 2012, Press Release Dated 17 January 2013, website http://images2.asercentre.org/aserreports/ ASER_2012_PRESS_RELEASE.pdf
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Human Development 13.33 A number of initiatives have been taken during the Eleventh Plan period with focus on improvement of access along with equity and excellence, adoption of state-specific strategies, enhancing the relevance of higher education through curriculum reforms, vocationalization, networking, and use of IT and distance education along with reforms in governance in higher education. The major initiatives are as follows:
During the Eleventh Plan, 16 central universities were established which include conversion of three state universities to central universities. Seven new Indian Institutes of Management (IIMs), 8 new Indian Institutes of Technology (IITs), 10 new National Institutes of Technology (NITs), 5 Indian Institutes of Science Education & Research (IISERs), and 2 Schools of Planning and Architecture (SPAs) were also established. The National Mission on Education through ICT (NMEICT) which aims at providing high speed broadband connectivity to universities and colleges and development of e-content in various disciplines is under implementation. Nearly 404 universities have been provided 1Gbps connectivity or have been configured under the scheme and 19,851 colleges have also been provided VPN connectivity. Over 250 courses have been completed and made available in National Programme on Technology Enhanced Learning (NPTEL) Phase I and another 996 courses in various disciplines in engineering and science are being generated in Phase-II of NPTEL by IIT Madras. The low cost accesscum-computing device Aakash 2 was launched on 11 November 2012. Using the A-View software developed under the NMEICT, several programmes for teachers' empowerment have been conducted for batches of 1000 teachers at a time by IIT Mumbai.
A Scheme of Interest Subsidy on Educational Loans to economically weaker sections (EWS) students was introduced from 2009-10.
An Expert Group was set up by the Prime Minister in order to suggest ways of enhancing employment opportunities in Jammu and Kashmir and to formulate job plans involving the public and private sectors. Among the key recommendations of the Expert Group, one is offering scholarships over the next five years, to encourage the youth of Jammu and Kashmir to
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pursue higher studies outside the state. This scheme is being implemented since 2011-12.
To address the increasing skill challenges of the Indian IT industry, the government has approved setting up of twenty new Indian Institutes of Information Technology (IIITs) on PPP basis. The project is targeted for completion in nine years from 2011-12 to 2019-20. The Government of India also provides financial assistance to the states up to a limit of ` 12.30 crore per polytechnic to meet the costs of establishing new government polytechnics in un-served districts.
HEALTH 13.34 Improvement in the standard of living and health status of the population has remained one of the important objectives for policymakers in India. In line with the National Health Policy 2002, the NRHM was launched on 12 April 2005 with the objective of providing accessible, affordable, and quality healthcare to the rural population. It seeks to bring about architectural correction in the health systems by adopting the approaches like increasing involvement of community in planning and management of healthcare facilities, improved programme management, flexible financing and provision of untied grants, decentralized planning and augmentation of human resources. Table 13.9 shows the progress made by India over the years based on health indicators. 13.35 In 2012-13, the Plan outlay for health was increased by 13.9 per cent to ` 30,477 crore. The combined revenue and capital expenditure of the centre and states on medical and public health, water supply and sanitation, and family welfare has increased from ` 53,057.80 crore in 2006-7 to ` 1,18,295.78 crore in 2011-12 (BE). In the Twelfth Five Year Plan the central outlay for health has been increased by 200 per cent to ` 3,00,018 crore compared to the actual outlay of ` 99,491 crore in the Eleventh Five Year Plan. This outlay will be directed towards building on the initiatives taken in the Eleventh Plan period, for extending the outreach of public health services, and for moving towards the long-term objective of establishing a system of universal health coverage. Despite the efforts by the government to provide affordable access to the decentralized public health system, its expenditure on public health as a percentage of GDP is low as indicated earlier in this chapter.
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Table 13.9 : India — Selected health indicators Sl. No.
Parameter
1981
1991
Current level
1.
Crude Birth Rate (CBR) (per 1000 population)
33.9
29.5
21.8 (2011*)
2.
Crude Death Rate (CDR)(per 1000 population)
12.5
9.8
7.1 (2011*)
3.
Total Fertility Rate (TFR)(per woman)
4.5
3.6
2.5 (2010*)
4.
Maternal Mortality Rate (MMR) (per 100,000 live births)
NA
NA
212 (2007-9*)
5.
IMR (per 1000 live births):
110
80
44 (2011*)
Rural
48
Urban
29
6.
Child (0-4 years) Mortality Rate ( per 1000 children)
7.
Life Expectancy at Birth:
41.2
26.5
13.3 (2010*)
(1981-85)
(1989-93)
(2006-10)**
Total
55.4
59.4
66.1
Male
55.4
59.0
64.6
Female
55.7
59.7
67.7
Source: Ministry of Health and Family Welfare. *Sample Registration Survey (SRS), RGI. ** Abridged Life Table 2003-07 to 2006-10, RGI.
13.36 The government has launched a large number of programmes and schemes to address the major concerns and bridge the gaps in existing health infrastructure and provide accessible, affordable, equitable healthcare. The details of some major programmes and developments are as follows: National Rural Health Mission (NRHM): The NRHM which provides an overarching umbrella to the existing health and family welfare programmes was launched in 2005 to improve accessibility to quality healthcare for the rural population, bridge gaps in healthcare, facilitate decentralized planning in the health sector, and bring about inter-sectoral convergence. Better infrastructure, availability of manpower, drugs and equipment, and augmentation of health human resources in health facilities at different levels have led to improvement in healthcare delivery services and increase in outpatient department (OPD) and inpatient department (IPD) services (Table 13.10). 13.37 Under the NRHM, over 1.4 lakh health human resources have been added to the health system across the country (up to September 2012). Accredited social health activists (ASHAs) have been engaged in each village / large habitation in the ratio of one per 1000 population. Till September 2012, 8.84 lakh ASHAs had been selected in the entire country, of whom 8.09 lakh had been given orientation training. Further, 7.96 lakh ASHAs had been provided drug kits. As part of the infrastructure strengthening under the NRHM, 10,473 sub-centres, 714 primary health centres (PHCs), and 245 http://indiabudget.nic.in
community health centres (CHCs) have been newly constructed. Also, renovation/upgradation of 10,326 sub-centres, 2963 PHCs, and 1221 CHCs has been completed. A total of 8199 PHCs have been made functional as 24X7 services across the country. Further, nearly 2024 vehicles are operational as mobile medical units (MMUs) in 459 districts in the country under the NRHM. The total plan outlay for the year 2012-13 under the NRHM is ` 20,542 crore and ` 2712.7 crore for schemes/projects in the northeastern region and Sikkim. Janani Suraksha Yojana (JSY): The JSY launched in 2005 aims to bring down the MMR by promoting institutional deliveries conducted by skilled birth attendants. The beneficiaries have increased from 7.38 lakh in 2005-6 to more than 1.09 crore in 201112. The number of institutional deliveries has increased from 1.08 crore during 2005-6 to 1.75 crore during 2011-12. The number of institutional deliveries during 2012-13(up to September 2012) was 80.39 lakh. In addition, Janani Shishu Suraksha Karyakram (JSSK), a new initiative which entitles all pregnant women delivering in public health institutions to an absolutely no expenses delivery covering free delivery including Caesarean, free drugs, diagnostics, blood and diet, and free transport from home to institution including during referrals, is also in operation. National Vector Borne Disease Control Programme: To control and prevent vector-borne diseases such as malaria, dengue, chikungunya, Japanese encephalitis, kala-azar, and lymphatic filariasis in
Human Development Table 13.10 : Health Care Infrastructure Facilities SC/PHC/CHC*(2011)
No. 176,820
Government hospitals (rural & urban areas)**
11,493
AYUSH hospitals & dispensaries
27,339
Nursing personnel (as on 31-12-10)** 18,94,968 Doctors (modern system) (2011)**
922,177
Source : Ministry of Health & Family Welfare as obtained from *RHS: Rural Health Statistics in India 2011 and ** National Health Profile 2011.
the country, a National Vector Borne Disease Control Programme has been launched. Of these six diseases, kala-azar and lymphatic filariasis have been targeted for elimination by 2015. With this initiative, malaria has shown a declining trend with 0.95 million cases and 446 deaths reported out of the 94.85 million persons screened in 2012 (up to November) compared to 1.31 million cases and 753 deaths of the 108.97 million persons screened in 2011. Dengue in the recent past has been reported from almost all the states and UTs except Lakshadweep. During 2011, 18,860 cases and 169 deaths were reported, whereas during 2012, 47,029 cases and 242 deaths have been reported. Chikungunya cases have shown a declining trend after its re-emergence in 2006. Human Resources, Infrastructure Development/ Upgradation of Tertiary Healthcare: To strengthen government medical colleges, land requirement norms and infrastructural requirements for opening new medical colleges have been revised. However, to further increase availability of doctors, it is proposed to set up new medical colleges attached to district hospitals and strengthen and upgrade existing ones to add 16,000 new MBBS seats during the Twelfth Plan period. In order to meet the shortage of nurses, a scheme is under implementation for opening of 132 ANM schools (at a cost of ` 5 crore per school) and 137 general nursing and midwifery (GNM) schools (at ` 10 crore per school) in districts where there are no such schools. A sum of ` 520.50 crore had been released under the scheme till December 2012. Opening of six nursing colleges at the sites of AIIMS-like institutions at a total cost of ` 120 crore is also under implementation. The scheme for strengthening / upgradation of state government medical colleges envisages a one-time grant of ` 1350 crore to be funded by central and state governments in a 75:25 ratio. During 2009-10
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to 2012-13, 72 medicals colleges have been funded. To augment the supply of skilled paramedical manpower and promote paramedical training, one National Institute of Paramedical Sciences (NIPS) at Najafgarh, Delhi, and eight Regional Institutes of Paramedical Sciences (RIPS) are being set up at a cost of ` 804.43 crore. Besides, State Government Medical Colleges are being provided support for conducting paramedical courses through one-time grant at a cost of ` 352 crore. Pradhan Mantri Swasthya Suraksha Yojana (PMSSY): The PMSSY aims at correcting regional imbalances in the availability of affordable/reliable tertiary health-care services and augmenting facilities for quality medical education in the country. For the year 2012-13, ` 1544.21 crore has been earmarked under the PMSSY, which aims at (i) construction of 6 AIIMS-like institutions in the first phase at Bhopal, Bhubaneswar, Jodhpur, Patna, Raipur, and Rishikesh and in the second phase in West Bengal and Uttar Pradesh, (ii) upgradation of 13 medical colleges in the first phase and 6 in the second phase. The academic session for 50 MBBS seats has commenced at the six new AIIMS like institutions in September 2012 and hospitals are likely to be operational by September 2013. Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homoeopathy (AYUSH): The Indian system of medicines is also being developed and promoted by involvement/integration of the AYUSH system in national healthcare delivery through an allocation of ` 990 crore Plan outlay in 2012-13. To integrate AYUSH healthcare with mainstream allopathic healthcare services, the states are provided financial support for co-location of AYUSH facilities at PHCs, CHCs, and district hospitals and supply of essential drugs to standalone AYUSH hospitals/dispensaries.
WOMEN AND CHILD DEVELOPMENT 13.38 Women lag behind men in many social indicators like health, education, and economic opportunities. Hence they need special attention due to their vulnerability and lack of access to resources. Since national budgets impact men and women differently through the pattern of resource allocation, the scope and coverage of schemes for women and child development have been expanded with progressive increase in Plan expenditure under various Plan schemes, increased employment for women under the MGNREGA and gender budgeting (GB). The allocations for GB as a percentage of total
290
Economic Survey 2012-13
budget have gone up from 2.79 per cent in 2005-6 to 5.91 per cent in 2012-13. Some of the important schemes and policy initiatives for economic and social empowerment of women and child development are as follows: Integrated Child Development Services (ICDS) Scheme: The objective of the ICDS scheme is holistic development of children below 6 years of age and proper nutrition and health education of pregnant and lactating mothers starting with 33 projects and 4891 anganwadi centres (AWCs) in 1975. This has now been universalized with cumulative approval of 7076 projects and 14 lakh AWCs including 20,000 anganwadis 'on-demand'. At present 7025 ICDS projects and 13.31 lakh AWCs are operational. They are currently providing services to 928 lakh beneficiaries. A proposal for strengthening and restructuring of the ICDS Scheme with an overall budget allocation of ` 1,23,580 crore during the Twelfth Plan has been approved and will be rolled out in all the districts in three years. Greater emphasis is being laid on awareness generation, convergence with the MGNREGA, and MIS-based monitoring. Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (RGSEAG)-Sabla: Sabla now operational in 205 selected districts aims at all-round development of adolescent girls in the age group 1118 years and making them self-reliant with a special focus on out-of-school girls. The scheme has two major components, nutrition and non-nutrition. Nutrition is being given in the form of 'take home rations' or 'hot cooked meals' to out-of -school 11-14 year old girls and all adolescent girls in the 14 -18 age group. The non-nutrition component addresses the developmental needs of 11-18 year old adolescent girls who are provided iron-folic acid supplementation, health check-up and referral services, nutrition and health education, counseling/ guidance on family welfare, skill education, guidance on accessing public services, and vocational training. The target of the scheme is to provide nutrition to 1 crore adolescent girls in a year. Against an allocation of ` 750 crore for 2012-13, ` 496 crore has been released to states/UTs benefiting 87.23 lakh adolescent girls as on 31.12.2012. Indira Gandhi Matritva Sahyog Yojana (IGMSY): The IGMSY is a conditional cash transfer scheme for pregnant and lactating women implemented initially on pilot basis in 53 selected districts in the country from October 2010. As on 31December 2012, more
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than 3 lakh beneficiaries had been covered and ` 27 crore released to states. The scheme is now covered under the Direct Benefit Transfer (DBT) programme with nine districts being included in the first phase. In 2012-13, the scheme has a budgetary outlay of ` 520 crore and targets covering 12.5 lakh pregnant and lactating women. National Mission for Empowerment of Women (NMEW): This initiative for holistic empowerment of women through better convergence and engendering of policies, programmes, and schemes of different ministries was operationalized in 2010-11. Under the Mission, institutional structures at state level including State Mission Authorities headed by Chief Ministers and State Resource Centres for Women (SRCWs) for spearheading initiatives for women's empowerment have been established across the country. Rashtriya Mahila Kosh (RMK): The RMK provides micro-credit in a quasi-informal manner, lending to intermediate micro-credit organizations (IMOs) across states. It focuses on poor women and their empowerment through the provision of credit for livelihood-related activities. With a corpus fund of ` 31 crore, the RMK has grown to over ` 180 crore including reserves and surplus due to credit, investments, and recovery management with an additional budgetary allocation of ` 69 crore. From its inception in 1993 till 31 December 2012, the RMK has sanctioned loans worth ` 342.40 crore and released ` 275.89 crore covering over 7.19 lakh women beneficiaries. Policies to address violence against women: Addressing violence against women is another area which has received a lot of recent attention. Following the recent tragic incident of sexual assault in New Delhi, a committee of eminent jurists, headed by former Chief Justice of India Justice J. S. Verma, was constituted to review existing laws and examine levels of punishment in cases of aggravated sexual assault and it has submitted its recommendations. An ordinance has also been issued on sexual assault against women [Criminal Law (Amendment) Ordinance, 2013] based on the recommendations of the Justice Verma Committee. A Commission of Inquiry was also set up under the Chairpersonship of Ms Justice Usha Mehra, retired Judge of Delhi High Court to identify lapses on the part of public authorities and suggest measures to improve the safety and security of women in the capital. New initiatives are being taken like one-stop crisis centres
Human Development
this scheme. An amount of ` 777 crore had been released to states up to 31December 2012 against an allocation of ` 824 crore for 2012-13 for scholarships to an estimated 35 lakh beneficiaries. For providing pre-matric scholarships to students whose parents are engaged in unclean occupations, out of an allocation of ` 10 crore for 2012-13, ` 5.71 crore had been released to states (up to December 2012). This had benefited 3.23 lakh students up to December, 2012.
for providing shelter, police assistance, legal, medical and counselling services with public hospitals as focal point. A scheme for providing restorative justice through financial assistance and support services to victims of rape will be implemented in the Twelfth Plan as per the directives of the Supreme Court of India.
WELFARE AND DEVELOPMENT OF SCS, STS, OBCS, AND OTHER WEAKER SECTIONS 13.39 Economic and social empowerment and educational upliftment of socially disadvantaged groups and marginalized sections of society is necessary for achieving faster and more inclusive development. Programmes are being implemented through states, government's apex corporations, and NGOs for the upliftment of disadvantaged and marginalized sections of society.
Under the revised Post-Matric Scheme, an amount of ` 1269.73 crore has been released to states out of the BE of ` 1500 crore. The number of beneficiaries during 2012-13 is estimated at 40 lakh.
Under the Rajiv Gandhi National Fellowship Scheme which aims at providing financial assistance to SC students pursuing MPhil and PhD courses, ` 125 crore has been allocated for 2000 new/renewal fellowships during 2012-13.
Under the National Overseas Scholarship Scheme, financial support to students pursuing Master's level courses and PhD/Post-Doctoral courses abroad, 30 awards are given per year. During 2012-13, an amount of ` 1.7 crore had been released up to 31 December 2012 against an allocation of ` 6 crore.
Under Top Class Education, eligible students who secure admission in notified institutions like the IITs, IIMs, and NITs, are provided full financial support for meeting the requirements of tuition fees, living expenses, books, and computers. In 2012-13, up to 31 December 2012, ` 8.35 crore had been released against an allocation of ` 25 crore to assist 677 students.
SCs 13.40 Special Central Assistance (SCA) to the Scheduled Castes Sub Plan (SCSP) is a major initiative for lifting SCs above the poverty line through self-employment or training. The amount of subsidy admissible is 50 per cent of the project cost, subject to a maximum of ` 10,000 per beneficiary. During 2012-13, the physical target is to cover over 12 lakh beneficiaries. An amount of ` 713.02 crore had been released to states against an allocation of ` 1180 crore up to 31 December 2012. Another recent measure is increasing the existing rates (between ` 0.20 lakh and ` 2.50 lakh) of relief to victims of atrocities, their family members, and dependents (to between ` 0.50 lakh and ` 5 lakh) as per the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities Amendment) Rules 2011. An amount of ` 55.36 crore had been released to states against an allocation of ` 100 crore up to December 2012. 13.41 A number of schemes to encourage SC students to continue higher education studies are also under implementation. Some of them are as follows:
Pre-Matric Scholarship Scheme for SC Students studying in Classes IX and X was introduced from 1 July 2012 to support parents of SC children in education of their wards so that the incidence of drop-out, especially in the transition from elementary to secondary stage is minimized. Students with parental income not exceeding ` 2 lakh per annum are eligible for http://indiabudget.nic.in
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STs 13.42 For the welfare and development of STs, an outlay of ` 4090 crore has been made in the Annual Plan for 2012-13. During 2012-13, ` 1200 crore has been provided as Special Central Assistance (SCA) to Tribal Sub-Plan (TSP). The SCA to TSP is a 100 per cent grant extended to states as additional funding to their TSP for family-oriented income-generating schemes, creation of incidental infrastructure, extending financial assistance to SHGs, communitybased activities, and development of forest villages. The outlay for grants-in-aid under Article 275(1) during 2012-13 is ` 1317 crore.
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Economic Survey 2012-13
13.43 For economic empowerment of STs, financial support is extended through the National Scheduled Tribes Finance and Development Corporation (NSTFDC) in the form of loans and micro-credit at concessional rates of interest for income-generating activities. Market development of tribal products and their retail marketing is done by the Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) through its sales outlets. Till 31 October 2012, 32.37 lakh claims had been filed and 12.76 lakh titles distributed under the provisions of the 'The Scheduled Tribes and Other Traditional Forest Dwellers Act 2006'. Further, 14,603 titles were ready for distribution. A total of 27.88 lakh claims have been disposed of.
Programme is ` 1000 crore in 2012-13. The authorized share capital of the National Minorities Development and Finance Corporation (NMDFC) has been raised from ` 650 crore in 2006-7 to ` 1500 crore in 2010-11 for expanding its loan and microfinance operations to promote self-employment and other economic ventures among backward sections of the minority communities. An amount of ` 99.64 crore has been released to the NMDFC during 201213. The Prime Minister's New 15 Point Programme for Welfare of Minorities which earmarks 15 per cent of targets/ outlays for minorities in many important schemes aims at ensuring the equitable flow of benefits of education, employment, and basic infrastructure schemes to minorities.
13.44 There are also many schemes for helping ST students. Under the Post-Matric Scholarship Scheme, 100 per cent financial assistance is provided to ST students whose family income is less than or equal to ` 2 lakh per annum to pursue postmatric-level education including professional, graduate, and postgraduate courses in recognized institutions. The Top Class Education Scheme for STs provides financial assistance for quality education to 625 ST students per annum to pursue studies at degree and post-degree level in any of 125 identified institutes. The family income from all sources of the beneficiary ST student under the scheme should not exceed ` 2 lakh per annum. Financial assistance is also provided to 15 eligible ST students for pursuing higher studies abroad in specified fields at Master's and PhD level under the National Overseas Scholarship Scheme. A scheme for Strengthening of Education among ST Girls in Low Literacy Districts is also being implemented to bridge the gap in literacy levels between the general female population and tribal women.
13.46 The corpus of the Maulana Azad Education Foundation (MAEF) had been enhanced from ` 100 crore in 2005-6 to ` 750 crore till March 2012. Fund allocation has been enhanced from ` 1190 crore in 2011-12 to ` 1620 crore in 2012-13 for three scholarships schemes, Pre-Matric, Post-Matric, and Metric-cum-means based, which are being implemented exclusively for the notified minorities. Two schemes, viz. (i) the Maulana Azad National Fellowship for Minority Students, with an allocation of ` 70 crore in 2012-13 and (ii) Computerization of Records of State Wakf Boards, with an allocation of ` 5 crore in 2012-13, are under implementation since 2009-10. There is also a scheme for Leadership Development of Minority Women with an allocation of ` 15 crore for 2012-13.
Minorities 13.45 The five communities--Muslims, Christians, Sikhs, Buddhists, and Parsis- notified as minority communities constitute 18.42 per cent of the total population of the country. The plan outlay for the development of minorities was raised from ` 2850 crore in 2011-12 to ` 3135 crore in 2012-13. The Multi-sectoral Development Programme, a special areas development initiative to address the 'development deficits' especially in education, skill development, employment, health and sanitation, housing, and drinking water in 90 minority concentration districts (MCDs), was launched in 2008-9. Projects worth ` 3734 crore were approved during the Eleventh Plan. The outlay for this http://indiabudget.nic.in
OBCs 13.47 Central assistance is provided to states for educational development of OBCs. Under the PreMatric Scholarship for OBCs Scheme, against an allocation of ` 50 crore during 2012-13, ` 35.45 crore was released to states up to December 2012. Under the Post-Matric Scholarship Scheme, the target is to provide scholarship to 17.25 lakh OBC students. To provide hostel facilities to OBC students studying in middle and secondary schools, colleges, and universities and enable them to pursue higher studies, ` 6.13 crore was released up to December 2012 against an allocation of ` 45 crore in 2012-13.
Persons with Disabilities 13.48 Persons with disabilities are a valuable human resource for the country. For the physical rehabilitation, educational and economic development, and social empowerment of differently abled persons many schemes are in operation. According to Census 2001, there were 2.19 crore
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Human Development persons with disabilities in India comprising1.26 crore males and 0.93 crore females, who constitute 2.13 per cent of the total population,; with 75 per cent living in rural areas; 49 per cent literate; and only 34 per cent employed. Some important schemes for the welfare of disabled persons include the following: Scheme of Assistance to Disabled Persons for Purchase/Fitting of Aids/ Appliances (ADIP): The ADIP was launched to assist needy disabled persons in procuring durable, sophisticated, and scientifically manufactured, modern, standard aids and appliances that can promote their physical, social, and psychological rehabilitation, by reducing the effects of disabilities, and enhance their economic potential. During 2012-13(till 31.12.2012) ` 32.60 crore had been released to the implementing agencies against a Plan outlay of ` 100 crore for the scheme. Every year around 2 lakh persons with disabilities are provided assistive devices.
Deendayal Disabled Rehabilitation Scheme (DDRS): The DDRS includes projects for providing education, vocational training, and rehabilitation of persons with orthopaedic, speech, visual, and mental disabilities. It provides for 18 model projects covering various services provided by voluntary agencies which are supported through grants-in-aid that include programmes for pre-school and early intervention, special education, vocational training and placement, community-based rehabilitation, manpower development, psychosocial rehabilitation of persons with mental illness, and rehabilitation of leprosy-cured persons. Against an allocation of ` 120 crore for the financial year 2012-13, ` 14.48 crore had been sanctioned as on 31December 2012.
Incentives to Employers in the Private Sector for Providing Employment to Persons with Disabilities: This Scheme incentivizes the private
sector to employ persons with disability with the government providing the employer's contribution to the Employees Provident Fund (EPF) and Employees State Insurance (ESI) for three years, for employees with disabilities employed on or after 01 April 2008 with a monthly salary up to ` 25,000.
Social Defence 13.49 The social defence sector includes schemes/ programmes which aim at the welfare, security, healthcare, and maintenance especially of indigent senior citizens by providing them productive and independent living and schemes for victims of substance abuse aimed at drug demand reduction through awareness campaigns and treatment of addicts and their detoxification so that they may join the mainstream. The Integrated Programme for Older Persons (IPOP), aims at covering 64,000 beneficiaries during 2012-13. Grants-in-aid are provided to NGOs for running integrated rehabilitation centres for addicts, regional resource and training centers, and other projects through the Assistance for the Prevention of Alcoholism and Substance (Drugs) Abuse scheme. During 2012-13 (up to December 2012), ` 8.06 crore had been released against a revised allocation of ` 17 crore. The scheme aims to benefit 1.2 lakh persons. 13.50 There are three national-level financial institutions which also help in the up-liftment of the weaker sections of society. The National Scheduled Castes Finance and Development Corporation (NSCFDC), National Safai Karamcharis Finance and Development Corporation (NSKFDC), and National Backward Classes Finance and Development Corporation (NBCFDC) provide credit facilities to their target groups at concessional rates of interest for various income-generating activities. During 201213, 1.23 lakh beneficiaries were disbursed loans as on 31 December 2012 by these three Institutions
Table 13.11 : Details of the Loan Disbursed/Beneficiaries Covered under the NSCFDC, NSKFDC, and NBCFDC in 2012-13 (up to December 2012) Sl. Corporation No.
Amount of Loan Disbursed (` ` crore) Te r m MicroOthers Total Loan finance
1.
NSCFDC
77.94
26.53
11.08
115.55
10734
7935
837
19506
2.
NSKFDC
47.86
20.49
3.15
71.50
2312
8167
599
11078
3.
NBCFDC
76.74
25.79
42.92
145.45
17560
24070
50362
91992
202.54
72.81
57.15
332.50
30606
40172
51798
122576
Total
Source: Ministry of Social Justice and Empowerment.
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Tentative No. of Beneficiaries Te r m MicroOthers Loan finance
Total
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together. Micro-finance beneficiaries of the NBCFDC and NSKFDC have increased by 23.79 per cent and 54 per cent respectively, while those under the NSCFDC have fallen by 66 per cent in 2012-13 (AprilDecember) over the corresponding period of the previous year (Table 13.11).
OUTLOOK
AND CHALLENGES 13.51 The global recession of 2008 and the recent global slowdown have squeezed the fiscal space for most countries and consequently the purse for socialsector spending. However, India's social sector spending has seen a continuous increase even during these crisis-ridden years. India needs to balance the dual imperatives of growth and inclusion. This can happen only if growth leads to higher and better jobs. While the government's flagship programme, the MGNREGA, is intended to fill this 'job deficit' in the interregnum, we have to focus on longer-term inclusive growth strategies. The $ 1 trillion Infrastructure opportunity is one such example. Even in the interregnum, schemes like the MGNREGA should move towards more production- and growthgenerating activities. The draft Twelfth Five Year Plan has emphasized faster, more inclusive, and sustainable growth. A special effort is needed in two areas of human development in India - health and education. These will help translate our demographic advantage into a real dividend (See chapter 2). There is also need to address delivery-related issues in a mission mode to ensure optimum utilization of funds and to convert outlays into outcomes. For this, good governance is critical.
13.52 Coming to expenditure management, in the last few years public expenditure on social programmes has increased dramatically from ` 9.10 lakh crore in the Tenth Plan period to ` 22.69 lakh crore during the Eleventh Plan period with a step up of over 149 per cent. In the Eleventh Plan period nearly ` 7 lakh crore has been spent on the 15 major flagship programmes. This sharp increase is unprecedented. A number of legislative steps have also been taken to secure the rights of people, like the Right to Information Act, the MGNREGA, the Forest Rights Act, and the RTE. Thus the funds are in place, rights constitutionally guaranteed, and many achievements recorded, but there are also pressing issues like leakages and funds not reaching the targeted beneficiaries. While the Direct Benefit Transfer (DBT) system with the help of the UID can
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help in plugging many of these leakages, there is enough scope for expenditure reduction even in social-sector programmes through convergence (integration and combining). Economic Survey 201112 had pointed out that there are many schemes like the AABY, JBY, and RSBY with significant overlap and catering to the same or similar categories of the population, with Shiksha Sahyoga Yojana (SSY) as a add-on benefit under the former two schemes. A welcome development this year is the merger of the JBY with the AABY. There are many other such areas where convergence can take place. For example the JSY, Janani Shishu Surksha Karyakram (JSSK), and Indira Gandhi Matritva Sahyog Yojana (IGMSY) have many overlapping features and the same beneficiaries. This calls for a careful exercise in identifying overlapping schemes and weeding out or converging them. A threshold level could also be fixed for the schemes as a critical minimum investment or outlay is needed for any programme to be successful. The Committee on 'Restructuring of Centrally Sponsored Schemes' has suggested that new centrally sponsored schemes should have a minimum Plan expenditure of ` 10,000 crore over the Five Year Plan and should be included under flagship schemes. 13.53 Another area needing attention is decentralization. While Plan programmes are designed with a bottom-up approach and are panchayat- and PRI-centric, they are actually implemented in a top-down manner and do not effectively articulate the needs and aspirations of the local people, especially the most vulnerable. With the 73rd Constitutional Amendment, several functions were transferred to PRIs and since 2004 there has also been massive transfer of funds to PRIs, especially after the enactment of the MGNREGA. But institutionally the PRIs remain weak and do not have the required capacity to plan or implement programmes effectively. The Twelfth Five Year Plan proposes a complete break from the past and provides sizeable resources to the Ministry of Panchayati Raj. These higher outlays should be converted into outcomes. This calls for greater focus on empowering PRIs through training and awareness generation coupled with social audit of all socialsector programmes. Cash transfers to the intended beneficiaries can also help empower citizens, even while giving them choice of provider. This too can help improve the quality of service delivery.
ECONOMIC SURVEY 2012-13 STATISTICAL APPENDIX
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STATISTICAL APPENDIX : ECONOMIC SURVEY 2012-2013 0.1
Select Indicators: 1950-51 to 2011-12 .....................................................................................................
PAGE
A1-A2
1. National Income and Production 1.1 1.2 1.3 A 1.3 B 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 1.31 1.32
Gross National Income and Net National Income ...................................................................................... Annual Growth Rate of Gross National Income and Net National Income ................................................. Gross Domestic Product at Factor Cost by Industry of Origin at Constant Prices ..................................... Gross Domestic Product at Factor Cost by Industry of Origin at Current Prices ....................................... Annual Growth Rates of Real Gross Domestic Product at Factor Cost by Industry of Origin . .................. Gross Domestic Saving and Gross Domestic Capital Formation ............................................................... Gross Domestic Saving and Gross Domestic Capital Formation as per cent of GDP at Current Market Prices ............................................................................................................................ Net State Domestic Product at Current Prices .......................................................................................... Per Capita Net State Domestic Product at Current Prices ......................................................................... Index Numbers of Agricultural Production ................................................................................................ Index Numbers of Area under Principal Crops ......................................................................................... Index Numbers of Yield of Principal Crops .............................................................................................. Production of Major Crops ...................................................................................................................... Gross Area Under Major Crops ............................................................................................................... Yield per Hectare of Major Crops ............................................................................................................ Production of important crops in three largest producing states in 2011-12 ............................................. Net Availability of Cereals and Pulses ..................................................................................................... Net Availability, Procurement and Public Distribution of Foodgrains .......................................................... Per Capita Availability of Certain Important Articles of Consumption ......................................................... Production, Imports and Consumption of Fertilizers ................................................................................. Production of Major Livestock Products and Fish .................................................................................... Production of Coal and Lignite ................................................................................................................ Production of Fabrics ............................................................................................................................. Progress of Electricity Supply (Utilities & Non-Utilities) (A) : Installed Plant Capacity ................................................................................................................... (B) : Energy Generated (Gross) ............................................................................................................. Pattern of Electricity Consumption (Utilities) ............................................................................................. Operations of Indian Railways ................................................................................................................ Revenue Earning Goods Traffic on Indian Railways (A) : Traffic Originating ........................................................................................................................... (B) : Goods Carried ................................................................................................................................ Operations of Road Transport ................................................................................................................ Growth of Civil Aviation .......................................................................................................................... Commodity Balance of Petroleum and Petroleum Products ....................................................................... Production of Selected Industries ........................................................................................................... Index of Industrial Production .................................................................................................................. State-wise/Utilitywise average rate of electricity for domestic and industrial consumers .........................
A3 A4 A5 A6 A7 A8-A9 A10-A11 A12 A13 A14 A15 A16 A17 A18 A19 A20 A21 A22 A23 A24 A24 A25 A25 A26 A26 A27 A27 A28 A28 A29 A29 A30 A31-A33 A34 A35
2. Budgetary Transactions 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22
Gross Capital Formation from Budgetary Resources of the Central Government ..................................... Budgetary Transactions of the Central and State Governments and Union Territories .............................. Total Expenditure of the Central Government ........................................................................................... Plan Outlay by Heads of Development: Centre, States and Union Territories, 1961-80 .............................. Sixth Plan Outlay by Heads of Development: Centre, States and Union Territories, 1980-85 ..................... Plan Outlay by Heads of Developement: Centre, States and Union Territories, 1985-92 ............................ Eighth Plan Outlay by Heads of Development: Centre, States and Union Territories, 1992-97 . ................. Ninth Plan Outlay by Heads of Development: Centre, States and Union Territories, 1997-98 to 2001-02 ... Tenth Plan Outlay by Heads of Development: Centre, States and Union Territories, 2002-07 and Annual Plans 2002-03 to 2006-07 ..................................................................................................... Eleventh Plan (2007-2012) Outlay by Heads of Development : Centre, States and Union Territories ......... Twelfth Plan (2012-17) Outlay by Heads of Development: Centre, States and Union Territories ................ Financing for Central and State Annual Plans 2011-12(RE/LE) and 2012-13 (BE/AP) ................................ Overall Financing Pattern of the Public Sector Plan outlay during the Ninth Plan : 1997-2002 .................... Overall Financing Pattern of the Public Sector Plan outlay during the Tenth Plan : 2002-2007. .................. Overall Financing Pattern of the Public Sector Plan outlay during the Eleventh Plan : 2007-2012 .............. Overall Financing Pattern of the Public Sector Plan outlay during the Twelfth Plan : 2012-2017 ................ Financial Performance of Indian Railways ............................................................................................... Financial Performance of the Department of Posts .................................................................................. Receipts and expenditure of the Central Government ............................................................................. Outstanding liabilities of the Central Government ..................................................................................... Total expenditure and capital formation by the Central Government and its financing ............................... Receipts and disbursements of State and consolidated General Government ..........................................
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A36 A37 A38 A39 A40 A41 A42 A43 A44 A45 A46 A47 A48 A48 A49 A49 A50 A51 A52 A53 A54 A55
STATISTICAL APPENDIX : ECONOMIC SURVEY 2012-13
PAGE
3. Employment 3.1 3.2
Employment in Organised Sectors —Public and Private ........................................................................... Per Capita Emoluments of Central Public Sector Enterprises Employees in relation to increase in Average All-India Consumer Price Index (1960=100) ............................................................................
A56 A57
4. Monetary Trends 4.1 4.2 4.3 4.4 4.5 4.6 4.7
Sources of Change in Money Stock (M3) ................................................................................................ Scheduled Commercial Banks: Seasonal Flow of Funds ......................................................................... Scheduled Commercial Banks: Variations in Selected Items ..................................................................... Scheduled Commercial Banks’ Outstanding Advances Against Sensitive Commodities ............................. Branch Expansion of Public Sector Banks and Other Commercial Banks ................................................. Advances to Agriculture and other Priority Sectors by Public Sector Banks ............................................ State-wise Distribution of Bank Offices, Aggregate Deposits and Gross Bank Credit of Public Sector Banks and Percentage Share of Advances to Priority Sectors ................................................................ Financial Assistance Sanctioned and Disbursed by All India Financial Institutions ....................................
4.8
A58 A59 A60 A61 A62 A63 A64 A65
5. Prices 5.1 5.2 5.3 5.4 5.5
Index Numbers of Wholesale Prices ........................................................................................................ Index Numbers of Wholesale Prices - Selected Commodities and Commodity Groups .............................. All India Consumer Price Index Numbers ................................................................................................. Index Numbers of Wholesale Prices - Relative Prices of Manufactured and Agricultural Products ............ Minimum Support Price/Procurement Price for Crops (Crop year basis) ...................................................
A66 A67-A68 A69 A70 A71
6. Balance of Payments 6.1A 6.1B 6.2 6.3A 6.3B 6.4 6.5
Foreign Exchange Reserves (` cr.) ........................................................................................................ Foreign Exchange Reserves ( US$ Mn.) ................................................................................................. Balance of Payments as per IMF Balance of Payments Manual 5 ............................................................. Balance of Payments as per IMF Balance of Payments Manual 6 (` Bn.) ................................................. Balance of Payments as per IMF Balance of Payments Manual 6 (US$ Mn.) ............................................ Exchange Rate of Rupee vis-a-vis Selected Currencies of the World ...................................................... Trends in Nominal and Real Effective Exchange Rate of Rupee ...............................................................
A72-A73 A74-A75 A76-A77 A78 A79 A80 A81
7. Foreign Trade 7.1A 7.1B 7.2A 7.2B 7.3A 7.3B 7.4A 7.4B 7.5 7.6
Exports, Imports and Trade Balance (` cr.) ............................................................................................. A82 Exports, Imports and Trade Balance (US$ Mn.) ....................................................................................... A83 Principal Imports ..................................................................................................................................... A84-A86 Share and Percentage Growth/Change of Major Imports ......................................................................... A87 Principal Exports .................................................................................................................................... A88-A90 Share and Percentage Growth/Change of Major Exports ........................................................................ A91 Direction of Imports : Imports by Regions and Countries (US$ Mn. & ` cr.) ............................................... A92-A96 Direction of Exports : Exports by Regions and Countries (US$ Mn. & ` cr.) ............................................. A97-A101 India’s Share in World Exports by Commodity Divisions and Groups ........................................................ A102-A105 Index Numbers of Foreign Trade ............................................................................................................. A106
8. External Assistance 8.1A 8.1B 8.2A 8.2B 8.3A 8.3B 8.4A 8.4B
Overall External Assistance (` cr.) ......................................................................................................... Overall External Assistance ( US$ Mn.) .................................................................................................. Authorization of External Assistance by Source (` cr.) ........................................................................... Authorization of External Assistance by Source ( US$ Mn.) .................................................................... Utilization of External Assistance by Source (` cr.) ................................................................................. Utilization of External Assistance by Source ( US$ Mn.) .......................................................................... India’s External Debt Outstanding (` cr.) ................................................................................................. India’s External Debt Outstanding ( US$ Mn.) ...........................................................................................
A107 A108 A109-A110 A111-A112 A113-A114 A115-A116 A117-A118 A119-A120
9. Human Development Indicators 9.1 9.2 9.3 9.4 9.5 9.6 9.7
Selected Indicators of Human Development for Major States ................................................................... Gross Enrolment Ratio in Classes I-V and VI-VIII and I-VIII ....................................................................... Number of Recognised Educational Institutions in India (Provisional) ........................................................ State-wise Literacy Rates (1951-2011) .................................................................................................. State-wise Infant Mortality Rate .............................................................................................................. Access to safe drinking water in Households in India ............................................................................. Population of India (1951-2011) ...............................................................................................................
A121 A122 A123 A124 A125 A126 A127
Note :na = not available ; ‘…’ = nil or negligible; P= Provisional ; Q = Quick Estimate; ` = Rupee; $=US Dollar; cr.=crore; Mn.=Million
http://indiabudget.nic.in
0.1 : SELECT INDICATORS 1950-51 1960-61 1970-71 1
1980-81
1990-91 2000-01
2008-09
2009-10
2010-11
2011-12
8
9
10
11
531814 1991982 5303566 6108903
72669672R
8353495 1R
798506 1347899 2342774 4158676 4516071
49370062R
5243582 1R
33901
363422R
38037 1R
34.3
36.5
36.8
35.0
23.8
32.0
33.7
34.0
30.8
148.4
165.7
107q
102.8q
121q
124.1q
43.1
91.6
162.6
145.2
152.9
165.5
170.3
14.3
36.8
73.7
155.7
126.0
130.8
143.3
156.1
38
81
193
444
145
163
180
195
82
108.4
129.6
176.4
196.8
234.4
218.1
244.5
257.4
1
2.4
4.6
6.8
13.5
32.3
63.4
69.1
76.3
82.8g
2.7
8
14.3
18.6
48.8
99.2
187.6
207.1
216.7
230.5g
32.3
55.2
76.3
119
225.5
332.6
525.2
566.1
570.4
583.1g
0.3
0.5
6.8
10.5
33
32.4
33.5
33.7
37.7
38.1g
5
17
56
111
264
499
724
771
811
877
260i
1117
2524
15023
58369
185737
628161
717035
826268
1030461J
606
642
1535
6711
32553
203571
840755
845534
1142922
1465959
1269
1346
2031
8486
18143
44076
185295
178751
251136
304624
608
1122
1634
12549
43198
230873 1374436 1363736
1683467
2345463
1273
2353
2162
15869
24075
288373
369769
489181
184482 1231340 1150778
1225999
1333954
274580
260742
2
3
4
5
6
7
10036
17049
44382
136838
279618
410279
589787
7114
8889
10016
10712
14330
20362
31754
9.3
14.3
15.1
19.2
26.0
24.4
9.5
11.6
14.3
17.8
22.9
Index of agricultural production [base; triennium ending 1981-82]for the data given till 2000-01
46.2
68.8
85.9
102.1
Index of industrial production (Base: 2004-05=100)a
7.9b
15.6
28.1
6.8
7.9
17
21
50.8
ECONOMIC INDICATORS GDP at factor cost: at current prices in Rs. crore GDP at factor cost: at constant prices in Rs. crore Per capita Net National Income at factor cost at constant prices in Rs. Gross Domestic Capital Formation as percentage of GDP at current market prices Gross domestic savings as percentage of GDP at current market prices
Wholesale Price Index averagec Consumer Price Index for Industrial workersd OUTPUT (a) Foodgrains [millon tonnes] (b) Finished Steelf [millon tonnes] (c) Cement [millon tonnes] (d) Coal and ligniteh [millon tonnes] (e) Crude oil [millon tonnes] (f) Electricity generated [utilities only] [billon KWH] Plan outlay (Rs. crore) FOREIGN TRADE (i) Exports Rs. crore US $ million (ii) Imports Rs. crore US $ million
49975
303696
Foreign exchange reservesk [excluding gold,SDRs and Reverse Tranche Position at IMF]; Rs. crore US $ million
911
186
438
4822
4388
1914
390
584
5850
2236
39554
241676
254935
Contd....
http://indiabudget.nic.in
A2
Economic Survey 2012-13 0.1 : SELECT INDICATORS 1950-51 1960-61 1970-71
2008-09
2009-10
2010-11
2011-12
2
3
4
5
6
7
8
9
10
11
361
439.2
548.2
683.3
846.4
1028.7
1161
1177
1210s
na
39.9
41.7
36.9
33.9
29.5
25.4
22.5
22.1
21.8r
na
7.2
7.1r
na na
1
1980-81
1990-91 2000-01
SOCIAL INDICATORS Population (Million)l Birth Rate (per 1000)m Death Rate (per
1000)m
27.4
22.8
14.9
12.5
9.8
8.4
7.3
32.1
41.3
45.6
50.4
58.7
62.5
na
na
66.1r
(a) Male
32.5
41.9
46.4
50.9
58.6
61.6
na
na
64.6r
na
(b) Female
31.7
40.6
44.7
50
59
63.3
na
na
67.6r
na
18.3
28.3
34.4
43.6
52.2
64.8
na
na
74.04
na
27.2
40.4
46
56.4
64.1
75.3
na
na
82.14
na
8.9
15.4
22
29.8
39.3
53.7
na
na
65.46
na
61.8
83.7
151.1
268.7
393.6
587.2
793.7
846.5
922.2
na
RMP per 10,000 population
1.7
1.9
2.8
3.9
4.7
5.7
6.8
7.2
7.6
na
Types)p
3.2
5.7
6.4
8.3
9.5
na
na
na
na
na
Life Expectancy at Birthi (in
years)n
Education: Literacy Rate (%)o (a) Male (b) Female Health & Family Welfare Registered Medical Practitioner (RMP) (Allopathy) (Thousand) on 31st Dec
Beds (All
per 10,000
1R: 1st Revised Estimates, 2R: 2nd Revised Estimates. na : Not available. a
The Index of Industrial Production has been revised since 2005-06 on base(2004-05=100). The figures for the year 2007-08 onwards are on the new base.
b
Relates to the calender year 1950.
c
The figures from 2008-09 are based on current series 2004-05=100 and earlier data are based on old base years.
d
The figures from 2008-09 are based on current series 2001=100 and earlier data are based on old base years.
e
4th Advance Estimates.
f
Includes main producers, majors and others.
g
Provisional.
h
Coal output includes Meghalaya Coal from 2005-06 onwards.
i
Relates to 1951-52.
j
Revised Estimates only.
k
As on end-March.
l
Relate to mid-financial year (as on October 1) based on population figures of C. S. O.
m
For calendar year. Figure shown against 1990-91 is for calendar year 1991 and so on. Source : Office of R. G. I.
n
Data for 1950-51, 1960-61, 1970-71 and 1980-81 relate to the decades 1941-50, 1951-60, 1961-70 and 1971-80 respectively, centred at midpoints of the decade, i. e. , 1946, 1956, 1966 and 1976. The estimates for 1990-91 and 1991-92 refer to the periods 1988-92 and 198993 respectively. The estimates for 2005-06 refers to the period 2001-05. The estimates for 2006-07 refers to the period 2002-06.
o
Data for 1950-51, 1960-61, 1970-71, 1980-81, 1990-91 and 2000-01 are as per Census of India 1951, 1961, 1971, 1981, 1991 and 2001. The figures for 1951, 1961 and 1971 relate to population aged 5 years and above and those for 1981, 1991 and 2001 to population aged 7 years and above. All India literacy rates exclude Assam for 1981 and J&K for 1991. For 2005-06, data is based on National Family Health Survey (2005-06) (+ 6 years).
p
Includes beds in hospitals, dispensaries, P. H. Cs, clinics, sanatoriums, etc.
q
Base; triennium ending 2007-08=100.
r
Abridged Life Table 2002-06, Registrar General of India.
s
Sample Registration System (SRS), RGI.
http://indiabudget.nic.in A—2
A3
Economic Survey 2012-13 1.1 : GROSS NATIONAL INCOME AND NET NATIONAL INCOME Gross national income at factor cost ` crore) (`
Net national income at factor cost ` crore) (`
Per capita net national income `) (`
Index numbers (1950-51=100) Net national income
Per capita net national income
Year At current At 2004-05 At current At 2004-05 At current At 2004-05 At current At 2004-05 prices prices prices prices prices prices prices prices 1 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11 (2R) 2011-12(1R)
2 9995 10561 10424 11359 10660 10851 12948 13235 14792 15517 16977 17894 19130 21874 25541 26731 30383 35718 37683 41451 44098 46930 51641 63333 74639 79327 85312 97400 104774 114653 137183 160253 178351 208412 233689 261288 291119 329449 391799 450809 524268 603451 692078 805881 942302 1105102 1288706 1434408 1653771 1831842 1969249 2147677 2321510 2601508 2949089 3364387 3920042 4561574 5270644 6070903 7185159 8276665
3
4
5
278677 285558 293791 311784 324830 333542 352418 347970 374219 381864 408739 420953 429594 451446 485193 467155 472024 509965 523558 557652 585672 591703 590138 617498 625437 682355 691096 743223 784297 744772 798504 842324 864288 932051 967485 1007999 1051071 1086209 1193697 1266767 1331040 1349541 1422692 1506138 1603264 1720069 1859370 1943208 2073140 2229900 2318974 2450681 2551730 2757120 2949089 3228177 3534849 3879457 4133292 4488314 4882249 5196848
9464 9985 9840 10803 10154 10309 12362 12581 14078 14754 16169 16998 18159 20790 24301 25338 28750 33851 35685 39152 41294 43852 48216 59221 69342 73064 78505 90072 96663 104766 125761 146332 162236 190443 212713 236151 262781 296257 352948 405561 471618 538824 617940 723024 845554 992516 1158858 1287141 1490030 1645370 1762358 1918827 2075329 2329354 2629198 3000666 3501313 4076878 4705447 5411104 6422359 7399935
255405 262804 271541 289931 305985 314238 332192 326992 352054 358913 385761 396844 404119 424527 456327 436650 439345 475052 486775 518434 541867 545976 542686 567937 572741 626779 631897 681442 719996 677340 727359 767481 785134 848950 878609 913143 950457 978464 1080137 1146446 1202305 1211877 1276845 1354116 1440972 1547480 1675759 1745160 1861252 2001250 2074858 2190737 2278363 2466093 2629198 2877284 3149149 3451829 3664388 3966408 4310195 4572075
6
7
264 274 265 285 263 262 308 308 337 346 373 383 400 448 513 522 581 669 689 740 763 792 850 1021 1169 1204 1266 1421 1492 1578 1852 2115 2291 2634 2878 3128 3408 3760 4384 4934 5621 6295 7086 8106 9292 10695 12250 13352 15158 16437 17295 18450 19653 21729 24143 27131 31206 35825 40775 46249 54151 61564
Source : Central Statistics Office (CSO). 1R : 1st Revised Estimates. 2R : 2nd Revised Estimates.
http://indiabudget.nic.in A—3
7114 7200 7299 7650 7927 7996 8284 7995 8422 8425 8889 8938 8901 9149 9627 9003 8876 9388 9397 9800 10016 9855 9571 9792 9658 10326 10192 10748 11111 10201 10712 11091 11089 11742 11889 12095 12328 12417 13418 13947 14330 14157 14643 15181 15835 16675 17714 18103 18934 19993 20362 21065 21575 23005 24143 26015 28067 30332 31754 33901 36342 38037
8 100.0 105.5 104.0 114.1 107.3 108.9 130.6 132.9 148.8 155.9 170.9 179.6 191.9 219.7 256.8 267.7 303.8 357.7 377.1 413.7 436.3 463.4 509.5 625.8 732.7 772.1 829.5 951.8 1021.4 1107.0 1328.9 1546.3 1714.3 2012.4 2247.7 2495.3 2776.7 3130.5 3729.5 4285.5 4983.5 5693.6 6529.6 7640.0 8934.8 10487.7 12245.4 13600.9 15744.8 17386.2 18622.4 20275.8 21929.5 24613.7 27782.1 31707.3 36997.5 43079.4 49721.3 57177.8 67863.5 78193.3
3R : 3rd Revised Estimates.
9 100.0 102.9 106.3 113.5 119.8 123.0 130.1 128.0 137.8 140.5 151.0 155.4 158.2 166.2 178.7 171.0 172.0 186.0 190.6 203.0 212.2 213.8 212.5 222.4 224.2 245.4 247.4 266.8 281.9 265.2 284.8 300.5 307.4 332.4 344.0 357.5 372.1 383.1 422.9 448.9 470.7 474.5 499.9 530.2 564.2 605.9 656.1 683.3 728.7 783.6 812.4 857.7 892.1 965.6 1029.4 1126.6 1233.0 1351.5 1434.7 1553.0 1687.6 1790.1
At current At 2004-05 prices prices 10 100.0 103.8 100.3 108.1 99.8 99.5 116.9 116.7 127.8 131.4 141.3 145.2 151.7 170.0 194.5 198.2 220.3 253.8 261.3 280.8 289.6 300.3 322.6 387.3 443.6 456.6 480.3 538.9 565.9 598.5 702.6 802.2 869.3 999.2 1091.9 1186.5 1292.9 1426.2 1663.2 1871.6 2132.4 2387.9 2688.2 3074.9 3524.8 4057.2 4647.0 5065.1 5750.1 6235.4 6560.8 6999.0 7455.2 8242.8 9158.6 10292.1 11837.9 13590.1 15467.9 17544.3 20542.2 23353.9
11 100.0 101.2 102.6 107.5 111.4 112.4 116.4 112.4 118.4 118.4 124.9 125.6 125.1 128.6 135.3 126.5 124.8 132.0 132.1 137.8 140.8 138.5 134.5 137.6 135.8 145.1 143.3 151.1 156.2 143.4 150.6 155.9 155.9 165.0 167.1 170.0 173.3 174.5 188.6 196.0 201.4 199.0 205.8 213.4 222.6 234.4 249.0 254.5 266.1 281.0 286.2 296.1 303.3 323.4 339.4 365.7 394.5 426.3 446.3 476.5 510.8 534.7
A4
Economic Survey 2012-13 1.2 : ANNUAL GROWTH RATES OF GROSS NATIONAL INCOME AND NET NATIONAL INCOME (Per cent)
Year
Gross national income at factor cost At current prices
1
Net national income at factor cost
At 2004-05 prices
At current prices
At 2004-05 prices
Per capita net national income At current prices
At 2004-05 prices
2
3
4
5
6
7
1951-52 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(IR)
5.7 1.8 19.3 2.2 11.8 4.9 9.4 5.4 6.9 14.3 16.8 4.7 13.7 17.6 5.5 10.0 6.4 6.4 10.0 22.6 17.9 6.3 7.5 14.2 7.6 9.4 19.7 16.8 11.3 16.9 12.1 11.8 11.4 13.2 18.9 15.1 16.3 15.1 14.7 16.4 16.9 17.3 16.6 11.3 15.3 10.8 7.5 9.1 8.1 12.1 13.4 14.1 16.5 16.4 15.5 15.2 18.4 15.2
2.5 2.7 5.7 -1.3 7.5 2.0 7.0 3.0 2.1 5.1 7.5 -3.7 1.0 8.0 2.7 6.5 5.0 1.0 -0.3 4.6 1.3 9.1 1.3 7.5 5.5 -5.0 7.2 5.5 2.6 7.8 3.8 4.2 4.3 3.3 9.9 6.1 5.1 1.4 5.4 5.9 6.4 7.3 8.1 4.5 6.7 7.6 4.0 5.7 4.1 8.0 7.0 9.5 9.5 9.7 6.5 8.6 8.8 6.4
5.5 1.5 19.9 1.8 11.9 4.8 9.6 5.1 6.8 14.5 16.9 4.3 13.5 17.7 5.4 9.7 5.5 6.2 10.0 22.8 17.1 5.4 7.4 14.7 7.3 8.4 20.0 16.4 10.9 17.4 11.7 11.0 11.3 12.7 19.1 14.9 16.3 14.2 14.7 17.0 16.9 17.4 16.8 11.1 15.8 10.4 7.1 8.9 8.2 12.2 12.9 14.1 16.7 16.4 15.4 15.0 18.7 15.2
2.9 2.7 5.7 -1.6 7.7 1.9 7.5 2.9 1.8 5.1 7.5 -4.3 0.6 8.1 2.5 6.5 4.5 0.8 -0.6 4.7 0.8 9.4 0.8 7.8 5.7 -5.9 7.4 5.5 2.3 8.1 3.5 3.9 4.1 2.9 10.4 6.1 4.9 0.8 5.4 6.1 6.4 7.4 8.3 4.1 6.7 7.5 3.7 5.6 4.0 8.2 6.6 9.4 9.4 9.6 6.2 8.2 8.7 6.1
3.8 -0.3 17.5 -0.2 9.5 2.8 7.6 2.8 4.5 12.0 14.4 1.9 11.2 15.2 3.0 7.4 3.1 3.7 7.4 20.1 14.5 2.9 5.2 12.2 5.0 5.8 17.4 14.2 8.4 15.0 9.3 8.7 9.0 10.3 16.6 12.5 13.9 12.0 12.6 14.4 14.6 15.1 14.5 9.0 13.5 8.4 5.2 6.7 6.5 10.6 11.1 12.4 15.0 14.8 13.8 13.4 17.1 13.7
1.2 0.9 3.6 -3.5 5.3 0.0 5.5 0.6 -0.4 2.8 5.2 -6.5 -1.4 5.8 0.1 4.3 2.2 -1.6 -2.9 2.3 -1.4 6.9 -1.3 5.5 3.4 -8.2 5.0 3.5 0.0 5.9 1.3 1.7 1.9 0.7 8.1 3.9 2.7 -1.2 3.4 3.7 4.3 5.3 6.2 2.2 4.6 5.6 1.8 3.5 2.4 6.6 4.9 7.8 7.9 8.1 4.7 6.8 7.2 4.7
FIRST PLAN (1951-56) SECOND PLAN (1956-61) THIRD PLAN (1961-66) THREE ANNUAL PLANS (1966-69) FOURTH PLAN (1969-74) FIFTH PLAN (1974-79) ANNUAL PLAN (1979-80) SIXTH PLAN (1980-85) SEVENTH PLAN (1985-90) TWO ANNUAL PLANS (1990-92) EIGHTH PLAN (1992-97) NINTH PLAN (1997-2002) TENTH PLAN (2002-2007) ELEVENTH PLAN (2007-2012)1R
1.8 9.5 9.6 12.2 11.1 10.7 9.4 15.3 14.1 15.7 16.4 10.8 12.8 16.1
3.7 4.2 2.8 3.9 3.4 4.9 -5.0 5.4 5.6 3.2 6.6 5.7 7.6 8.0
0.0 7.4 7.1 9.8 8.4 8.0 5.8 12.8 11.4 13.0 14.2 8.6 11.1 14.6
2.4 2.2 0.3 1.5 0.9 2.6 -8.2 3.1 3.3 0.8 4.6 3.5 5.9 6.3
Source : Based on data in Table 1.1.
ANNUAL AVERAGE GROWTH RATES 1.9 4.2 9.6 4.2 9.5 2.6 12.2 3.7 10.8 3.2 10.4 4.9 8.4 -5.9 15.3 5.4 13.8 5.5 15.3 2.8 16.6 6.7 10.6 5.5 12.8 7.5 16.1 7.8
1R : 1st Revised Estimates.
http://indiabudget.nic.in A—4
2R : 2nd Revised Estimates.
3R : 3rd Revised Estimates.
Economic Survey 2012-13
A5
1.3A : GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY OF ORIGIN At constant 2004-05 prices (` crore)
Year
Agriculture, forestry & fishing, mining and quarrying
1 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(1R)
Manufacturing, construction, electricity, gas and water supply
Trade, hotels, transport & communication
Financing, insurance, real estate and business services
Community, social & personal services
Gross domestic product at factor cost (2 to 6)
2
3
4
5
6
7
150191 152987 157764 169547 174611 173255 182651 175180 192337 190851 204340 205014 202234 207030 225287 202906 200481 228813 228836 243347 258665 254395 243082 259751 256719 289695 274522 300873 307874 271096 305906 321876 323862 354720 360230 362783 364989 360949 417581 425075 444880 438685 465084 479592 504477 504527 549202 542313 574374 590696 592227 624923 594280 643183 650454 680628 711768 751077 753744 764817 822415 847744
40138 41996 41834 44416 48325 53962 58809 57737 62009 66378 73555 78638 83517 92432 99250 102475 106304 109856 115422 124372 126356 129506 133917 134649 136045 144928 158354 170123 182590 176035 183970 197519 197833 214737 224284 233818 245385 259641 280863 304461 325450 325150 336716 357237 389903 436863 468146 483585 504485 535730 570571 585971 627374 676833 744755 824272 928626 1023998 1071681 1173089 1284941 1334249
30792 31608 32641 33861 36065 38700 41537 42831 44965 47779 51879 55259 58503 62650 66890 68079 69862 72852 76155 80275 84205 86121 87991 91686 97176 105980 110697 118084 127772 126751 133906 142057 149903 157545 165037 178195 188888 198578 210405 226074 237736 243178 256897 274682 301997 342536 370200 398109 428613 476088 506742 550383 596906 663432 727720 815407 910084 1009520 1085125 1197891 1345660 1440312
23325 23863 24863 25219 26140 27190 27635 28679 29492 30619 31252 32596 33693 34735 35688 36766 37412 38431 40305 41980 43735 45989 47767 48936 48779 52142 56277 59032 63203 63818 65041 70326 77029 84585 90907 99783 110295 118383 129934 146088 155165 171956 181320 201568 209401 226348 240354 268495 289440 314990 329271 352792 380081 402243 437174 492340 561063 628124 703629 771905 849632 948808
28474 29329 29934 30860 31967 32955 34219 35765 37233 38834 40741 42656 45686 48684 51894 53950 56438 58659 61272 64655 68218 71264 73594 75541 79120 81914 84190 86450 90186 96779 101666 103842 111849 116027 124065 131184 141043 151240 160385 173022 180564 185232 196332 205101 209742 225157 243288 263486 289085 328771 343963 357984 372048 392121 411361 440426 452823 483917 544497 608369 634358 672469
279618 286147 294267 312177 325431 333766 352766 348500 374948 383153 410279 423011 431960 453829 488247 470402 475190 513860 527270 561630 589787 595741 593843 620872 628079 684634 693191 744972 785965 745083 798506 843426 868092 936270 973357 1013866 1057612 1094993 1206243 1280228 1347889 1367171 1440504 1522344 1619694 1737741 1876319 1957032 2087828 2246276 2342774 2472052 2570690 2777813 2971464 3253073 3564364 3896636 4158676 4516071 4937006 5243582
Source : Central Statistics Office. 1R : 1st Revised Estimates. 2R : 2nd Revised Estimates. 3R : 3rd Revised Estimates. Note : For the year prior to 1999-2000 totals under col. 7 may not add up to totals of individual item under col. 2 to col. 6 due to splicing technique applied independently at the level of each industry and at the total level.
http://indiabudget.nic.in A—5
A6
Economic Survey 2012-13 1.3B : GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY OF ORIGIN At current prices (` crore)
Year
Agriculture, forestry & fishing, mining and quarrying
Manufacturing, construction, electricity, gas and water supply
Trade, hotels, transport & communication
Financing, insurance, real estate and business services
Community, social & personal services
Gross domestic product at factor cost (2 to 6)
2
3
4
5
6
7
5274 5453 5316 5850 4993 4847 6152 6045 7002 7043 7434 7704 7899 9274 11291 11301 13123 16393 16912 18505 19086 19510 21448 28171 31062 31028 31833 37592 38717 40373 50760 58745 63985 75982 82204 88083 95182 105358 130731 144461 168166 195454 219680 254876 293013 319243 381142 408521 466446 497027 506476 546674 548062 608788 650454 732234 829771 961330 1083032 1242818 1503034 1666829
1346 1505 1416 1559 1640 1760 2071 2148 2334 2616 3113 3398 3740 4274 4788 5199 5819 6380 6940 7944 8622 9538 10534 12230 15232 16571 18811 21270 23951 26774 30900 36090 39953 47053 53656 60593 67754 77630 91163 108908 127079 140700 163887 188251 229365 280971 318260 348543 393491 426993 474323 497578 550421 618840 744755 859410 1033410 1205458 1360426 1536492 1807212 2032107
968 1048 1055 1121 1151 1192 1378 1525 1667 1801 1985 2145 2348 2628 3084 3345 3890 4445 4732 5107 5627 6102 6730 8057 10642 12067 13066 14702 16119 18604 21968 26946 30749 35716 41125 48022 54272 61963 73159 85630 100318 115570 136250 160990 192142 231175 273135 313093 358538 399094 441785 490290 542132 623246 727720 846606 998379 1150044 1310845 1481623 1774708 2102558
1254 1349 1425 1537 1647 1768 1917 2054 2203 2364 2547 2602 2987 3231 3512 3796 4063 4458 4772 5120 5579 6117 6694 7465 8390 9511 10579 11540 12448 13576 15120 17835 20453 23388 26907 30819 35337 40387 46926 55297 64598 78904 87495 105686 119442 143791 158637 180642 210593 251145 274940 315689 356089 400056 437174 493102 586595 691464 845369 964937 1165901 1384481
1115 1162 1201 1250 1283 1361 1430 1503 1597 1760 1989 2154 2343 2599 2945 3276 3665 4105 4422 4822 5315 5901 6456 7261 9142 10290 11311 12296 13529 15149 17537 19927 23134 26345 30311 34284 39428 45700 52994 60741 70019 81366 94507 106090 118663 140190 166469 193188 236123 273013 294459 317513 341496 371288 411361 459151 505121 573790 703894 883033 1016112 1167520
10036 10596 10449 11378 10689 10861 12965 13255 14827 15574 17049 17992 19238 21986 25686 26895 30613 35976 37938 41722 44382 47221 51943 63658 74930 79582 85545 97633 104930 114500 136838 160214 178985 209356 235113 262717 292924 332068 396295 456540 531814 613528 703723 817961 955386 1118586 1301788 1447613 1668739 1847273 1991982 2167745 2338200 2622216 2971464 3390503 3953276 4582086 5303566 6108903 7266967 8353495
1 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(1R)
Source : Central Statistics Office. 1R : 1st Revised Estimates. 2R : 2nd Revised Estimates. 3R : 3rd Revised Estimates. Note : For the year prior to 1999-2000 totals under col. 7 may not add up to totals of individual item under col. 2 to col. 6 due to splicing technique applied independently at the level of each industry and at the total level.
http://indiabudget.nic.in A—6
A7
Economic Survey 2012-13 1.4 : ANNUAL GROWTH RATES OF REAL GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRY OF ORIGIN
At 2004-05 prices (Per cent)
Year
Agriculture, forestry & fishing, mining and quarrying
1 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(1R)
Manufacturing, construction, electricity, gas and water supply
Trade, hotels, transport & communication
Financing, insurance, real estate and business services
Community, social & personal services
Gross domestic product at factor cost (2 to 6)
2
3
4
5
6
7
1.9 3.1 7.5 3.0 -0.8 5.4 -4.1 9.8 -0.8 7.1 0.3 -1.4 2.4 8.8 -9.9 -1.2 14.1 0.0 6.3 6.3 -1.7 -4.4 6.9 -1.2 12.8 -5.2 9.6 2.3 -11.9 12.8 5.2 0.6 9.5 1.6 0.7 0.6 -1.1 15.7 1.8 4.7 -1.4 6.0 3.1 5.2 0.0 8.9 -1.3 5.9 2.8 0.3 5.5 -4.9 8.2 1.1 4.6 4.6 5.5 0.4 1.5 7.5 3.1
4.6 -0.4 6.2 8.8 11.7 9.0 -1.8 7.4 7.0 10.8 6.9 6.2 10.7 7.4 3.2 3.7 3.3 5.1 7.8 1.6 2.5 3.4 0.5 1.0 6.5 9.3 7.4 7.3 -3.6 4.5 7.4 0.2 8.5 4.4 4.3 4.9 5.8 8.2 8.4 6.9 -0.1 3.6 6.1 9.1 12.0 7.2 3.3 4.3 6.2 6.5 2.7 7.1 7.9 10.0 10.7 12.7 10.3 4.7 9.5 9.5 3.8
2.6 3.3 3.7 6.5 7.3 7.3 3.1 5.0 6.3 8.6 6.5 5.9 7.1 6.8 1.8 2.6 4.3 4.5 5.4 4.9 2.3 2.2 4.2 6.0 9.1 4.5 6.7 8.2 -0.8 5.6 6.1 5.5 5.1 4.8 8.0 6.0 5.1 6.0 7.4 5.2 2.3 5.6 6.9 9.9 13.4 8.1 7.5 7.7 11.1 6.4 8.6 8.5 11.1 9.7 12.0 11.6 10.9 7.5 10.4 12.3 7.0
2.3 4.2 1.4 3.7 4.0 1.6 3.8 2.8 3.8 2.1 4.3 3.4 3.1 2.7 3.0 1.8 2.7 4.9 4.2 4.2 5.2 3.9 2.4 -0.3 6.9 7.9 4.9 7.1 1.0 1.9 8.1 9.5 9.8 7.5 9.8 10.5 7.3 9.8 12.4 6.2 10.8 5.4 11.2 3.9 8.1 6.2 11.7 7.8 8.8 4.5 7.1 7.7 5.8 8.7 12.6 14.0 12.0 12.0 9.7 10.1 11.7
3.0 2.1 3.1 3.6 3.1 3.8 4.5 4.1 4.3 4.9 4.7 7.1 6.6 6.6 4.0 4.6 3.9 4.5 5.5 5.5 4.5 3.3 2.6 4.7 3.5 2.8 2.7 4.3 7.3 5.0 2.1 7.7 3.7 6.9 5.7 7.5 7.2 6.0 7.9 4.4 2.6 6.0 4.5 2.3 7.3 8.1 8.3 9.7 13.7 4.6 4.1 3.9 5.4 4.9 7.1 2.8 6.9 12.5 11.7 4.3 6.0
2.3 2.8 6.1 4.2 2.6 5.7 -1.2 7.6 2.2 7.1 3.1 2.1 5.1 7.6 -3.7 1.0 8.1 2.6 6.5 5.0 1.0 -0.3 4.6 1.2 9.0 1.2 7.5 5.5 -5.2 7.2 5.6 2.9 7.9 4.0 4.2 4.3 3.5 10.2 6.1 5.3 1.4 5.4 5.7 6.4 7.3 8.0 4.3 6.7 7.6 4.3 5.5 4.0 8.1 7.0 9.5 9.6 9.3 6.7 8.6 9.3 6.2
Source : Central Statistics Office. 1R : 1st Revised Estimates. 2R : 2nd Revised Estimates. 3R : 3rd Revised Estimates. Note : For the year prior to 1999-2000 totals under col. 7 may not add up to totals of individual item under col. 2 to col. 6 due to splicing technique applied independently at the level of each industry and at the total level.
http://indiabudget.nic.in A—7
A8
Economic Survey 2012-13 1.5 : GROSS DOMESTIC SAVING AND (At current prices) Gross Domestic Saving
Year
1 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(1R)
Household sector
Private corporate sector
2 681 634 695 672 774 1041 1222 1028 986 1267 1226 1237 1519 1589 1897 2596 3161 3275 3277 4375 4531 5229 5330 8020 8677 9790 11206 13679 16482 16338 18116 19013 21972 26955 32796 36666 42111 57304 67063 82985 108603 105632 127943 151454 187142 198585 224653 284127 352114 438851 463750 545288 564161 657587 763685 868988 994396 1118347 1330872 1630799 1832901 2003720
Source : Central Statistics Office.
3 93 136 64 90 118 134 155 121 140 185 281 320 344 394 389 405 424 410 439 549 672 769 806 1083 1465 1083 1181 1413 1652 2398 2339 2560 2980 3254 4040 5426 5336 5932 8486 11845 15164 20304 19968 29866 35260 59153 62540 66080 69191 87234 81062 76906 99217 129816 212519 277208 338584 469023 417467 540955 619370 644473
Gross Fixed Capital Formation
Public sector
Total (2+3+4)
4 215 309 195 181 213 247 318 336 325 351 572 654 750 929 1072 1085 941 944 1165 1361 1618 1689 1816 2363 3340 4192 5195 5253 5976 6331 6135 9120 10004 9030 8950 11322 11246 10471 11943 11900 10641 17594 16709 11674 24266 31527 31194 29583 -3146 -9238 -29266 -36820 -7148 36372 74499 88955 152929 248962 54280 10585 199662 117097
5 989 1079 954 943 1105 1422 1696 1485 1450 1803 2079 2211 2613 2912 3358 4086 4526 4629 4881 6285 6821 7687 7952 11466 13482 15066 17582 20345 24110 25068 26590 30692 34956 39239 45786 53414 58693 73707 87492 106730 134408 143530 164621 192994 246668 289265 318387 379790 418159 516847 515545 585374 656230 823775 1050703 1235151 1485909 1836332 1802619 2182339 2651933 2765290
1R : 1st Revised Estimates.
http://indiabudget.nic.in A—8
Public sector 6 264 304 324 381 453 619 721 752 817 1045 1215 1269 1510 1794 2106 2348 2360 2320 2431 2525 2742 3245 4185 4631 4948 6401 8051 8792 9638 11532 13656 17376 22276 24225 27823 32590 39723 41211 47566 52517 60013 70701 71197 79309 102134 105704 108750 112814 128621 138611 145973 160190 168143 190806 224108 271342 339617 401326 480698 543883 606245 662698
Private sector 7 704 741 650 587 659 765 1050 1051 965 958 1075 1285 1332 1580 1866 2072 2506 3075 3241 3667 3746 4234 4295 5044 7132 7494 7495 9043 10081 11032 13159 15274 16629 19780 22626 27050 29753 39993 48051 61476 79650 81765 106732 112147 126308 189342 219296 259587 298448 346055 349223 430050 432977 506672 706920 848950 1004157 1240347 1340401 1511889 1868220 2086374
2R : 2nd Revised Estimates.
Total (6+7) 8 968 1045 974 968 1112 1384 1771 1803 1782 2003 2290 2554 2842 3374 3972 4420 4866 5395 5672 6192 6488 7479 8480 9675 12080 13895 15546 17835 19719 22564 26815 32650 38905 44005 50449 59640 69476 81204 95617 113993 139663 152466 177929 191456 228442 295046 328046 372401 427069 484666 495196 590240 601120 697478 931028 1120292 1343774 1641673 1821099 2055772 2474465 2749072
Change in Stocks Public sector 9 26 30 -18 -26 45 -25 37 139 83 12 63 29 97 87 90 124 64 233 41 50 302 356 88 541 938 1447 1121 109 1100 1346 71 2006 1136 337 1676 1932 896 -1515 -493 1690 1987 -2207 2657 1974 -604 -613 1883 3553 2277 15553 9326 9079 -4740 -3076 16472 22008 16939 40597 51032 48905 47714 42510
3R : 3rd Revised Estimates.
Economic Survey 2012-13
A9
GROSS DOMESTIC CAPITAL FORMATION (` crore) Change in stocks Private sector
Gross Domestic Capital Formation
Total (9+10)
Public sector
Private sector
Valuables
Total (12+13+14)
Errors & omissions
Adjusted total
10
11
12
13
14
15
16
17
140 143 59 -42 -9 77 198 103 -81 198 265 247 260 188 272 192 450 199 55 504 507 710 322 1097 1992 676 272 1278 2118 2445 116 3747 3315 1450 3144 6383 5636 3534 9036 4324 4368 1304 7182 -3693 14676 25170 -16873 9491 -5300 26944 5831 -11050 22940 23743 63678 82381 130162 160937 55759 130266 197399 146874
165 173 40 -67 36 53 235 242 2 209 328 276 357 275 363 316 514 432 96 554 809 1066 411 1639 2929 2123 1393 1387 3218 3791 188 5753 4451 1787 4820 8314 6532 2019 8543 6014 6355 -903 9839 -1719 14072 24557 -14991 13044 -3023 42497 15158 -1971 18200 20667 80150 104389 147101 201534 106791 179171 245113 189384
290 334 306 355 498 594 758 891 900 1057 1278 1298 1607 1881 2196 2472 2424 2553 2472 2575 3044 3601 4273 5172 5886 7848 9172 8901 10738 12878 13727 19382 23412 24562 29499 34522 40619 39696 47073 54207 62000 68494 73854 81283 101530 105091 110633 116367 130898 154164 155299 169269 163403 187730 240580 293350 356556 441923 531730 592788 653959 705207
844 884 709 545 650 842 1248 1154 884 1156 1340 1532 1592 1768 2138 2264 2956 3274 3296 4171 4253 4944 4617 6141 9124 8170 7767 10321 12199 13477 13275 19021 19944 21230 25770 33433 35389 43527 57087 65800 84018 83069 113914 108454 140984 214512 202423 269078 293148 372999 355054 419000 455917 530415 770598 931331 1134319 1401284 1396160 1642155 2065618 2233248
na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na 15519 14724 14187 13957 24572 41054 41392 49709 53592 72213 116312 162836 242968
1133 1218 1014 901 1148 1437 2006 2045 1784 2212 2618 2830 3199 3649 4335 4736 5380 5827 5768 6746 7297 8545 8891 11314 15009 16018 16939 19222 22937 26355 27003 38403 43356 45792 55269 67954 76008 83223 104160 120007 146018 151563 187768 189737 242514 319603 313055 385445 424046 542682 525078 602456 633277 742717 1052231 1266073 1540583 1896799 2000103 2351255 2882413 3181423
-165 44 -95 29 -28 24 49 -87 42 -178 -58 -274 -146 -297 -377 -51 69 -361 -471 -220 -82 -380 -641 545 -874 -1070 -666 -341 1301 -707 1682 -5100 -5833 -4037 -6191 -8306 -10960 -2691 -4364 -998 6586 -4656 -9331 8048 16047 -9558 23069 16647 12475 -3848 3222 -31310 -5534 19699 11809 13680 -9151 3963 -68723 11878 -10764 -39959
968 1262 920 930 1121 1461 2056 1958 1826 2034 2560 2556 3053 3352 3958 4685 5449 5466 5297 6526 7215 8165 8249 11858 14135 14949 16273 18880 24238 25648 28684 33303 37522 41756 49078 59648 65048 80532 99796 119009 152604 146907 178437 197785 258561 310045 336125 402092 436521 538834 528299 571146 627743 762416 1064041 1279754 1531433 1900762 1931380 2363132 2871649 3141465
http://indiabudget.nic.in A—9
Gross domestic product at market prices 18 10401 11054 10850 11810 11170 11371 13547 13951 15551 16384 17942 19010 20429 23462 27367 28857 32669 38261 40512 44605 47638 50999 56214 68420 80770 86707 93422 105848 114647 125729 149642 175805 196644 229021 256611 289524 323949 368211 436893 501928 586212 673875 774545 891355 1045590 1226725 1419277 1572394 1803378 2012198 2168652 2348330 2530663 2837900 3242209 3693369 4294706 4987090 5630063 6477827 7795313 8974947
Year
19 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10(3R) 2010-11(2R) 2011-12(1R)
A10
Economic Survey 2012-13 1.6 : GROSS DOMESTIC SAVING AND (As per cent of GDP Gross Domestic Saving
Year
Household sector
1 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12(1R)
Private corporate sector
Gross Fixed Capital Formation
Public sector
Total (2+3+4)
2
3
4
5
6.5 5.7 6.4 5.7 6.9 9.2 9.0 7.4 6.3 7.7 6.8 6.5 7.4 6.8 6.9 9.0 9.7 8.6 8.1 9.8 9.5 10.3 9.5 11.7 10.7 11.3 12.0 12.9 14.4 13.0 12.1 10.8 11.2 11.8 12.8 12.7 13.0 15.6 15.3 16.5 18.5 15.7 16.5 17.0 17.9 16.2 15.8 18.1 19.5 21.8 21.4 23.2 22.3 23.2 23.6 23.5 23.2 22.4 23.6 25.2 23.5 22.3
0.9 1.2 0.6 0.8 1.1 1.2 1.1 0.9 0.9 1.1 1.6 1.7 1.7 1.7 1.4 1.4 1.3 1.1 1.1 1.2 1.4 1.5 1.4 1.6 1.8 1.2 1.3 1.3 1.4 1.9 1.6 1.5 1.5 1.4 1.6 1.9 1.6 1.6 1.9 2.4 2.6 3.0 2.6 3.4 3.4 4.8 4.4 4.2 3.8 4.3 3.7 3.3 3.9 4.6 6.6 7.5 7.9 9.4 7.4 8.4 7.9 7.2
2.1 2.8 1.8 1.5 1.9 2.2 2.4 2.4 2.1 2.1 3.2 3.4 3.7 4.0 3.9 3.8 2.9 2.5 2.9 3.1 3.4 3.3 3.2 3.5 4.1 4.8 5.6 5.0 5.2 5.0 4.1 5.2 5.1 3.9 3.5 3.9 3.5 2.8 2.7 2.4 1.8 2.6 2.2 1.3 2.3 2.6 2.2 1.9 -0.2 -0.5 -1.3 -1.6 -0.3 1.3 2.3 2.4 3.6 5.0 1.0 0.2 2.6 1.3
9.5 9.8 8.8 8.0 9.9 12.5 12.5 10.6 9.3 11.0 11.6 11.6 12.8 12.4 12.3 14.2 13.9 12.1 12.0 14.1 14.3 15.1 14.1 16.8 16.7 17.4 18.8 19.2 21.0 19.9 17.8 17.5 17.8 17.1 17.8 18.4 18.1 20.0 20.0 21.3 22.9 21.3 21.3 21.7 23.6 23.6 22.4 24.2 23.2 25.7 23.8 24.9 25.9 29.0 32.4 33.4 34.6 36.8 32.0 33.7 34.0 30.8
Source : Central Statistics Office.
1R : 1st Revised Estimates.
http://indiabudget.nic.in A—10
Public sector
Private sector
6
7
2.5 2.8 3.0 3.2 4.1 5.4 5.3 5.4 5.3 6.4 6.8 6.7 7.4 7.6 7.7 8.1 7.2 6.1 6.0 5.7 5.8 6.4 7.4 6.8 6.1 7.4 8.6 8.3 8.4 9.2 9.1 9.9 11.3 10.6 10.8 11.3 12.3 11.2 10.9 10.5 10.2 10.5 9.2 8.9 9.8 8.6 7.7 7.2 7.1 6.9 6.7 6.8 6.6 6.7 6.9 7.3 7.9 8.0 8.5 8.4 7.8 7.4
6.8 6.7 6.0 5.0 5.9 6.7 7.8 7.5 6.2 5.8 6.0 6.8 6.5 6.7 6.8 7.2 7.7 8.0 8.0 8.2 7.9 8.3 7.6 7.4 8.8 8.6 8.0 8.5 8.8 8.8 8.8 8.7 8.5 8.6 8.8 9.3 9.2 10.9 11.0 12.2 13.6 12.1 13.8 12.6 12.1 15.4 15.5 16.5 16.5 17.2 16.1 18.3 17.1 17.9 21.8 23.0 23.4 24.9 23.8 23.3 24.0 23.2
Total (6+7) 8 9.3 9.5 9.0 8.2 10.0 12.2 13.1 12.9 11.5 12.2 12.8 13.4 13.9 14.4 14.5 15.3 14.9 14.1 14.0 13.9 13.6 14.7 15.1 14.1 15.0 16.0 16.6 16.8 17.2 17.9 17.9 18.6 19.8 19.2 19.7 20.6 21.4 22.1 21.9 22.7 23.8 22.6 23.0 21.5 21.8 24.1 23.1 23.7 23.7 24.1 22.8 25.1 23.8 24.6 28.7 30.3 31.3 32.9 32.3 31.7 31.7 30.6
Economic Survey 2012-13
A11
GROSS DOMESTIC CAPITAL FORMATION at current market prices) Change in stocks
Gross Domestic Capital Formation
Public sector
Private sector
Total (9+10)
Public sector
Private Valuables Total sector (12+13+14)
9
10
11
12
13
14
0.2 0.3 -0.2 -0.2 0.4 -0.2 0.3 1.0 0.5 0.1 0.4 0.2 0.5 0.4 0.3 0.4 0.2 0.6 0.1 0.1 0.6 0.7 0.2 0.8 1.2 1.7 1.2 0.1 1.0 1.1 0.0 1.1 0.6 0.1 0.7 0.7 0.3 -0.4 -0.1 0.3 0.3 -0.3 0.3 0.2 -0.1 -0.1 0.1 0.2 0.1 0.8 0.4 0.4 -0.2 -0.1 0.5 0.6 0.4 0.8 0.9 0.8 0.6 0.5
1.3 1.3 0.5 -0.4 -0.1 0.7 1.5 0.7 -0.5 1.2 1.5 1.3 1.3 0.8 1.0 0.7 1.4 0.5 0.1 1.1 1.1 1.4 0.6 1.6 2.5 0.8 0.3 1.2 1.8 1.9 0.1 2.1 1.7 0.6 1.2 2.2 1.7 1.0 2.1 0.9 0.7 0.2 0.9 -0.4 1.4 2.1 -1.2 0.6 -0.3 1.3 0.3 -0.5 0.9 0.8 2.0 2.2 3.0 3.2 1.0 2.0 2.5 1.6
1.6 1.6 0.4 -0.6 0.3 0.5 1.7 1.7 0.0 1.3 1.8 1.5 1.7 1.2 1.3 1.1 1.6 1.1 0.2 1.2 1.7 2.1 0.7 2.4 3.6 2.4 1.5 1.3 2.8 3.0 0.1 3.3 2.3 0.8 1.9 2.9 2.0 0.5 2.0 1.2 1.1 -0.1 1.3 -0.2 1.3 2.0 -1.1 0.8 -0.2 2.1 0.7 -0.1 0.7 0.7 2.5 2.8 3.4 4.0 1.9 2.8 3.1 2.1
2.8 3.0 2.8 3.0 4.5 5.2 5.6 6.4 5.8 6.4 7.1 6.8 7.9 8.0 8.0 8.6 7.4 6.7 6.1 5.8 6.4 7.1 7.6 7.6 7.3 9.1 9.8 8.4 9.4 10.2 9.2 11.0 11.9 10.7 11.5 11.9 12.5 10.8 10.8 10.8 10.6 10.2 9.5 9.1 9.7 8.6 7.8 7.4 7.3 7.7 7.2 7.2 6.5 6.6 7.4 7.9 8.3 8.9 9.4 9.2 8.4 7.9
8.1 8.0 6.5 4.6 5.8 7.4 9.2 8.3 5.7 7.1 7.5 8.1 7.8 7.5 7.8 7.8 9.0 8.6 8.1 9.4 8.9 9.7 8.2 9.0 11.3 9.4 8.3 9.8 10.6 10.7 8.9 10.8 10.1 9.3 10.0 11.5 10.9 11.8 13.1 13.1 14.3 12.3 14.7 12.2 13.5 17.5 14.3 17.1 16.3 18.5 16.4 17.8 18.0 18.7 23.8 25.2 26.4 28.1 24.8 25.4 26.5 24.9
…. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. 0.8 0.7 0.6 0.6 0.9 1.3 1.1 1.2 1.1 1.3 1.8 2.1 2.7
http://indiabudget.nic.in A—11
Errors & omissions
Adjusted Total
Year
15
16
17
18
10.9 11.0 9.3 7.6 10.3 12.6 14.8 14.7 11.5 13.5 14.6 14.9 15.7 15.6 15.8 16.4 16.5 15.2 14.2 15.1 15.3 16.8 15.8 16.5 18.6 18.5 18.1 18.2 20.0 21.0 18.0 21.8 22.0 20.0 21.5 23.5 23.5 22.6 23.8 23.9 24.9 22.5 24.2 21.3 23.2 26.1 22.1 24.5 23.5 27.0 24.2 25.7 25.0 26.2 32.5 34.3 35.9 38.0 35.5 36.3 37.0 35.4
-1.6 0.4 -0.9 0.2 -0.2 0.2 0.4 -0.6 0.3 -1.1 -0.3 -1.4 -0.7 -1.3 -1.4 -0.2 0.2 -0.9 -1.2 -0.5 -0.2 -0.7 -1.1 0.8 -1.1 -1.2 -0.7 -0.3 1.1 -0.6 1.1 -2.9 -3.0 -1.8 -2.4 -2.9 -3.4 -0.7 -1.0 -0.2 1.1 -0.7 -1.2 0.9 1.5 -0.8 1.6 1.1 0.7 -0.2 0.1 -1.3 -0.2 0.7 0.4 0.4 -0.2 0.1 -1.2 0.2 -0.1 -0.4
9.3 11.4 8.5 7.9 10.0 12.8 15.2 14.0 11.7 12.4 14.3 13.4 14.9 14.3 14.5 16.2 16.7 14.3 13.1 14.6 15.1 16.0 14.7 17.3 17.5 17.2 17.4 17.8 21.1 20.4 19.2 18.9 19.1 18.2 19.1 20.6 20.1 21.9 22.8 23.7 26.0 21.8 23.0 22.2 24.7 25.3 23.7 25.6 24.2 26.8 24.4 24.3 24.8 26.9 32.8 34.7 35.7 38.1 34.3 36.5 36.8 35.0
1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12(1R)
2
State\UT
http://indiabudget.nic.in
A—12
1511
2651573
5033
2296
3534547
7429
128276
11074
4097390
8179
149519
12327
2715
273557
40279
335810
10808
313812
2139
172250
135706
111109
7477
3411
8619
6049
619884
69348
142917
153981
243028
30720
28873
136581
281579
17045
74388
102853
62342
4407
325955
5
2007-08
2008-09
4738370
8908
178822
13745
3168
310530
48616
392771
12509
359391
2796
203939
154827
127516
8784
4154
10341
6614
677781
82809
175503
180134
278534
34290
33115
164595
314485
22149
76234
129690
71478
5199
384005
6
( ` crore)
5433588
10089
211591
15739
3763
362570
61263
463382
14210
429999
5463
231963
176442
141318
9700
4717
11122
7436
787761
86045
202652
206200
300875
38715
39407
203822
368013
25224
87112
149028
82495
6521
441784
7
2009-10
6403939
11512
250416
18512
4193
425625
71264
536297
16183
507571
6364
286008
200329
168403
10397
5504
12305
8228
982452
102918
231355
246213
354872
43830
46029
238711
440942
27852
100117
183970
92970
7632
531139
8
2010-2011
7368223
12082
297843
21025
4691
493399
82415
609538
18478
572020
7481
325266
220618
194869
11299
N.A
13979
9115
1150616
118762
281812
290593
408737
49846
51688
279616
N.A
34658
113114
230843
103559
8691
608921
9
2011-12
16.78
4.12
17.55
20.64
24.24
13.78
21.14
14.74
10.41
20.92
7.96
20.82
17.84
19.54
10.01
10.51
19.19
7.10
20.55
26.00
16.47
12.33
16.53
9.39
10.55
18.59
16.61
15.26
9.66
23.18
8.76
9.48
17.33
10
2006-07
Source : For Sl. No. 1-32 — Directorate of Economics & Statistics of respective State Governments and for All-India — CSO. As on August 14, 2012. na :Not Available.
All-India NDP(2004-05 base)
32. Puducherry
94717
7610
30. Chandigarh
31. Delhi
1633
29. A & N islands
238629
32670
22288
190029
27. Uttarakhand
296767
9981
276711
1871
151428
113013
87921
6728
2944
7701
5503
526910
57536
127663
135104
203819
231029
8170
193645
28. West Bengal
26. Uttar Pradesh
25. Tripura
24. Tamil Nadu
23. Sikkim
112636
86108
22. Rajasthan
67987
5421
19. Nagaland
21. Punjab
2400
18. Mizoram
20. Odisha
5846
17. Meghalaya
370023
15. Maharashtra
4603
41387
14. Chhattisgarh
16. Manipur
99940
104776
12. Kerala
13. Madhya Pradesh
148729
11. Karnataka
26247
21189
23292
9. Himachal Pradesh
10. Jammu & Kashmir
27652
116104
240733
14394
58512
86222
10999
6. Goa
8. Haryana
53056
5. Jharkhand
91331
172265
70167
4. Bihar
57033
3765
269120
4
2006-07
7. Gujarat
47181
3188
201303
3
2004-05
3. Assam
2. Arunachal Pradesh
1. Andhra Pradesh
1
Sl. No.
1.7 : NET STATE DOMESTIC PRODUCT AT CURRENT PRICES 2008-09
2009-10
15.92
10.10
16.56
11.31
18.25
14.64
23.29
13.16
8.29
13.41
14.32
13.75
20.08
26.37
11.13
15.86
11.92
9.92
17.65
20.53
11.95
13.97
19.24
11.10
10.00
17.64
16.97
18.42
27.13
12.62
9.31
17.05
21.12
11
15.64
8.91
19.60
11.50
16.69
13.52
20.70
16.96
15.74
14.52
30.72
18.40
14.09
14.77
17.48
21.78
19.98
9.34
9.34
19.41
22.80
16.98
14.61
11.62
14.69
20.51
11.69
29.94
2.48
26.09
14.65
17.97
17.81
12
14.67
13.26
18.32
14.51
18.78
16.76
26.01
17.98
13.60
19.65
95.39
13.74
13.96
10.82
10.43
13.55
7.55
12.43
16.23
3.91
15.47
14.47
8.02
12.90
19.00
23.83
17.02
13.88
14.27
14.91
15.41
25.43
15.05
13
(% Growth over previous year)
2007-08
17.86
14.10
18.35
17.62
11.43
17.39
16.32
15.74
13.88
18.04
16.49
23.30
13.54
19.17
7.19
16.68
10.64
10.65
24.71
19.61
14.16
19.40
17.95
13.21
16.80
17.12
19.82
10.42
14.93
23.45
12.70
17.04
20.23
14
2010-11
15.06
4.95
18.94
13.57
11.88
15.92
15.65
13.66
14.18
12.70
17.55
13.73
10.13
15.72
8.68
N.A
13.60
10.78
17.12
15.39
21.81
18.03
15.18
13.73
12.29
17.14
N.A
24.44
12.98
25.48
11.39
13.88
14.64
15
2011-12
A12 Economic Survey 2012-13
http://indiabudget.nic.in
A—13
33103
18565
26690
30062
24394
21. Punjab
22. Rajasthan
23. Sikkim
24. Tamil Nadu
25. Tripura
24143
31206
68673
83275
97568
53778
27823
35111
16013
29081
42288
32199
24055
41883
22237
36568
28764
30952
21419
49831
24800
19028
40419
35981
25059
43395
35825
74201
95241
102980
61430
31567
42619
17785
31111
47606
36448
26882
49380
27735
39985
32488
34229
23093
57760
29385
20935
45700
42419
27448
43966
56916
50016
108708
24789
11051
21290
34352
39727
5
2007-08
40775
79306
111756
108486
69177
35487
50657
20422
35587
54137
46983
31279
55315
31416
46207
38582
40583
24773
62234
34360
25278
53046
48084
30212
49903
67388
55068
135966
25046
13728
24099
39656
46345
6
(` )
2008-09
46117
88158
129746
117371
79396
41045
62885
23661
39949
64336
90749
34982
61894
34361
50209
42715
43142
27332
71300
35121
28712
60264
51386
33648
58798
82024
63549
149164
28223
15548
27464
48662
52814
7
2009-10
53331
98719
150653
130461
85741
47738
72093
26903
44965
75449
104506
42434
68998
40412
52966
48591
47164
29684
87686
41167
32253
71434
59975
37593
68020
94464
75115
159244
31993
18928
30569
55789
62912
8
2010-11
60603
95759
175812
140073
93075
54830
82193
30052
50750
84496
121440
47506
74606
46150
56638
N.A
52971
32284
101314
46573
38669
83725
68374
42220
74899
108859
N.A
192652
35652
23435
33633
62213
71480
9
2011-12
15.02
2.18
15.33
14.80
20.16
12.55
19.26
12.60
9.05
19.99
6.43
18.65
15.70
17.99
8.21
7.74
17.76
5.02
18.74
23.28
14.41
11.42
15.18
7.83
9.32
16.43
14.86
11.99
7.98
21.21
7.29
6.94
16.10
10
2006-07
14.80
8.05
14.37
5.55
14.23
13.46
21.38
11.07
6.98
12.58
13.20
11.75
17.90
24.72
9.35
12.95
10.59
7.82
15.91
18.49
10.03
13.07
17.89
9.53
8.85
15.54
15.26
14.57
25.27
10.88
7.87
14.51
19.89
11
2007-08
2008-09
2009-10
13.82
6.88
17.34
5.35
12.61
12.42
18.86
14.83
14.39
13.72
28.91
16.36
12.02
13.27
15.56
18.76
18.56
7.27
7.75
16.93
20.75
16.07
13.35
10.07
13.50
18.40
10.10
25.07
1.04
24.22
13.19
15.44
16.66
12
13.10
11.16
16.10
8.19
14.77
15.66
24.14
15.86
12.26
18.84
93.15
11.84
11.89
9.37
8.66
10.71
6.31
10.33
14.57
2.21
13.58
13.61
6.87
11.37
17.83
21.72
15.40
9.71
12.69
13.26
13.96
22.71
13.96
13
(% Growth over previous year)
Source : For Sl. No. 1-32 — Directorate of Economics & Statistics of respective State Governments and for All-India — CSO. As on August 14, 2012. na : Not Available.
All-India Per Capita NNI (2004-05 base)
48302
17650
20. Odisha
32. Puducherry
30441
19. Nagaland
63877
24662
18. Mizoram
31. Delhi
24086
17. Meghalaya
74173
18640
16. Manipur
30. Chandigarh
36077
15. Maharashtra
40921
18559
14. Chhattisgarh
22649
15442
13. Madhya Pradesh
29. A & N islands
31871
28. West Bengal
26882
11. Karnataka
12. Kerala
12950
21734
24726
33348
9. Himachal Pradesh
10. Jammu & Kashmir
26. Uttar Pradesh
40393
37972
27. Uttarakhand
49261
32021
8. Haryana
94882
7. Gujarat
9967 19789
76968
7914
4. Bihar
19737
6. Goa
16782
3. Assam
30000
33135
18510
26610
4
2006-07
5. Jharkhand
25321
3
2. Arunachal Pradesh
2
1
2004-05
1. Andhra Pradesh
State\UT
Sl. No.
1.8 : PER CAPITA NET STATE DOMESTIC PRODUCT AT CURRENT PRICES
15.64
11.98
16.11
11.15
7.99
16.31
14.64
13.70
12.56
17.27
15.16
21.30
11.48
17.61
5.49
13.76
9.32
8.61
22.98
17.22
12.33
18.54
16.71
11.72
15.68
15.17
18.20
6.76
13.36
21.74
11.30
14.65
19.12
14
2010-11
13.64
-3.00
16.70
7.37
8.55
14.86
14.01
11.71
12.87
11.99
16.20
11.95
8.13
14.20
6.93
N.A
12.31
8.76
15.54
13.13
19.89
17.21
14.00
12.31
10.11
15.24
N.A
20.98
11.44
23.81
10.02
11.51
13.62
15
2011-12
Economic Survey 2012-13
A13
A14
Economic Survey 2012-13 1.9 : INDEX NUMBERS OF AGRICULTURAL PRODUCTION (Base : Triennium ending 2007-08 = 100)
1 A.
2007-08
2008-09
2009-10
2010-11
2011-12
2
3
4
5
6
7
Foodgrains
62.9
105.4
106.5
100.6
114.3
118.8
(a) Cereals
55.0
105.5
107.4
100.2
111.1
118.1
Rice
29.7
102.9
105.6
94.8
102.2
111.0
Wheat
14.5
105.4
108.2
108.3
116.5
125.9
Coarse Cereals
10.8
112.1
110.0
92.3
118.9
114.7
7.9
105.2
102.1
102.3
129.3
122.3
3.1
97.5
119.8
126.8
139.5
128.7
Non-foodgrains
37.1
108.6
107.6
105.0
127.9
129.5
(a) Oilseeds Totala
12.6
108.6
100.8
88.9
116.8
107.3
Groundnut
5.6
125.0
97.6
73.9
112.5
94.4
Rapeseed and Mustard
2.4
81.8
100.9
92.6
114.6
95.0
Cotton
4.4
115.9
99.7
107.5
147.7
157.6
Jute
0.6
100.5
94.7
110.4
98.4
107.1
Mesta
0.1
105.5
77.9
62.5
65.1
72.3
Tea
1.5
101.5
101.0
101.0
101.0
101.0
Coffee
0.4
95.4
95.5
105.4
110.0
110.0
Rubber
0.4
99.8
104.5
100.5
100.5
100.5
Sugarcane
8.1
106.1
86.8
89.0
104.3
108.9
Tobacco
1.1
93.0
121.0
147.4
176.9
176.9
Potato
2.1
114.6
138.4
147.2
170.4
187.4
100.0
107.0
107.0
102.8
121.0
124.1
(b) Pulses Gram B.
Weight
(b)
(c)
Fibres
Plantation Crops
(d) Others
C.
ALL COMMODITIES
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. a Includes groundnut, rapeseed & mustard, sesamum, linseed, nigerseed, castorseed, safflower, sunflower and soyabean.
http://indiabudget.nic.in A—14
Economic Survey 2012-13
A15
1.10 : INDEX NUMBERS OF AREA UNDER PRINCIPAL CROPS (Base : Triennium ending 2007-08 = 100) 2007-08
2008-09
2009-10
2010-11
2011-12
2
3
4
5
6
Foodgrains
101.2
100.9
100.0
104.4
104.3
(a) Cereals
100.9
101.6
99.5
101.8
103.3
Rice
100.3
104.0
95.7
97.9
100.4
Wheat
101.9
100.9
103.5
105.7
108.7
99.9
97.9
98.5
101.2
96.2
102.4
97.3
102.2
116.4
108.8
103.0
107.8
111.6
125.5
113.6
1 A.
Coarse Cereals (b) Pulses Gram B.
Non-foodgrains
103.0
106.0
104.2
113.8
115.5
(a) Oilseeds Totala
98.5
101.8
94.8
101.0
98.0
Groundnut
101.2
99.2
88.1
94.2
85.5
87.9
95.0
84.3
104.1
89.2
Cotton
103.7
103.6
111.6
123.8
134.1
Jute
103.2
99.6
102.8
98.1
102.6
Mesta
102.9
81.1
66.3
69.4
72.3
Tea
102.0
102.0
102.0
102.0
102.0
Coffee
100.4
102.2
103.7
105.1
105.1
Rubber
103.1
107.5
111.4
111.4
111.4
105.3
91.9
86.9
101.7
105.9
95.9
107.6
122.4
135.8
135.8
105.0
123.6
124.0
125.9
127.6
102.1
103.4
102.1
109.0
109.8
Rapeseed and Mustard (b) Fibres
(c) Plantation Crops
(d) Others Sugarcane Tobacco Potato C.
ALL COMMODITIES
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. a Includes groundnut, rapeseed & mustard, sesamum, linseed, nigerseed, castorseed, safflower, sunflower and soyabean.
http://indiabudget.nic.in A—15
A16
Economic Survey 2012-13 1.11 : INDEX NUMBERS OF YIELD OF PRINCIPAL CROPS (Base : Triennium ending 2007-08 = 100) 2007-08
2008-09
2009-10
2010-11
2011-12
2
3
4
5
6
Foodgrains
104.2
105.6
100.6
109.5
114.0
(a) Cereals
104.5
105.7
100.7
109.1
114.3
Rice
102.6
101.5
99.1
104.4
110.6
Wheat
103.4
107.2
104.7
110.2
115.8
Coarse Cereals
112.3
112.4
93.8
117.5
119.3
102.8
104.9
100.1
111.1
112.5
94.7
111.1
113.7
111.2
113.3
Non-foodgrains
105.4
101.5
100.7
112.4
112.2
(a) Oilseeds Totala
110.3
99.0
93.8
115.7
109.4
Groundnut
123.5
98.4
83.8
119.4
110.4
93.1
106.3
109.9
110.2
106.5
111.7
96.2
96.4
119.4
117.5
97.4
95.1
107.4
100.4
104.4
102.5
96.0
94.3
93.8
100.0
Tea
99.6
99.0
99.0
99.0
99.0
Coffee
95.0
93.4
101.7
104.6
104.6
Rubber
96.8
97.3
90.2
90.2
90.2
100.8
94.4
102.4
102.5
102.9
97.0
112.5
120.4
130.3
130.3
109.1
112.0
118.7
135.3
146.9
104.8
103.5
100.7
111.0
113.0
1 A.
(b) Pulses Gram B.
Rapeseed and Mustard (b) Fibres Cotton Jute Mesta (c) Plantation Crops
(d) Others Sugarcane Tobacco Potato C.
ALL COMMODITIES
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. a
Includes groundnut, rapeseed & mustard, sesamum, linseed, nigerseed, castorseed, safflower, sunflower and soyabean.
http://indiabudget.nic.in A—16
Economic Survey 2012-13
A17
1.12 : PRODUCTION OF MAJOR CROPS (Tonnes) Group/Commodity 1 Foodgrains
Unit
1970-71
1980-81
1990-91
2000-01
2
3
4
5
6
2007-08
2008-09
2009-10
2010-11
2011-12a
7
8
9
10
11
Million
108.4
129.6
176.4
196.8
230.8
234.4
218.1
244.5
257.4
Kharif
Million
68.9
77.7
99.4
102.1
121.0
118.1
104.0
120.9
129.9
Rabi
Million
39.5
51.9
77.0
94.7
109.8
116.3
114.1
123.6
127.5
Cereals
Million
96.6
119.0
162.1
185.7
216.0
219.9
203.4
226.3
240.2
Kharif
Million
65.0
73.9
94.0
97.6
114.6
113.5
99.7
113.8
123.8
Rabi
Million
31.6
45.1
68.1
88.1
101.5
106.4
103.7
112.5
116.4
Pulses
17.2
Million
11.8
10.6
14.3
11.0
14.8
14.6
14.7
18.2
Kharif
Million
3.9
3.8
5.4
4.4
6.4
4.7
4.2
7.1
6.2
Rabi
Million
7.9
6.8
8.9
6.6
8.4
9.9
10.5
11.1
11.1
Rice
Million
42.2
53.6
74.3
85.0
96.7
99.2
89.1
96.0
104.3
Kharif
Million
39.5
50.1
66.3
72.8
82.7
84.9
75.9
80.7
91.5
Rabi
Million
2.7
3.5
8.0
12.2
14.0
14.3
13.2
15.3
12.8
Wheat
Million
23.8
36.3
55.1
69.7
78.6
80.7
80.8
86.9
93.9
Jowar
Million
8.1
10.4
11.7
7.5
7.9
7.2
6.7
7.0
6.0
Kharif
Million
5.8
7.5
8.3
4.5
4.1
3.1
2.8
3.4
3.2
Rabi
Million
2.3
2.9
3.4
3.0
3.8
4.1
3.9
3.6
2.8
Maize
Million
7.5
7.0
9.0
12.0
19.0
19.7
16.7
21.7
21.6
Bajra
Million
8.0
5.3
6.9
6.8
10.0
8.9
6.5
10.4
10.1
Gram
Million
5.2
4.3
5.4
3.9
5.8
7.1
7.5
8.2
7.6
Tur
Million
1.9
2.0
2.4
2.2
3.1
2.3
2.5
2.9
2.7
Million
9.6
9.4
18.6
18.4
29.8
27.7
24.9
32.5
30.0
Oilseeds b Kharif
Million
7.0
5.0
9.8
11.9
20.7
17.8
15.7
21.9
20.8
Rabi
Million
2.6
4.4
8.8
6.5
9.0
9.9
9.2
10.6
9.2
Groundnut
Million
6.1
5.0
7.5
6.4
9.2
7.2
5.4
8.3
6.9
Kharif
Million
na
3.7
5.1
4.9
7.4
5.6
3.8
6.6
5.1
Rabi
Million
na
1.3
2.4
1.5
1.8
1.6
1.6
1.6
1.8
Rapeseed and Mustard Million
2.0
2.3
5.2
4.2
5.8
7.2
6.6
8.2
6.8
126.4
154.2
241.0
296.0
348.2
285.0
292.3
342.4
357.7
Sugarcane
Million
Cotton c
Million
4.8
7.0
9.8
9.5
25.9
22.3
24.0
33.0
35.2
Jute and Mestad
Million
6.2
8.2
9.2
10.5
11.2
10.3
11.8
10.6
11.6
Juted
Million
4.9
6.5
7.9
9.3
10.2
9.6
11.2
10.0
10.9
Mestad
Million
1.3
1.7
1.3
1.2
1.0
0.7
0.6
0.6
0.7
Tea
Million
0.4
0.6
0.7
0.8
1.0
1.0
1.0
1.0
1.0
Coffee
Million
0.1
0.1
0.2
0.3
0.3
0.3
0.3
0.3
0.3
Rubber
Million
0.1
0.2
0.3
0.6
0.8
0.9
0.8
0.8
0.8
Potato
Million
4.8
9.7
15.2
22.5
28.5
34.4
36.6
42.3
46.6
Plantation Crops
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. na : Not available. a Fourth Advance Estimates. b Includes groundnut, rapeseed & mustard, sesamum, linseed, castorseed, nigerseed, safflower, sunflower and soyabean. c Bales of 170 Kgs. d Bales of 180 Kgs.
http://indiabudget.nic.in A—17
A18
Economic Survey 2012-13 1.13 : GROSS AREA UNDER MAJOR CROPS (Million hectares)
Group/Commodity 1 Foodgrains
1970-71
1980-81
1990-91
2000-01
2007-08
2008-09
2009-10
2010-11
2
3
4
5
6
7
8
9
124.3
126.7
127.8
121.0
124.1
122.8
121.3
126.7
2011-12a 10 125.0
Kharif
82.3
83.2
80.8
75.2
73.6
71.4
69.5
72.4
72.1
Rabi
42.0
43.5
47.0
45.8
50.5
51.4
51.8
54.3
52.9
Cereals
101.8
104.2
103.2
100.7
100.4
100.7
98.0
100.3
100.2
Kharif
72.9
72.8
69.3
64.6
62.1
61.6
58.9
60.1
60.7
Rabi
28.9
31.4
33.9
36.1
38.4
39.1
39.1
40.2
39.5
Pulses
22.6
22.5
24.7
20.3
23.6
22.1
23.3
26.4
24.8
Kharif Rabi Rice Kharif
9.5
10.4
11.5
10.6
11.5
9.8
10.6
12.3
11.3
13.1
12.1
13.2
9.7
12.1
12.3
12.7
14.1
13.4
37.6
40.1
42.7
44.7
43.9
45.5
41.9
42.9
44.0
36.0
38.4
39.7
40.7
39.5
40.8
37.6
38.0
40.1
Rabi
1.6
1.7
3.0
4.0
4.5
4.7
4.3
4.8
3.9
Wheat
18.2
22.3
24.2
25.7
28.0
27.8
28.5
29.1
29.9
Jowar
17.4
15.8
14.4
9.9
7.8
7.5
7.7
7.4
6.3
10.9
10.2
8.6
4.9
3.5
2.9
3.2
3.1
2.6
Kharif Rabi
6.5
5.6
5.8
5.0
4.3
4.6
4.5
4.3
3.7
Maize
5.8
6.0
5.9
6.6
8.1
8.2
8.3
8.6
8.7
Bajra
12.9
11.7
10.5
9.8
9.6
8.8
8.9
9.6
8.7
Gram
7.8
6.6
7.5
5.2
7.5
7.9
8.2
9.2
8.3
2.7
2.8
3.6
3.6
3.7
3.4
3.5
4.4
4.0
Oilseeds b
Tur
16.6
17.6
24.1
22.8
26.7
27.5
26.0
27.2
26.4
Kharif
10.8
10.2
14.0
15.8
17.9
18.5
18.0
18.2
18.5
5.8
7.4
10.1
7.0
8.8
9.0
8.0
9.0
8.0
Groundnut
7.3
6.8
8.3
6.6
6.3
6.2
5.5
5.9
5.3
Kharif
na
5.9
6.8
5.7
5.3
5.3
4.6
5.0
4.3
Rabi
Rabi Rapeseed and Mustard
na
0.9
1.5
0.9
1.0
0.9
0.9
0.9
1.0
3.3
4.1
5.8
4.5
5.8
6.3
5.6
6.9
5.9
Sugarcane
2.6
2.7
3.7
4.3
5.1
4.4
4.2
4.9
5.1
Cotton
7.6
7.8
7.4
8.6
9.4
9.4
10.1
11.2
12.2
Jute and Mesta
1.1
1.3
1.0
1.0
1.0
0.9
0.9
0.9
0.9
Jute
0.8
0.9
0.8
0.8
0.8
0.8
0.8
0.8
0.8
Mesta
0.3
0.4
0.2
0.2
0.1
0.1
0.1
0.1
0.1
Tea
0.4
0.4
0.4
0.5
0.6
0.6
0.6
0.6
0.6
Coffee (Plucked area)
0.1
0.2
0.3
0.3
0.3
0.4
0.4
0.4
0.4
Rubber (Tapped area)
0.2
0.3
0.5
0.6
0.6
0.7
0.7
0.7
0.7
Potato
0.5
0.7
0.9
1.2
1.6
1.8
1.8
1.9
1.9
Plantation crops
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. na : Not available. a Fourth Advance Estimates. b Includes groundnut, rapeseed & mustard, sesamum, linseed, castorseed, nigerseed, safflower, sunflower and soyabean.
http://indiabudget.nic.in A—18
Economic Survey 2012-13
A19
1.14 : YIELD PER HECTARE OF MAJOR CROPS (Kg. / hectare) Group/Commodity 1 Foodgrains
2011-12a
1970-71
1980-81
1990-91
2000-01
2007-08
2008-09
2009-10
2010-11
2
3
4
5
6
7
8
9
10
872
1023
1380
1626
1860
1909
1798
1930
2059
Kharif
837
933
1231
1357
1644
1654
1496
1669
1803
Rabi
942
1195
1635
2067
2174
2263
2202
2278
2408
Cereals
949
1142
1571
1844
2151
2183
2075
2256
2396
Kharif
892
1015
1357
1512
1846
1841
1693
1893
2038
Rabi
1093
1434
2010
2438
2645
2721
2649
2800
2947
Pulses
524
473
578
544
625
659
630
691
694
410
361
471
417
557
478
397
578
543
Kharif Rabi Rice
607
571
672
604
688
804
823
790
822
1123
1336
1740
1901
2202
2178
2125
2239
2372
Kharif
1100
1303
1670
1788
2095
2081
2019
2121
2284
Rabi
1625
2071
2671
3042
3147
3009
3053
3176
3275
Wheat
1307
1630
2281
2708
2802
2907
2839
2989
3140
Jowar
466
660
814
764
1021
962
860
949
954
Kharif
533
737
969
938
1176
1055
853
1119
1249
Rabi
354
520
582
594
894
904
865
827
748
Maize
1279
1159
1518
1822
2335
2414
2024
2540
2476
Bajra
622
458
658
688
1042
1015
731
1079
1156
Gram
663
657
712
744
762
895
915
895
912
Tur
709
689
673
618
826
671
711
655
656
Oilseeds b
579
532
771
810
1115
1007
958
1193
1135
Kharif
649
492
698
757
1154
961
875
1203
1124
Rabi
449
588
872
929
1034
1097
1146
1174
1160
Groundnut
834
736
904
977
1459
1163
991
1411
1305
Kharif
na
629
751
861
1386
1063
835
1335
1186
Rabi
na
1444
1611
1756
1857
1764
1830
1846
1805
594
560
904
935
1001
1143
1183
1185
1145
48
58
65
69
69
65
70
70
70
Rapeseed and Mustard Sugarcane (tonnes/hect.) Cotton Jute and mesta Jute Mesta
106
152
225
190
467
403
403
499
491
1032
1130
1634
1867
2101
2071
2349
2192
2283
1186
1245
1833
2026
2260
2207
2492
2329
2422
684
828
988
1078
1219
1141
1121
1115
1189
1182
1491
1794
1673
1705
1695
1695
1695
1695
Plantation Crops Tea Coffee
814
624
759
959
761
748
815
838
838
Rubber
653
788
1076
1576
1299
1306
1211
1211
1211
10
13
16
18
18
19
20
23
25
Potato (tonnes/hect.)
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. na : Not available. a Fourth Advance Estimates. b Includes groundnut, rapeseed & mustard, sesamum, linseed, castorseed, nigerseed, safflower, sunflower and soyabean.
http://indiabudget.nic.in A—19
A20
Economic Survey 2012-13
1.15 : PRODUCTION OF IMPORTANT CROPS IN THREE LARGEST PRODUCING STATES IN 2011-12a (Production Million tonnes) Crops/Groups of Crops
States
1 I.
Production
2
Per cent Share of Production to All India
3
Cumulative Per cent Share of Production
4
5
Foodgrains Rice
Wheat
Maize
West Bengal
14.85
14.24
14.24
Uttar Pradesh
14.03
13.45
27.68
Andhra Pradesh
12.89
12.36
40.04
Uttar Pradesh
30.29
32.26
32.26
Punjab
17.21
18.33
50.59
Haryana
12.68
13.50
64.09
4.09
18.96
18.96
Karnataka
Total Coarse Cereals
Total Pulses
Total Foodgrains
Andhra Pradesh
3.76
17.43
36.39
Maharashtra
2.30
10.66
47.06
Rajasthan
7.03
16.73
16.73
Karnataka
6.91
16.45
33.18 47.42
Maharashtra
5.98
14.23
Madhya Pradesh
4.16
24.17
24.17
Uttar Pradesh
2.43
14.12
38.29
Rajasthan
2.36
13.71
52.00 19.53
Uttar Pradesh
50.29
19.53
Punjab
28.35
11.01
30.55
Madhya Pradesh
19.05
7.40
37.95
Gujarat
2.64
38.10
38.10
Tamil Nadu
1.07
15.44
53.54
Andhra Pradesh
0.85
12.27
65.80
Rajasthan
2.97
43.81
43.81
Madhya Pradesh
0.87
12.83
56.64
Haryana
0.86
12.68
69.32
Madhya Pradesh
6.28
51.14
51.14
Maharashtra
4.03
32.82
83.96
Rajasthan
1.39
11.32
95.28
Karnataka
0.19
38.00
38.00
II. Oilseeds Groundnut
Rapeseed & Mustard
Soyabean
Sunflower
Total Oilseeds
Andhra Pradesh
0.12
24.00
62.00
Maharashtra
0.05
10.00
72.00
Madhya Pradesh
7.72
25.72
25.72
Rajasthan
5.73
19.09
44.82
Gujarat
4.93
16.43
61.25 36.02
III. Other Cash Crops Sugarcane
Uttar Pradesh
Cottonb
Jute & Mestac
128.82
36.02
Maharashtra
81.86
22.89
58.90
Tamil Nadu
39.28
10.98
69.89
Gujarat
12.00
34.09
34.09
Maharashtra
7.20
20.45
54.55
Andhra Pradesh
4.90
13.92
68.47
West Bengal
8.62
74.50
74.50
Bihar
1.89
16.34
90.84
Assam
0.64
5.53
96.37
Source : Directorate of Economics and Statistics, Department of Agriculture and Cooperation. a
Fourth Advance Estimates.
b
Production in million bales of 170 kgs.
http://indiabudget.nic.in A—20
c
Production in million bales of 180 kgs.
Economic Survey 2012-13
A21
1.16 : NET AVAILABILITY OF CEREALS AND PULSES Year
Cereals Population (million)
1
Net production (million tonnes)
2
3
Net imports (million tonnes) 4
Pulses
Change in Government stocks (million tonnes) 5
Net availability (Col. 3+4-5) (million tonnes) 6
Net availability (million tonnes)
Per capita net availability per day (grams) Cereals
Pulses
Total
7
8
9
10
1961
442.4
60.9
3.5
(-)0.2
64.6
11.1
399.7
69.0
468.7
1971
551.3
84.5
2.0
(+)2.6
84.0
10.3
417.6
51.2
468.8
1972
563.9
82.3
(-)0.5
(-)4.7
86.5
9.7
419.1
47.0
466.1
1973
576.8
76.2
3.6
(-)0.3
80.1
8.7
350.5
41.1
421.6
1974
590.0
82.8
5.2
(-)0.4
88.4
8.8
410.4
40.8
451.2
1975
603.5
78.6
7.5
(+)5.6
80.6
8.8
365.8
39.7
405.5
1976
617.2
94.5
0.7
(+)10.7
84.4
11.4
373.8
50.5
424.3
1977
631.3
87.3
0.1
(-)1.6
89.0
10.0
386.3
43.3
429.6
1978
645.7
100.1
(-)0.8
(-)0.3
99.6
10.7
422.5
45.5
468.0 476.5
1979
660.3
104.8
(-)0.3
(+)0.4
104.1
10.8
431.8
44.7
1980
675.2
88.5
(-)0.5
(-)5.8
93.8
7.6
379.5
30.9
410.4
1981
688.5
104.1
0.5
(-)0.2
104.8
9.4
417.3
37.5
454.8
1982
703.8
106.6
1.6
(+)1.3
106.8
10.1
415.6
39.2
454.8
1983
718.9
103.0
4.1
(+)2.7
104.4
10.4
397.8
39.5
437.3
1984
734.5
122.0
2.4
(+)7.1
117.4
11.3
437.8
41.9
479.7
1985
750.4
116.9
(-)0.3
(+)2.7
113.9
10.5
415.6
38.4
454.0
1986
766.5
119.9
(-)0.1
(-)1.6
121.5
12.3
434.2
43.9
478.1
1987
782.7
115.2
(-)0.4
(-)9.5
124.4
10.4
435.4
36.4
471.8 448.5
1988
799.2
113.2
2.3
(-)4.6
120.1
10.7
411.8
36.7
1989
815.8
136.6
0.8
(+)2.6
134.7
12.5
452.6
41.9
494.5
1990
832.6
138.4
...
(+)6.2
132.3
12.5
435.3
41.1
476.4
1991
851.7
141.9
(-)0.6
(-)4.4
145.7
12.9
468.5
41.6
510.1
1992
867.8
136.8
(-)0.7
(-)1.6
137.7
10.9
434.5
34.3
468.8
1993
883.9
145.8
2.6
(+)10.3
138.1
11.7
427.9
36.2
464.1
1994
899.9
149.6
0.5
(+)7.5
142.6
12.2
434.0
37.2
471.2
1995
922.0
155.3
(-)3.0
(-)1.7
154.0
12.7
457.6
37.8
495.4
1996
941.6
147.1
(-)3.5
(-)8.5
152.1
11.3
442.5
32.7
475.2
1997
959.8
162.0
(-)0.6
(-)1.8
163.2
13.0
466.0
37.1
503.1
1998
978.1
156.9
(-)2.9
(+)6.1
147.9
11.7
414.2
32.8
447.0
1999
996.4
165.1
(-)1.5
(+)7.5
156.1
13.3
429.2
36.5
465.7
2000
1014.8
171.8
(-)1.4
(+)13.9
156.6
11.7
422.7
31.8
454.4
2001
1033.2
162.5
(-)4.5
(+)12.3
145.6
11.3
386.2
30.0
416.2
2002
1050.6
174.5
(-)8.5
(-)9.9
175.9
13.6
458.7
35.4
494.1
2003
1068.2
143.2
(-)7.1
(-)23.2
159.3
11.3
408.5
29.1
437.6
2004
1085.6
173.5
(-)7.7
(-)3.3
169.1
14.2
426.9
35.8
462.7
2005
1102.8
162.1
(-)7.2
(-)2.4
157.3
12.7
390.9
31.5
422.4
2006
1119.8
170.8
(-)3.8
(-)1.8
168.8
13.3
412.8
32.5
445.3
2007
1136.6
177.7
(-)7.0
(+)1.7
169.0
14.7
407.4
35.5
442.8
2008
1153.1
197.2
(-)14.4
(+)17.0
165.9
17.6
394.2
41.8
436.0
2009
1169.4
192.4
(-)7.2
(+)11.5
173.7
15.8
407.0
37.0
444.0
2010
1185.8
178.0
(-)4.7
(-)0.5
173.8
15.3
401.7
35.4
437.1
2011(P)
1201.9
198.2
(-)4.2
(+)8.3
185.8
17.3
423.5
39.4
462.9
Sources : 1. Directorate of Economics and Statistics, Department of Agriculture & Cooperation. 2. Registrar General of India. P Provisional ... Negligible Notes : 1. Population figure relates to mid year. 2. Production figures relate to the agricultural year July-June: 1961 figures correspond to the production of 1960-61 and so on for subsequent years. 3. The net availability of foodgrains is estimated to be gross production [-] seed,feed and wastage, [-] exports[+]imports, [+/-] change in stocks. 4. The net availability of foodgrains divided by the population estimates for a particular year indicate per capita availability of foodgrains in terms of kg/year. Net availability, thus worked out further divided by the number of days in a year i.e., 365 days gives us net availability of foodgrains in terms of grams/day. 5. Figures in respect of per capita net availability given above are not strictly representative of actual level of consumption in the country especially as they do not take into account any change in stocks in possession of trader, producers and consumers. 6. For calculation of per capita net availability, the figure of net imports from 1981 to 1994 are based on imports and exports on Government of India account only. Net import from 1995 are, however, based on the total exports and imports (both Government as well as Private accounts).
http://indiabudget.nic.in A—21
A22
Economic Survey 2012-13 1.17 : NET AVAILABILITY, PROCUREMENT AND PUBLIC DISTRIBUTION OF FOODGRAINS (Million tonnes)
Year
Net production of foodgrains
Net imports
Net availability of foodgrainsa
Procurement
Public distribution b
Col. 3 as per cent of Col. 4
Col. 5 as per cent of Col. 2
Col. 6 as per cent of Col. 4
1
2
3
4
5
6
7
8
9
1951
48.1
4.8
52.4
3.8
8.0
9.2
7.9
15.3
1961
72.0
3.5
75.7
0.5
4.0
4.6
0.7
5.3
1971
94.9
2.0
94.3
8.9
7.8
2.1
9.3
8.3
1972
92.0
(-)0.5
96.2
7.7
10.5
(-)0.5
8.3
10.9
1973
84.9
3.6
88.8
8.4
11.4
4.0
9.9
12.8
1974
91.6
5.2
97.1
5.6
10.8
5.3
6.2
11.1
1975
87.4
7.5
89.3
9.6
11.3
8.4
10.9
12.6
1976
105.9
0.7
95.8
12.8
9.2
0.7
12.1
9.6
1977
97.3
0.1
99.0
9.9
11.7
0.1
10.1
11.8
1978
110.6
(-)0.6
110.2
11.1
10.2
(-)0.5
10.0
9.2
1979
115.4
(-)0.2
114.9
13.8
11.7
(-)0.2
12.0
10.2
1980
96.0
(-)0.3
101.4
11.2
15.0
(-)0.3
11.6
14.8
1981
113.4
0.7
114.3
13.0
13.0
0.6
11.4
11.4
1982
116.6
1.6
116.9
15.4
14.8
1.4
13.2
12.6
1983
113.3
4.1
114.7
15.6
16.2
3.5
13.7
14.1
1984
133.3
2.4
128.6
18.7
13.3
1.8
14.0
10.4
1985
127.4
(-)0.4
124.3
20.1
15.8
(-)0.3
15.8
12.7
1986
131.6
0.5
133.8
19.7
17.3
0.4
15.0
12.9
1987
125.5
(-)0.2
134.8
15.7
18.7
(-)0.1
12.5
13.8
1988
122.8
3.8
130.8
14.1
18.6
2.9
11.5
14.2
1989
148.7
1.2
147.2
18.9
16.4
0.8
12.7
11.1
1990
149.7
1.3
144.8
24.0
16.0
0.9
16.0
11.0
1991
154.3
(-)0.1
158.6
19.6
20.8
...
12.7
13.1
1992
147.3
(-)0.4
148.5
17.9
18.8
(-)0.3
12.2
12.7
1993
157.5
3.1
149.8
28.1
16.4
2.1
17.9
10.9
1994
161.2
1.1
154.8
26.0
14.0
0.7
16.1
9.1
1995
167.6
(-)2.6
166.7
22.6
15.3
(-)1.6
13.5
9.0
1996
157.9
(-)3.1
163.3
19.8
18.3
(-)1.9
12.5
11.2
1997
174.5
(-)0.1
176.2
23.6
17.8
...
13.5
10.1
1998
168.2
(-)2.5
159.6
26.3
18.6
(-)1.6
15.6
11.1
1999
178.2
(-)1.3
169.4
30.8
17.7
(-)0.8
17.3
9.9
2000
183.6
(-)1.4
168.3
35.6
13.0
(-)0.8
19.4
7.7
2001
172.2
(-)2.9
156.9
42.6
13.2
(-)1.8
24.7
8.4
2002
186.2
(-)6.7
189.5
40.3
18.2
(-)3.5
21.7
9.6
2003
152.9
(-)5.5
170.6
34.5
23.2
(-)2.8
22.6
13.2
2004
186.5
(-)6.5
183.3
41.1
28.3
(-) 3.5
22.0
15.5
2005
173.6
(-)6.0
170.0
41.5
31.0
(-) 3.5
23.9
18.2
2006
182.5
(-)2.3
181.9
37.0
31.8
(-) 1.3
20.3
17.5
2007
190.1
(-)4.7
183.7
35.8
32.8
(-) 2.6
18.8
17.8
2008
210.2
(-) 9.7
183.5
54.2
34.7
(-) 5.3
25.8
18.9
2009
205.2
(-) 4.1
189.5
60.5
41.3
(-) 2.2
29.5
21.8
2010
190.8
(-) 2.2
189.2
56.1
43.7
(-)1.2
29.4
23.1
2011(P)
214.2
(-) 2.9
203.1
64.5
47.9
(-)1.4
30.1
23.6
Sources : 1. Department of Food and Public Distribution. 2. Directorate of Economics & Statistics, Department of Agriculture & Cooperation. a b
Notes :
P Provisional ... Negligible Net availability = Net production+Net imports - changes in Government stocks. Includes quantities released under the Food for Work Programme during the years 1978 to 1990.
1. Production figures relate to agricultural year: 1951 figures correspond to 1950-51 and so on. Figures for procurement and public distribution relate to calender years. 2. Net Imports from 1981 to 1994 are only on Government account and from 1995 onwards the net Imports are total Imports and Exports of the Country.
http://indiabudget.nic.in A—22
A23
Economic Survey 2012-13 1.18 : PER CAPITA AVAILABILITY OF CERTAIN IMPORTANT ARTICLES OF CONSUMPTION Clothd Edible oil a (Kg.)
Year 1
Vanaspati b (Kg.)
2
1960-61 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12P
3.2 3.5 3.0 2.4 3.4 3.3 3.5 3.2 3.8 3.8 3.7 3.8 5.1 4.5 5.8 5.5 5.0 5.0 5.8 5.3 5.3 5.5 5.4 5.8 6.1 6.3 7.0 8.0 6.2 8.5 9.0 8.2 8.8 7.2 9.9 10.2 10.6 11.1 11.4 12.7 13.3 13.6 13.8
Sugar (Nov.-Oct.) (Kg.)c
3 0.8 1.0 1.1 1.0 0.8 0.6 0.8 0.9 0.9 1.0 1.0 1.2 1.3 1.3 1.2 1.3 1.3 1.2 1.2 1.2 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.3 1.4 1.3 1.4 1.4 1.2 1.1 1.1 1.2 1.2 1.3 1.1 1.0 1.0
4 4.8 7.4 6.8 6.2 6.1 5.8 6.1 6.0 7.2 9.6 7.8 7.3 8.2 9.0 10.5 10.7 11.1 11.4 11.7 12.1 12.3 12.7 13.0 13.7 12.5 13.2 14.1 14.6 14.5 14.9 15.6 15.8 16.0 16.3 16.1 15.5 16.3 16.8 17.8 18.8 17.9 17.0 18.1
Cotton e (meters)
Man-made (meters)
5
Total (meters)
6
13.8 13.6 12.4 13.2 12.0 12.9 12.6 11.4 9.5 10.2 10.1 12.9 12.2 11.8 12.6 12.6 15.4 15.2 14.0 15.0 14.6 15.1 13.7 15.6 15.9 15.2 16.3 16.2 15.9 13.1 14.2 14.2 14.8 14.4 13.4 14.1 16.4 18.0 19.0 17.9 19.7 21.4 19.8
1.2 2.0 2.2 2.0 1.9 1.7 2.0 2.4 4.0 4.8 4.6 4.4 4.9 4.3 4.7 4.6 6.1 6.6 7.0 8.0 8.1 9.0 9.2 8.9 10.3 10.8 11.7 13.1 15.0 15.1 16.4 16.5 17.2 17.0 17.6 19.4 19.7 21.6 22.8 21.1 23.4 22.6 20.7
Sources : 1. Directorate of Vanaspati, Vegetable Oils & Fats, Ministry of Consumer Affairs, Food & Public Distribution. 2. Directorate of Sugar, Ministry of Consumer Affairs, Food & Public Distribution. 3. Ministry of Textiles. na : Notes:
a b c d e f
Not available.
P
Tea (Gram)
Coffee f (Gram)
7
8
9
15.0 15.6 14.6 15.2 13.9 14.6 14.6 13.8 13.5 15.0 14.7 17.3 17.1 16.1 17.3 17.2 21.5 21.8 21.0 23.0 22.7 24.1 22.9 24.5 26.2 26.0 28.0 29.3 30.9 28.2 30.6 30.7 32.0 31.4 31.0 33.5 36.1 39.6 41.9 39.0 43.1 44.0 40.5
296.0 401.0 426.0 458.0 492.0 471.0 446.0 450.0 516.0 599.0 521.0 511.0 466.0 525.0 519.0 576.0 589.0 545.0 592.0 612.0 571.0 612.0 655.0 649.0 667.0 664.0 646.0 657.0 635.0 684.0 642.0 631.0 650.0 623.0 662.0 663.0 687.0 687.0 701.0 704.0 709.0 715.0 728.0
80.0 65.0 65.0 69.0 64.0 62.0 62.0 71.0 73.0 77.0 73.0 79.0 79.0 82.0 78.0 72.0 71.0 76.0 72.0 79.0 65.0 59.0 64.0 60.0 56.0 55.0 55.0 58.0 58.0 65.0 55.0 58.0 67.0 67.0 70.0 72.0 75.0 77.0 80.0 82.0 86.0 90.0 95.0
Electricity Domestic (KWH) 10 3.4 7.0 7.3 7.3 8.1 8.8 9.7 10.4 10.9 11.9 12.1 13.5 15.1 17.0 18.3 21.0 22.9 25.1 28.2 30.9 36.1 38.2 41.9 45.6 48.8 53.0 56.2 58.6 62.9 66.7 71.2 75.2 76.8 79.0 83.6 87.8 90.4 98.8 106.0 112.7 121.2 130.9 na
4. Tea Board. 5. Coffee Board. 6. Central Electricity Authority, Ministry of Power.
: Provisional.
Includes groundnut oil, rapeseed and mustard oil, sesamum oil, nigerseed oil, soyabean oil and sunflower oil but excludes oil for manufacture of vanaspati. Relates to calendar year. Relates to actual releases for domestic consumption. The data of cloth; prior to 1980-81 is calender year wise; in meters upto 1984-85; in square meter from 1985-86 onwards. Figures for blended/mixed fabrics were not separately available prior to 1969. These have been included under man-made fibre fabrics after 1969. Figures up to 1971-72 relate to coffee season and are thereafter on calendar year basis. The figures for 1972-73 correspond to 1973 and so on.
http://indiabudget.nic.in A—23
A24
Economic Survey 2012-13 1.19 : PRODUCTION, IMPORTS AND CONSUMPTION OF FERTILIZERS (Thousand tonnes of nutrients) 1970-71
1980-81
1990-91
2000-01
2007-08
2008-09
2009-10
2010-11
2011-12
2
3
4
5
6
7
8
9
10
A. Nitrogenous fertilizers Production Imports Consumption
830 477 1487
2164 1510 3678
6993 414 7997
11004 154 10920
10900 3677 14419
10870 3844 15090
11900 3447 15580
12156 4492 16558
12259 5240 17261
B. Phosphatic fertilizers Production Imports Consumption
229 32 462
842 452 1214
2052 1311 3221
3748 396 4215
3807 1391 5515
3464 2927 6506
4321 2756 7274
4222 3802 8050
4104 4427 7648
C. Potassic fertilizers Imports Consumption
120 228
797 624
1328 1328
1541 1567
2653 2636
3380 3313
2945 3632
4069 3514
3335 2658
D. All fertilizers (NPK) Production Imports Consumption
1059 629 2177
3006 2759 5516
9045 2758 12546
14752 2090 19702
14707 7721 22570
14334 10151 24909
16221 9148 26486
16378 12363 28122
16363 13002 27567
1
Source :
Ministry of Chemicals & Fertilizers, Department of Fertilizers.
1.20 : PRODUCTION OF MAJOR LIVESTOCK PRODUCTS AND FISH Year 1
Milk (Million tonnes)
Eggs (Million Nos.)
Fish (Thousand tonnes)
2
3
1950-51
17.0
1832
1960-61
20.0
2881
1160
1970-71
22.0
6172
1756
1980-81
31.6
10060
2442
1990-91
53.9
21101
3836
2000-01
80.6
36632
5656
2005-06
97.1
46235
6572
2006-07
102.6
50663
6869
2007-08
107.9
53583
7127
2008-09
112.2
55562
7620
2009-10
116.4
60267
7914
2010-11
121.8
63024
8400
2011-12
127.9
66450
8700
Source : Department of Animal Husbandry, Dairying & Fisheries.
http://indiabudget.nic.in A—24
4 752
Economic Survey 2012-13
A25
1.21 : PRODUCTION OF COAL AND LIGNITE (Million tonnes) Coal Year
Lignite
Coking
Non-coking
Metallurgical
Non-Metallurgical
2
3
1 1950-51 1960-61 1970-71 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 a 2002-03 a 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12P
na 16.99 17.82 24.59 26.89 30.10 30.11 30.57 29.07 27.91 26.28 25.16 24.50 24.10 26.33 25.72 25.99 24.54 23.53 22.64 24.16 23.82 21.23 19.31 17.96 18.35 18.27 18.19 16.97 17.23 18.07 17.30 17.73 17.70 16.20
Source : Ministry of Coal na : Not available.
4
na na na 8.03 9.23 7.47 6.24 6.04 6.57 11.63 14.73 17.56 19.93 21.20 19.95 19.64 19.07 19.71 16.57 17.90 19.34 15.36 12.02 11.77 10.71 11.84 11.13 12.03 14.54 14.87 16.39 17.51 26.68 31.85 35.46 a
5
na 38.24 55.13 81.29 88.11 92.93 101.87 110.80 118.56 126.23 138.71 151.88 156.46 166.43 183.00 192.90 200.98 209.55 230.03 245.12 252.43 253.09 266.72 278.55 299.12 311.08 331.85 352.39 375.53 398.74 422.63 457.95 487.63 483.15 488.29
6
32.30 na na 113.91 124.23 130.50 138.22 147.41 154.20 165.77 179.72 194.60 200.89 211.73 229.28 238.26 246.04 253.80 270.13 285.66 295.93 292.27 299.97 309.63 327.79 341.29 361.25 382.61 407.04 430.83 457.08 492.76 532.04 532.69 539.94 P Figures
Including Meghalaya Coal.
Total coal and lignite (5)+(6)
Total
7
na na 3.39 5.11 6.31 6.93 7.30 7.80 8.05 9.43 11.16 12.40 12.80 13.77 14.55 16.62 18.10 19.34 22.14 22.54 23.05 23.42 22.12 22.95 24.81 26.02 27.96 30.34 30.06 31.29 33.98 32.42 34.07 37.74 43.11
na na na 119.02 130.54 137.43 145.52 155.21 162.25 175.20 190.88 207.00 213.69 225.50 243.83 254.88 264.14 273.14 292.27 308.20 318.98 315.69 322.09 332.58 352.60 367.29 389.25 412.95 437.11 462.12 491.01 525.18 566.11 570.43 583.05
are provisional.
1.22 : PRODUCTION OF FABRICS (million sq. mtrs.) Sector
2004-05
1 Mill sector Power looms (inc. Hosiery) Handloom Others Total
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12P
2
3
4
5
6
7
8
9
1526
1656
1746
1781
1796
2016
2205
2313
37437
41044
44383
46529
45725
50699
52649
50391
5722
6108
6536
6947
6677
6806
6907
6901
693
769
724
768
768
812
798
848
45378
49577
53389
56025
54966
60333
62559
60453
Share in output (per cent) 3.4
3.3
3.3
3.2
3.3
3.3
3.5
3.8
Power looms (inc. Hosiery)
Mill sector
82.5
82.8
83.1
83.1
83.2
84.1
84.2
83.4
Handlooms
12.6
12.3
12.2
12.4
12.1
11.3
11.0
11.4
1.5
1.6
1.4
1.4
1.4
1.3
1.3
1.4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Others Total
Source : Office of Textile Commissioner, Mumbai. P:
Provisonal
http://indiabudget.nic.in A—25
A26
Economic Survey 2012-13
1.23 A : PROGRESS OF ELECTRICITY SUPPLY (UTILITIES AND NON-UTILITIES) INSTALLED PLANT CAPACITY Utilities Year
Non-
(Thousand MW) Total (5)+(6)
Hydro
Thermal+Resb
Nuclear
Total
Utilities
2
3
4
5
6
7
0.6 1.9 6.4 11.8 13.1 13.9 14.5 15.5 16.2 17.3 17.8 18.3 18.8 19.2 19.6 20.4 20.8 21.0 21.7 21.9 22.4 23.9 25.1 26.3 26.8 29.5 30.9 32.3 34.7 35.9 36.9 36.9 37.6 39.0
1.1 2.7 7.9 17.6 21.4 24.4 27.0 30.0 31.8 35.6 39.7 43.8 45.8 48.1 50.7 54.4 58.1 60.1 61.9 65.0 68.7 71.3 73.6 76.0 78.4 80.5 84.7 88.6 93.7 103.0 107.0 118.0 131.3 156.1
0 0 0.4 0.9 0.9 1.1 1.1 1.3 1.3 1.3 1.5 1.5 1.5 1.8 2.0 2.0 2.2 2.2 2.2 2.2 2.2 2.7 2.9 2.7 2.7 2.7 2.8 3.4 3.9 4.1 4.1 4.6 4.8 4.8
1.7 4.6 14.7 30.3 35.4 39.4 42.6 46.8 49.3 54.2 59.0 63.6 66.1 69.1 72.3 76.8 81.1 83.3 85.8 89.1 93.3 97.9 101.6 105.0 107.9 112.7 118.4 124.3 132.3 143.0 148.0 159.4 173.7 199.9
0.6 1.0 1.6 3.1 3.9 4.4 5.1 5.5 5.7 6.3 7.5 8.2 8.6 9.3 10.1 10.7 11.2 11.8 12.1 13.2 14.1 14.7 16.2 17.1 18.3 18.7 19.1 21.3 22.3 25.0 27.0 31.5 34.4 36.5
2.3 5.6 16.3 33.4 39.3 43.8 47.7 52.3 55.0 60.5 66.5 71.8 74.7 78.4 82.4 87.5 92.3 95.1 97.9 102.3 107.4 112.6 117.8 122.1 126.2 131.4 137.5 145.6 154.6 168.0 175.0 190.9 208.1 236.4
1 1950-51a 1960-61 1970-71 1980-81 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12P
B : ENERGY GENERATED (GROSS)
(Billion KwH)
Utilities Year
Hydro
1 1950-51a 1960-61 1970-71 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09a 2009-10 2010-11 2011-12P Source : Ministry of Power. P Provisional
Thermal+Resb
Non-
Nuclear
Total
Utilities
Total (5)+(6)
2
3
4
5
6
7
2.5 7.8 25.2 38.0 47.1 45.5 56.5 49.6 48.4 50.0 53.9 51.0 53.8 47.5 57.9 62.1 71.7 72.8 69.9 70.4 82.7 72.6 68.9 74.6 82.9 80.6 74.5 73.5 64.0 75.2 84.6 101.5 113.5 120.4 110.1 104.1 114.4 130.5
2.6 9.1 28.2 51.1 52.6 56.3 61.3 69.5 79.9 86.7 98.8 114.4 128.9 149.6 157.7 178.7 186.5 208.7 224.8 248.2 262.1 299.3 317.9 337.0 353.7 386.8 408.1 424.4 449.3 472.1 492.8 506.0 538.4 585.3 616.2 677.1 704.3 759.4
…. …. 2.4 2.3 2.8 2.9 3.0 3.0 2.0 3.5 4.1 5.0 5.0 5.0 5.8 4.6 6.1 5.5 6.7 5.4 5.6 8.0 9.1 10.1 11.9 13.3 16.9 19.5 19.4 17.8 17.0 17.3 18.8 16.9 14.9 18.6 26.3 33.3
5.1 16.9 55.8 91.4 102.5 104.7 120.8 122.1 130.3 140.2 156.8 170.4 187.7 202.1 221.4 245.4 264.3 287.0 301.4 324.0 350.4 379.9 395.9 421.7 448.5 480.7 499.5 517.4 532.7 565.1 594.4 623.8 670.7 722.6 741.2 799.8 844.8 923.2
1.5 3.2 5.4 7.6 7.6 8.2 8.4 9.0 10.0 10.8 12.3 13.0 13.6 16.9 19.9 23.0 25.1 28.6 31.3 32.3 35.1 38.2 40.8 44.1 48.4 51.5 55.0 61.7 63.8 68.2 71.4 73.6 81.8 90.5 99.7 106.1 120.9 128.2
6.6 20.1 61.2 99.0 110.1 112.9 129.2 131.1 140.3 151.0 169.1 183.4 201.3 219.0 241.3 268.4 289.4 315.6 332.7 356.3 385.5 418.1 436.7 465.8 496.9 532.2 554.5 579.1 596.5 633.3 665.8 697.4 752.5 813.1 840.9 906.0 965.7 1051.4
a
Calendar year
b Res: Renewable Energy Sources includes Small Hydro Projects, Wind Power, Biomass Power, Biomass Gasifier, Urban & Industrial Waste & Solar Power.
http://indiabudget.nic.in A—26
A27
Economic Survey 2012-13 1.24 : PATTERN OF ELECTRICITY CONSUMPTION (UTILITIES)
(per cent) Year
Domestic
1
Commercial
2
1950-51 1960-61 1970-71 1980-81 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Industry
3
12.6 10.7 8.8 11.2 12.7 12.9 13.6 14.0 14.2 15.2 15.5 16.9 16.8 17.3 18.0 18.2 18.5 18.7 19.7 20.3 21.0 22.2 23.9 24.7 24.6 24.9 24.8 24.3 24.4 24.0 24.7 24.9 25.2
Traction
Agriculture
5
6
7
7.4 3.3 3.2 2.7 2.8 2.6 2.5 2.5 2.4 2.5 2.3 2.3 2.2 2.2 2.3 2.3 2.3 2.3 2.4 2.3 2.4 2.6 2.6 2.5 2.6 2.6 2.5 2.4 2.4 2.2 2.2 2.2 2.2
3.9 6.0 10.2 17.6 18.6 17.8 18.4 19.1 21.7 24.2 24.3 25.1 26.4 28.2 28.7 29.7 30.5 30.9 30.0 30.8 31.4 29.2 26.8 25.3 24.9 24.1 22.9 21.9 21.7 20.6 20.4 21.0 20.5
6.0 4.5 4.3 4.4 4.4 4.5 4.2 4.0 4.3 4.5 4.6 4.3 4.5 4.5 4.4 4.3 4.0 4.2 4.5 4.7 4.9 4.9 5.6 6.7 6.5 6.1 6.1 5.9 5.1 6.5 5.4 4.8 5.4
4
7.5 6.1 5.9 5.7 6.1 6.4 6.1 5.9 5.7 6.1 6.2 5.4 5.9 5.8 5.7 5.9 6.1 6.1 6.2 6.5 6.4 6.3 7.1 7.5 7.5 7.8 8.1 8.7 8.8 9.2 10.2 10.4 10.4
62.6 69.4 67.6 58.4 55.4 55.8 55.2 54.5 51.7 47.5 47.1 46.0 44.2 42.0 40.9 39.6 38.6 37.8 37.2 35.4 33.9 34.8 34.0 33.3 33.9 34.5 35.6 36.8 37.6 37.5 37.1 36.7 36.5
Others
Source : Ministry of Power/Central Electricity Authority
1.25 : OPERATIONS OF INDIAN RAILWAYS 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2007-08 2008-09 2009-10 2010-11 2011-12P 1
2
1. Route Kilometres (000’s) Electrified 0.4 Total 53.6 2. Originating traffic (million tonnes) Revenue Earning 73.2 Total Traffic 93.0 3. Goods carried (billion tonne km.) Revenue Earning 37.6 Total Traffic 44.1 4. Earnings from goods carried (` crore) 139.3 5. Average Lead: all goods traffic (km) 470.0 6. Average rate/ tonne km. (paise) 3.2 7. Passengers Originating (million) c 1284.0 8. Passengers kilometers (billion) 66.5 9. Passengers Earnings (` crore) 98.2 10. Average lead: passenger traffic (km) 51.8 11. Average rate per passenger-kilometre (paise) 1.5 Source : Ministry of Railways P Provisional
a c
3
4
5
6
7
8
9
10
11
12
0.8 56.2
3.7 59.8
5.4 61.2
10.0 62.4
14.9 63.0
18.3 63.3
18.6 64.0
18.9 64.0
19.6 64.4
20.28 c 64.60 c
119.8 156.2
167.9 196.5
195.9 220.0
318.4 341.4
473.5 504.2
793.9a 804.1a
833.4a 836.6a
887.8a 892.2a
921.7a 926.4a
969.05a 975.16a
72.3 87.7
110.7 127.4
147.7 158.5
235.8 242.7
312.4 315.5
521.4 523.2
551.4a 552.0a
600.6a 601.3a
625.7a 626.5a
667.61 668.62
280.5
600.7
1550.9
561.0
648.0
720.0
711.0
626.0
651.0
660.0
674.0
676.0
689.0
3.9
5.4
10.5
35.0
73.8
89.0
93.8
94.8
97.0
101.5
1594.0
2431.0
3613.0
3858.0
4833.0
6524.0
6920.4
7245.8
7651.1
8224.4c
77.7
118.1
208.6
295.6
457.0
770.0
838.0
903.5
978.5
1046.5c
131.6
295.5
827.5
48.7
48.6
57.7
76.6
94.6
118.0
121.1
124.7
127.9
127.2 c
1.7
2.5
4.0
10.6
22.9
25.7
26.1
25.9
26.3
27.0c
8247.0 23045.4 46425.5 51749.3a 56937.3a 60687.1a 67761.41
3144.7 10515.1c 19844.2c 21931.3c 23488.2c 25792.6c 28296.9c
Excluding Konkan Railways Corporation Limited loading. Includes Metro Railway/Kolkata’s earnings.
http://indiabudget.nic.in A—27
b
Excluding Metro Kolkata.
A28
Economic Survey 2012-13 1.26 : REVENUE EARNING GOODS TRAFFIC ON INDIAN RAILWAYS A : TRAFFIC ORIGINATING (Million tonnes)
Commodity
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2007-08a 2008-09a
1 1. Coal
2009-10a
2010-11a 2011-12Pa
2
3
4
5
6
7
8
9
10
11
12
20.2
30.9
47.9
64.1
135.1
223.7
336.83
369.6
396.2
420.4
455.81
2. Raw materials for Steel Plants except iron ore
na
10.5
16.1
20.2
25.9
38.7
11.2
10.9
11.6
13.3
14.51
3. Pig iron & finished steel i) steel plants
na
3.8
6.2
7.53
10.0
11.79
20.75
22.0
24.2
24.1
25.68
ii) from other points iii) Total
na na
na na
na na
na na
na na
na na
5.04 25.79
6.6 28.6
7.7 31.9
8.8 32.8
9.47 35.15
na
2.6
9.8
11.1
13.1
14.56
53.74
45.8
43.6
25.7
8.35
na na
na na
na na
na na
na na
na na
43.61 39.34
42.9 41.9
44.3 44.8
44.7 48.1
54.74 40.29
iv) Total 5. Cement
na 2.5
na 6.5
na 11.0
na 9.64
na 28.9
na 42.88
136.69 78.99
130.6 86.2
132.7 93.2
118.5 99.1
103.38 107.66
6. Foodgrains 7. Fertilizers
7.8 na
12.7 1.4
15.1 4.7
18.3 8.11
25.4 18.4
26.68 27.12
38.23 35.83
35.5 41.4
38.7 43.7
43.5 48.2
46.34 52.68
8. POL 9. Container Service
2.7
4.7
8.9
15.0
25.0
36.25
35.88
38.1
38.9
39.3
39.77
na na
na na
na na
na na
na na
na na
3.74 17.39
7.1 23.3
9.6 25.3
11.0 26.6
9.47 28.54
iii) Total 10. Balance (other goods)
na 40.0
na 46.7
na 48.2
na 42.1
na 36.6
na 51.79
21.13 73.34
30.3 62.2
35.0 66.1
37.6 69.2
38.01 75.74
11. Total revenue earning freight traffic
73.2
119.8
167.9
196.0
318.4
473.5
793.9
833.4
887.8
921.7
969.05
2007-08 2008-09
2009-10a
4. Iron ore i) for export ii) for steel plants iii) for other domestic users
i) Domestic Container ii) EXIM Containers
B : GOODS CARRIED (Billion tonne-km.) Commodity
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01
1
2010-11a 2011-12Pa
2
3
4
5
6
7
8
9
10
11
12
11.3
20.5
27.84
36.4
85.9
133.4
208.5
230.1
247.0
268.3
291.45
na
1.98
2.71
4.25
7.51
13.53
7.85
7.5
8.9
9.8
10.27
i) steel plants
na
3.32
6.2
8.56
11.6
12.05
21.23
22.2
25.4
24.9
26.31
ii) from other points
na
na
na
na
na
na
3.84
4.7
6.1
7.4
7.61
iii) Total
na
na
na
na
na
na
25.07
27.0
31.5
32.2
33.92
1. Coal 2. Raw materials for Steel Plants except iron ore 3. Pig iron & finished steel
4. Iron ore i) for export
na
na
5.49
7.29
7.54
7.93
27.58
21.9
25.0
15.5
2.02
ii) for steel plants
na
na
na
na
na
na
10.84
10.1
10.0
9.6
14.30
iii) for other domestic users
na
na
na
na
na
na
15.65
18.8
19.0
21.2
19.68
iv) Total
na
na
na
na
na
na
54.07
50.8
54.0
46.4
36.0
5. Cement
na
2.47
6.99
7.19
18.9
24.91
43.21
46.5
53.8
57.0
62.04 57.92
4
9.62
14.51
24.3
35.6
33.1
46.86
45.6
50.3
52.0
7. Fertilizers
6. Foodgrains
na
na
3.81
8.92
17.3
23
25.81
33.1
36.6
40.7
43.91
8. POL
na
2.56
5.26
11.7
15.1
19.87
23.4
24.0
24.9
26.1
26.10
9. Container Service i) Domestic Container
…
…
…
…
…
…
4.8
9.7
12.7
13.8
13.63
ii) EXIM Containers
…
…
…
…
…
…
18.3
28.4
31.6
27.2
31.61
iii) Total
…
…
…
…
…
…
23.1
38.1
44.3
41.0
45.24
22.3
31.9
37.89
39.1
36.4
44.54
63.51
48.8
49.5
52.3
60.76
37.6
72.3
110.7
147.6
235.8
312.4
521.4
551.5
600.6
625.7
667.61
10. Balance (other goods) 11. Total revenue earning freight traffic Source : Ministry of Railways na : Not available
P Provisional
a
Excluding Konkan Railways.
http://indiabudget.nic.in A—28
A29
Economic Survey 2012-13 1.27 : OPERATIONS OF ROAD TRANSPORT Unit 1 1. Length of roads
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 2009-10
2
3
4
5
6
7
8
9
2010-11
2011-12
11
12
10
(Thousand km)
Totala
399.9
524.5
914.9 1485.4
2327.4
3373.5
4471.5
4582.4
4690.3
na
Surfaced
157.0
263.0
398.0
684.0
1091.0
1601.7
2324.5
2432.8
2524.7
na
19.8
23.8
23.8
31.7
33.7
57.7
70.5
70.9
70.9
na
NA
21.0
23.3
31.5
33.4
57.7
70.5
70.9
70.9
na
2. Length of national highways
(Thousand km)
Total Surfaced 3. Length of state highways
(Thousand km)
Total
NA
na
56.8
94.4
127.3
132.1
158.5
160.2
163.9
na
Surfaced
NA
na
51.7
90.3
124.8
129.9
156.7
158.2
161.9
na
114951 127746
4. Number of registered vehicles (Thousand) 141866
na
Goods vehicles
All vehicles
306.0 82.0
665.0 1865.0 5391.0 21374.0 54991.0 168.0
343.0
554.0
1356.0
2948.0
6041
6432
7064
na
Buses
34.0
57.0
94.0
162.0
331.0
634.0
1486
1527
1604
na
Central
34.8
111.7
451.8
930.9
4596.0 23861.0
53098 48386.9
75453.2
75572.5
States
12.6
55.2
231.4
750.4
3259.6 12901.7
34241 39512.6
45992.4
53577.3
5. Revenue from road transport (` crore)
Source : Department of Road Transport & Highways. na : Not Available. a
Includes roads constructed under the Pradhan Mantri Gram Sadak Yojana (PMGSY) since December 2000 and erstwhile Jawahar Rozgar Yojana (JRY) of the 1990s. Sources : National Highways - Roads Wing, Ministry of Road Transport & Highways. : State Highways – State Public Works Departments. : Registered Vehicles – Office of the State Transport Commissioners. : Revenue from Road Transport (Central) – Directorate of Data Management, Central Excise and Customs. : Revenue from Road Transport (States) – State Finances- A Study of Budgets 2007-08 by RBI and its earlier issues.
1.28 : GROWTH OF CIVIL AVIATION Unit 196061 1
2
1. Total fleet strength (i ) Air India (ii) Indian Airlines (iii) National Aviation Company of India Limited 2. Revenue tonne(` crore) Kilometers (i ) Air India (ii) Indian Airlines (iii) National Aviation Company of India Limited 3. Number of passengers (Lakh) carried (i ) Air India (ii) Indian Airlines (iii) National Aviation Company of India Limited 4. Passengers handled at (Lakh) AAI Airports Joint Venture Int’l Airports Total at Indian Airports 5. Cargo handled at (Thousand AAI Airports tonnes) AAI Airports Joint Venture Int’l Airports Total at Indian Airports
197071
198081
199091
199900
200405
200506
200708
200809
20092010
201011
201112
3
4
5
6
7
8
9
10
11
12
13
14
13 88
10 73
17 49
24 56
26 53
36 61
34 64 122
108
113
98
91
7.56 10.0
27.52 20.00
98.01 40.03
138.10 145.65 69.92 74.03
221.80 101.73
236.40 114.09 372.90 328.40 353.30 367.70 360.30
1.25 7.90
4.87 21.30
14.18 54.29
21.61 78.66
33.50 59.30
44.40 71.32
44.40 78.61 133.20 117.80 117.50 127.80 134.30
na
na 107.38
177.23 390.35
na
na 178.70
377.33 797.41 1278.47 1397.30 723.46 561.42 592.95 726.52 703.43 991.52 1140.57 1366.76 1621.92 1576.56 1714.98 1701.99 1959.71 2348.44 2279.99
Source : Ministry of Civil Aviation. na : Not available.
http://indiabudget.nic.in A—29
592.84
733.42 637.05 442.54 508.71 596.43 684.00 531.81 646.16 728.84 837.87 939.00 1168.86 1088.7 1237.55 1434.3 1623.1
A30
Economic Survey 2012-13 1.29 : COMMODITY BALANCE OF PETROLEUM AND PETROLEUM PRODUCTS (Million tonnes)
Item
195051a
196061a
197071a
198081
199091
200001
200708
200809
20092010
201011
201112
201213 (Apr.Nov.)
1
2
3
4
5
6
7
8
9
10
11
12
13
I. Crude Oil 1. Refinery throughput
0.3
6.6
18.4
25.8
51.8
103.4
156.1
160.8
192.8
206.2
211.4
144.0
2. Domestic production
0.3
0.5
6.8
10.5
32.2
32.4
34.1
33.5
33.7
37.7
38.1
25.4
0.3
0.5
6.8
5.5
11.8
11.8
11.2
11.3
11.8
16.4
18.0
13.1
(a) On-shore
...
...
...
5.0
20.4
20.6
22.9
22.2
21.9
21.3
20.1
12.3
3. Imports
(b) Off-shore
na
6.0
11.7
16.2
20.7
74.1
121.7
132.8
159.0
163.6
171.7
118.0
4. Exports
...
...
...
...
...
...
...
...
…
…
5. Net imports (3-4)
na
6.0
11.7
16.2
20.7
74.1
121.7
132.8
159.0
163.6
171.7
118.0
3.3
7.7
17.9
30.9
55.0
100.1
128.9
133.6
137.8
141.0
148.0
102.1
8.2
II. Petroleum Products 1. Domestic consumption
b
of which (a) Naphtha
...
...
0.9
2.3
3.4
11.7
13.3
13.9
10.1
10.7
11.1
(b) Kerosene
0.9
2.0
3.3
4.2
8.4
11.3
9.4
9.3
9.3
8.9
8.2
5.0
(c) High speed diesel oil
0.2
1.2
3.8
10.3
21.1
37.9
47.7
51.7
56.2
60.1
64.7
45.7
(d) Fuel oils
0.9
1.7
4.7
7.5
9.0
12.7
12.7
12.6
11.6
10.8
9.2
5.4
0.2
5.7
17.1
24.1
48.6
95.6
144.9
150.5
179.8
190.3
196.7
137.6
11.0
2. Domestic production
c
of which (a) Naphtha
na
...
1.2
2.1
4.9
9.9
16.4
14.8
17.1
17.5
17.2
(b) Kerosene
na
0.9
2.9
2.4
5.5
8.7
7.8
8.2
8.5
7.7
7.5
5.2
(c) High speed diesel oil
na
1.1
3.8
7.4
17.2
39.1
58.4
62.9
73.3
78.1
81.9
59.2
(d) Fuel oils
na
1.6
4.1
6.1
9.4
11.4
15.8
17.7
18.3
20.1
19.5
11.0
3. Imports
3.1
2.5
1.1
7.3
8.7
9.3
22.5
18.5
14.7
16.8
15.0
10.4
4. Exports
na
na
0.3
…
2.7
8.4
40.8
38.9
51.0
59.1
60.8
41.1
5. Net Imports (3-4)
na
na
0.8
7.3
6.0
0.9
-18.3
-20.4
-36.3
-42.3
-45.8
-30.7
Source : Ministry of Petroleum and Natural Gas. na Not available. a Calender year. b Excluding refinery fuel consumption Including import by private parties. c Excludes LPG production from fractionators.
http://indiabudget.nic.in A—30
Semi-finished steel (main producers)
Finished steel
Steel castings
6.
7.
8.
http://indiabudget.nic.in
A—31 na
-do-
18. Tractors (complete)
` Million
22. Computersh
Million Million hp
1)h
21. Electric motors (Exc.phase 1)h
20. Electric motors (phase
19. Transformers (small)h Th Numbers
-do-
IV. ELECTRICAL ENGINEERING INDUSTRIES
35.0
-do-
16. Pumps (Power driven pumps)
17. Engines Inc. combustion & Diesel enginesh
na
na
na
na
na
5.5
na
-do-
7.9
-do-
8.6
-doThousand
15. Motor cyclesh
b
3
na
4.0
na
1.0
1.2
1.5
1.7
3.0
` Million
-do-
-do-
Th tonnes
-do-
-do-
-do-
-do-
-do-
14. Cars, jeeps & land rovers (passanger cars)
13. Commercial vehicles
12. Textile machinery
11. Machine tools
III. MECHANICAL ENGINEERING INDUSTRIES
10. Copper and copper productsh
Aluminium
Crude Steel
9.
Hot metal (incl. Pig iron)
4.
METALLURGICAL INDUSTRIES
II.
5.
Iron ore
3.
0.3
-do-do-
(i) On-shore
(ii) Off-shore
na
0.3
Petroleum, crude
2.
32.3
3
1950-51
-do-
Coal (incl. lignite)
1.
Million tonnes
2
1
I. MINING
Unit
Industry
na
na
na
na
na
43.2
105.0
0.9
26.6
28.2
na
8
na
18.5
35.0
2.4
1.0
3.5
4.3
10.9
na
0.5
0.5
55.2
4
1960-61
na
na
na
na
na
65
259.0
97.0
46.7
41.2
na
430
na
168.8
62.0
4.6
0.9
6.1
7.0
32.5
na
6.8
6.8
76.3
5
1970-71
na
na
na
na
71.0
173.9
431.0
447.2
49.4
71.7
na
1692
na
199.0
71.0
6.8
2.0
10.3
9.6
42.2
5.0
5.5
10.5
119.0
6
1980-81
na
na
na
na
142.2
158.4
19.0
1842.8
220.8
145.5
na
7731
na
451.1
262
13.5
4.3
na
12.2
53.7
21.2
11.8
33.0
225.5
7
1990-91
7914.6
5.2
na
na
284.4
306.0
481.9
3756.1
632.2
152.0
125296
12263
na
620.4
352.4
32.3
3.3
30.6
22.6
80.6
20.6
11.8
32.4
332.6
8
2000-01
1.30 : PRODUCTION OF SELECTED INDUSTRIES
29360.0
7.4
3.1
3542.5
236.4
855.4
1726.1
6201.2
1047.5
391.1
17115
14456
764.1
831.7
449.5
46.6
3.2
46.5
36.5
154.4
20.8
11.4
32.2
437.1
9
2005-06
30374.2
9.1
3.3
5713.8
300.5
986.2
1954.7
7112.2
1238.7
520.0
24101
17311
797.5
1061.2
612.0
52.5
3.1
50.8
39.7
187.7
22.7
11.3
34.0
462.1
10
2006-07
33872.9
10.0
3.1
5288.9
295
1120.8
2089.3
6503.5
1422.0
545.1
27447
17645
889.6
1042.7
567.0
56.1
2.8
53.9
42.1
213.2
22.9
11.2
34.1
491.1
11
2007-08
29931.1
11.6
2.8
4408.9
293.6
1136.1
2140.3
6802.0
1516.8
416.5
16890
13956
853.8
934.5
1592.0
57.2
3.2
58.4
43.3
213.0
22.2
11.3
33.5
525.2
12
2008-09
29636.5
14.7
2.8
6956.6
373.7
1250.5
2891.7
8444.9
1910.5
566.6
15742
15018
705.4
1045.1
1486.0
60.6
4.1
65.8
47.4
218.6
21.9
11.8
33.7
566.1
13
2009-10
28180.7
14.5
3.0
7482.0
465.4
1484.3
3139.1
10527.1
2452.8
752.6
24572
18400
670.6
790.4
598.0
68.6
4.3
70.7
42.9
208.0
21.3
16.4
37.7
570.4
14
Contd...
29912.0
15.4
2.8
6517.1
548.7
1565.2
3014.4
12006.9
2513.2
910.2
29785
23640
684.6
963.2
770.0
73.4
4.5
73.8
42.5
167.3
20.1
18.0
38.1
583.1
15
2010-11 2011-12a
Economic Survey 2012-13
A31
31. Automobile tyres
http://indiabudget.nic.in
A—32
35.
-do-do-
(i) Mill sector
(ii) Decentralised sector
-do-
-do-
(ii) Decentralised sector
(c) Man-made fibre fabrics
-do-
(i) Mill sector
-do-
-do-
(b) Mixed / blended cloth
-do-
(ii) Decentralised sector
Million sq. metres
Million tonnes
-do-
` crore
Million tonnes
-do-
Million
Th tonnes
Th tonnes
(i) Mill sector
(a) Cotton cloth
37. Cloth
VI. TEXTILE INDUSTRIES
36. Petroleum refinery productsf
Vitaminsh
34. Antibiotics & its
33. Cement
preparationsh
(truck/bus)h
30. Writing & printing
32. Car/cab tyres h
paperh
29. Craft
paperh
28. Corrugated &other paperh ` crore
46
550c 3c 547c
13c 287c
na
na
na
2089
4649
6738
5.7
na
na
8.0
na
1.5
na
na
na
99
147
na
na
23.7
4
1960-61
300c
na
na
na
814
3401
4215
0.2
na
na
2.7
na
na
na
na
na
12
-do-do-
26. Soda ash
25. Di Ammonium Phosphate
27. Caustic Soda
na na
Th MT
1.7
3
1950-51
-do-
(DAP)h
CHEMICAL AND ALLIED INDUSTRIES
24. Ureah
V.
Th tonnes
2
1
23. Aluminium conductors
Unit
Industry
949
2
951
63
107
170
3547
4055
7602
17.1
na
na
14.3
na
3.8
na
na
na
371
449
na
na
64.2
5
1970-71
1346
4
1350
540
730
1270
4934
3434
8368
24.1
na
na
18.6
na
8.0
na
na
na
578
563
na
na
86.0
6
1980-81
5085
41
5126
1682
698
2380
13572
1859
15431
48.6
na
na
48.8
na
20.1
na
na
na
992
1385
na
na
67.6
7
1990-91
13932
232
14164
6019
332
6351
18612
1106
19718
95.6
na
na
99.2
na
29.3
na
na
na
1642
1631
na
na
30.9
8
2000-01
1.30 : PRODUCTION OF SELECTED INDUSTRIES
19194
212
19406
6046
252
6298
22681
1192
23873
119.8
33.2
921.4
140.5
10.2
11.8
1974
899
270
1883
2298
4628
20099
28.9
9
2005-06
20158
111
20269
6552
330
6882
24933
1305
26238
135.3
32.3
1066.8
154.7
11.8
12.1
2066
977
261
1914
2078
4852
20308
24.6
10
2006-07
21831
110
21941
6466
422
6888
25947
1249
27196
144.9
39.1
1435.6
167.6
13.9
12.8
2144
1014
214
2051
2006
4212
19857
35.0
11
2007-08
21191
111
21302
6340
426
6766
25639
1259
26898
150.5
43.0
1366.6
181.4
14.0
12.0
2288
1060
223
2050
1989
2993
19922
75.6
12
2008-09
23583
69
23652
7285
482
7767
27449
1465
28914
179.8
57.6
1260.6
200.7
15.9
13.8
2387
1184
226
2103
2051
4247
21112
112.6
13
2009-10
22488
75
22563
7752
526
8278
30114
1604
31718
190.3
65.6
1143.6
209.7
20.0
13.5
2577
1260
269
2168
2298
3537
21880
97.9
14
Contd...
21347
68
21415
7947
521
8468
28846
1724
30570
196.7
55.6
1098.5
223.5
19.5
13.5
2867
1263
259
2211
2427
3962
21984
98.3
15
2010-11 2011-12a
A32 Economic Survey 2012-13
-do-
http://indiabudget.nic.in
A—33
na
-doBillion KWH
5
155
21
277
1134e
na
na
na
na
na
na
na
na
…
17
355
54
318
3029e
na
na
new items/change in specifications hence data prior to 2005-06 may not be comparable.
e f
h
c
111
753
139
568
5148
10
22
32
83
83
21
11
32
41
43
87
144
1067
6
1980-81
264
850
170
705
12047
42
135
177
160
160
40
187
227
51
51
107
207
1510
7
1990-91
499
1445
313
827
18510
100
566
666
236
236
26
839
865
55
55
247
646
2267
8
2000-01
617
1193
262
893
19321
108
628
736
229
229
37
1076
1113
53
53
349
588
2521
9
2005-06
662
1285
254
949
28199
97
792
889
247
247
32
1271
1303
54
54
354
635
2824
10
2006-07
Relates to October-September. Relates to November-October. Excluding LPG Production from natural gas. g Relates to edible hydrogenated oil from 2004-05 onwards
d
Provisional. Includes buses, trucks and tempos, 3 & 4 wheelers upto 2001-01 but excludes. utility/multi purpose vehicles and three wheelers from 2004-05 onwards. calendar year.
a
b
56
558
71
423
3740
na
5
5
62
na
62
22c
9
1
22c
na
na
10
36
na
38
19c
65
22
929
5
1970-71
21c
15c
11c
…
na
788c
4
1960-61
na
533c
3
1950-51
704.4
1380
265
948
26300
81
880
961
280
280
28
1420
1448
51
51
378
677
2948
11
2007-08
723.8
1532
267
968
14677
80
750
830
233
233
28
1332
1360
42
42
361
655
2896
12
2008-09
771.5
1122
278
991
18802
90
873
963
302
302
30
1435
1465
43
43
407
707
3079
13
2009-10
Department of Coal. 3 Ministry of Mines. Ministry of Petroleum & Natural Gas. 37-40 Ministry of Textiles. Ministry of Steel 41 Directorate of Sugar. Central Statistics Office {( based on total production of sample units only covered under Index of Industrial Production series (base 2004-05=100)}.
Th = thousand
1 2 & 36 4 to 8 9-35,42-44,& VIII
Not available.
Sources :
VIII. ELECTRICITY GENERATED (utilities)
44. Vanaspati/Edible hydrogenated
-do-
43. Coffee
oilhg
-do-
41. Sugar ( including sugar cubes)d
42. Tea
Th tonnes
-do-
VII. FOOD INDUSTRIES
-do-
(ii) Acrelic
-do-
-do-
(i) Polyester
(b) Synthetic
(i) Viscose
(a) Cellulosic
-do-
-do-
40. Staple fibre:
-do-
(ii) Nylon
-do-
-do-
-do-
(i) Polyster
(b) Synthetic
(i) Viscose
(a) Cellulosic
Th tonnes
(iii) 100% non-cotton
39. Filament yarn:
-do-
(i) Cotton
(ii) Mixed / blended
Million kg.
2
1
38. Spun yarn (by cotton textile mills)
Unit
Industry
1.30 : PRODUCTION OF SELECTED INDUSTRIES
811.1
827
283
967
24350
80
896
976
305
305
33
1463
1496
41
41
426
797
3490
14
876.9
1235
311
972
274300
78
829
907
323
323
28
1380
1408
42
42
457
789
3126
15
2010-11 2011-12a
Economic Survey 2012-13
A33
A34
Economic Survey 2012-13 1.31 : INDEX OF INDUSTRIAL PRODUCTION (Base: 2004–05=100)
Industry Group
Industry
1
2 General Index
Weight
2005-06
3
2007-08
2008-09
2009-10
2010-11
2011-12
4
5
6
7
8
9 170.3
100.00
108.6
141.7
145.2
152.9
165.5
10
Mining
14.16
102.3
112.5
115.4
124.5
131.0
128.5
15-36
Manufacturing
75.53
110.3
150.1
153.8
161.3
175.7
181.0
15
Food products and beverages
7.28
113.2
147.5
135.4
133.5
142.9
164.8
16
Tobacco products
1.57
101.0
98.4
102.7
102.0
104.1
109.7
17
Textiles
6.16
108.3
124.6
120.1
127.4
135.9
134.0
18
Wearing apparel; dressing and 2.78
114.1
149.9
134.6
137.1
142.2
130.1
0.58
90.9
110.0
104.4
105.8
114.3
118.5
dyeing of fur 19
Luggage, handbags, saddlery, harness & footwear; tanning and dressing of leather products
20
Wood and products of wood & cork except furniture; articles of straw & plating materials
1.05
106.8
148.0
155.3
160.1
156.5
159.2
21
Paper and paper products
1.00
106.3
112.6
118.0
121.1
131.4
138.0
22
Publishing, printing & reproduction 1.08
113.7
140.2
142.4
133.8
148.8
192.8 125.8
of recorded media 23
Coke, refined petroleum products & nuclear fuel
6.72
100.6
119.6
123.4
121.8
121.5
10.06
101.0
118.4
115.0
120.7
123.1
122.7
2.02
112.3
135.7
142.6
167.4
185.2
184.6
4.31
107.8
130.6
134.9
145.4
151.4
158.6
11.34
115.5
156.3
159.0
162.4
176.7
192.1
24
Chemicals and chemical products
25
Rubber and plastics products
26
Other non-metallic mineral products
27
Basic metals
28
Fabricated metal products, except machinery & equipment
3.08
111.1
143.8
144.0
158.6
182.8
203.3
29
Machinery and equipment n.e.c.
3.76
126.1
185.0
171.0
198.0
256.3
241.3
machinery
0.31
145.3
164.8
148.8
154.4
146.3
148.7
31
Electrical machinery & apparatus n.e.c.
1.98
116.8
373.0
530.8
459.2
472.1
367.1
32
Radio, TV and communication 0.99
122.7
604.2
726.7
809.1
911.5
950.5
33
Medical, precision & optical
30
Office, accounting & computing
equipment & apparatus instruments, watches and clocks
0.57
95.4
111.4
119.8
100.9
107.8
119.5
34
Motor vehicles, trailers & semi-trailers
4.06
110.1
151.2
138.0
179.1
233.3
258.6
35
Other transport equipment
1.82
115.3
129.0
134.0
171.1
210.7
235.8
36
Furniture; manufacturing n.e.c
3.00
116.2
132.7
142.5
152.7
141.2
138.6
40
Electricity
10.32
105.2
120.0
123.3
130.8
138.0
149.3
Source : Central Statistics Office. n.e.c. : not elsewhere classified.
http://indiabudget.nic.in A—34
A35
Economic Survey 2012-13
1.32 : STATE-WISE/UTILITY WISE AVERAGE RATE OF ELECTRICITY FOR DOMESTIC & INDUSTRIAL CONSUMERS (Rates in Paise/kwh) Sl. No.
1
Name of Utility
Tariff effective from
2
3
1 2 3 4 5 6 7 8 9 10
Andhra Pradesh Assam Bihar Chhattishgarh Gujarat Haryana Himachal Pradesh Jammu & Kashmir Jharkhand Karnataka
01.04.2011 24-05-2011 01.05.2011 09.-04-2011 01.04.2010 01.06.2011 01.04.2011 01.10.2011 01.08.2011 07.12.2010
11 12
Kerala Madhya Pradesh
01-01-2010 01.06.2011
13
Maharashtra
01-09-2010
14 15 16 17 18 19
Meghalaya Orissa Punjab Rajasthan Tamil Nadu Uttar Pradesh
01-09-2010 01.04.2011 01.04-2011 11.09-2011 01-08-2010 15-04-2010
20 21
Uttarakhand West Bengal
01.05.2011 01-04-2010
22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Arunachal Pradesh Goa Manipur Mizoram Nagaland Sikkim Tripura A & N Islands Chandigarh Dadra & Nagar Haveli Daman & Diu Delhi (BYPL/BRPL/NDPL) Delhi (NDMC) Lakshadweep Puducherry Torrent Power Ltd. (Ahmedabad) Torrent Power Ltd.(Surat) CESC Ltd. (Kolkata) DPSC Ltd. (Wast Bengal) Durgapur Projects Ltd.(West Bengal) D.V.C (A) Bihar Area (B) West Bengal area Mumbai (B.E.S.T) Mumbai (Reliance Energy) Mumbai ( TATA’S )
01.04.2011 01-04-2002 21-03-2011 01-02-2011 01.07.2011 01-01-2009 01.09.2010 01-03-2008 01.04.2011 01.06.2011 01.06.2011 01.09.2011 01.09.2011 01-09-2004 20-02-2010 01.09.2011 01.09.2011 01-04-2010 01-04-2010 01-04-2010 01-09-2010 01-09-2010 01-09-2010 01-06-2009 01-09-2010
43 44 45
Domestic 4 KW (400 KWh/month)
Large Industry 1000KW 60% L.F. (438000) KWh/ Month)
4
5
415.38 466.50 385.58 295.00 475.50 u 404.55 239.48 258.34 249.00 476.96 d 430.50 f 398.89 657.47 u 634.92 r 505.49
436.86 419.68 580.26 459.55 509.13 462.23 459.74 369.77 368.01 536.36 d 552.59 o 378.49 629.84
298.75 367.90 519.52 480.63 367.50 436.50 u 124.00 r 280.00 570.83 u 557.69 r 380.00 186.75 339.70 370.00 416.63 266.06 365.00 342.50 325.25 254.38 254.38 429.19 322.88 221.88 128.75 449.23 458.25 552.12 385.12 325.74
412.05 690.70 326.66
617.75 b 567.03 c 410.29 508.14 559.35 571.71 499.91 574.61 u 489.77 r 465.93 666.42 325.00 398.29 372.57 316.49 409.38 441.78 434.70 323.51 323.51 651.63 665.25 348.21 467.66 518.26 580.86 544.06 407.57 437.29 474.42 609.01 879.86 603.61
Source : Ministry of Power. b : Continuous Supply Areas. c : Non-Continuous Supply Areas. d : Bangalore, Devangere & other City Municipal Corp. e : Areas under other local bodies. f : Areas under Village Panchayats. u : Urban. r : Rural. o : Other Areas. Note : The above rates of electricity are for certain assumed load and electricity consumption levels in a month.
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A36
Economic Survey 2012-13
2.1 : GROSS CAPITAL FORMATION FROM BUDGETARY RESOURCES OF THE CENTRAL GOVERNMENT (` crore) Gross capital formation by the Central Government Fixed assets
1 First Plan (1951-52 to 1955-56) Second Plan (1956-57 to 1960-61) Third Plan (1961-62 to 1965-66) Annual Plans (1966-67 to 1968-69) Fourth Plan (1969-70 to 1973-74) Fifth Plan(1974-75 to 1978-79) Sixth Plan (1980-81 to 1984-85) Seventh Plan (1985-86 to 1989-90) Eighth Plan (1992-93 to 1996-97) Ninth Plan (1997-98 to 2001-02) Tenth Plan (2002-03 to 2006-07) Eleventh Plan (2007-08 to 2011-12) 1950-51 1955-56 1960-61 1965-66 1970-71 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 c 1994-95 1995-96 1996-97 1997-98 d 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12(RE) 2012-13(BE)
Works stores
Increase in stocks of foodgrains & fertilisers
Gross financial assistance for capital formation to Total (2+3+4)
State governments
Nondepartmental commercial undertakingsa
Othersb
Total (6+7+8)
Total (5+9)
2
3
4
5
6
7
8
9
10
594 1362 2355 1411 2858 5222 14148 30729 74043 95934 138379 279255 80 177 302 549 485 950 1090 1119 1242 1443 1751 2411 2814 3219 3953 4452 5817 5683 6977 7800 8193 9056 11643 13106 14804 16858 17632 18693 20324 24983 20953 10982 20963 22828 26508 33182 34897 42381 50069 56410 62882 67513 92002
10 8 100 12 104 68 675 888 -443 4634 5648 9970 10 5 -38 1 8 18 -30 -11 59 84 156 141 71 137 171 106 88 278 80 337 409 203 232 -341 -476 -173 315 262 323 1092 1305 1652 734 1169 888 1268 1589 1270 1396 2589 2177 2538 2904
9 74 -10 -180 7 661 na na na na na na -9 -30 44 -30 26 237 53 na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na na
612 1445 2445 1243 2969 5951 14823 31616 73599 100568 144027 289225 80 153 307 520 519 1204 1112 1107 1301 1528 1908 2552 2884 3356 4123 4558 5905 5961 7056 8137 8602 9259 11875 12765 14328 16685 17946 18955 20647 26075 22258 12634 21697 23997 27396 34450 36487 43651 51465 58999 65059 70051 94906
816 1373 2837 2127 4570 9669 25693 61469 130780 143451 180157 298683 41 275 319 739 740 1433 1524 2221 3302 3244 3666 3928 4931 5974 7195 10054 10800 12723 13956 13935 20009 19377 19651 23196 27416 27571 32945 23578 25613 29077 30653 34531 37254 40908 43320 27206 31469 43029 51697 53483 66182 84292 104700
81 932 1659 1594 2751 9381 21289 31643 26950 43504 26055 114895 5 22 211 493 531 1838 2183 2156 2105 2235 3166 3881 4074 4679 5489 6082 6523 5667 6317 7054 5541 4764 4730 6632 7191 4222 4174 5849 6401 6944 7297 17014 4686 4581 7720 5304 3764 41825 10298 9698 30773 22301 28709
96 155 210 164 621 921 2663 8829 21796 36547 74600 291352 2 33 25 53 98 187 172 203 205 223 273 439 514 694 744 784 1091 1419 1648 3887 905 1765 1392 2457 5265 6798 5884 6433 5147 5507 6752 12709 13146 13074 14419 17797 16164 15386 23477 62322 94354 95813 106664
993 2460 4707 3884 7942 19980 49645 101941 179526 223502 280813 704929 49 331 555 1285 1369 3459 3879 4580 5612 5701 7105 8247 9520 11346 13428 16920 18415 19810 21921 24876 26456 25906 25774 32285 39872 38591 43004 35860 37160 41527 44702 64254 55085 58564 65459 50307 51398 100240 85472 125502 191309 202406 240073
1605 3905 7152 5128 10911 25932 64468 133557 253125 324070 424839 994154 129 483 862 1805 1889 4663 4991 5688 6913 7229 9012 10799 12404 14702 17551 21477 24320 25770 28977 33013 35057 35165 37649 45051 54200 55276 60950 54815 57807 67602 66959 76888 76782 82561 92855 84757 87885 143891 136937 184501 256368 272457 334979
Source : Ministry of Finance, Economic & Functional Classification of the Central Governmet Budget-various issues. na Not available RE: Revised Estimates BE: Budget Estimates a Public undertakings operated by autonomous corporations and companies. b Includes loans and grants to local authorities for capital formation. c From 1993-94 onwards, Delhi is not included. d From 1997-98 onwards loans to States/UTs are exclusive of loans against States/UT’s share in small saving collections.
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Economic Survey 2012-13
A37
2.2 : BUDGETARY TRANSACTIONS OF THE CENTRAL AND STATE GOVERNMENTS AND UNION TERRITORIES (Including internal and extra-budgetary resources of public sector undertakings for their plans) (` crore) 1980-81 1
1990-91
2
I. TOTAL OUTLAY 36845 A. DEVELOPMENT1 24426 B. NON-DEVELOPMENT 12419 1. Defence (net) 3600 2. Interest payments 2957 3. Tax collection charges 504 4. Police 1163 5. Others2 4195 II. CURRENT REVENUE 24563 A. TAX REVENUE 19844 1. Income and corporation tax 2817 2. Customs 3409 3. Union excise duties 6500 4. Sales tax 4018 5. Others 3100 B. NON-TAX REVENUE3 4719 (Internal resources of public sector undertakings for the Plan) (1374) III. GAP (I-II) 12282 FINANCED BY: IV NET CAPITAL RECEIPTS (A+B) 8831 A. INTERNAL (net) 7161 1. Net market loans4 3163 2. Net small savings 1121 3. Net State and public provident funds 558 4. Special deposits of nonGovernment provident funds 604 5. Special borrowings from RBI against compulsory -70 deposits 6. Net misc. capital receipts5 1785 B. EXTERNAL6 1670 1. Net loans 749 (i) Gross 1141 (ii) Less repayments 392 2. Grants 436 3. Net special credit -53 V. OVERALL BUDGETARY DEFICIT 3451
2000-01
3
2007-08
4
5
2008-09 6
2009-10 7
2010-11 (BE) 8
2010-11 (RE) 9
2011-12 (BE) 10
176548 105922 70626 15427 25006 1973 5657 22563 110607 87723 10712 20644 24514 18228 13625 22884
615658 317464 298194 49622 122792 6570 21343 97867 393284 305320 67460 47542 68526 72874 48918 87964
1431960 830644 601316 91681 249195 11895 39743 208802 1124843 870329 304732 104119 123611 167731 170136 254514
1721651 999140 722511 114223 277637 14858 51399 264394 1200091 915450 319470 99879 108613 190817 196671 284641
2070959 1170691 900268 141781 317287 18490 67830 354881 1321414 1000844 367142 83324 102991 231461 215926 320570
2292510 1339678 952832 147344 359988 20946 68033 356521 1572558 1160267 421900 115000 132000 246878 244490 412291
2458842 1442691 1016151 151582 359886 21221 78542 404920 1717443 1263268 437946 131800 137263 296240 260019 454175
2694145 1583525 1110620 164415 401186 23601 87454 433963 1898108 1494498 524519 151700 163550 350874 303855 403610
(11183) 65941
(39415) 222374
(69740) 307117
(150463) 521560
(160538) 749546
(209759) 719952
(184323) 741399
(228509) 796037
54455 50192 11308 8309
223283 214965 85341 8192
319548 307574 199708 -174
374212 360403 319330 -4065
751949 737770 531493 26030
701617 677093 491271 17152
717138 692118 455433 18859
767261 750588 496266 25579
3887
23661
31565
137027
44413
33425
34996
33728
6721
7177
-1246
-2333
0
0
0
0
-105
na
na
na
na
na
na
na
20072 4263 3181 5339 2158 586 -76 11486
90594 8318 7505 17328 9823 813 0 -909
77721 11974 9316 16809 7493 2658 0 -12430
-89556 13809 11015 21022 10007 2794 0 147348
135834 14179 11038 22177 11140 3141 0 -2404
135246 24524 22464 34735 12271 2060 0 18335
182830 25020 22264 33947 11683 2756 0 24262
195015 16673 14500 26820 12320 2173 0 28776
Source : Economic Division, Department of Economic Affairs, Ministry of Finance. na Not available
RE: Revised Estimates
BE:
Budget Estimates
Notes: 1. Includes plan expenditure of Railways, Communications and non-departmental commercial undertakings financed out of their internal and extra budgetary resources, including market borrowings and term loans from financial institutions to State Government public enterprises. Also includes developmental loans given by the Central and State Governments to non-departmental undertakings, local bodies and other parties. However, it excludes a notional amount of `45 crore in 1980-81 on account of conversion of loan capital given to non-departmental commercial undertakings into equity capital. 2. Includes general administration, pensions and ex-gratia payments to famine relief (only non-plan portion), subsidies on food and controlled cloth, grants and loans to foreign countries and loans for non-developmental purpose to other parties, but excludes Contingency Fund transactions. It also excludes notional transactions in respect of subscriptions to International Monetary Fund of ` 559 crore in 1980-81, ` 550 crore in 1990-91, ` 629 crore in 2000-01, nil in 2007-08, ` 1,444 crore in 2008-09, ` 3,654 crore in 2009-10, nil in 2010-11(RE) and ` 8,768 crore in 2011-12(BE). 3. Includes internal resources of Railways, Communications and non-departmental commercial undertakings for the plan. 4. Includes market borrowings of State Government public enterprises. 5. Excludes the notional receipts on account of repayments of loans by non-departmental commercial undertakings due to their conversion into equity capital. It also excludes notional transactions in respect of International Monetary Fund and Contingency Fund transactions. 6. ` 538 crore for loans from IMF Trust Fund are included in 1980-81 under external loans and an amount of ` 572 crores for revolving fund is included in external loans for 1990-91.
http://indiabudget.nic.in A—37
A38
Economic Survey 2012-13 2.3 : TOTAL EXPENDITURE OF THE CENTRAL GOVERNMENT (` crore) Final outlays
1 First Plan (1951-52 to 1955-56) Second Plan (1956-57 to 1960-61) Third Plan (1960-61 to 1965-66) Annual Plan (1966-67 to 1968-69) Fourth Plan (1969-70 to 1973-74) Fifth Plan (1974-75 to 1978-79) Sixth Plan (1980-81 to 1984-85) Seventh Plan (1985-86 to 1989-90) Eighth Plan(1992-93 to 1996-97) Ninth Plan (1997-98 to 2001-02) Tenth Plan (2002-03 to 2006-07) Eleventh Plan (2007-08 to 2011-12) 1950-51 1955-56 1960-61 1965-66 1970-71 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94b 1994-95 1995-96 1996-97 1997-98c 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12(RE) 2012-13(BE)
Transfer payments to the rest of the economy Current Capital Total (5+6)
Financial investments & loans to the rest of the economy (gross)
Total expenditure (4+7+8)
9
Government consumption expenditure
Gross capital formation
Total (2+3)
2
3
4
5
6
7
8
1241 1962 4256 3878 9775 17576 35885 81974 179676 331143 516165 1003526 235 269 433 1109 1669 3449 3606 3678 3975 4502 5174 6096 7057 8130 9428 11210 14665 16551 18764 20784 22359 24466 26865 31815 34878 41881 44238 53090 59920 68831 71977 77324 85389 87170 105692 116305 121609 131396 174345 210625 230262 256898 290124
612 1445 2445 1243 2969 5951 14823 31616 73599 100568 144027 289224 80 153 307 520 519 1204 1112 1107 1301 1528 1908 2552 2884 3356 4123 4558 5905 5961 7056 8137 8602 9259 11875 12765 14328 16685 17946 18955 20647 26075 22258 12634 21697 23997 27396 34450 36487 43652 51464 58999 65059 70050 94906
1854 3406 6701 5121 12745 23527 50708 113590 253275 431711 660192 1292750 315 422 740 1630 2189 4654 4718 4785 5277 6030 7082 8648 9941 11486 13552 15768 20570 22512 25820 28920 30961 33725 38739 44580 49206 58566 62184 72046 80567 94906 94235 89958 107086 111167 133088 150755 158095 175048 225809 269624 295321 326948 385030
809 1567 2983 3214 8036 19773 50604 134246 387746 795621 1390293 2933125 111 203 427 754 1239 3018 3945 4678 5683 6064 6912 7728 9590 11436 14938 18347 21243 25380 31399 37877 45134 51378 58518 66750 76368 85304 100807 111577 137611 161549 183696 201188 228501 248436 259529 297267 356560 408676 543347 580898 656300 743904 803130
123 249 501 407 1454 3230 9910 26292 66433 106925 185704 559464 6 49 69 132 193 536 502 755 1063 1220 1302 1525 1788 2337 2958 3825 4408 5474 5750 6835 7117 8449 9092 11811 13974 15263 16294 17360 18671 20482 22404 28009 29406 32038 36822 41681 45758 53758 70287 113345 150312 171762 207820
932 1816 3484 3621 9490 23003 60514 160538 454179 902546 1575997 3492589 117 251 495 886 1432 3553 4447 5433 6745 7283 8214 9253 11378 13773 17896 22173 25651 30854 37148 44712 52251 59827 67610 78560 90342 100566 117101 128937 156282 182031 206100 229197 257907 280474 296351 338948 402318 462434 613634 694243 806612 915666 1010950
966 2600 5076 4740 10760 21145 47034 89764 127752 150754 123921 214033 72 301 570 1425a 1956 3830 3986 4768 5696 5191 7200 7500 9175 10729 12432 15172 17803 16938 18434 21417 21760 19179 19578 22648 27450 26101 31975 23884 26907 30572 27929 41462 33886 34491 34393 11380 9771 51427 25087 28575 62795 46149 101656
3751 7823 15261 13481 32994 67674 158256 363892 835206 1485011 2360109 4999372 504 975 1806 3940a 5577 12037 13150 14986 17717 18504 22495 25401 30494 35988 43879 53112 64023 70305 81402 95049 104973 112731 125927 145788 166998 185233 211260 224866 263755 307509 328265 360616 398879 426132 463831 501083 570185 688909 864530 992442 1164728 1288763 1497636
Source : Ministry of Finance, Economic & Functional Classification of the Central Governmet Budget-various issues. RE: Revised Estimates BE: Budget Estimates a b c
For 1965-66, includes ` 53 crore as additional payments to IMF, IBRD, IDA & ADB following the change in the par value of the rupee. This is a nominal outlay as it is met by the issue of non-negotiable Government of India securities. From 1993-94 onwards, Delhi is not included. From 1997-98 onwards loans to States/UTs are exclusive of loans against States/UTs shares in small saving collections.
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A39
Economic Survey 2012-13
2.4 : PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES, 1961-80 Amount (` ` crore) Head of development
Third Annual Plan Plans 1961-66 1966-69
1 1. Agriculture and allied sectors
2
1088.9 1107.1a
2. Irrigation and flood control 3. Power
3
Fourth Plan 1969-74
Percentage distribution
Fifth Plan 1974-79
4
5
2320.4a
4864.9
Annual Plan 1979-80 6 1996.5
Third Plan 1961-66
Annual Plans 1966-69
Fourth Plan 1969-74
Fifth Annual Plan Plan 1974-79 1979-80
7
8
9
10
12.7
16.7
14.7
12.3
11 16.4
664.7
471.0
1354.1
3876.5
1287.9
7.8
7.1
8.6
9.8
10.6
1252.3
1212.5
2931.7
7399.5
2240.5
14.6
18.3
18.6
18.8
18.4
4. Village and small scale industries
240.8
126.1
242.6
592.5
255.7
2.8
1.9
1.5
1.5
2.1
5. Industry and minerals
1726.3
1510.4
2864.4
8988.6
2383.5
20.1
22.8
18.2
22.8
19.6
6. Transport and communications
2111.7
1222.4
3080.4
6870.3
2044.9
24.6
18.5
19.5
17.4
16.8
588.7
306.8
774.3
263.0
6.9
4.6
4.9
7. Education 8. Scientific research
⎫ ⎬ 130.8 ⎭
1710.3 0.8
0.7
760.8
223.1
2.6
2.1
2.1
1.9
1.8
491.8
118.5
0.3
1.1
1.8
1.2
1.0
387.6
1.2
1.6
2.9
2.8
3.2
47.1
225.9
140.2
335.5
24.9
70.4
278.0
11. Water supply and sanitation
105.7
102.7
458.9
1091.6
12. Housing, urban and regional development
9. Health
2.2 4.3
91.4b
71.6
10. Family planning
⎫ ⎬ 0.8 ⎭
0.8
127.6
73.3
270.2
1150.0
368.8
1.5
1.1
1.7
2.9
3.0
13. Welfare of backward classes
99.1
73.6
164.6
724.0 c
247.9 c
1.2
1.1
1.0
1.8
2.0
14. Social welfare
19.4
11.2
64.4
88.2
30.7
0.2
0.2
0.4
0.2
0.3
15. Labour welfare and craftsman trainingd
55.8
34.8
⎫ ⎬ 179.8 ⎭
0.7
0.5
0.2
2.1
1.9
2.0
1.7
⎫ ⎬ 1.1 ⎭
16. Other programmesd
173.1
115.8
na
na
31.1
817.2
236.5
17. Special schemes (i) Welfare programme
123.6
na
na
na
na
0.8
na
na
(ii) Crash scheme for educated unemployed
na
na
54.0
na
na
na
na
0.3
na
na
(iii) Advance action for Fifth Plan
na
na
120.0
na
na
na
na
0.8
na
na
8576.5
6625.4
15778.8
39426.2
12176.5
100.0
100.0
100.0
100.0
100.0
TOTAL Source : Planning Commission na
Not available
a
Includes buffer stocks: ` 140 crore for 1968-69, ` 25 crore for 1969-70, ` 50 crore for 1971-72, ` 25 crore for 1972-73 and ` 24 crore for 1973-74. Thus the figure for the buffer stocks during the Fourth Plan works out to ` 124 crore against the original plan provision of ` 255 crore.
b
Includes new and renewable sources of energy.
c
Includes Hill and Tribal Areas.
d
For the Fifth Plan and Annual Plan break up of labour welfare and craftsman training and other programmes is not available.
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A40
Economic Survey 2012-13 2.5 : SIXTH PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES, 1980-85 Amount (` ` crore)
Head of development
1 I.
Agriculture
Sixth Plan outlay 1980-85 2 5695.1
Percentage distribution
Sixth Plan (Actual) 1980-85
Sixth Plan outlay 1980-85
Sixth Plan (Actual) 1980-85
3
4
5
6623.5
5.8
6.1
II.
Rural development
5363.7
6996.8
5.5
6.4
III.
Special area programmes
1480.0
1580.3
1.5
1.4
IV.
Irrigation and flood control
12160.0
10929.9
12.5
10.0
V.
Energy
26535.4
30751.3
27.2
28.1
1. Power
19265.4
18298.6
19.8
16.7
100.0
163.1
0.1
0.1
2. New and renewable sources of energy
VI.
3. Petroleum
4300.0
8482.1
4.4
7.8
4. Coal
2870.0
3807.5
2.9
3.5
15017.6
16947.5a
15.4
15.5
1780.5
1945.1
1.8
1.8
13237.1
14790.4a
13.6
13.5
…
212.0
…
0.2
12412.0
14208.4
12.7
13.0
5100.0
6586.7
5.2
6.1
Industry and minerals 1. Village and small scale industries 2. Large and medium industries 3. Others
VII. Transport 1. Railways 2. Others VIII. Communications and information & broadcasting IX.
Science & Technology
X.
Social services 1. Education 2. Health and family welfare
7312.0
7612.7
7.5
6.9
3134.3
3469.5
3.2
3.2
865.2
1020.4b
0.9
0.9
14035.2
15916.6
14.4
14.5
2523.7
2976.6
2.6
2.7
2831
3412.2
2.9
3.1
3. Housing and urban development
2488.4
2839.1
2.6
2.6
4. Other social services
6192.1
6688.7
6.3
6.1
XI.
Others
XII.
Total (I to XI)
801.5
847.5
0.9
0.8
97500.0
109291.7 (110467.3)
100.0
100.0
a. Central Plans
47250.0
57825.2
48.5
52.9
b. State Plans
48600.0
49458.2 (50633.8)
49.8
45.3
1650.0
2008.3
1.7
1.8
c. Union Territory Plans Source : Planning Commission a
Excludes ` 2.85 crore for National Test Houses.
b
Includes ` 2.85 crore for National Test Houses.
Note : Figures in brackets are inclusive of expenditure ( ` 191 crore in 1980-81, ` 162 crore in 1981-82, ` 442 crore in 1982-83, ` 226 crore in 1983-84 and ` 154.5 crore in 1984-85) on works financed by central assistance for natural calamities’ relief .
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Economic Survey 2012-13
A41
2.6 : PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES & UNION TERRITORIES, 1985-92 Amount (` ` crore) Head of development
Seventh Plan 1985-90 (Actual)
1 I.
Annual Plan 1990-91 (Actual)
2
3
Percentage distribution Annual Plan 1991-92 (Actual) 4 3850.5
Seventh Plan 1985-90 (Actual)
Annual Plan 1990-91 (Actual)
Annual Plan 1991-92 (Actual)
5
6
7
5.8
5.8
5.9
Agriculture & allied activities
12792.6
3405.4
15246.5
4149.9
4141.6
7.0
7.1
6.4
3470.3
986.3
1067.3
1.6
1.7
1.6
7.6
6.8
6.5
II.
Rural development
III.
Special area programmes
IV.
Irrigation & flood control
16589.9
3974.1
4231.9
V.
Energy
61689.3
17101.1
19733.6
28.2
29.3
30.5
a. Power
37895.3
11387.8
14517.9
17.3
19.5
22.4
b. Petroleum
16008.8
3592.1
3339.8
7.3
6.2
5.2
7122.3
1984.8
1709.6
3.3
3.4
2.6
662.9
136.4
166.3
0.3
0.2
0.3
29220.3
6374.3
6564.5
13.4
10.9
10.1
c. Coal & lignite d. Non-conventional sources of energy VI.
Industry & minerals a. Village & small scale industries b. Other industries
VII. Transport
3249.3
877.9
941.2
1.5
1.5
1.5
25971.1
5496.4
5623.3
11.9
9.4
8.7
29548.1
8074.3
9314.0
13.5
13.8
14.4
a. Railways
16549.2
4892.8
5393.3
7.6
8.4
8.3
b. Others
12998.9
3181.5
3920.7
5.9
5.5
6.1
VIII. Communications
8425.5
2948.3
3613.7
3.9
5.1
5.6
IX.
Science, technology & environment
3023.9
758.7
861.7
1.4
1.3
1.3
X.
General economic services
2249.6
754.7
843.0
1.0
1.3
1.3
XI.
Social services
34959.7
9606.6
10298.7
16.0
16.5
15.9
a. Education
7685.5
2316.5
2599.0
3.5
4.0
4.0
b. Medical & public health
3688.6
1040.8
924.8
1.7
1.8
1.4
c. Family welfare
3120.8
782.2
1023.3
1.4
1.3
1.6
d. Housing
2722.8
939.8
603.9
1.2
1.6
0.9
e. Urban development
2113.4
740.2
748.4
1.0
1.3
1.2
15628.5
3787.1
4399.3
7.1
6.5
6.8
1513.8
235.6
230.7
0.7
0.4
0.4
218729.6 (221435.4)
58369.3
64751.2
100.0
100.0
100.0
a. Central Plan
127519.6
34254.7
37846.5
58.3
58.7
58.4
b. State Plans
87492.4 (90198.2)
23116.9
25739.3
40.0
39.6
39.8
3717.7
997.7
1165.4
1.7
1.7
1.8
f. Other social services XII. General services XIII. Total (I to XII)
c. Union Territory Plans Source: Planning Commission. Notes: 1. As per revised budget classification.
2. Figures in brackets are inclusive of expenditure on works financed by central assistance for natural calamities’ relief. 3. Annual Plan expenditure in respect of some erstwhile Union Territories have been included in State Plans’ figures consequent on their attaining Statehood. 4. Totals may not add up because of rounding. 5. Expenditure for petrochemical and engineering units under the Ministry of Petroleum and Natural Gas has been excluded from Energy and included under Industry and Minerals.
http://indiabudget.nic.in A—41
24000.0
10507.0
b. Petroleum
c. Coal & lignite
Industry & minerals
b. Other industries
a. Village & small scale industries
http://indiabudget.nic.in
A—42
General economic services
Social services
X.
XI.
6500.0 5273.0 5277.0
34786.3
c. Family welfare
d. Housing
e. Urban development
f. Other social services 266.0
5039.5
791.3
650.6
1008.1
1241.9
27916.7
43693.8
72852.4
Source : Planning Commission. Note : Figures may not add upto total because of rounding.
6250.0
179985.0
b. State Plans
c. Union Territory Plans
247865.0
a. Central Plans
434100.0
1810.5
7575.9
General services
2619.4
19599.7
a. Education
b. Medical & public health
1213.9
11322.8
1490.1
929.9
5150.9
4500.7
6162.0
10662.7
6448.9
995.3
7444.2
157.4
2276.5
20289.8
4705.2
1283.8
79011.9
XIII. Total (I to XII)
XII.
9041.7 4549.5
25110.0
Science, technology & environment
IX.
28723.6
b. Others
VIII. Communications
27202.0
55925.6
40587.5
6334.2
46921.7
1465.4
32525.3
a. Railways
VII. Transport
VI.
5698.5
79588.7
Energy
a. Power
V.
d. Non-conventional sources of energy
12157.4
115561.1
Irrigation & flood control
IV.
6750.1
5091.4
Special area programmes
34425.4
Rural development
III.
3 4215.6
II.
22467.2
Annual Plan 1992-93 (Actual)
Agriculture & allied activities
2
Eighth Plan Outlay 1992-97
I.
1
Head of development
1364.2
31500.6
55215.9
88080.7
462.6
6109.0
855.8
1291.5
1312.6
1300.4
3147.3
14016.6
848.8
1153.4
6201.6
6075.7
5901.0
11976.7
7328.9
1152.2
8481.1
253.5
2293.1
9589.3
14773.1
26909.0
5370.5
1363.6
7033.3
4263.5
4
Annual Plan 1993-94 (Actual)
1654.4
37459.1
59053.8
98167.3
651.1
8077.6
1025.2
1055.6
1684.9
1625.9
3940.0
17409.2
1159.6
1407.4
7273.8
6624.6
5472.0
12096.6
7575.6
1512.4
9088.0
253.3
2238.7
8643.6
16346.4
27482.0
6104.1
1428.2
8717.1
5350.2
5
Annual Plan 1994-95 (Actual)
Amount ( ` crore)
1842.5
42044.3
63493.7
107380.4
866.7
8928.0
1535.6
1356.6
1743.5
1929.1
5355.7
20848.4
1104.0
1764.8
8626.2
7431.9
6335.0
13766.9
9013.7
1794.4
10808.1
310.2
1948.3
8123.5
16511.4
26893.3
7245.1
407.8
9967.2
5082.0
6
Annual Plan 1995-96 (Actual)
2486.7
49016.8
67472.9
118976.4
1172.5
11139.3
2064.6
3177.5
223.7
2068.3
6536.3
25209.6
1579.2
1854.0
9122.4
8360.1
8310.0
16670.1
10256.0
1811.4
12067.4
426.7
1958.6
8007.6
16937.5
27330.4
7974.0
449.1
9563.1
5984.4
7
Annual Plan 1996-97 (Actual)
1.4
41.5
57.1
100.0
0.4
8.0
1.2
1.2
1.5
1.7
4.5
18.2
1.0
2.1
5.8
6.6
6.3
12.9
9.3
1.5
10.8
0.3
2.4
5.5
18.3
26.6
7.5
1.6
7.9
5.2
8
Eighth Plan Outlay 1992-97
1.7
38.3
60.0
100.0
0.4
6.9
1.1
0.9
1.4
1.7
3.6
15.5
2.0
1.3
7.1
6.2
8.5
14.6
8.9
1.4
10.2
0.2
3.1
7.8
16.7
27.9
6.5
1.8
7.0
5.8
9
Annual Plan 1992-93 (Actual)
1.5
35.8
62.7
100.0
0.5
6.9
1.0
1.5
1.5
1.5
3.6
15.9
1.0
1.3
7.0
6.9
6.7
13.6
8.3
1.3
9.6
0.3
2.6
10.9
16.8
30.6
6.1
1.5
8.0
4.8
10
Annual Plan 1993-94 (Actual)
1.7
38.2
60.1
100.0
0.7
8.2
1.0
1.1
1.7
1.7
4.0
17.7
1.2
1.4
7.4
6.7
5.6
12.3
7.7
1.5
9.3
0.3
2.3
8.8
16.7
28.0
6.2
1.5
8.9
5.5
11
Annual Plan 1994-95 (Actual)
1.7
39.2
59.1
100.0
0.8
8.3
1.4
1.3
1.6
1.8
5.0
19.4
1.0
1.6
8.0
6.9
5.9
12.8
8.4
1.7
10.1
0.3
1.8
7.6
15.4
25.0
6.7
0.4
9.3
4.7
12
Annual Plan 1995-96 (Actual)
Percentage distribution
2.7 : EIGHTH PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES, 1992-97
2.1
41.2
56.7
100.0
1.0
9.4
1.7
2.7
0.2
1.7
5.5
21.2
1.3
1.6
7.7
7.0
7.0
14.0
8.6
1.5
10.1
0.4
1.6
6.7
14.2
23.0
6.7
0.4
8.0
5.0
13
Annual Plan 1996-97 (Actual)
A42 Economic Survey 2012-13
http://indiabudget.nic.in
A—43
42462.0 74686.0 3649.0 55420.0 222375.0 a a a a 65148.0 a a 119373.0 a a 47280.0 18458.0 14580.0 183273.0 a a a a a a 12496.0 859200.0 489361.0 369839.0 na
2
Ninth Plan 1997-2002 (Actual)
5929.3 10074.3 874.0 9905.0 31792.7 19396.3 9682.7 2212.7 501.0 10306.1 1813.9 8492.2 18101.1 8239.0 9862.1 10131.5 2004.0 1811.0 26867.1 7656.6 2641.5 1822.2 2117.5 2944.4 9685.0 1961.2 129757.3 70861.4 56223.9 2671.9
3
Annual Plan 1997-98 (Actual)
7698.2 10985.5 1183.8 10813.7 35572.4 21159.0 11213.6 2540.2 659.5 7978.9 1776.7 6202.3 20347.0 8857.0 11490.0 11375.6 2442.5 3071.3 38737.9 9684.1 5411.9 2342.7 3143.4 2820.6 15335.1 1373.6 151580.4 85901.4 62786.6 2892.3
4 7576.9 9852.4 1045.5 13529.1 40893.4 28015.4 9867.2 2093.5 917.3 6866.0 909.5 5956.6 25733.8 9395.0 16338.8 31880.9 3248.5 2537.6 40919.5 11690.5 4055.3 3200.0 3588.4 3143.1 15242.2 1653.2 185736.8 109119.3 72428.6 4188.9
6
Annual Plan 2000-2001 (Actual)
8248.3 14234.8 919.1 14552.0 37145.4 25180.0 8702.1 2106.8 1156.5 7942.0 1842.0 6100.0 29918.3 10177.0 19741.3 18083.0 3669.7 2948.0 46474.0 10807.7 4408.5 3613.9 6674.5 5260.1 15709.3 2180.6 186315.2 104403.8 76838.7 5072.7
7
Annual Plan 2001-2002 (Actual)
4.9 8.7 0.4 6.5 25.9 a a a a 7.6 a a 13.9 a a 5.5 2.1 1.7 21.3 a a a a a a 1.5 100.0 57.0 43.0 na
8
Ninth Plan 1997-2002 (Actual)
4.6 7.8 0.7 7.6 24.5 14.9 7.5 1.7 0.4 7.9 1.4 6.5 13.9 6.3 7.6 7.8 1.5 1.4 20.7 5.9 2.0 1.4 1.6 2.3 7.5 1.5 100.0 54.6 43.3 2.1
9
Annual Plan 1997-98 (Actual)
5.1 7.2 0.8 7.1 23.5 14.0 7.4 1.7 0.4 5.3 1.2 4.1 13.4 5.8 7.6 7.5 1.6 2.0 25.6 6.4 3.6 1.5 2.1 1.9 10.1 0.9 100.0 56.7 41.4 2.0
10
Annual Plan 1998-99 (Actual)
4.6 7.0 0.9 8.8 22.3 13.3 6.2 2.3 0.5 4.5 1.1 3.4 14.6 5.6 9.0 8.7 1.8 1.5 23.9 6.2 2.2 1.8 2.2 1.8 9.7 1.2 100.0 54.4 43.6 2.0
11
Annual Plan 1999-2000 (Actual)
Percentage distribution
4.1 5.3 0.6 7.3 22.0 15.1 5.3 1.1 0.5 3.7 0.5 3.2 13.9 5.1 8.8 17.2 1.7 1.4 22.0 6.3 2.2 1.7 1.9 1.7 8.2 0.9 100.0 58.7 39.0 2.3
12
Annual Plan 2000-01 (Actual)
4.4 7.6 0.5 7.8 19.9 13.5 4.7 1.1 0.6 4.3 1.0 3.3 16.1 5.5 10.6 9.7 2.0 1.6 24.9 5.8 2.4 1.9 3.6 2.8 8.4 1.2 100.0 56.0 41.2 2.7
13
Annual Plan 2001-2002 (Actual)
Notes : 1. Figures may not add upto total because of rounding. 2. For 1999-2000, anticipated expenditure has been taken into account for Centre, for some of the sub-heads included in other social services and general service as actual expenditure figures are not available. 3. For 2000-01 anticipated expenditure has been taken into account for Centre for some of heads like social services, industry & minerals, general economic services and general services. 4. For actual expenditure Annual Plan 2001-02, the Revised Estimate have been taken into account for Central Sector for some of the sub-heads included in agriculture and social services and others, as actual expenditure figures are not available. 5. The Ninth Plan figures are at 1996-97 prices and the Annual Plan figures are at current prices. 6. State Plan figures for the Ninth Plan (1997-2002) include allocation for Union Territory Plans also.
7365.4 11280.5 1513.9 14209.7 35809.6 21327.4 9953.2 3719.1 809.9 7247.8 1746.6 5501.2 23462.6 9057.0 14405.6 14038.6 2941.7 2451.6 38439.4 9999.6 3568.7 2969.1 3516.4 2823.2 15562.5 1847.4 160608.2 87297.4 70027.0 3283.9
5
Annual Plan 1999-2000 (Actual)
Amount ( ` crore) Annual Plan 1998-99 (Actual)
a : Ninth Plan allocations were made broad sector-wise.
Agricultural & allied activities Rural development Special area programmes Irrigation and flood control Energy a. Power b. Petroleum c. Coal & lignite d. Non-conventional sources of energy Industry and minerals a. Village and small scale industries b. Other industries Transport a. Railways b. Others Communications Science, technology & environment General economic services Social services a. Education b. Medical & public health c. Family welfare d. Housing e. Urban development f . Other social services General services Total ( I to XII ) a. Central Plan b. State Plans c. Union Territory Plans
Source : Planning Commission. na : Not available
XII. XIII.
VIII. IX. X. XI.
VII.
VI.
I. II. III. IV. V.
1
Head of development
2.8 : NINTH PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES (1997-98 to 2001-02)
Economic Survey 2012-13
A43
a
http://indiabudget.nic.in
A—44
893183 632456 na
1525639
16328
a a a a a a
11965
126247 78430 5526
210203
1868
11603 4340 3735 7685 6524 23066
56954
4995
4160
35244 11108 24136 13057
2083 6692
8776
1712
25281 15806 1911
44710
Source : Planning Commission. na Not Available a Tenth Plan allocations have been made broad sector-wise b Some UT outlays included in State outlays
a. Central Plans b. State Plans c. Union Territory Plansb
XIII Total (I to XII)
XII General services
a. Education b. Medical & public health c. Family welfare d. Housing e. Urban development f . Other social services
347391
38630
XI Social services
30424
X General economic services
225977 a a 98968
a a
IX Science, Technology &Environment
VII Transport a. Railways b. Others VIII Communications
a. Village & small scale Industries b. Other industries
58939
d. Non-conventional sources of energy
VI Industry & Minerals
a a a
403927
V Energy
a. Power b. Petroleum c. Coal & Lignite
103315
IV Irrigation & flood control
1066
19753
121928 20879
7655
3
Annual Plan 2002-03 (Actual)
58933
2
Tenth Plan 2002-07 (Actual)
III Special area programmes
II Rural development
I Agriculture & allied activities
1
Head of development
132262 86756 5809
224827
1801
13069 4649 4230 8476 6704 25597
62726
5955
4356
35267 13044 22223 12875
2186 5517
7703
1205
30785 16626 1583
50199
12900
1540
20729
8776
4
Annual Plan 2003-04 (Actual)
150818 107206 5641
263665
3312
na na na na na na
79734
5245
5521
38772 na na 9281
na na
10113
896
34315 22999 2518
60729
19024
2385
18584
10963
5
Annual Plan 2004-05 (Actual)
Amount ( ` crore)
104658 142519 na
247177
4098
na na na na na na
92350
6084
6608
38766 na na 494
na na
7898
na
na na na
22043
26332
4234
25717
12554
6
Annual Plan 2005-06 (Actual)
124342 185570 na
309912
5934
na na na na na na
110735
9053
6994
52520 na na 749
na na
10344
na
na na na
29450
31803
5603
30154
16573
7
Annual Plan 2006-07 (Actual)
58.5 41.5 na
100.0
1.1
a a a a a a
22.8
2.5
2.0
14.8 a a 6.5
a a
3.9
a
a a a
26.5
6.8
1.4
8.0
3.9
8
Tenth Plan 2002-07 (Actual)
60.1 37.3 2.6
100.0
0.9
5.5 2.1 1.8 3.7 3.1 11.0
27.1
2.4
2.0
16.8 5.3 11.5 6.2
1.0 3.2
4.2
0.8
12.0 7.5 0.9
21.3
5.7
0.5
9.4
3.6
9
Annual Plan 2002-03 (Actual)
58.8 38.6 2.6
100.0
0.8
5.8 2.1 1.9 3.8 3.0 11.4
27.9
2.6
1.9
15.7 5.8 9.9 5.7
1.0 2.5
3.4
0.5
13.7 7.4 0.7
22.3
5.7
0.7
9.2
3.9
10
Annual Plan 2003-04 (Actual)
57.2 40.7 2.1
100.0
1.3
na na na na na na
30.2
2.0
2.1
14.7 na na 3.5
na na
3.8
na
na na na
23.0
7.2
0.9
7.0
4.2
11
Annual Plan 2004-05 (Actual)
42.3 57.7 na
100.0
1.7
na na na na na na
37.4
2.5
2.7
15.7 na na 0.2
na na
3.2
na
na na na
8.9
10.7
1.7
10.4
5.1
12
Annual Plan 2005-06 (Actual)
Percentage distribution
40.1 59.9 na
100.0
1.9
na na na na na na
35.7
2.9
2.3
16.9 na na 0.2
na na
3.3
na
na na na
9.5
10.3
1.8
9.7
5.3
13
Annual Plan 2006-07 (Actual)
2. 9 : TENTH PLAN OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES 2002-07 AND ANNUAL PLANS 2002-03 TO 2006-07
A44 Economic Survey 2012-13
854123
153600
572443
V Energy
VI Industry & Minerals
VII Transport
http://indiabudget.nic.in
A—45
XII General services
Source : Planning Commission. RE Revised Estimates
XIII Total (I to XII)
3644718
42283
1102327
62523
X General economic services
XI Social services
87933
IX Science, Technology &Environment
95380
210326
IV Irrigation & flood control
VIII Communications
26329
III Special area programmes
301069
II Rural development
3
Eleventh Plan (2007-12) Projected (At 2006-07 prices)
136381
2
Head of development
I Agriculture & allied activities
1
S. No.
475012
6243
153133
10183
9909
8348
83743
19501
84677
38275
6607
34309
20083
4
Annual Plan 2007-08 (Actual)
628161
6999
209206
11108
11860
13090
105064
30260
106212
41164
6999
59080
27117
5
Annual Plan 2008-09 (Actual)
717035
7972
215955
11482
13267
14748
127356
39041
148372
42853
7875
58615
29498
6
Annual Plan 2009-10 (Actual)
826268
9088
272031
20496
15948
10336
139541
45056
150251
46049
10093
67008
40370
7
Annual Plan 2010-11 (Actual)
Amount (` ` crore)
1030461
25295
347250
36107
18313
11994
157480
51794
194759
60993
11242
69197
46037
8
3676936
55597
1197576
89376
69297
58516
613185
185653
684271
229334
42817
288209
163105
9
100.0
1.2
30.2
1.7
2.4
2.6
15.7
4.2
23.4
5.8
0.7
8.3
3.7
10
100.0
1.3
32.2
2.1
2.1
1.8
17.6
4.1
17.8
8.1
1.4
7.2
4.2
11
Annual Eleventh Eleventh Annual Plan Plan Plan Plan 2011-12 (2007-12) (2007-12) 2007-08 (RE) Realization Projected (Actual) (At current (At 2006-07) prices) prices)
100.0
1.1
33.3
1.8
1.9
2.1
16.7
4.8
16.9
6.6
1.1
9.4
4.3
12
Annual Plan 2008-09 (Actual)
100.0
1.1
30.1
1.6
1.9
2.1
17.8
5.4
20.7
6.0
1.1
8.2
4.1
13
Annual Plan 2009-10 (Actual)
100.0
1.1
32.9
2.5
1.9
1.3
16.9
5.5
18.2
5.6
1.2
8.1
4.9
14
100.0
2.5
33.7
3.5
1.8
1.2
15.3
5.0
18.9
5.9
1.1
6.7
4.5
15
100.0
1.5
32.6
2.4
1.9
1.6
16.7
5.0
18.6
6.2
1.2
7.8
4.4
16
Annual Annual Eleventh Plan Plan Plan 2010-11 2011-12 (2007-12) (Actual) (RE) Realization (At current prices)
Percentage distribution
2.10 : ELEVENTH PLAN (2007-2012) OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES
Economic Survey 2012-13
A45
A46
Economic Survey 2012-13 2.11 : TWELFTH PLAN (2012-17) OUTLAY BY HEADS OF DEVELOPMENT : CENTRE, STATES AND UNION TERRITORIES Amount (` ` crore)
S.No.
Head of development
Percentage distribution
Twelfth Plan (2012-17) Projected (At current prices)
Annual Plan 2012-13 (BE)
Twelfth Plan (2012-17) Projected (At current prices)
Annual Plan 2012-13 (BE)
3
4
5
6
1
2
I
Agriculture & allied activities
363273
56669
4.7
4.5
Rural development
457464
75062
6.0
6.0
80370
16149
1.0
1.3
II III
Special area programmes
IV
Irrigation & flood control
V VI VII VIII IX X XI XII XIII
Energy Industry & Minerals Transport Communications
422012
75327
5.5
6.0
1438466
213531
18.8
17.1
377302
72811
4.9
5.8
1204172
184357
15.7
14.7
80984
15411
1.1
1.2
Science, Technology &Environment
167350
24338
2.2
1.9
General economic services
305612
52497
4.0
4.2
2664843
429648
34.7
34.3
107959
35916
1.4
2.9
7669807
1251715
100.0
100.0
Social services General services Total (I to XII)
Source : Planning Commission. BE : Budget Estimates
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Economic Survey 2012-13
A47
2.12 : FINANCING FOR CENTRAL AND STATE ANNUAL PLANS : 2011-12 (RE/LE) AND 2012-13 (BE/AP) (` crore) Items
2011-12 States and UTs (LE)
1 I
Domestic non-debt resources
II
Total (2 + 3)
States and UTs (AP)
Centre (BE)
Total (5 + 6)
2
3
4
5
6
112302
-23296
89006
142238
15793
158031
7
a
BCR
89418
-118372
-28954
123551
-12377
111174
b
MCR (excluding deductions for repayment of loans)
-2952
95076
92124
-9426
28170
18744
c
Plan grants from GOI (TFC)
11739
0
11739
13913
0
13913
d
ARM
e
Adjustment of opening balance
1568
0
1568
5961
0
5961
12528
0
12528
8240
0
8240
Domestic Debt Resources
190921
436111
627032
228222
492198
720419
Net Borrowings (i) - (ii)
190921
436111
627032
228222
492198
720419
(i) Gross Borrowings (a to f)
248853
436111
684964
294161
492198
786359
State Provident Fund (Net)
31161
10000
41161
32396
12000
44396
b
Small Savings (Net)
17987
-10302
7685
21791
1198
22988
c
Negotiated Loans
18270
0
18270
22935
0
22935
d
Government of India Loans(EAPS)
e
Market Borrowings (Net)
f
Bonds/Debentures
a
(ii) Repayments
III
Centre (RE)
2012-13
14037
0
14037
17304
0
17304
167397
436414
603811
199735
479000
678735
0
0
0
0
0
0
57931
0
57931
65939
0
65939
Own Resources (incl. Borrowings) I+II
303223
412815
716038
370460
507990
878450
Central Assistance( Grants) (1+2+3)
101277
-105199
-3922
126624
-129998
-3374
1
Normal Central
2
ACA for EAPsb
3
Others
Assistancea
22888
-21832
1056
25875
-25589
286
4102
-13350
-9248
6471
-13500
-7029
74286
-70017
4270
94278
-90909
3369
404500
307617
712117
497084
377992
875076
Contribution of Public Sector Enterprises (PSE)
52796
236766
289562
88588
260482
349070
C
Local Bodies
10081
0
10081
12991
0
12991
D
Net Inflow from Abroad
0
13788
13788
0
13035
13035
467377
558170
1025548
598662
651510
1250172
A
Government Resources (I+II+III)
B
Aggregate Plan Resources (A+B+C+D) Source : Planning Commission. LE Latest Estimates AP Annual Plan RE Revised Estimates BE Budget Estimates BCR Balance from current revenues MCR Miscellaneous capital receipts ARM Additional resource mobilisation ACA Additional Central assistance EAPs Externally aided projects a
NCA (Grants) and Other (Grants) under Central Assistance in the States and UTs columns include the allocation for Delhi & Puducherry in both the years of 2011-12 (LE) and 2012-13 (AP).
b
ACA for EAPs (Grants) includes ` 10000 crore loan amount in Centre’s columns for 2011-12 (RE) and ` 11000 crore for 2012-13 (BE).
Note : UTs includes only UTs with legislature, namely, Delhi & Puducherry.
http://indiabudget.nic.in A—47
A48
Economic Survey 2012-13 2.13 : OVERALL FINANCING PATTERN OF THE PUBLIC SECTOR PLAN OUTLAY DURING THE NINTH PLAN : 1997-2002 (` crore at 1996-97 prices) Centre (Including UTs without Legislature)
Resource 1
States and UTs with Legislature
2
1. Balance from current revenues (BCR) 2. Resources of PSEs 3. Borrowings (including net MCR & other liabilities) 4. Net inflow from abroad
b
5. Aggregate resources (1 to 4) 6. Assistance for plans of States and UTs with Legislature 7. Resources for the Public Sector (5+6)
3
Total 4
–2778
1372
–1406
285379
55030a
340409
316760
143419
460179
60018
…
60018
659379
199821
859200
–167158
167158
…
492221
366979
859200
Source : Planning Commission. MCR - Miscellaneous capital receipts. a For States and UTs : Resources of PSEs are inclusive of 3/4th of total LIC/GIC loans, and the full amount of loan from Rural Electrification Corporation (REC), Industrial Development Bank of India (IDBI) and “others” under negotiated loans; Bonds and debentures are also included under this item. Accordingly, item 3 i.e. Borrowings of States / UTs is exclusive of the items which are already included in item 2 i.e. Resources of PSEs. b
Consists of external loans amounting to ` 49,956 crore and external grants of ` 10,062 crore.
2.14 : OVERALL FINANCING PATTERN OF THE PUBLIC SECTOR PLAN OUTLAY DURING THE TENTH PLAN : 2002-2007 (` crore at 2001-02 prices) Resource
Centre (Including UTs without Legislature)
1 1
Balance from current revenues (BCR )
2
Borrowings(including net MCR & other liabilities)
2
States and UTs with Legislature 3
Total 4
-6385
26578
20193
685185
261482
946667
3
Net inflow from abroad
27200
…
27200
4
Centre’s GBS (1+2+3)
706000
…
706000
5
Resources of PSEs
515556
82684
598240
6
State’s Own Resources (1+2+5)
7
Central Assistance States & UTs
8
Resources of the Public Sector Plan (1+2+3+5+7)
Source : Planning Commission. GBS: Gross Budgetary Support.
http://indiabudget.nic.in A—48
…
370744
370744
-300265
300265
…
921291
671009
1592300
Economic Survey 2012-13
A49
2.15 : OVERALL FINANCING PATTERN OF THE PUBLIC SECTOR PLAN OUTLAY DURING THE ELEVENTH PLAN : 2007-2012 (` crore at 2006-07 prices) Resource
Centre (Including UTs without Legislature)
States and UTs with Legislature
Total
2
3
4
1 1
Balance from current revenues (BCR )
653989
385050
1039039
2
Borrowings(including net MCR & other liabilities)
767722
649423
1417145
3
Net inflow from abroad
…
…
…
4
Centre’s GBS (1+2+3)
1421711
…
2456184
5
Resources of PSEs
1059711
128824
1188535
6
State’s Own Resources (1+2+5)
…
1163296
1163296
7
Central Assistance States & UTs
-324851
324851
…
8
Resources of the Public Sector Plan (1+2+3+5+7)
2156571
1488147
3644718
Source : Eleventh Plan Document, Planning Commission.
2.16 : OVERALL FINANCING PATTERN OF THE PUBLIC SECTOR PLAN OUTLAY DURING THE TWELFTH PLAN : 2012-2017 (` crore at current prices) Resource 1
Centre
States and UTs
Total
2
3
4
1
Balance from current revenues (BCR )
1387371
959979
2347350
2
Borrowings(including net MCR)
2181255
1518301
3699556
3
Net inflow from abroad
…
…
…
4
Centre’s GBS (1+2+3)
3568626
…
3568626
5
Resources of Public Sector Enterprises
1622899
380319
2003218
6
State’s Own Resources (1+2+5)
…
2858599
2858599
7
Central Assistance States & UTs
-857786
857786
…
8
Resources of the Public Sector Plan (1+2+3+5+7)
4333739
3716385
8050123
Source : Draft Twelfth Plan Document, Planning Commission.
http://indiabudget.nic.in A—49
A50
Economic Survey 2012-13 2.17 : FINANCIAL PERFORMANCE OF INDIAN RAILWAYS (` crore) 1980-81 1
1990-91
2001-02
2008-09
2009-10
2010-11
2011-12
2012-13 (BE)
2
3
4
5
6
7
8
9
2624
12096
37837
79862
86964
94536
104110
132552
(i) Passenger coaching
827
3147
11197
21931
23488
25793
28246
36073
(ii) Other coaching
116
336
872
1972
2235
2470
2717
2994
1618
8408
24845
53433
58502
62845
69548
89339
82
242
944
2501
2880
3418
3643
4096
1. Gross traffic receipts
(iii) Goods (iv) Other earnings (v) Suspense account 2. Working expenses (i) Ordinary working expenses
-19
-37
-21
25
-141
10
-43
50
2537
11154
36293
71839
82915
89474
98667
112400
2233
8234
28703
54349
65810
68139
74537
84400
(ii) Appropriations to depreciation reserve fund
220
1950
2000
10490
2187
5515
6520
9500
(iii) Appropriation to pension fund
84
970
5590
7000
14918
15820
17610
18500
87
942
1544
8023
4049
5062
5443
20152
3. Net traffic receipts (1-2) 4. Net miscellaneous receipts 5. Net revenues (3+4)
40
171
793
1152
1495
1285
1339
2081
127
1113
2337
9175
5544
6347
6782
22233
325
938
2337
4718
5543
4941
5656
6676
6. Dividend (i) Payable to general revenues (ii) Payment of Deferred Dividend (iii) Deferred dividend (iv) Net dividend payable
0
0
1000
0
0
0
0
0
325
938
1337
4718
5543
4941
5656
6676
7. Surplus (+) or deficit (-)
-198
175
1000
4457
1
1406
1126
15557
8. (i) Capital at charge
6096
16126
37757
72238
87655
130540
122772
140852
(ii) Investment from capital fund
0
0
10390
32063
35346
38676
38676
43591
6096
16126
48147
104301
123001
169216
161448
184443
9. Item 5 as % of item 8(iii)
2.1
6.9
4.9
8.8
4.5
3.8
4.2
12.1
10. Item 7 as % of item 8(iii)
-3.2
1.1
2.1
4.3
0.0
0.8
0.7
8.4
(iii) Total[(i)+(ii)]
Source : Ministry of Railways. BE:
Budget Estimates.
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Economic Survey 2012-13
A51
2.18 : FINANCIAL PERFORMANCE OF THE DEPARTMENT OF POSTS (` crore) 1980-81 1
1990-91
2000-01
2008-09
2009-10
2010-11
2011-12
2012-13 (BE)
2
3
4
5
6
7
8
9
1. Gross receipts
278
840
3298
5862
6267
6962
7899
7793
2. Net working expenses
346
1033
4848
9455
12908
13308
13705
13715
3. Net receipts (1-2)
-68
-193
-1550
-3593
-6641
-6346
-5806
-5921
4. Dividend to general revenues 5. Surplus(+)/deficit (-) (3-4)
4
0
0
0
0
0
0
0
-72
-193
-1550
-3593
-6641
-6346
-5806
-5921
Source : Department of Posts, Ministry of Communication & Information Technology. BE:
Budget Estimates.
http://indiabudget.nic.in A—51
A52
Economic Survey 2012-13 2.19 : Receipts and expenditure of the Central Government (` crore)
1 1. Revenue receipts (a+b) (a) Tax revenue (net of States’ share) (b) Non-tax revenue
2007-08
2008-09
2009-10
2010-11a
2011-12 (BE)
2011-12 (P)
2012-13 (BE)
2
3
4
5
6
7
8
541864
540259
572811
788471
789892
756193
935685
439547
443319
456536
569869
664457
631886
771071
102317
96940
116275
218602
125435
124307
164614
594433
793798
911809
1040723
1097162
1140915
1286109
171030
192204
213093
234022
267986
272455
319759
(b) Major subsidies
66638
123206
134658
164516
134411
146951
179554
(c) Defence expenditure
54219
73305
90669
92061
95216
102827
113828
2 . Revenue expenditure of which: (a) Interest payments
3. Revenue deficit (2-1) 4. Capital receipts
52569
253539
338998
252252
307270
384722
350424
170807
343697
451676
408857
467837
542251
555240
5100
6139
8613
12420
15020
16898
11650
of which: (a) Recovery of loans
(b) Other receipt (mainly CPSEs disinvestment) 38795 (c) Borrowings and other liabilitiesb
126912
566
24581
22846
40000
15622
30000
336992
418482
373591
412817
509731
513590
5. Capital expenditure
118238
90158
112678
156605
160567
157529
204816
6. Total expenditure [2+5=6(a)+6(b)]
712671
883956
1024487
1197328
1257729
1298444
1490925
(a) Plan expenditure
205082
275235
303391
379029
441547
413513
521025
(b) Non-plan expenditure
507589
608721
721096
818299
816182
884931
969900
7. Fiscal deficit [6-1-4(a)-4(b)]
126912
336992
418482
373591
412817
509731
513590
-44118
144788
205389
139569
144831
237276
193831
of which:
8. Primary deficit [7-2(a)] Memorandum items (a) Interest receipts (b) Non-plan revenue expenditure
21060
20717
21784
19734
19578
20099
19231
420861
559024
657925
726491
733558
806820
865596
Source : Union Budget documents and Controller General of Accounts. BE CPSEs a b
Budget Estimates
P: Provisional Actuals (Unaudited)
Central Public Sector Enterprises. Based on provisional Actuals for 2010-11. Does not include receipts in respect of Market Stabilization Scheme, which will remain in the cash balance of the Centeral Government and will not be used for expenditure.
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Economic Survey 2012-13
A53
2.20 : Outstanding liabilities of the Central Government
2007-08 1
2008-09
2009-10
2010-11
(` crore) (end March) 2011-12 2012-13 (RE) (BE)
2
3
4
5
6
7
Internal liabilitiesa
2725394
3036132
3395877
3781135
4300764
4847274
a) Internal debt
1799651
2019841
2328339
2667115
3202411
3743658
1104564
1338194
1746619
2072033
2508447
2987447
695087
681647
581720
595082
693964
756211
b) Other Internal liabilities
925743
1016291
1067538
1114020
1098353
1103616
2.
External debt(outstanding)b
112031
123046
134083
157639
167950
178098
3.
Total outstanding liabilities (1+2)
2837425
3159178
3529960
3938774
4468714
5025372
4.
Amount due from Pakistan on account of share of pre-partition debt
300
300
300
300
300
300
5.
Net liabilities (3-4)
2837125
3158878
3529660
3938474
4468414
5025072
1.
i)
Market borrowings
ii) Others
Memorandum items (a) External debtc
210083
264076
249311
278448
322893
333042
(b) Total outstanding liabilities(adjusted)
2935477
3300208
3645188
4059583
4623657
5180316
(c) Internal liabilities( Non-RBI)d
2492205
2707846
3087360
3464858
3868405
4405915
2702288
2971922
3336671
3743306
4191298
4738957
104872
113335
137460
151292
na
na
1569546
1569043
1607544
1794504
1907536
2119006
(d) Outstanding liabilities
(Non-RBI)d
(e) Contingent liabilities of Central Government (f) Total assets
Source: Union Budget documents, Controller of Aid, Accounts and Audit and Reserve Bank of India. n.a. : not available RE: Revised Estimates BE: Budget Estimates a Internal debt includes net borrowing of ` 1,70,554 crore for 2007-08, ` 88,773 crore for 2008-09, ` 2,737 crore for 2009-10, and ` 20,000 crore for 2012-13(BE) under Market Stabilisation Scheme. b External debt figures represent borrowings by Central Government from external sources and are based upon historical rates of exchange. c Converted at year end exchange rates. For 2007-08,the rates prevailing at the end of March, 2008 and so on. d This includes marketable dated securties held by the RBI.
http://indiabudget.nic.in A—53
A54
Economic Survey 2012-13 2.21 : Total expenditure and capital formation by the Central Government and its financing (As per economic and functional classification of the Central Government budget)
1
2007-08
2008-09
2
3
2009-10
2010-11
2011-12 (RE)
2012-13 (BE)
4
5
6
7
` crore) (` I. II.
Total expenditure
688908
864530
992440
1164727
1288763
1497636
Gross capital formation out of budgetary resources of Central Government
143892
136935
184501
256368
272456
334978
43652
51464
58999
65059
70050
94906
100240
85471
125502
191309
202406
240072
13674
-176082
-232452
-103270
-239495
-146868
130218
313017
416953
359638
511951
481846
(i) Gross capital formation by the Central Government (ii) Financial assistance for capital formation in the rest of the economy III. Gross saving of the Central Government IV. Gap(II-III) Financed by a. Draft on other sectors of domestic economy
118180
299208
402774
333409
498163
468811
(i) Domestic capital receipts
145351
246612
404160
326979
522827
468811
(ii) Budgetary deficit/draw down of cash balance
-27171
52596
-1386
6430
-24664
0
12038
13809
14179
26229
13788
13035
39.0
6.3
22.9
b. Draft on foreign savings
(increase over previous year in per cent) II. Gross capital formation out of budgetary resources of Central Government
63.7
-4.8
34.7
Memorandum items (` ` crore) 1
Total expenditure
688908
864530
992440
1164727
1288763
1497636
2
Gross capital formation out of budgetary resources of Central Government
143891
136935
184501
256368
272456
334978
3
Consumption expenditure
131396
174345
210625
230262
256898
290124
4
Current transfers
408676
543347
580898
656300
743904
803130
5
Others
4945
9903
16417
21798
15505
69404
10.6
16.2
(Growth rate in per cent) 1
Total expenditure
20.8
2
Gross capital formation out of budgetary resources of Central Government
25.5
14.8
17.4
3
Consumption expenditure
63.7
-4.8
34.7
39.0
6.3
22.9
8.0
32.7
20.8
9.3
11.6
4
12.9
Current transfers
14.6
33.0
6.9
13.0
13.3
5
8.0
Others
19.7
100.3
65.8
32.8
-28.9
347.6
17.4
10.6
16.2
( Point contribution in per cent) 1
Total expenditure
20.8
25.5
2
Gross capital formation out of budgetary resources of Central Government
14.8
9.8
-1.0
5.5
7.2
1.4
4.9
3
Consumption expenditure
1.7
6.2
4.2
2.0
2.3
2.6
4
Current transfers
9.1
19.5
4.3
7.6
7.5
4.6
5
Others
0.1
0.7
0.8
0.5
-0.5
4.2
Source: Ministry of Finance, An Economic and Functional classification of the Central Government Budget-various issues. RE: Revised Estimates BE: Budget Estimates Notes: 1. Gross capital formation in this table includes loans given for capital formation on a gross basis. Consequently domestic capital receipts include loan repayments to the Central Government. 2. Consumption expenditure is the expenditure on wages and salaries and commodities and services for current use. 3. Interest payments, subsidies, pension etc. are treated as current transfers. 4. Gross capital formation & total expenditure are exclusive of loans to States’/UTs’ against States’/UTs’ share in the small savings collection. 5. The figures of total expenditure of the Central Government as per economic and functional classification do not tally with figures given in the Budget documents. In the economic and functional classification, interest transfered to DCUs, loans written off etc, are excluded from the current account. In the capital account, expenditure financed out of Railways, Posts &Telecommunications’ own funds etc, are included. 6. Point contribution refers to contribution of individual component to total growth.
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Economic Survey 2012-13
A55
2.22 : Receipts and disbursements of State and consolidated General Government (` crore) 2007-08
2008-09
2009-10
2010-11
2011-12 (RE)
2012-13 (BE)
2
3
4
5
6
7
Total Receipts (A+B)
765735
891292
1007633
1173575
1425944
1633303
A. Revenue Receipts (1+2)
623748
694658
768136
935347
1141469
1330978
437948
482983
528075
680198
811192
947257
286546
321930
363061
460709
551467
645069
185799
211675
240062
255149
330277
383721
1 State Governments I.
1. Tax Receipts of which States’ Own Tax Revenue 2. Non-tax Receipts of which Interest Receipts B. Capital Receipts
12637
16356
15294
15625
20221
19383
141987
196634
239497
238227
284475
302325
of which Recovery of Loans and Advances II.
7770
11072
8088
4995
18237
5303
Total Disbursements (a+b+c)
752324
882332
1015330
1158730
1433084
1632293
a) Revenue
580805
681985
799154
932297
1135376
1288411
b) Capital
157258
184376
198689
207617
260583
317728
14261
15971
17487
18816
37124
26154
-42943
-12672
31017
-3051
-6093
-42567
75455
134589
188819
161461
207875
215266
Total Receipts (A+B)
1355862
1564803
1845808
2153561
2536348
2836885
A. Revenue Receipts (1+2)
1060928
1117098
1210559
1578820
1750801
2070855
1. Tax Receipts
877495
926302
984611
1250067
1453444
1718327
2. Non-tax receipts
183433
190796
225948
328753
297357
352528
c) Loans and Advances III. Revenue Deficit IV. Gross Fiscal Deficit General Government I.
of which: Interest receipts
21621
25368
25748
25078
30535
29381
294934
447705
635249
574742
785547
766029
45750
832
25393
24087
15696
30223
9493
14611
11499
8206
24248
8535
Total Disbursements (a+b+c)
1315283
1599677
1852119
2145145
2518825
2835873
a) Revenue
1070555
1357963
1580574
1828020
2139659
2378712
225803
218679
246246
268328
321151
411941
18925
23035
25299
48797
58015
45220
9627 199111
240865 467137
370015 604668
249200 534032
388858 728080
307857 726260
B. Capital Receipts of which: a) Disinvestment proceeds b) Recovery of loans & advances II.
b) Capital c) Loans and Advances III. Revenue Deficit IV. Gross Fiscal Deficit Source: Reserve Bank of India. RE: Revised Estimates Note :
1. 2. 3. 4. 5. 6. 7.
BE:
Budget Estimates
Disinvestment proceeds are inclusive of miscellaneous capital receipts of the states. Negative (-) sign indicates surplus in deficit indicators. Capital receipts include public accounts on a net basis. Capital disbursements are exclusive of public accounts. General Government consists of Central Government & State Government combined. Inter-governmental transactions are adjusted from the Central Government budget documents. Total disbursements are net of repayments of the Central and State Governments and total receipts are net of variation in cash balances of the Central and State Governments as well as ways and means advances of state government from the Reserve Bank.
http://indiabudget.nic.in A—55
A56
Economic Survey 2012-13 3.1 : EMPLOYMENT IN ORGANISED SECTORS—PUBLIC AND PRIVATE (Lakh persons as on 31 March) 1995
2000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2
3
4
5
6
7
8
9
10
11
12
1 Central Government
33.95
32.73
31.33
30.27
29.38
28.60
28.00
27.39
26.60
25.52
24.63
2 State Governments
73.55
74.60
73.67
72.22
72.02
73.00
72.09
71.71
72.38
73.53
72.18
3 Quasi-Governments
65.20
63.26
59.01
58.22
57.48
59.09
58.61
57.96
58.44
58.68
58.14
4 Local bodies
21.97
22.55
21.79
21.26
21.18
21.18
21.32
19.68
20.73
20.89
20.53
194.66
193.14
185.8
181.97
180.07
181.88
180.02
176.74
177.95
178.62
175.48
1 PUBLIC SECTOR A. By branch
Total B. By industry 1 Agriculture, hunting etc.
5.39
5.14
5.06
4.93
4.96
4.69
4.75
4.71
4.77
4.78
4.77
2 Mining and quarrying
10.16
9.24
8.47
10.30
10.14
11.46
11.37
11.21
11.12
11.03
10.90
3 Manufacturing
17.56
15.31
12.60
11.89
11.30
10.92
10.87
10.44
10.60
10.66
10.16
9.35
9.46
9.13
8.74
8.60
8.49
8.49
7.96
8.39
8.35
8.31
11.64
10.92
9.48
9.32
9.11
8.94
8.66
8.52
8.45
8.59
8.47
1.62
1.63
1.82
1.81
1.84
1.82
1.78
1.65
1.74
1.71
1.70
7 Transport, storage & communications
31.06
30.77
29.39
28.15
27.51
26.75
26.37
26.34
26.01
25.29
23.84
8 Finance, insurance, real estate etc.
12.83
12.96
13.77
14.08
14.08
13.90
13.69
13.47
13.56
14.13
13.61
4 Electricity, gas and water 5 Construction 6 Wholesale and retail trade
9 Community, Social & personal services
95.04
97.71
96.09
92.76
92.52
91.76
90.90
88.54
90.11
90.51
90.95
194.66
193.14
185.80
181.97
180.07
178.73
176.88
172.84
174.75
175.05
172.71
1 Argiculture, hunting etc.
8.94
9.04
8.95
9.17
9.83
10.28
9.50
9.92
8.96
9.23
9.18
2 Mining and quarrying
1.03
0.81
0.66
0.65
0.79
0.95
1.00
1.11
1.15
1.61
1.32
47.06
50.85
47.44
44.89
44.89
45.49
47.50
49.7
51.98
51.84
53.97
4 Electricity, gas and water
0.40
0.41
0.50
0.47
0.49
0.40
0.50
0.51
0.64
0.64
0.70
5 Construction
0.53
0.57
0.44
0.45
0.49
0.55
0.70
0.69
0.80
0.91
1.02
6 Wholesale and retail trade
3.08
3.30
3.60
3.51
3.75
3.87
4.10
2.72
4.72
5.06
5.46
7 Transport, storgage & communications
0.58
0.70
0.79
0.81
0.85
0.87
1.00
1.04
1.32
1.66
1.89
8 Finance, insurance, real estate etc.
2.93
3.58
4.26
4.58
5.23
6.52
8.80
10.96
13.11
15.52
17.18
Total PRIVATE SECTOR
3 Manufacturing
9 Community, Social & personal services
16.03
17.23
17.56
17.92
18.20
18.78
19.50
21.73
20.23
21.40
23.50
80.59
86.46
84.21
82.46
84.52
87.71
92.40
98.38
102.91
107.87
114.22
168.66
164.57
156.75
153.07
150.86
151.85
149.84
146.34
147.04
146.66
143.77
26.00
28.57
29.05
28.90
29.21
30.03
30.18
30.4
30.91
31.96
31.71
194.66
193.14
185.80
181.97
180.07
181.88
180.02
176.74
177.95
178.62
175.48
Male
64.31
65.80
63.57
62.02
63.57
66.87
69.80
74.03
78.88
81.83
86.69
Female
16.28
20.66
20.64
20.44
20.95
21.18
22.94
24.72
24.98
26.63
27.83
Total
80.59
86.46
84.21
82.46
84.52
88.05
92.74
98.75
103.77
108.46
114.52
232.97
230.37
220.32
215.09
214.42
218.72
219.64
220.37
225.92
228.49
230.45
42.28
49.23
49.68
49.34
50.16
51.21
53.12
55.12
55.80
58.59
59.54
275.25
279.60
270.00
264.43
264.58
269.93
272.76
275.49
281.72
287.08
289.99
Total BY SEX PUBLIC SECTOR Male Female Total PRIVATE SECTOR
PUBLIC AND PRIVATE SECTOR Male Female Total
Source : Ministry of Labour & Employment, Director General of Employment and Training. Note : 1. Coverage in construction, particularly on private account, is known to be inadequate. 2. Employment in private sector relates to non-agriculture establishments in private sector employing 10 or more persons. Employment in public sector relate to all estalishments irrespective of size. 3. Excludes Sikkim, Arunachal Pradesh, Dadra & Nagar Haveli and Lakshadweep as these are not yet covered under the programme. 4. Industry-wise break-up not tally with public sector, private sector and grand total due to non-inclusion of data as per NIC 1998, information in respect of J&K , Manipur and Daman & Diu not included in 2011.
http://indiabudget.nic.in A—56
ase e
Economic Survey 2012-13
A57
3.2 : PER CAPITA EMOLUMENTS OF PUBLIC SECTOR ENTERPRISES EMPLOYEES IN RELATION TO INCREASE IN AVERAGE ALL-INDIA CONSUMER PRICE INDEX (1960=100) Year
Employee (in lakh) (Excl. casual & Daily rated workers)
Emoluments ` crore) (`
Per capita emoluments (` )
Increase over 1971-72 in per capita (per cent)
Average index
Increase over 1971-72 (per cent)
2
3
4
5
6
7
1 1971-72
7.01
415
5920
-
192
-
1972-73
9.32
541
5805
1.94
207
7.81
1973-74
13.44
749
5573
5.86
250
30.21
1974-75
14.32
1060
7402
25.03
317
65.10
1975-76
15.04
1352
8983
51.74
313
63.02
1976-77
15.75
1408
8940
51.01
301
56.77
1977-78
16.38
1646
10048
69.73
324
68.75
1978-79
17.03
1908
11210
89.36
331
72.40
1979-80
17.75
2213
12468
110.61
360
87.50
1980-81
18.39
2619
14239
140.52
401
108.85
1981-82
19.39
3133
16158
172.94
451
134.90
1982-83
20.24
3649
18029
204.54
486
153.13
1983-84
20.72
4485
21549
264.00
547
184.92
1984-85
21.07
5126
24328
310.95
582
203.13
1985-86
21.54
5576
25887
337.28
620
222.92
1986-87
22.11
6371
28820
386.82
674
251.04
1987-88
22.14
7193
32537
449.61
736
283.23
1988-89
22.09
8683
39415
565.79
803
318.23
1989-90
22.36
9742
43665
637.58
855
345.31
1990-91
22.19
10912
49179
730.73
951
395.31
1991-92
21.79
12311
56508
854.52
1079
461.98
1992-93
21.52
13983
64983
997.69
1185
517.10
1993-94
20.70
14913
72043
1116.94
1272
562.50
1994-95
20.62
17015
82517
1293.87
1402
630.21
1995-96
20.52
21931
106876
1705.34
1542
703.13
1996-97
20.08
22219
110662
1769.29
1687
778.65
1997-98
19.52
25385
129582
2088.89
1803
839.06
1998-99
19.00
26254
138179
2234.10
2039
961.98
1999-00
18.06
30402
168339
2743.56
2109
998.44
2000-01
17.40
38223
219672
3610.67
2190
1440.62
2001-02
19.92
38556
193554
3169.49
2284
1089.58 1136.98
2002-03
18.66
42169
225986
3717.33
2375
2003-04
17.62
43919
248481
4097.31
2467
1184.89
2004-05
17.00
48629
286053
4731.97
2561
1236.98
2005-06
16.49
46841
284057
4698.26
2674
1292.71
2006-07
16.14
52586
325869
5404.54
2853
1385.94
2007-08
15.65
64306
410898
6840.84
3030
1478.12
2008-09
15.33
83045
541716
9050.46
3306
1621.88
2009-10
14.90
90863
609663
10198.36
3715
1834.90
2010-11
14.40
98402
703718
11787.13
4103
2036.98
2011-12
13.98
105407
731995
12264.78
4447
2216.15
Source : Department of Public Enterprises.
http://indiabudget.nic.in A—57
A58
Economic Survey 2012-13 4.1 : SOURCES OF CHANGE IN MONEY STOCK (M3) (` Billion) Outstanding balances as on Items
1 I.
M3(Broad Money) (i+ii+iii+iv)
March 31, March 31, March 31, 2010 2011 2012
Variations during Dec. 28 2012
2010-11 March 31 to March 31
2011-12 March 31 to March 31
2011 2012 March 31 March 31 to to Dec 30 Dec 28
2
3
4
5
6
7
8
9
56,027.0
65,041.2
73,577.5
80,319.2
9014.2
8536.3
7172.3
6741.7
(i)
Currency with the public
7,674.9
9,118.4
10,256.7
10,920.5
1443.4
1138.3
647.7
663.9
(ii)
Demand deposits with banks
7,179.7
7,228.6
7,049.1
7,208.2
48.9
-179.4
-38.8
159.0
41,134.3
48,657.7
56,243.5
62,175.1
7523.4
7585.8
6577.6
5931.6
38.1
36.5
28.2
15.4
-1.5
-8.3
-14.3
-12.8
II. Sources of change in Money Stock (M3) (1+2+3+4-5)
56,027.0
65,041.2
73,577.5
80,319.2
9014.2
8536.3
7172.3
6741.7
1. Net bank credit to Government (A+B)
16,691.9
19,839.0
23,716.1
25,957.7
3147.1
3877.2
2570.5
2241.6
RBI’s net credit to Government (i+ii)
2,115.9
3,965.5
5,357.4
5,504.7
1849.7
1391.8
535.1
147.3
i)
Central Government
2,115.8
3,940.3
5,344.1
5,498.0
1824.5
1403.8
560.3
153.9
ii)
State Governments
0.0
25.2
13.2
6.7
25.2
-12.0
-25.2
-6.6
Other bank’s credit to Government
14,576.0
15,873.4
18,358.8
20,453.1
1297.4
2485.4
2035.4
2094.3
2. Bank credit to commercial sector (A+B)
34,914.1
42,366.8
49,605.3
54,105.1
7452.7
7238.6
4680.8
4499.8
(iii) Time deposits with banks (iv) Other deposits with RBI
A)
B)
A)
RBI’s credit to commercial sector
13.3
21.6
39.6
37.3
8.4
18.0
11.0
-2.3
B)
Other bank’s credit to commercial sector
34,900.8
42,345.1
49,565.7
54,067.8
7444.3
7220.6
4669.8
4502.1
12,814.6
13,933.4
15,437.8
16,385.1
1118.8
1504.4
2025.9
947.3
4. Government’s currency liabilities to the public
112.7
127.2
134.4
147.2
14.5
7.2
3.2
12.8
5. Banking sector’s net non-monetary liabilities
8,506.3
11,225.2
15,316.2
16,276.0
2718.9
4091.0
2108.1
959.8
3. Net foregin exchange assets of banking sector
Source : Reserve Bank of India. Note : 1. Data are provisional. 2. RBI data relate to end March after closure of Government accounts. 3. Includes investments in foreign currency denominated bonds issued by IIFC(UK) since March 20, 2009.
http://indiabudget.nic.in A—58
http://indiabudget.nic.in
A—59 19.5
3. Increase in cash in hand
H1 April to September
3002.3
4
H1
2685.7
611.8
54.4
128.4
1891.1
2685.7
200.8
-18.9
59.0
20.9
5
H2
2968.0
-125.1
45.2
2056.8
991.2
2968.0
318.9
116.4
-194.9
-117.3
2844.9
6
H1
2009-10
4392.7
557.1
7.8
126.7
3701.2
4392.7
449.1
102.6
98.4
0.4
3742.2
7
H2
2847.4
103.8
44.8
894.5
1804.4
2847.4
472.8
10.7
156.8
22.7
2184.5
8
H1
2010-11
5719.6
274.0
2.9
274.1
5168.6
5719.6
498.5
113.2
113.9
27.2
4966.9
9
H2
3901.6
310.0
56.7
2007.5
1527.4
3901.6
66.6
181.0
408.5
-23.3
3268.8
10
H1
2011-12
Data on aggregate deposits also reflect redemption of Resurgent India Bonds (RIBs) of Rs.226.93billion, since October 1, 2003. Residual (net) is the balance of Uses of Funds over Sources of Funds and includes borrowings from RBI, IDBI, EXIM Bank and NABARD. The data relate to last reporting Fridays. Figures may not add up to totals due to rounding off.
3230.7
-801.1
-32.0
1818.5
2245.2
3230.7
-899.3
110.5
15.3
56.3
3947.8
2008-09
2423.9
H2 October to March
3895.0
25.5
-0.4
625.6
3244.3
3895.0
60.6
384.1
179.0
39.4
Excludes borrowings from RBI, IDBI, EXIM BANK and NABARD
P Provisional
Notes : 1. 2. 3. 4.
a
Source : Reserve Bank of India.
TOTAL
743.5
1176.4
2. Increase in investments
4. Increase in balances with RBI
1062.9
1. Increase in bank credit
USES
3002.3
241.2
5. Residual (Net)
TOTAL
177.1
27.7
3. Increase in other borrowingsa
4. Increase in other demand and time liabilities
-61.8
2. Increase in borrowings from RBI
3232.0
3
2
2618.0
H2
H1
1. Increase in aggregate deposits
SOURCES
1
Items
2007-08
4.2 : SCHEDULED COMMERCIAL BANKS: SEASONAL FLOW OF FUNDS
5256.7
-269.0
1.2
354.2
5170.3
5256.7
976.5
134.9
342.6
60.5
3742.3
11
H2
3615.0
-50.1
46.6
2099.6
1518.9
3615.0
-256.3
17.1
-53.8
77.2
3830.9
12
H1
2380.2
-210.0
37.4
-81.9
2634.7
2380.2
232.0
187.0
31.0
79.6
1850.7
13
H2 upto Dec. 28, 2012 P
2012-13
73085.7
2972.6
445.3
19395.7
50272.1
73085.7
2089.4
3937.9
2041.7
244.3
64772.4
14
Outstandingas on Dec. 28 2012 P
(` Billion)
Economic Survey 2012-13
A59
http://indiabudget.nic.in
A—60
4111.8
5897.2
6. Investments in Govt.securities
7. Bank credit
3548.7
-195.1
369.7
13.9
3239.1
2452.9
786.2
6
2005-06 April 01 to Mar 31
4241.1
753.2
562.5
47.6
5028.8
4377.9
650.9
7
2006-07 Mar 31 to Mar 30
4307.2
1826.0
788.1
-22.4
5850.1
4904.3
945.8
8
2007-08 Mar 30 to Mar 28
4136.4
1971.2
-166.9
77.3
6371.7
6384.0
-12.2
9
2008-09 Mar 28 to Mar 27
4692.4
2226.1
484.9
-116.9
6587.2
5361.9
1225.2
10
2009-10 Mar 27 to Mar 26
6972.9
1187.5
425.4
49.9
7151.4
7190.5
-39.0
11
2010-11 Mar 26 to Mar 25
6697.7
2378.7
98.9
37.2
7011.1
7174.9
-163.8
12
4153.6
2015.2
-176.1
156.7
5681.6
5554.0
127.6
13
50272.1
19365.4
3417.9
244.3
64772.4
58391.5
6380.9
14
2011-12 2012-13 Outstanding Mar 25 Mar 23 as on to to Dec 28 Mar 23 Dec 28(P) 2012(P)
Notes: 1. Figures in ( ) exclude the impact of mergers since May 3, 2003. 2. Figures in [ ] exclude the impact of conversion of a non-banking entity into banking entity from October 11, 2004.
b
Revised in line with the new accounting standards and are consistent with the methodology suggested by the Working Group on Money Supply : Analytics and Methodology of Compilation (June 1998) from 1998-99 onwards. The revision is in respect of pension and provident funds with commercial banks which are classified as other demand and time liabilities and includes those banks which have reported such changes so far. Data also reflect redemption of Resurgent India Bonds of Rs.226.93 billion, since October 2003.
2596.4 [2267.61]
642.2 [520.31]
196.8
0.5
[1922.69]
1957.8
1727.8 [1692.64]
230.1
5
2004-05 Mar 19 to Mar 18
Provisional.
1115.7
1313.4
109.9
-0.8
2235.6
1688.3
547.3
4
2003-04 Mar 21 to Mar 19
a
1394.9 (-949.49)
1122.4
-27.5
-35.4
(1478.22)
1774.9
1602.5 (1305.81)
172.4
3
2002-03 Mar 22 to Mar 21
(` Billion)
P
Source : Reserve Bank of India.
686.5
36.2
4 Borrowings from RBI
5. Cash in hand & balances with RBI
11033.6
9503.1
1530.5
2
Outstanding as on MARCH 22, 2002
3.Aggregate deposits b
2.Time
depositsa b
1.Demand deposits
1
Items
Variations during
4.3 : SCHEDULED COMMERCIAL BANKS: VARIATIONS IN SELECTED ITEMS
A60 Economic Survey 2012-13
Khandsari
Gur
Groundnut
Rapeseed/Mustardseed
6.
7.
8.
9.
http://indiabudget.nic.in
A—61 84
235
539
203
20. Soyabean oil
21. Other Veg.oil
22. Vanaspati
Total
254
15838
237
2839
200
609
15624
279
2446
162
603
181
76
9
227
108
67
204
495
62
30
9
68
275
15
207
3754
994
443
601
4309
4
March 2005
21274
209
4153
198
1066
321
112
9
107
260
98
104
819
186
54
58
718
326
85
58
4364
1110
498
1401
4961
5
25528
293
4817
211
727
696
106
5
261
338
129
106
958
114
85
5
675
369
140
56
6130
827
632
881
6967
6
March 2007
35226
373
5487
886
948
635
105
16
335
276
117
127
1324
213
75
9
437
401
199
87
8468
1247
1730
1518
10213
7
March 2008
As on last Friday of March 2006
35776
352
6061
223
1370
570
150
7
145
280
131
215
761
196
42
9
257
480
193
175
9251
1068
1127
1530
11183
8
March 2009
39178
1380
6655
178
987
788
218
5
328
242
141
325
736
205
118
10
514
437
299
163
9219
1318
1443
2370
11099
9
March 2010
45397
426
8636
418
1083
839
300
9
322
312
314
317
1115
242
118
25
328
527
108
167
10123
1563
1594
2187
14324
10
March 2011
Source : Reserve Bank of India. a Data are provisional Note : Effective from October 10, 2000 all commodities except unreleased stocks of levy sugar stand exempted from selective credit controls. Figures may not add up to total due to rounding.
170
14311
24. Raw Jute
2213
67
23. Cotton & Kapas
15
10
18. Linseed oil
19. Cottonseed oil
35
236
161
139
133
104
17. Castor oil
77
76 590
16. Rapeseed/Mustard
57
15. Groundnut oil
13. Soyabean
14. Other oilseeds
50
470
12. Cottonseed
4
12
12
8
43
246
11
29
4255
1030
465
689
3636
3
March 2004
99
214
27
42
3549
1029
253
484
4209
2
11. Castorseed
10. Linseed
Other food grains
Sugar
Pulses
3.
5.
Wheat
4.
Paddy and rice
1.
2.
1
Commodities
March 2003
68940
639
15559
484
1587
1321
639
456
10
386
810
775
1359
259
163
16
528
478
212
330
15718
2303
3594
3000
18314
11
March 2012
39217
459
5915
412
910
727
225
7
360
272
351
511
783
106
130
23
390
429
51
135
8369
1604
1424
2326
13298
12
64229
514
13734
470
1697
1597
515
10
473
418
833
851
721
215
149
16
508
435
176
271
12918
2139
3477
4087
18005
13
October 2011 2012
4.4 : SCHEDULED COMMERCIAL BANKS’ OUTSTANDING ADVANCES AGAINST SENSITIVE COMMODITIES
-6180
33
-2721
-6
-173
-112
-75
-2
38
-40
37
194
-332
-136
12
-2
62
-98
-57
-32
-1754
41
-170
139
-1026
14
-4711
-125
-1825
-14
110
276
-124
-446
463
32
23
76
-638
-44
-14
0
-20
-43
-36
-59
-2800
-164
-117
1087
-309
15
April-October 2011-12a 2012-13a
Variations during
(` crore)
Economic Survey 2012-13
A61
http://indiabudget.nic.in
A—62
Note: 1. 2. 3. 4.
70189
40
40
70149
72912
46
46
72866
271
2825
4416
7241
65354
14574
434
36189
36623
14157
3
2007
77102
46
46
77056
279
3795
4543
8338
68439
14876
500
37662
38162
15401
4
2008
80924
46
46
80878
295
4278
4738
9016
71567
15258
564
39387
39951
16358
5
2009
86239
47
47
86192
310
5446
5071
10517
75365
15564
715
41642
42357
17444
6
2010
91697
55
55
91642
317
7022
4882
11904
79421
15961
877
44428
45305
18155
7
2011
Nationalised banks includes IDBI Bank Ltd. Population group classification is based on 2001 census. The population group ‘Rural’ includes centres with population of less than 10,000. Data for 2006 to 2011 are revised and for 2012 are provisional. Data on number of branches exclude administrative offices.
Source : RBI
ALL COMMERCIAL BANKS
LOCAL AREA BANKS
F. NON-SCHEDULED COMMERCIAL BANK
ALL SCHEDULED COMMERCIAL BANKS(A to E)
261
2001
(b) NEW PRIVATE SECTOR BANKS
E. FOREIGN BANKS
4671
6672
63216
14532
181
(a) OLD PRIVATE SECTOR BANKS
D. OTHER SCHEDULED COMMERCIAL BANKS (a) + (b)
TOTAL OF PUBLIC SECTOR BANKS (including RRBs)
C. REGIONAL RURAL BANKS (RRBs)
(ii) OTHER PUBLIC SECTOR BANKS
34583
34764
B. NATIONALISED BANKS (including IDBI Ltd.) (i)+(ii)
(i) NATIONALISED BANKS
13920
2
2006
A. SBI AND ITS ASSOCIATES
1
Bank Groups
All Branches as on June 30
4.5 : BRANCH EXPANSION OF PUBLIC SECTOR BANKS AND OTHER COMMERCIAL BANKS
98591
55
55
98536
323
8205
5462
13667
84546
16572
973
48009
48982
18992
8
36350
16
16
36334
7
724
890
1614
34713
12387
94
15610
15704
6622
9
2012 June 30, 2012
Rural Branches
36.9
29.1
29.1
36.9
2.2
8.8
16.3
11.8
41.1
74.7
9.7
32.5
32.1
34.9
10
June 30, 2012
% of Rural Branches as on
A62 Economic Survey 2012-13
Economic Survey 2012-13
A63
4.6 : ADVANCES TO AGRICULTURE AND OTHER PRIORITY SECTORS BY PUBLIC SECTOR BANKS SECTORS
NUMBER OF ACCOUNTS (in thousand) March 2010
March 2011
March 2012
March 2010
March 2011
March 2012
2
3
4
5
6
7
31616 31015 600
33910 33214 696
38461 37586 875
372463 265826 106637
414973 300190 114783
479400 367052 112348
7217
7398
7129
276319
369430
396993
1354 1911
864 2211
1222 2373
5916 35855
7243 41341
6631 46727
14
9
25
41
36
114
3671
3945
3973
173184
188472
194283
45783
48339
53183
863778 2078397
1021495 2493499
1124148 3018476
17.92 12.78 5.13
16.64 12.03 4.6
15.88 12.16 3.72
13.29
14.81
13.15
0.28 1.72
0.29 1.65
0.22 1.55
8.33
7.55
6.44
41.55
40.96
37.24
1 1. Agriculture (a) Direct Finance a (b) Indirect Finance a 2. Small Scale Industries b 3. Micro & Small Enterprises 4. Setting up of Industrial Estates 5. Small road & water transport Operators 6. Retail Trade 7. Small Business 8. Professional &self employed persons 9. Micro Credit 10. Education 11. Consumption 12. State sponsored corpns/Organisations for on lending to Other Priority Sector 13. State sponsored organisation for SC/ST purchase &supply of inputs &marketing of outputs 14. Housing Loans 15. Funds provided to RRBs 16. Advances to Self Help Groups 17. Advances to Software Industries 18. Advances to Food & Agro Processing Sector 19. Investment in Venture Capital 20. Total Priority Sector Advances 21. ANBC c
AMOUNT OUTSTANDING (` in crore)
Percentage to ANBC 1.
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. a b c
Agriculture (a) Direct Finance a (b) Indirect Finance a Small Scale Industries b Micro & Small Enterprises Setting up of Industrial Estates Small road & water transport Operators Retail Trade Small Business Professional &self employed persons Micro Credit Education Consumption State sponsored corpns/Organisations for on lending to Other Priority Sector State sponsored organisation for SC/ST purchase &supply of inputs &marketing of outputs Housing Loans Funds provided to RRBs Advances to Self Help Groups Advances to Software Industries Advances to Food & Agro Processing Sector Investment in Venture Capital Total Priority Sector Advances
Excludes advances to plantations other than development finance. Includes small business. ANBC stands for Adjusted Net Bank Credit.
http://indiabudget.nic.in A—63
A64
Economic Survey 2012-13
4.7 : STATE-WISE DISTRIBUTION OF BANK OFFICES, AGGREGATE DEPOSITS AND GROSS BANK CREDIT OF PUBLIC SECTOR BANKS AND PERCENTAGE SHARE OF ADVANCES TO PRIORITY SECTORS (` crore) Deposits (Rs. crore) End
No of offices End State/Union Territory 1 1 Andaman & Nicobar 2 Andhra Pradesh
Credit (Rs. crore) End
Share of priority sectors in total bank credit (per cent)
June 1969
March 2012
June 1969
March 2012
June 1969
March 2012
June 1969
March 2012
2
3
4
5
6
7
8
9
1
44
…
1891
…
768
…
54.6
567
5869
121
269846
122
305304
24.4
42.7
3 Arunachal Pradesh
…
71
…
5755
…
1327
…
37.4
4 Assam
74
1110
33
58504
13
20230
10.3
54.2
273
2997
169
120685
53
32964
9.1
71.6
20
301
35
31981
64
39745
4.2
23.1
5 Bihar 6 Chandigarh 7 Chhattisgarh
…
1009
…
59044
…
31468
…
40.0
8 Dadra & Nagar Haveli
…
25
…
1242
…
364
…
65.9
9 Daman & Diu
…
25
…
1715
…
344
…
79.1
10 Delhi
274
2145
360
512269
245
473643
10.2
9.6
11 Goa
85
410
49
30466
20
8414
12.6
39.0
12 Gujarat
752
4298
401
254678
195
170750
15.9
38.6
13 Haryana
172
2162
49
101661
23
128213
28.2
32.5
14 Himachal Pradesh
42
957
12
34826
3
13132
2.7
69.5
15 Jammu & Kashmir
35
383
18
14042
1
3746
30.3
70.3
16 Jharkhand
…
1660
…
79960
…
25990
…
53.8
17 Karnataka
756
4744
188
286645
143
213433
24.8
35.4
18 Kerala
601
2868
117
124665
77
98690
27.6
55.2
…
12
…
566
…
55
…
45.5
19 Lakshadweep 20 Madhya Pradesh 21 Maharashtra
343
3363
107
146229
63
79878
22.3
60.0
1118
7170
903
1080072
912
947948
12.4
16.7 63.4
22 Manipur
2
61
1
3761
…
1228
…
23 Meghalaya
7
164
9
9704
3
2458
50
33.0
…
43
…
2265
…
901
…
77.6 48.5
24 Mizoram 25 Nagaland
2
85
1
4827
…
1508
40
100
2195
29
102346
15
48564
11.2
47.5
12
112
5
6062
5
3874
12.9
46.6
28 Punjab
346
3510
185
150215
50
126875
27.9
47.3
29 Rajasthan
364
3166
74
117748
38
111772
16.8
43.2
…
80
…
3608
…
1199
…
55.5
1060
5359
233
278058
311
322799
25.5
36.2
5
141
4
7407
…
1957
9.5
66.7
747
8180
337
358016
154
157545
16.9
58.7
26 Orissa 27 Puducherry
30 Sikkim 31 Tamil Nadu 32 Tripura 33 Uttar Pradesh 34 Uttarakhand
…
1101
…
50736
…
17231
…
68.8
35 West Bengal
504
4635
456
304305
526
196191
4.4
30.0
8262
70455
3896
4615801
3036
3590508
14.9
31.3
ALL INDIA Source : Reserve Bank of India. … : Nil. Notes: 1. 2. 3. 4.
Public Sector Banks include State Bank of India and Its Associates,Nationalised Banks and IDBI Bank Limited. Aggregate Deposits represents the demand and time liabilities of a bank (excluding inter- bank deposits). The Gross Bank Credit represents bank credit (excluding inter bank advances)as per form ‘A’ return under Sec. 42(2) of RBI Act, 1934 together with outstanding amount of bills rediscounted with RBI/financial Instititions. Data relates to Aggregate Deposits and Gross bank Credit for June is as on last Friday of June where as for March is as on March 31st and are based on ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks’. Figures may not add up to totals because of rounding.
http://indiabudget.nic.in A—64
Economic Survey 2012-13
A65
4.8 : FINANCIAL ASSISTANCE SANCTIONED AND DISBURSED BY ALL INDIA FINANCIAL INSTITUTIONS (` crore) 2007-08
2008-09
2009-10
2010-11
2011-12 P
2
3
4
5
6
2550.5 2280.1
4014.9 3311.5
7007.2 6045.4
12259.9 8399.6
4467.1 5949.6
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
na na
38454.5 27264.2
70854.9 61812.2
63006.9 53149.3
43808.3 38904.7
53151.1 50709.1
1175.3 1176.3
545.0 545.0
610.6 610.6
1237.3 1237.3
1258.5 1258.5
16146.3 15099.3
29216.7 28317.8
35545.2 31941.9
42213.7 38795.9
43339.6 41812.4
20364.0 12006.0
10317.0 8084.0
30442.0 12962.0
42716.0 26702.0
31868.0 18329.0
35006.4 29199.7
35246.9 29964.2
40193.8 33636.1
51014.8 35576.8
47167.8 38406.2
44572.3 38244.7
54218.8 49965.7
53566.9 49132.5
68336.1 59949.0
86231.1 79330.5
20.0 0.0
20.0 0.0
20.0 1.9
0.0 0.0
0.0 0.0
na na
na na
na na
na na
na na
0.0 0.1
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
20.0 20.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
na na
na na
na na
na na
na na
1 1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Industrial Finance Corporation of India Ltd (i) Sanctioned (ii) Disbursed Industrial Development Bank of India (i) Sanctioned (ii) Disbursed Industrial Investment Bank of India Ltd. (i) Sanctioned (ii) Disbursed State Financial Corporations (i) Sanctioned (ii) Disbursed State Industrial Development Corporations (i) Sanctioned (ii) Disbursed Unit Trust of India (i) Sanctioned (ii) Disbursed Life Insurance Corporation of India (i) Sanctioned (ii) Disbursed General Insurance Corporation of India (i) Sanctioned (ii) Disbursed Small Industries Development Bank of India (i) Sanctioned (ii) Disbursed Infrastructure Development Finance Corporation (i) Sanctioned (ii) Disbursed EXIM Bank (i) Sanctioned (ii) Disbursed National Bank for Agriculture and Rural Development (i) Sanctioned (ii) Disbursed New India Assurance Company Ltd. (i) Sanctioned (ii) Disbursed National Insurance Company Ltd. (i) Sanctioned (ii) Disbursed Oriental Insurance Company Ltd. (i) Sanctioned (ii) Disbursed United India Insurance Company Ltd. (i) Sanctioned (ii) Disbursed Industrial Credit and Investment Corporation of India Ltd. (i) Sanctioned (ii) Disbursed
Source : Reserve Bank of India-Respective Financial Institutions. na : Not available. P : Provisional
http://indiabudget.nic.in A—65
A66
Economic Survey 2012-13 5.1 : INDEX NUMBERS OF WHOLESALE PRICES (Base : 2004-05 = 100) Primary articles
Weight-Base (1993-94)=100 Weight-Base (2004-05)=100
Food articles Total Foodgrains
22.03 20.12
15.40 14.34
5.01 4.09
6.14 4.26
0.49 1.52
2
3
4
5
124 138 144 157 168 168 177 178 178 184
127 144 139 167 176 170 170 176 175 179
105 119 126 136 164 179 197
1
Last week of (1993-94 = 100) 1995-96 125 1996-97 136 1997-98 142 1998-99 153 1999-00 159 2000-01 162 2001-02 168 2002-03 178 2003-04 181 2004-05 183 Last month of (2004-05 = 100) 2005-06 104 2006-07 118 2007-08 129 2008-09 136 2009-10 166 2010-11 188 2011-12 208 Average of weeks (1993-94 = 100) 1994-95 116 1995-96 125 1996-97 136 1997-98 139 1998-99 156 1999-00 158 2000-01 163 2001-02 168 2002-03 174 2003-04 181 2004-05 188 Average of months (2004-05 = 100) 2005-06 104 2006-07 114 2007-08 124 2008-09 138 2009-10 155 2010-11 182 2011-12 200 2011-12 April 197 May 195 June 196 July 198 August 199 September 203 October 204 November 202 December 199 January 201 February 203 March 208 2012-13 April 216 May 215 June 215 July 219 August 222 September 222 October 219 221 November P December P 220
Nonfood articles
Fuel
Total
Mine- powerrals light & lubricants
Manufactured products Food products
Textiles
14.23 14.91
63.75 64.97
11.54 9.97
9.80 7.33
11.93 12.02
8.34 10.75
6
7
8
9
10
11
12
13
14
129 133 142 146 141 149 150 183 191 177
93 109 100 118 104 118 120 118 148 249
115 130 148 153 193 223 231 256 263 290
123 126 129 135 139 144 144 152 162 169
118 130 137 150 150 145 145 158 174 174
126 115 117 114 116 122 116 128 139 131
130 136 137 152 160 167 171 178 179 186
123 128 132 133 137 142 140 150 183 214
113 117 115 116 116 127 130 130 134 144
122.2 128.8 134.6 141.7 150.9 159.2 161.8 172.3 180.3 189.5
113 126 137 152 172 176 186
97 107 124 125 150 191 190
119 135 173 168 232 267 359
117 119 127 123 140 158 178
104 110 118 120 126 136 143
102 107 116 123 142 145 154
100 101 101 103 112 132 128
105 110 116 116 120 129 139
103 116 138 130 133 148 163
105 112 115 118 120 123 126
105.7 112.8 121.5 123.5 136.3 149.5 161.0
113 122 137 141 159 165 170 176 179 181 186
115 122 138 139 152 176 174 172 174 176 177
124 135 134 138 152 143 147 153 165 186 188
105 95 107 100 111 110 113 119 119 122 255
109 115 126 144 148 162 208 227 239 255 280
112 122 124 128 134 137 142 144 148 156 166
114 118 125 135 150 151 146 146 153 167 175
118 129 119 115 114 115 120 119 122 132 136
117 127 131 137 146 155 164 169 174 177 182
108 120 126 131 133 135 140 141 145 168 203
106 112 116 115 116 116 123 129 130 133 140
112.6 121.6 127.2 132.8 140.7 145.3 155.7 161.3 166.8 175.9 187.2
105 116 124 135 155 180 193
107 122 131 145 166 174 181
97 102 114 129 136 167 183
115 137 153 187 203 253 321
114 121 121 135 132 148 169
102 108 113 120 123 130 140
101 107 110 120 136 141 151
99 101 102 103 107 120 129
104 109 113 118 118 124 135
102 112 123 138 130 141 156
104 110 114 117 118 121 125
104.5 111.4 116.6 126.0 130.8 143.3 156.1
187 186 189 193 194 197 199 197 191 191 192 197
176 177 177 179 180 181 183 182 182 183 184 186
192 183 181 176 182 184 178 177 179 183 187 190
304 309 304 310 302 309 313 323 329 340 348 359
160 160 162 166 167 168 170 172 173 177 177 178
137 137 138 138 138 139 140 140 141 142 142 143
146 148 149 150 151 152 152 153 153 153 153 154
134 134 132 129 127 126 126 126 126 127 127 128
131 132 132 133 133 134 135 136 137 138 138 139
149 150 152 152 154 156 157 159 160 161 162 163
124 124 124 124 125 125 125 126 126 126 126 126
152.1 152.4 153.1 154.2 154.9 156.2 157.0 157.4 157.3 158.7 159.3 161.0
207 206 209 212 212 213 213 213 212
189 190 193 200 208 212 214 213 216
195 199 194 200 207 203 199 201 203
352 344 327 337 357 352 340 347 341
179 179 181 180 182 189 190 189 189
144 145 145 146 147 148 148 148 148
156 157 158 161 165 167 167 168 167
129 130 130 130 131 132 132 132 132
140 141 142 143 143 144 144 144 144
166 166 167 167 167 167 167 166 166
126 127 128 128 128 128 129 129 129
163.5 163.9 164.7 165.8 167.3 168.8 168.5 168.8 168.6
Source : Office of the Economic Adviser, Ministry of Commerce & Industry. Provisional
P
http://indiabudget.nic.in A—66
Chemicals & chemical products
All
Total
Basic Mach- commetals, inery modialloys & maties & metal chine products tools 8.36 100.00 8.93 100.00
http://indiabudget.nic.in
A—67
105 115 131 151 163 167 175
120 130 135 161 166 165 162 168 165 170
117 129 134 146 171 168 167 166 169 168
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
105 110 122 141 158 167 172
Average of months (Base:2004-05=100)
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
2
2.45 1.79
Average of weeks (Base:1993-94=100)
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Last month of (Base:2004-05=100)
1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Last week of (Base:1993-94=100)
1
Weight-Base : (1993-94=100) Weight-Base : (2004-05=100)
Rice
105 125 134 148 166 171 168
112 137 138 152 175 177 175 176 181 184
117 129 140 151 173 173 172
119 156 137 171 180 172 177 178 188 186
3
1.38 1.12
Wheat
113 149 145 156 191 197 202
135 151 146 160 166 180 190 181 177 174
126 147 148 159 199 191 210
147 145 152 152 169 182 176 177 172 168
4
0.60 0.72
Pulses
89 104 104 153 174 148 151
103 105 160 150 152 128 117 118 109 131
92 97 110 156 129 138 145
93 113 162 123 104 116 91 104 101 114
5
0.16 0.11
Tea
90 97 112 141 139 199 225
159 133 155 167 147 157 149 142 181 166
91 99 122 124 149 303 196
131 136 166 155 145 156 123 165 185 141
6
1.36 0.70
Raw cotton
135 136 122 138 160 211 223
189 189 102 108 113 150 182 154 137 160
159 118 130 142 173 240 227
261 na 117 108 156 171 187 131 141 191
7
0.11 0.06
Raw jute
97 110 140 144 148 165 200
135 135 134 151 140 140 144 169 181 182
94 132 147 141 153 171 231
130 130 138 148 139 140 145 199 180 167
8
1.03 0.40
Groundnut seed
118 118 122 151 156 165 191
106 118 140 144 149 161 182 181 194 223
118 118 136 151 163 185 210
107 125 144 144 156 185 181 181 198 232
9
1.75 2.09
Coal mining
117 127 126 142 136 157 184
106 123 139 143 160 226 240 255 274 315
122 123 133 124 147 168 193
106 129 146 144 204 240 243 287 287 333
10
6.99 9.36
Mineral oils
109 107 91 107 162 161 168
113 119 134 154 156 153 146 135 139 163
112 97 93 126 178 164 169
114 126 134 154 158 149 145 129 148 174
11
3.93 2.09
Sugar, khandsari & gur
(Base: 2004-05=100)
94 102 116 122 114 121 136
117 115 114 139 122 103 113 138 158 156
93 107 127 114 114 129 142
111 112 120 135 111 105 119 151 161 147
12
2.76 3.04
95 98 101 103 111 142 155
147 137 141 142 141 150 148 145 166 167
98 98 100 102 123 179 150
141 135 143 143 140 153 139 153 183 153
13
3.31 1.38
99 97 99 103 107 115 132
139 146 149 156 155 156 159 162 166 173
98 97 98 105 109 128 131
141 148 150 155 155 157 161 162 168 172
14
0.90 1.23
112 115 111 117 146 165 176
148 153 136 151 161 163 181 169 160 181
114 120 110 125 157 182 171
164 150 152 160 170 169 184 165 175 199
15
0.38 0.26
102 104 106 107 108 117 133
129 129 136 138 143 158 161 168 169 171
103 105 107 108 110 121 141
130 137 137 142 155 160 166 169 169 175
16
3.69 2.66
102 119 138 139 149 151 157
130 134 129 131 128 137 149 145 147 153
106 130 138 148 151 154 163
140 130 121 128 127 153 146 147 149 164
17
1.73 1.39
Contd....
100 105 119 137 124 136 150
117 124 130 133 134 137 137 143 180 232
97 111 138 126 127 143 158
119 126 133 134 136 137 137 150 201 244
18
3.72 6.88
Edible Cotton Cotton Jute,hemp Fertili- Cement Iron,steel oils yarn cloth & mesta zers & ferro (Mills) textiles alloys a
5.2 : INDEX NUMBERS OF WHOLESALE PRICES – SELECTED COMMODITIES AND COMMODITY GROUPS
Economic Survey 2012-13
A67
http://indiabudget.nic.in
A—68
173
172
173
175
December
January
February
March
203
December P
205
202
198
198
191
182
180
179
179
172
170
169
167
164
165
167
169
171
169
167
169
3
1.12
Wheat
250
256
257
261
260
245
226
219
211
210
209
211
213
215
214
202
193
190
188
187
190
4
0.72
Pulses
203
196
200
198
198
192
205
203
182
145
145
149
147
151
158
151
148
154
154
156
154
5
0.11
Tea
202
203
201
212
222
217
199
205
199
196
199
203
210
216
222
235
221
207
236
251
306
6
0.70
Raw cotton
231
235
242
255
252
246
227
216
222
227
223
206
195
200
210
224
222
223
245
257
240
7
0.06
250
257
241
243
239
230
233
235
231
231
214
208
192
191
197
205
203
194
192
189
184
8
0.40
Raw Groundjute nut seed
210
210
210
210
210
210
210
210
210
210
210
210
185
185
185
185
185
185
185
185
185
9
2.09
Coal mining
205
205
206
204
194
190
193
195
195
193
191
192
191
189
186
184
183
181
175
173
171
10
9.36
Mineral oils
194
195
197
198
193
181
174
173
171
169
170
171
174
171
168
167
166
166
162
164
165
11
2.09
Sugar, khandsari & gur
150
149
148
151
150
148
146
146
144
142
139
139
137
135
135
136
136
134
133
132
130
12
3.04
158
158
158
159
157
156
156
154
152
150
148
147
147
147
145
144
147
155
168
177
181
13
1.38
Edible Cotton oils yarn
135
135
134
135
135
133
133
133
132
131
132
131
131
131
131
131
131
132
134
134
131
14
1.23
180
179
180
178
176
175
175
175
174
171
171
171
172
172
173
175
177
183
184
184
184
15
0.26
Cotton Jute,hemp cloth & mesta (Mills) textiles
Source : Office of the Economic Adviser, Ministry of Commerce & Industry. na: Not available P : Provisional a Composite Index of Iron & Steel and Ferro Alloy for base 1993-94 and Iron & semis, steel long, steel flat, stainless steel & alloys and ferro alloys for base 2004-05
203
196
November P
September
October
191
195
August
182
187
July
178
May
June
177
April
2012-13
176
175
November
September
October
173
173
August
169
170
July
170
June
167
May
2
1.79
April
2011-12
1
Weight-Base:(2004-05=100)
Rice
5.2 : INDEX NUMBERS OF WHOLESALE PRICES – SELECTED COMMODITIES AND COMMODITY GROUPS (Base: 2004-05 = 100)
151
151
151
151
149
148
144
142
142
141
140
140
139
138
135
130
128
127
126
125
123
16
2.66
169
169
170
171
172
170
168
165
165
163
161
160
161
161
158
153
152
153
154
155
154
17
1.39
158
160
160
160
161
161
162
162
162
158
156
156
154
153
150
149
148
147
146
145
144
18
6.88
Fertili- Cement Iron, steel zers & ferro alloys a
A68 Economic Survey 2012-13
Economic Survey 2012-13
A69
5.3 : ALL INDIA CONSUMER PRICE INDEX NUMBERS Industrial workers (CPI-IW) Base Description 1
(1982=100 & 2001=100) Food Non-Food General 2
Average of Months 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Last Month of 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2011-12 April May June July August September October November December January February March 2012-13 April May June July August September October November December
New Series (CPI-NS)
3
4
337 369 388 445 446 453 466 477 495 506 527a 126 136 153 176 194 206
280 307 336 372 404 433 460 488 507 538 563a 124 130 138 151 168 185
339 373 401 431 446 446 462 479 494 502 115 a 129 141 156 181 196 212
Rural
(2010=100) Urban All-India
Agricultural labourers (CPI-AL) (1986-87=100) General
Rural labourers (CPI-RL) (1986-87=100) General
5
6
7
8
9
313 342 366 414 428 444 463 482 500 520 542a 125 133 145 163 180 195
… … … … … … … … … … … … … … … … 113.1
… … … … … … … … … … … … … … … … 110.4
… … … … … … … … … … … … … … … … 111.9
237 256 264 293 306 305 309 319 331 340 353 380 409 450 513 564 611
238 b 256 266 294 307 307 311 321 333 342 355 382 409 451 513 564 611
292 322 352 391 418 444 476 498 517 555 122a 125 134 141 161 176 192
319 351 380 414 434 445 468 487 504 525 119 a 127 137 148 170 185 201
… … … … … … … … … … … … … … … 106.9 116.2
… … … … … … … … … … … … … … … 103.9 114.6
… … … … … … … … … … … … … … … 105.6 115.5
237 262 272 296 306 300 309 324 332 340 358 392 423 463 536 585 625
238 262 273 296 307 302 311 326 334 342 360 393 423 464 536 584 626
197 198 201 204 205 209 212 212 207 206 207 212
177 178 179 184 185 187 186 188 188 191 192 192
186 187 189 193 194 197 198 199 197 198 199 201
107.5 108.7 109.9 111.7 113.1 114.4 115.2 115.4 114.5 114.9 115.4 116.2
104.5 105.0 107.3 108.9 109.9 111.1 112.0 112.5 112.3 112.8 113.5 114.6
106.2 107.1 108.8 110.5 111.7 113.0 113.8 114.1 113.6 114.0 114.6 115.5
587 592 598 604 610 615 619 621 618 618 621 625
587 592 597 604 610 614 620 621 619 619 623 626
218 219 222 227 230 232 233 235 235
194 195 196 199 200 200 203 203 205
205 206 208 212 214 215 217 218 219
117.9 119.1 120.5 122.6 124.3 125.6 126.6 126.9 126.8P
116.1 117.1 118.5 119.9 121.1 121.9 122.6 123.4 124.0P
117.1 118.2 119.6 121.4 122.9 124.0 124.9 125.4 125.6P
633 638 646 656 666 673 680 685 688
634 640 648 658 667 675 681 686 689
Source: 1. Labour Bureau, Shimla for consumer price indices for Industrial Workers (IW), Agricultural Labourers (AL) and Rural Labourers (RL). 2. C.S.O. for consumer price indices for new series (CPI-NS). P : Provisional a The current series of CPI for Industrial Workers with 2001 base was introduced w.e.f. January, 2006 and the figures from 2005-06 (last month) are based on new base. The earlier series on base 1982=100 was simultaneously discontinued. The conversion factor from the current to the old series is 4.63 in case of the General Index, and 4.58 for Food Index. b Average index from November, 1995 to March 1996. Note : 1. Annual figures are yearly averages of months. 2. Weights of CPI-IW for food & non-food with base 1982=100 are 57% & 43% respectively and with base 2001=100 are 46.20% & 53.80% respectively. 3. CPI- New Series (Rural, Urban & All-India) was introduced w.e.f. January 2011. The CPI-UNME has since been totally discontinued.
http://indiabudget.nic.in A—69
A70
Economic Survey 2012-13 5.4 : INDEX NUMBERS OF WHOLESALE PRICES – RELATIVE PRICES OF MANUFACTURED AND AGRICULTURAL PRODUCTS
Year
Weight (Base: 1993-94) Weight (Base: 2004-05) 1
General Index of Wholesale Price
Price Index of Manufactured Products
Price Index of Agricultural Productsa
Manufactured Price Index as per cent of Agricultural Price Index
100.00 100.00
63.75 64.97
21.54 18.59
(Col 3/Col 4)x100
2
3
4
5
(Base : 1993-94 = 100) 1994-95
112.6
112.3
116.0
96.8
1995-96
121.6
121.9
126.0
96.8
1996-97
127.2
124.4
136.4
91.2
1997-98
132.8
128.0
140.3
91.2
1998-99
140.7
133.6
157.2
85.0
1999-00
145.3
137.2
159.1
86.2
2000-01
155.7
141.7
163.7
86.6
2001-02
161.3
144.3
169.5
85.1
2002-03
166.8
148.1
175.3
84.5
2003-04
175.9
156.5
182.9
85.6
2004-05
187.3
166.3
186.7
89.1
2005-06
104.5
102.4
103.4
99.1
2006-07
111.4
108.2
112.5
96.3
2007-08
116.6
113.4
121.5
93.4
2008-09
126.0
120.4
133.5
90.2
2009-10
130.8
123.1
151.0
81.7
2010-11
143.3
130.1
176.6
73.7
2011-12
156.1
139.5
190.4
73.3
Apr-11
152.1
136.6
188.0
72.6
May-11
152.4
137.4
185.6
74.0
Jun-11
153.1
137.9
187.0
73.7
Jul-11
154.2
138.0
189.0
73.0
Aug-11
154.9
138.4
191.0
72.5
Sep-11
156.2
139.0
194.2
71.6
Oct-11
157.0
139.6
194.5
71.8
Nov-11
157.4
140.4
191.9
73.1
Dec-11
157.3
140.9
188.2
74.9
Jan-12
158.7
141.5
189.3
74.8
Feb-12
159.3
141.8
191.1
74.2
Mar-12
161.0
142.6
195.5
73.0
Apr-12
163.5
143.8
204.4
70.4
May-12
163.9
144.6
204.4
70.7
Jun-12
164.7
145.3
205.9
70.6
Jul-12
165.8
146.1
209.5
69.7
Aug-12
167.3
147.2
210.8
69.8
Sep-12
168.8
148.0
210.8
70.2
Oct-12
168.5
147.9
209.5
70.6
168.8
148.0
210.5
70.3
168.6
148.0
210.1
70.5
(Base : 2004-05 = 100)
2011-12
2012-13
Nov-12 Dec-12
P P
Source : Office of the Economic Adviser, Ministry of Commerce & Industry. a Composite Index of the sub-groups - (Food Articles and Non-food Articles). P
Provisional
http://indiabudget.nic.in A—70
A71
Economic Survey 2012-13 5.5 : MINIMUM SUPPORT PRICE/PROCUREMENT PRICE FOR CROPS (CROP YEAR BASIS)
(` /quintal) Commodities
1990 -91
199900
200203b
200405
200506
200607
200708
200809
200910
201011
201112
201213
Paddy (Common)
205
490
550
560
570
580c
645h
850k
950k
1000
1080
1250
Paddy (Fine )
215
...
...
...
...
...
...
...
...
...
...
...
Paddy (Super fine)
225
...
...
...
...
...
...
...
...
...
...
...
...
520
580
590
600
610c
675h
880k
980k
1030
1110
1280
Wheat
225
580
630
640
650g
750h
1000
1080
1100
1120
1285
1350
Jowar (Hybrid)
180
415
490
515
525
540
600
840
840
880
980
1500
...
...
...
...
...
555
620
860
860
900
1000
1520
Bajra
180
415
495
515
525
540
600
840
840
880
980
1175
Ragi
180
415
490
515
525
540
600
915
915
965
1050
1500
Maize
180
415
490
525
540
540
620
840
840
880
980
1175
Barley
200
430
505
540
550
565
650
680
750
780
980
980
Gram
450
1015
1225
1425
1435
1445
1600
1730
1760
2100
2800
3000
Paddy (Grade ‘A’)
Jowar (Maldandi)
Masur
...
...
...
1525
1535
1545
1700
1870
1870
2250
2800
2900
Arhar
480
1105
1325
1390
1400
1410
1550d
2000
2300
3000l
3200l
3850
Moong
480
1105
1335
1410
1520
1520
1700d
2520
2760
3170l
3500l
4400
Urad
480
1105
1335
1410
1520
1520
1700d
2520
2520
2900l
3300l
4300
23.00
56.10
69.50
74.50
79.50
80.25
81.18
81.18
129.84
139.12 145.00m
170.00
1800e
2500i
2500i
2500i
2800i
Sugarcane (Statutory minimum price) a Cotton F-414/H-777
620
1575
1695
1760
1760
1770e
Cotton H-4 750
750
1775
1895
1960
1980
1990f
2030f
3000j
3000j
3000j
3300j
3900
Groundnut
580
1155
1375
1500
1520
1520
1550
2100
2100
2300
2700
3700
3600
Jute(TD-5)
320
750
850
890
910
1000
1055
1250
1375
1575
1675
2200
Rapeseed/ mustard
600
1100
1340
1700
1715
1715
1800
1830
1830
1850
2500
3000
Sunflower
600
1155
1210
1340
1500
1500
1510
2215
2215
2350
2800
3700
Soyabean (Black)
350
755
805
900
900
900
910
1350
1350
1400
1650
2200
Soyabean (Yellow)
400
845
895
1000
1010
1020
1050
1390
1390
1440
1690
2240
Safflower
575
1100
1305
1550
1565
1565
1650
1650
1680
1800
2500
2800
Toria
570
1065
1305
1665
1680
1680
1735
1735
1735
1780
2425
,,,
1600
3100
3300
3500
3570
3590
3620
3660
4450
4450
4525
5100
Copra balls
...
3325
3550
3750
3820
3840
3870
3910
4700
4700
4775
5350
Sesamum
...
1205
1455
1500
1550
1560
1580
2750
2850
2900
3400
4200
Niger seed
...
915
1120
1180
1200
1220
1240
2405
2405
2450
2900
3500
Copra (milling)
a b c d e f g h i j k l m
Statutory Minimum Price (SMP) upto 2008-09. Fair and Remunerative Price (FRP) from 2009-10 onwards. Including Special onetime drought relief (SDR) price announced for 2002-03. An additional incentive bonus of Rs. 40 per quintal was payable on procurement between January 10, 2006 to March 31, 2007. A bonus of Rs. 40 per quintal was payable over and above the MSP. Medium staple. Long staple. An incentive bonus of Rs. 50 per quintal is payable on wheat over the Minimun Support Price (MSP). An additional incentive bonus of Rs. 100 per quintal was payable over the Minimun Support Price (MSP). Staple length (mm) of 24.5-25.5 and micronaire value of 4.3-5.1 Staple length (mm) of 29.5-30.5 and micronaire value of 3.5-4.3 An additional incentive bonus of Rs. 50 per quintal was payble over the MSP. Additional incentive at the rate of Rs. 500 per quintal of tur, urad and moong sold to procurement agencies . At 9.5 percent recovery, subject to a premium of Rs.1.53 for every 0.1 percent increase in the recovery above 9.5 percent.
http://indiabudget.nic.in A—71
A72
Economic Survey 2012-13 6.1 (A) : FOREIGN EXCHANGE RESERVES (` crore)
End of Fiscal
1
Reserves Gold
RTP
Tonnes
` crore
2
3
Transactions with IMF
SDRs
` crore
4
In millions of SDRs.
` crore
5
6
Foreign Currency Assets ` crore
Total
Drawals
` crore (3+4+6+7)
7
8
Repur- Outstanding chasesg repurchase obligations
9
10
11
1950-51
220
118
...
...
...
911
1029
...
...
48
1951-52
220
118
...
...
...
747
865
...
...
48
1952-53
220
118
...
...
...
763
881
...
...
48
1953-54
220
118
...
...
...
792
910
...
17
30
1954-55
220
118
...
...
...
774
892
...
17
13
1955-56
220
118
...
...
...
785
903
...
7
6
1956-57
220
118
...
...
...
563
681
61
6
61
1957-58
220
118
...
...
...
303
421
35
...
95
1958-59
220
118
...
...
...
261
379
...
...
95
1959-60
220
118
...
...
...
245
363
...
24
71
1960-61
220
118
...
...
...
186
304
...
11
61
1961-62
220
118
...
...
...
180
298
119
61
119
1962-63
220
118
...
...
...
177
295
12
...
131
1963-64
220
118
...
...
...
188
306
...
24
107
1964-65
250
134
...
...
...
116
250
48
48
107
1965-66
216
116
...
...
...
182
298
65
36
137
1966-67
216
183
...
...
...
296
479
89
43
313
1967-68
216
183
...
...
...
356
539
68
43
338
1968-69
216
183
...
...
...
391
574
...
59
279
1969-70
217
183
...
123
92
546
821
...
125
154
1970-71
216
183
...
149
112
438
733
...
154
...
1971-72
216
183
...
248
194
480
857
...
...
...
1972-73
216
183
...
247
226
479
888
...
...
...
1973-74
216
183
...
245
230
581
994
62
...
59
1974-75
216
183
...
235
229
611
1023
485
...
557
1975-76
216
183
...
203
211
1492
1886
207
...
804
1976-77
223
188
...
187
192
2863
3243
...
303
492
1977-78
229
193
...
162
170
4500
4863
...
249
210
1978-79
260
220
...
365
381
5220
5821
...
207
1979-80
266
225
...
529
545
5164
5934
...
55
1980-81
267
226
...
491
497
4822
5545
274 a
1981-82
267
226
...
425
444
3355
4025
1982-83
267
226
...
270
291
4265
4782
1893
1983-84
267
226
...
216
248
5498
5972
1414 b
72
1984-85
291
246
...
147
181
6817
7244
219 b
156 i
4888
1985-86
325
274
...
115
161
7384
7819
...
253
j
5285
1986-87
325
274
...
139
232
7645
8151
...
672 k
5548
1987-88
325
274
...
70
125
7287
7686
...
1209 l
4732
1988-89
325
274
...
80
161
6605
7040
...
1547
1989-90
333
281
...
82
184
5787
6252
3334 c
1460 n
2572
1990-91
333
6828
...
76
200
4388
11416
3205 d
1156 o
5132
1991-92
351
9039
...
66
233
14578
23850
4231
1127
1992-93
354
10549
...
13
55
20140
30744
1993-94
367
12794
...
77
339
47287
1994-95
396
13752
...
5
23
1995-96
398
15658
...
56
1996-97
398
14557
...
1997-98
396
13394
1998-99
357
1999-2000
358
... e
5f
... 268
637 b
...
901
b
...
2867 h
m
4444
3696
p
8934
1007
868 q
14986
60420
...
420 r
15812
66006
79781
...
3585
280
58446
74384
...
5749 t
8152
1
7
80368
94932
...
3461 u
4714
...
1
4
102507
115905
...
2286
v
2624
12559
...
6
34
125412
138005
...
1652 w
1220
12973
...
3
16
152924
165913
...
...
s
13545
... Contd...
http://indiabudget.nic.in A—72
Economic Survey 2012-13
A73
6.1 (A) : FOREIGN EXCHANGE RESERVES (Concl.) (` crore) End of Fiscal
Reserves Gold
RTP ` crore
Transactions with IMF
SDRs
Foreign Currency Assets ` crore ` crore
Total ` crore (3+4+6+7)
Drawals
Repurchasesg
Outstanding repurchase obligations
Tonnes
` crore
2
3
4
5
6
7
8
9
10
11
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
358 358 358 358 358 358 358 358 358 558 558 558
12711 14868 16785 18216 19686 25674 29573 40124 48793 81188 102572 138250
... ... 3190 5688 6289 3374 2044 1744 5000 6231 13158 14511
2 8 3 2 3 2 1 11 1 3297 2882 2885
11 50 19 10 20 12 8 74 6 22596 20401 22866
184482 249118 341476 466215 593121 647327 836597 1196023 1230066 1149650 1224883 1330511
197204 264036 361470 490129 619116 676387 868222 1237965 1283865 1259665 1361013 1506139
... ... ... ... ... 3024.6 1360.3 301.5 371.1 ... 161.3 ‌
... ... ... 2598.2 414.9 220.5 ... ... 2940.1 10090.4 1594.0 1392.1
... ... ... ... ... ... ... ... ... ... ...
2012-13x April May June July August September October November December
558 558 558 558 558 558 558 558 558
139797 144350 145056 143514 146206 148252 152553 151601 149103
15310 16020 16299 11916 12311 11962 12272 12347 12739
2885 2886 2886 2886 2886 2886 2886 2886 2886
23496 24589 24659 24291 24476 23455 24062 24154 24300
1369929 1428763 1445492 1431934 1435459 1369903 1408956 1417757 1433281
1548532 1613722 1631506 1611655 1618452 1553572 1597843 1605859 1619423
... ... ... ... ... ... ... ... ...
352.7 ... 196.3 ... 294.6 165.0 ... 28.1 307.2
... ... ... ... ... ... ... ... ...
1
In millions of SDRs
Source : Reserve Bank of India. SDRs : Special Drawing Rights, RTP : Reserve Tranche Position in IMF, ... : Nil or Negligible a
Excludes ` 544.53 crore drawn under Trust Fund. Drawals under Extended Fund Facility (EFF). c Drawals of `1883.6 crore under Compensatory and Contingency Financing Facility and `1450.2 crore under First Credit Tranche of Standby Arrangement. d Drawals of ` 2217.2 crore under Compensatory and Contingency Financing Facility and ` 987.5 crore under First Credit Tranche of Standby Arrangement. e Includes voluntary repurchases of Rupees (`199 crore) and sales of Rupees (` 35.2 crore) by the IMF under its General Resources Account. f Sales of Rupees by the IMF. g Additionally, SDR 59.9 million in May 1979, SDR 7.3 million in July 1980 and SDR 34.5 million in March 1982 were used for voluntary repurchases of Rupees. h SDR 66.50 million were used for repurchases of drawals under Compensatory Financing Facility (CFF). i SDR 33.25 million and ` 117.85 crore in foreign currencies were used for repurchases of drawals under CFF. j SDR 66.5 million and SDRs 131.25 million were used for repurchases of drawals under CFF and EFF, respectively. k SDR 431.25 million were used for repurchases of drawals under EFF. l SDR 704.17 million were used for repurchases of drawals under EFF. m SDR 804.18 million were used for repurchases of drawals under EFF. n SDR 681.25 million were used for repurchases of drawals under EFF. o SDR 468.75 million were used for repurchases of drawals under EFF p SDR 337.49 million were used for repurchases of drawals under EFF. q SDR 237.49 million were used for repurchases of drawals under EFF. r SDR 95.84 million were used for repurchases of drawals under EFF. s SDR 812.77 million were used for repurchases of drawals under EFF. t SDR 1130.48 million were used for repurchases of drawals under EFF. u SDR 678.38 million were used for repurchases of drawals under EFF. v SDR 449.29 million were used for repurchases of drawals under EFF. w SDR 212.46 million were used for repurchases of drawals under EFF. x Figures pertain to end of Month Note : 1. Figures after 1965-66 are not comparable with those of the earlier years owing to devaluation of the Rupee in June 1966. 2. Also figures for July 1991 onwards are not comparable with those of earlier periods due to the downward adjustment of the Rupee effected on July 1,1991 and July 3, 1991. 3. Drawals, Repurchase and outstanding repurchase obligations are calculated at the ruling rates of exchange. 4. Gold is valued at Rs. 53.58 per 10 grams up to May 1966 and at Rs. 84.39 per 10 grams up to September 1990 and closer to international market price w.e.f. October 17,1990. 5. Foreign exchange includes (a) foreign assets of the Reserve Bank of India and (b) Government balances held abroad up to 1955-56. 6. While reserves pertain to end period, repurchases are for the relevant periods. 7. FCA excludes US $ 250.00 millon (as also its equivalent value in Indian Rupee) invested in foreign currency denominated bonds issued by IIFC (UK) since March 20, 2009, excludes US $ 380.00 million since September 16, 2011, excludes US$ 550 million since February 27, 2012, excludes US $ 673 million since 30th March 2012 and US $ 790 million since July 5, 2012 as also its equavalent value in Indian rupee in respective months. 8. Includes Rs. 31,463 crore (US$ 6,699 million) reflecting the purchase of 200 metric tonnes of gold from IMF on November 3, 2009. 9. Includes SDRs 3,082.5 million allocated under general allocation and SDRs 214.6 million allocated under special allocation by the IMF done on August 28, 2009 and September 9, 2009, respectively. 10. Totals may not tally due to rounding off. b
http://indiabudget.nic.in A—73
A74
Economic Survey 2012-13 6.1 (B) : FOREIGN EXCHANGE RESERVES (US$ million)
End of Fiscal
Reserves RTP
SDRs
2
3
4
1950-51
247
...
...
1951-52
247
...
...
1952-53
247
...
1953-54
247
1954-55
1
Gold
Transactions with IMF Foreign Currency Assets 5
Total (2+3+4+5)
Drawals
Repurchases
Outstanding repurchase obligations
6
7
8
9
1914
2161
...
...
100
1568
1815
...
...
100
...
1603
1850
...
...
100
...
...
1664
1911
...
36
64
247
...
...
1626
1873
...
36
28
1955-56
247
...
...
1648
1895
...
15
13
1956-57
247
...
...
1184
1431
126
12
128
1957-58
247
...
...
637
884
72
...
200
1958-59
247
...
...
548
795
...
...
200
1959-60
247
...
...
515
762
...
50
150
1960-61
247
...
...
390
637
...
23
128
1961-62
247
...
...
377
624
249
127
250
1962-63
247
...
...
372
619
25
...
275
1963-64
247
...
...
395
642
...
50
225
1964-65
281
...
...
243
524
99
100
225
1965-66
243
...
...
383
626
137
75
288
1966-67
243
...
...
395
638
126
57
418
1967-68
243
...
...
475
718
89
58
450
1968-69
243
...
...
526
769
...
78
372
1969-70
243
...
123
728
1094
...
167
205
1970-71
243
...
148
584
975
...
205
...
1971-72
264
...
269
661
1194
...
...
...
1972-73
293
...
297
629
1219
...
...
...
1973-74
293
...
296
736
1325
79
...
75
1974-75
304
...
293
782
1379
608
...
715
1975-76
281
...
234
1657
2172
239
...
896
1976-77
290
...
217
3240
3747
...
336
559
1977-78
319
...
200
5305
5824
...
333
249
1978-79
377
...
470
6421
7268
...
256
...
1979-80
375
...
662
6324
7361
...
145
...
1980-81
370
...
603
5850
6823
342
16
327
1981-82
335
...
473
3582
4390
692
40
964
1982-83
324
...
291
4281
4896
1968
...
2876
1983-84
320
...
230
5099
5649
1376
70
4150
1984-85
325
...
145
5482
5952
201
134
3932
1985-86
417
...
131
5972
6520
...
209
4290
1986-87
471
...
179
5924
6574
...
521
4291
1987-88
508
...
97
5618
6223
...
930
3653
1988-89
473
...
103
4226
4802
...
1070
2365
1989-90
487
...
107
3368
3962
...
873
1493
1990-91
3496
...
102
2236
5834
1858
644
2623
1991-92
3499
...
90
5631
9220
1240
460
3451
1992-93
3380
...
18
6434
9832
1623
335
4799
1993-94
4078
...
108
15068
19254
325
134
5040
1994-95
4370
...
7
20809
25186
...
1146
4300 Contd...
http://indiabudget.nic.in A—74
A75
Economic Survey 2012-13 6.1 (B) : FOREIGN EXCHANGE RESERVES (Concl.)
(US$ million) End of
Reserves
Fiscal
1
Gold
RTP
SDRs
2
3
4
1995-96
4561
1996-97 1997-98
Transactions with IMF Foreign Currency Assets 5
Total (2+3+4+5)
Drawals
6
7
Repurchases
8
Outstanding repurchase obligations 9
...
82
17044
21687
...
1710
2374
4054
...
2
22367
26423
...
977
1313
3391
...
1
25975
29367
...
615
664
1998-99
2960
...
8
29522
32490
...
102
287
1999-2000
2974
...
4
35058
38036
...
...
...
2000-01
2725
...
2
39554
42281
...
...
...
2001-02
3047
...
10
51049
54106
...
...
...
2002-03
3534
672
4
71890
75428
...
...
...
2003-04
4198
1311
2
107448
112959
...
561.3
...
2004-05
4500
1438
5
135571
141514
...
93.5
...
2005-06
5755
756
3
145108
151622
670.0
50.7
...
2006-07
6784
469
2
191924
199179
302.7
...
...
2007-08
10039
436
18
299230
309723
74.2
...
...
2008-09
9577
981
1
241426
251985
86.3
611.9
...
2009-10
17986
1380
5006
254685
279057
...
461.3
... ...
2010-11
22972
2947
4569
274330
304818
36.2
353.2
2011-12
27023
2836
4469
260069
294397
‌
275.1
2012-13a April
26618
2915
4474
260839
294846
...
68.9
May
25585
2839
4358
253237
286019
...
...
... ...
June
25760
2895
4379
256703
289736
...
35.1
...
July
25715
2135
4353
256573
288775
...
...
...
August
26239
2209
4393
257620
290462
...
52.7
...
September
28133
2270
4451
259958
294812
...
30.8
...
October
28189
2268
4446
260351
295254
...
...
...
November
27803
2264
4430
260013
294510
...
5.2
...
December
27220
2326
4436
261656
295638
...
56.0
...
Source : Reserve Bank of India. SDRs : Special Drawing Rights, a
RTP : Reserve Tranche Position in IMF,
... : Nil or Negligible
Figures pertain to end of Month
Notes : 1. For compiling figures in US dollars, gold is valued at SDR 35 per troy ounce as in the International Financial Statistics of the IMF upto October 16, 1990. Thereafter gold has been valued close to international market price. 2. Conversion of foreign currency assets and SDR in US dollars is done at exchange rates supplied by the IMF. 3. Transactions with IMF are converted at respective SDR/$ rate. 4. While reserves pertain to end period, repurchases are for the relevant periods. 5. FCA excludes US $ 250.00 millon invested in foreign currency denominated bonds issued by IIFC (UK) since March 20, 2009, excludes US $ 380.00 million since September 16, 2011, excludes US $ 550 million since February 27, 2012, excludes US $ 673 million since 30th March 2012 and US $ 790 million since July 5, 2012. 6. Includes Rs. 31,463 crore ( US$ 6,699 million) reflecting the purchase of 200 metric tonnes of gold from IMF on November 3, 2009. 7. Includes SDRs 3,082.5 million allocated under general allocation and SDRs 214.6 million allocated under special allocation by the IMF done on August 28, 2009 and September 9, 2009, respectively. 8. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—75
A76
Economic Survey 2012-13 6.2 : BALANCE OF PAYMENTS AS PER IMF BALANCE OF PAYMENTS MANNUAL 5 2000-01 ` crore
Item 1
2006-07
US$ million
2
3
` crore 4
2007-08
US$ million 5
` crore 6
2008-09
US$ million 7
` crore 8
US$ million 9
1
Imports (c.i.f.)
264589
57912
862833
190670
1035672
257629
1405400
308520
2
Exports (f.o.b.)
207852
45452
582871
128888
668008
166162
858000
189001
3
Trade Balance (2-1)
-56737
-12460
-279962
-61782
-367664
-91467
-547400
-119519
4
Invisibles a) Receipts
147778
32267
517146
114558
598088
148875
770400
167819
a) Payments
102639
22473
281567
62341
293902
73144
350600
76214
21948
4801
24742
5468
26568
6599
29992
6521
45139
9794
235579
52217
304185
75731
419800
91605
-11598
-2666
-44383
-9565
-63479
-15737
-127600
-27914
26744
5862
66791
14753
174395
43326
35100
8342
(of which: Interest & Service Payments on Loans and Credits) c) Net 5
Current Account Balance
6
Capital Account I
Foreign Investment (Net) i)
II
Foreign Direct Investment a) Inward FDI
18404
4031
102652
22739
139420
34728
190600
41737
b) Outward FDI
-3480
-759
-67742
-15046
-75644
-18835
-90500
-19365
c) Net
14924
3272
34910
7693
63776
15893
100100
22372
ii) Portfolio Investment (net)
11820
2590
31881
7060
110619
27433
-65000
-14030
Loans (net)
24459
5264
110434
24490
163491
40653
34800
8314
a) Inflow
13521
2941
16978
3767
17019
4241
24400
5230
b) Out flow
11519
2531
9005
1992
8553
2126
12900
2792
2002
410
7973
1775
8466
2114
11500
2438
a) Inflow
95750
20865
229547
50875
313312
77951
260900
56987
b) Out flow
73293
16011
127086
28160
158287
39413
237700
51111
c) Net
22457
4854
102461
22715
155025
38538
23200
5876
i)
External Assistance.
c) Net ii) Commercial Borrowingsa
III Banking a) Receipts
44448
9744
167494
37209
223979
55814
295400
65207
b) Payments
53592
11705
159017
35296
176824
44055
314600
68453
c) Net
-9144
-1961
8477
1913
47155
11759
-19200
-3246
-2760
-617
-725
-162
-492
-122
-500
-100
a) Receipts
12948
2856
36797
8230
117094
29229
76100
16685
b) Payments
11637
2564
18101
4021
73716
18261
97300
22602 -5917
IV Rupee Debt Service (net) V
Other Capital
1311
292
18696
4209
43377
10968
-21200
VI Errors & Omissions (net)
c) Net
-1369
-305
4344
968
5241
1316
1500
440
Total Capital (I to VI of 6)
39241
8535
208017
46171
433167
107901
30500
7835
8
Overall Balance (5 + 7)
27643
5868
163634
36606
369689
92164
-97100
-20080
9
Monetary Movement
7
a) IMF Transactions Purchases
...
...
...
...
...
...
...
...
ii) Repurchases
i)
115
26
...
...
...
...
...
...
-115
-26
...
...
...
...
...
...
-27528
-5842
-163634
-36606
-369689
-92164
97100
20080
10 Total Reserve movement (9a(iii)+9b) -27643
-5868
-163634
-36606
-369689
-92164
97100
20080
iii) Net b) Increase (-)/decrease (+) in Reserves [(-) Increase/ (+) decrease] Source : a
Reserve Bank of India. ... : Nil or Negligible Commercial borrowings includes short term credit.
Note : Totals may not tally due to rounding off.
Contd....
http://indiabudget.nic.in A—76
Economic Survey 2012-13
A77
6.2 : BALANCE OF PAYMENTS AS PER IMF BALANCE OF PAYMENTS MANNUAL 5 (Concl.) Item 1 1 2 3 4
Imports (c.i.f.) Exports (f.o.b.) Trade Balance (2-1) Invisibles a) Receipts b) Payments (of which: Interest & Service Payments on Loans and Credits) c) Net 5 Current Account Balance 6 Capital Account I Foreign Investment (Net) i) Foreign Direct Investment (FDI) a) Inward FDI b) Outward FDI c) Net ii) Portfolio Investment (net) II Loans (net) i) External Assistance a) Inflow b) Out flow c) Net ii) Commercial Borrowingsa a) Inflow b) Out flow c) Net III Banking a) Receipts b) Payments c) Net IV Rupee Debt Service V Other Capital a) Receipts b) Payments c) Net VI Errors & Omissions 7 Total Capital (I to VI of 6) 8 Overall Balance (5 + 7) 9 Monetary Movement a) IMF Transactions i) Purchases ii) Repurchases iii) Net b) Increase (-)/decrease (+) in Reserves 10 Total Reserve movement (9a(iii)+9b) [(-) Increase/ (+) decrease]
` crore
2009-10 US$ million
2010-11 PR US$ ` crore million
2011-12P US$ ` crore million
2012-13(Apr.-Sep.)P US$ ` crore million
10
11
12
13
14
15
16
17
1423200 863300 -559900
300644 182442 -118202
1746100 1165700 -580500
383481 256159 -127322
2394600 1482500 -912100
499533 309774 -189759
1296600 800700 -496000
237221 146549 -90672
774600 394400
163430 83408
867200 506400
190488 111218
1053500 517300
219229 107625
596100 313500
109048 57349
27133 380200 -179700
5719 80022 -38180
27670 360800 -219700
6073 79269 -48053
41046 536200 -376000
8527 111604 -78155
28816 282600 -213400
5273 51699 -38973
240000
50362
193500
42127
188700
39231
102500
18608
157800 -71800 86000 154000 58000
33109 -15143 17966 32396 12447
132400 -78300 54100 139400 132700
29029 -17195 11834 30293 29135
155000 -51800 103200 85600 89700
32952 -10892 22061 17170 19307
89000 -18700 70300 32200 61500
16246 -3434 12812 5796 11252
27900 14300 13600
74163 61716 12447
35900 13400 22500
7882 2941 4941
27400 16100 11300
5646 3350 2296
10100 10000 100
1845 1830 15
322100 277700 44400
68267 58709 9558
459500 349300 110200
100899 76705 24194
649100 570700 78400
135344 118334 17010
376100 314700 61400
68831 57594 11237
292100 282300 9800 -500
61499 59416 2083 -97
419300 397300 22000 -300
92323 87361 4962 -68
427800 356800 71000 -400
89904 73678 16226 -79
251000 169800 81200 -100
45994 31095 14899 -27
54600 117800 -63200 -100 243900 64200
11451 24613 -13162 -12 51622 13441
45200 101900 -56700 -12100 279100 59500
9995 22411 -12416 -2636 61104 13050
64100 94200 -30100 -11600 307400 -68500
13296 20224 -6929 -2432 65323 -12831
36100 62100 -26100 -3700 215300 1900
6597 11339 -4742 -653 39336 363
... ... ... -64200 -64200
... ... ... -13441 -13441
... ... ... -59500 -59500
... ... ... -13050 -13050
... ... ... 68500 68500
... ... ... 12831 12831
... ... ... -1900 -1900
... ... ... -363 -363
Source : Reserve Bank of India. a Commercial borrowings includes short term credit. PR: Partially Revised. P: Preliminary ... : Nil or Negligible Note : 1. Grants received are covered under item 4(a). 2. Estimated interest accrued and credited to NRI deposits during the year has been treated as notional outflow under invisible payments and added as reinvestment in NRI deposits under banking capital. 3. In accordance with the recommendations of Report of the Technical Group on Reconciling of Balance of Payments and DGCI&S Data on Merchandise data on gold brought out by the Indians returning from abroad have been included under Import payments with contra entry under Private Transfer Receipts. Data has, therefore, been revised from 1992-93 i.e. since the inception of the scheme. 4. In accordance with the provision of IMF’s Balance of Payments Manual (5th Edition), gold purchased from the Government of India by the RBI has been excluded from the BOP statistics. Data for the earlier years has, therefore, been amended by making suitable adjustments in “Other Capital-Receipts and Foreign Exchange Reserves”. Similarly, item “SDR Allocation” has been deleted from the table. 5. With effect from 1996-97, private transfer receipts include redemption in rupees of both principal and interest under Non-Resident External (Rupee) Account [NRE(R)A] and Non-Resident Non-Repatriable Rupee Deposit [NR(NR)RD] schemes. This marks an improvement in data reporting. 6. The presentation of balance of payments statistics in the above table differs from the adjusted balance of payments statistics published in the previous issues of the Economic Survey. 7. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—77
A78
Economic Survey 2012-13 6.3 (A): BALANCE OF PAYMENTS AS PER IMF BALANCE OF PAYMENTS MANNUAL 6 (` billion) Item
1 1 Current Account (1.A+1.B+1.C) 1.A Goods and Services (1.A.a+1.A.b) 1.A.a
Goods
1.A.b
Services (1.A.b.1 to 1.A.b.13)
2010-11PR
2011-12P
2012-13(Apr.-Sept. 2012)P
Credit
Debit
Net
Credit
Debit
Net
Credit
Debit
Net
2
3
4
5
6
7
8
9
10
20307
22497
-2190
25265
29027
-3762
13962
16081
-2119
17337
21129
-3792
21605
27647
-6042
11811
15153
-3342
11664
17461
-5798
14828
23946
-9119
8007
12967
-4960
5673
3667
2006
6777
3701
3076
3804
2187
1617
...
...
...
...
...
...
2
1
1
...
...
...
...
...
...
2
12
-9
1.A.b.1 Manufacturing services on physical inputs owned by others 1.A.b.2 Maintenance and repair services n.i.e. 1.A.b.3 Transport
651
635
16
876
791
85
461
413
48
1.A.b.4 Travel
719
502
216
892
659
233
408
333
75
1.A.b.5 Construction
31
53
-22
39
48
-10
25
27
-2
1.A.b.6 Insurance and pension services
89
64
25
127
72
55
59
30
29
297
341
-44
287
383
-97
145
139
6
9
110
-102
14
155
-142
9
105
-96
1.A.b.7 Financial services 1.A.b.8 Charges for the use of intellectual property n.i.e. 1.A.b.9 Telecommunications computer and information services
2513
171
2343
3077
156
2921
1784
86
1698
1.A.b.10 Other business services
1039
1212
-173
1183
1226
-43
806
817
-11
10
25
-14
19
13
6
22
18
4
24
37
-13
23
37
-15
17
18
-1 -124
1.A.b.11 Personal cultural and recreational services 1.A.b.12 Government goods and services n.i.e. 1.A.b.13 Others n.i.e. 1.B Primary Income 1.C Secondary Income 2 Capital Account (2.1+2.2)
292
517
-226
242
159
83
63
187
437
1255
-818
484
1252
-768
272
847
-575
2533
113
2420
3176
127
3049
1879
81
1798
31
29
2
44
46
-3
14
43
-29
2.1 Gross acquisitions (DR.)/disposals (CR.) of non-produced nonfinancial assets 2.2 Capital transfers 3 Financial Account (3.1 to 3.5) 3.1 Direct Investment (3.1A+3.1B) 3.1.A
Direct Investment in India
3.1.B
Direct Investment by India
3.2 Portfolio Investment 3.2A
Portfolio Invesment in India
3.2.B
Portfolio Invesment by India
2
1
1
13
17
-5
3
4
-1
29
29
1
31
29
2
11
39
-28
22903
20594
2309
23825
19945
3880
12006
9820
2186
1759
1218
541
2320
1289
1032
1166
463
703
1643
319
1324
2200
650
1550
1040
149
891
116
899
-783
120
638
-518
126
313
-187
11449
10149
1300
8864
8036
828
4091
3779
312
11414
10061
1353
8823
7983
840
4044
3700
344
35
88
-53
41
53
-12
47
79
-32
3.3 Financial derivatives (other than reserves) and employee stock options 3.4 Other investment 3.4.1
Other equity (ADRs/GDRs)
3.4.2
Currency and deposits
3.4.3
Loans (External Assistance ECBs and Banking Capital)
3.4.4
...
...
...
...
...
76
118
-42
8633
1062
11699
10364
1335
6664
5426
1238
94
...
94
28
...
28
10
...
10
2320
2148
171
3125
2535
590
1912
1371
541
3330
2503
827
2989
2277
712
1313
946
367
Insurance pension and standardized guarantee schemes
3.4.5
Trade credit and advances
3.4.6
Other accounts receivable/ payable—other
3.4.7
... 9695
Special drawing rights
3.5 Reserve assets 4 Total assets/liabilities 5 Net errors and omissions Source: Reserve Bank of India
...
...
...
...
...
...
1
6
-5
3497
2949
549
4929
4624
306
3147
2628
519
455
1033
-579
629
929
-300
282
481
-199
...
...
...
...
...
...
...
...
...
...
595
-595
941
256
685
9
28
-19
22903
20594
2309
23825
19945
3880
12006
9820
2186
...
121
-121
...
116
-116
...
37
-37
PR: Partially Rervised
Note: Totals may not tally due to rounding off.
http://indiabudget.nic.in A—78
P: Preliminary,
Economic Survey 2012-13
A79
6.3 (B): BALANCE OF PAYMENTS AS PER IMF BALANCE OF PAYMENTS MANNUAL 6 (US$ million) Item
2010-11PR
1.A Goods and Services (1.A.a+1.A.b)
2012-13(Apr.-Sept. 2012)P
Debit
Net
Credit
Debit
Net
Credit
Debit
Net
2
3
4
5
6
7
8
9
10
446158 494067
-47909
527050 605229
-78179 255483 294199
-38715
380953 464036
-83084
450777 576439
-1,25,661 216139 277239
-61100
-127164
309843 499533
-189690 146549 237221
-90672
1 1 Current Account (1.A+1.B+1.C)
2011-12P
Credit
1.A.a
Goods
256318 383481
1.A.b
Services (1.A.b.1 to 1.A.b.13)
124635
80555
44080
140935
76906
64029
69590
...
...
...
...
...
...
29
18
11
...
...
...
...
...
...
44
214
-70
1.A.b.3 Transport
14298
13947
350
18257
16454
1802
8426
7548
877
1.A.b.4 Travel
15793
11026
4768
18462
13762
4699
7460
6094
1366
40018
29572
1.A.b.1 Manufacturing services on physical inputs owned by others 1.A.b.2 Maintenance and repair services n.i.e.
677
1157
-481
804
1006
-202
451
501
-50
1.A.b.6 Insurance and pension services
1.A.b.5 Construction
1945
1400
545
2632
1497
1134
1087
553
534
1.A.b.7 Financial services
6508
7483
-975
5967
7984
-2018
2661
2544
118
193
2424
-2231
281
3207
-2927
165
1917
-1751
1.A.b.8 Charges for the use of intellectual property n.i.e. 1.A.b.9 Telecommunications computer and information services
55217
3748
51469
63972
3258
60714
32640
1572
31069
1.A.b.10 Other business services
22823
26626
-3803
24557
25467
-910
14742
14959
-217
1.A.b.11 Personal cultural and recreational services 1.A.b.12 Government goods and
227
543
-316
393
275
118
411
332
79
531
820
-288
478
780
-302
308
337
-29
services n.i.e. 1.A.b.13 Others n.i.e. 1.B Primary Income 1.C Secondary Income
6424
11382
-4959
5133
3214
1919
1165
3430
-2265
9587
27537
-17951
10144
26130
-15987
4972
15482
-10510
55618
2494
53125
66129
2660
63469
34373
1478
32895
685
645
40
907
968
-61
258
792
-535
38
14
25
275
361
-86
57
78
-21
647
631
16
632
607
25
201
714
-514
503724 453219
50505
2 Capital Account (2.1+2.2) 2.1 Gross acquisitions (DR.)/disposals (CR.) of non-produced nonfinancial assets 2.2 Capital transfers 3 Financial Account (3.1 to 3.5) 3.1 Direct Investment (3.1A+3.1B)
38609
26775
497083 416410
11834
49007
26947
80673 219641 179737
39904
22061
21277
8465
12812
3.1.A
Direct Investment in India
36047
7018
29029
46552
13599
32952
18979
2732
16246
3.1.B
Direct Investment by India
2562
19757
-17195
2456
13348
-10892
2299
5732
-3434
251903 223660
28243
185013 168440
16573
74803
69186
5616
251125 221704
29422
184150 167338
16812
73942
67744
6197
-239
861
1442
-581
...
1386
2158
-773
29208 122003
99296
22707
3.2 Portfolio Investment 3.2A
Portfolio Invesment in India
3.2.B
Portfolio Invesment by India
777
1956
-1179
...
...
...
213212 189734
23478
863
1102
...
...
3.3 Financial derivatives (other than reserves) and employee stock options 3.4 Other investment 3.4.1
Other equity (ADRs/GDRs)
3.4.2
Currency and deposits
3.4.3
Loans (External Assistance
3.4.4
Insurance pension and
ECBs and Banking Capital)
2049
...
2049
597
...
597
179
...
179
50954
47186
3768
64714
52619
12095
35023
25093
9930
73374
55079
18295
63427
46656
16770
24048
17338
6710
standardized guarantee schemes 3.4.5
Trade credit and advances
3.4.6
Other accounts receivable/ payable—other
3.4.7
...
...
...
...
...
...
15
111
-96
76776
64742
12034
102754
96087
6668
57599
48088
9511
10059
22727
-12668
13021
19943
-6922
5154
8776
-3623
...
...
...
...
...
...
...
...
...
...
13050
-13050
18550
5719
12831
158
521
-363
503724 453219
50505
80673 219641 179737
39904
Special drawing rights
3.5 Reserve assets 4 Total assets/liabilities 5 Net errors and omissions Source: Reserve Bank of India
244512 215304
...
2636
-2636
PR: Partially Rervised
Note: Totals may not tally due to rounding offContd...
http://indiabudget.nic.in A—79
497083 416410 ...
2432
-2432
P: Preliminary,
...
653
-653
http://indiabudget.nic.in
A—80
82.912 86.732 87.135 86.517 87.344 87.866 85.213 87.537 88.191
51.812 54.474 56.030 55.495 55.559 54.606 53.024 54.776 54.648
68.187 69.699 70.309 68.252 68.875 70.126 68.752 70.367 71.667
… … … … … … … … 44.791 41.483 42.181 48.090 53.990 56.512 53.912 58.111 56.991 65.135 67.084 60.218 65.894 0.638 0.683 0.707 0.703 0.707 0.699 0.672 0.676 0.653
0.227 0.246 0.291 0.316 0.348 0.316 0.303 0.331 0.391 0.414 0.382 0.397 0.407 0.418 0.391 0.388 0.353 0.462 0.511 0.533 0.607
0.194 0.198 0.204 0.206 0.205 0.211 0.214 0.209 0.211 0.21 0.217
0.194
0.185
5
52.197 53.911 54.500 54.729 56.000 55.795 53.780 54.944 55.232
24.698 24.937 23.956 22.725 24.541 26.087 26.491 27.986 29.458 30.383 30.473 31.253 33.991 35.205 37.137 39.765 39.042 40.875 43.488 44.840 48.307
21.8 21.586 21.651 21.764 21.734 21.161 20.805 20.413 20.574 20.5 20.788
21.709
21.267
6
8
Indonesian rupiah
29.02 30.18 30.68 30.62 30.93 30.36 29.45 30.55 30.36
0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.006 0.006
0.004 0.013 0.004 0.013 0.004 0.013 0.004 0.013 0.004 0.013 0.004 0.013 0.003 0.013 0.003 0.013 0.003 0.013 0.003 0.013 0.003 0.013 c (Market Rate) 0.005 0.015 0.004 0.015 0.002 0.015 0.001 0.014 0.001 0.015 0.015 0.038 f f 0.01 0.021 f 0.004 0.015 0.006 0.009 f 0.005 0.007 f 0.005 0.004 f f 0.005 0.003 f 0.005 0.003 g 0.005 8.269 0.045 32.843 g 31.156 0.005 32.155 0.004 32.678 0.005 31.266 0.005 30.24 0.01 27.68 0.005
0.005 0.012 (Official Rate) 0.004 0.013
7
Turkish lira
27.89 27.68 27.48 27.36 27.44 26.97 26.12 26.45 26.23
0.017 0.001 0.122 42.398 35.279 34.725 33.856 32.759 23.938 24.153 19.549 15.489 15.713 15.707 19.17 21.044 21.762 23.569 25.351 26.43 28.22
0.012 0.01 0.008 0.007 0.006 0.005 0.004 0.003 0.002 0.002 0.002
0.015
0.05
9
Brazilian real
d e
3.98 4.01 4.02 4.16 4.22 4.25 4.12 4.19 4.25
0.01 2.565 10.009 8.145 4.953 4.616 4.613 4.421 4.599 4.788 5.183 4.806 4.248 3.964 4.122 4.113 3.703 3.853 3.618 3.66 3.79
0.009 0.009 0.009 0.009 0.009 0.009 0.009 0.008 0.008 8.435 8.46
0.009
0.008
10
Mexican pesos
b
0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05
0.383 0.039 0.039 0.039 0.043 0.043 0.035 0.033 0.037 0.039 0.037 0.04 0.039 0.041 0.044 0.048 0.043 0.038 0.039 0.04 0.04
0.033 0.033 0.033 0.033 0.033 0.034 0.033 0.033 0.033 0.033 0.033
0.034
0.033
11
Korean won
0.57 0.60 0.59 0.59 0.59 0.58 0.55 0.57 0.56
1.195 1.229 1.083 1.024 1.03 0.95 0.884 0.871 0.841 0.82 0.772 0.819 0.798 0.763 0.741 0.748 0.658 0.614 0.572 0.53 0.55
1.049 1.056 1.085 1.119 1.035 1.035 1.054 1.021 1.028 1.025 1.01
1.05
1.021
12
1.68 1.74 1.77 1.75 1.77 1.77 1.73 1.78 1.78
1.155 1.208 1.24 1.254 1.338 1.391 1.067 1.085 1.14 1.1 1.069 1.132 1.132 1.121 1.096 1.236 1.194 1.346 1.406 1.47 1.56
1.021 1.014 1.02 1.025 1.027 1.028 1.026 1.019 1.026 1.028 1.029
1.015
0.977
13
Thailand baht
79.952 83.275 84.908 83.595 84.078 83.897 81.623 83.715 84.036
35.347 37.142 43.886 45.791 50.477 50.886 50.674 57.513 58.934 59.546 60.215 64.126 65.684 66.928 64.49 67.254 62.651 71.277 73.733 69.723 75.313
35.485 35.931 36.551 37.385 37.709 37.695 37.162 35.91 36.329 36.082 35.939
35.347
33.433
14
SDR
Reserve Bank of India. ... : Nil or Negligible The Euro came into existence on Jan/01/1999 b Peso revalued in January 1993 1000 old Peso = 1 New Peso. c Indicative rates announced by Foreign Exchange Dealers Association of India (FEDAI) On February 28, 1986 the cruzado, equal to 1000 cruzerios, was introduced. On January 15, 1989, the new cruzado, equal to 1000 old cruzados was introduced. Currency renamed Cruzerio Real on 1.8.93 New currency Real introduced in July 1994. 2750 old Cruzeiro Real = 1Real. f 100 Turkish Lira. g Turkish Lira has been replaced by New Lira w.e.f. 1.1.2005 Annual/ monthly averages. During March 1992 to February 1993, a dual exchange rate system was prevalent, in which the official rate was fixed by the RBI and the market rate was determined in the Inter-Bank market for the US dollar. 2. The data for 2001-02 in respect of Deutsche Mark, French Franc and Italian Lira pertain to 11 months only as Germany, France and Italy accepted the Euro as their national currency w.e.f. March 1, 2002. 3. Figures of US dollar, Pound Sterling, Euro and Japanese Yen from May 2012 onwards are RBI's reference rates.
Source : a d e Note: 1.
51.959 51.686 47.206 48.821 52.353 56.365 61.024 69.551 69.851 67.552 68.319 74.819 77.739 82.864 79.047 85.643 80.841 78.316 75.886 70.885 76.381
29.455 30.649 31.366 31.399 33.449 35.499 37.165 42.071 43.333 45.684 47.692 48.395 45.952 44.932 44.273 45.285 40.261 45.993 47.417 45.577 47.919
45.461 46.838 47.788 49.721 50.384 47.567 42.862 39.535 40.578 40.141 37.704
March 1992 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 April May June July August September October November December
… … … … … … … … … … … …
44.677
…
4
Canadian dollar
Pakistan rupee
Japanese Yen
Euroa
March 1992 25.89 1992-93 April 25.89 May 25.89 June 25.89 July 25.89 August 25.89 September 25.89 October 25.89 November 25.89 December 26.154 January 1993 26.199 February 26.199
3
Pound sterling
42.515
2
US dollar
24.474
1991-92
1
Year / Month
(Rupee per unit of foreign currency)
6.4 : EXCHANGE RATE OF RUPEE vis-a-vis SELECTED CURRENCIES OF THE WORLD
A80 Economic Survey 2012-13
Economic Survey 2012-13
A81
6.5 : TRENDS IN NOMINAL AND REAL EFFECTIVE EXCHANGE RATE OF RUPEE (Trade Based Weights) Year/month (Average)
Nominal effective exchange rate (NEER) 6-currency index
Real effective exchange rate (REER) 6-currency index
Nominal effective exchange rate (NEER) 36-currency index
Real effective exchange rate (REER) 36-currency index
2
3
4
5
104.32
1
(Base: 1993-94=100) 1994-95
96.96
105.82
98.91
1995-96
88.56
101.27
91.54
98.19
1996-97
86.85
101.11
89.27
96.83
1997-98
87.94
104.41
92.04
100.77
1998-99
77.49
96.14
89.05
93.04
1999-2000
77.16
97.69
91.02
95.99
2000-01
77.43
102.82
92.12
100.09 100.86
2001-02
76.04
102.71
91.58
2002-03
71.27
97.68
89.12
98.18
2003-04
69.97
99.17
87.14
99.56
2004-05
69.58
101.78
87.31
100.09
2005-06
103.04
105.17
102.24
103.10
2006-07
98.09
104.30
97.63
101.29
2007-08
104.62
112.76
104.75
108.52
2008-09
90.42
102.32
93.34
97.80
2009-10
87.07
101.97
90.93
94.73
2010-11 (P)
91.83
114.91
93.66
102.34
2011-12 (P)
84.86
111.86
87.61
99.15
Base: 2004-05=100
2012-13 (P) April
79.24
107.57
81.92
94.93
May
76.10
104.12
78.68
91.53
June
74.67
102.24
77.32
89.94
July
75.95
104.16
78.26
91.03
August
75.53
104.76
77.63
90.30
September
75.67
105.75
78.85
91.72 93.90
October
77.55
107.86
80.73
November
75.33
105.11
78.42
91.22
December
75.05
104.56
78.01
90.74
Source : Reserve Bank of India. P : Provisional
http://indiabudget.nic.in A—81
A82
Economic Survey 2012-13 7.1 (A) : EXPORTS, IMPORTS AND TRADE BALANCE (` crore)
Year
Exports (including re-exports)
1 1949-50 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (P)a (April-December)
2 485 606 716 578 531 593 609 605 561 581 640 642 660 685 793 816 810 1157 1199 1358 1413 1535 1608 1971 2523 3329 4036 5142 5408 5726 6418 6711 7806 8803 9771 11744 10895 12452 15674 20232 27658 32553 44041 53688 69751 82674 106353 118817 130100 139752 159561 203571 209018 255137 293367 375340 456418 571779 655864 840755 845534 1142922 1465959 1166439
Imports
Trade Balance
3
4
617 608 890 702 610 700 774 841 1035 906 961 1122 1090 1131 1223 1349 1409 2078 2008 1909 1582 1634 1825 1867 2955 4519 5265 5074 6020 6811 9143 12549 13608 14293 15831 17134 19658 20096 22244 28235 35328 43198 47851 63375 73101 89971 122678 138920 154176 178332 215236 230873 245200 297206 359108 501065 660409 840506 1012312 1374436 1363736 1683467 2345463 1967522
-132 -2 -174 -124 -79 -107 -165 -236 -474 -325 -321 -480 -430 -446 -430 -533 -599 -921 -809 -551 -169 -99 -217 104 -432 -1190 -1229 68 -612 -1085 -2725 -5838 -5802 -5490 -6060 -5390 -8763 -7644 -6570 -8003 -7670 -10645 -3810 -9687 -3350 -7297 -16325 -20103 -24076 -38580 -55675 -27302 -36182 -42069 -65741 -125725 -203991 -268727 -356448 -533680 -518202 -540545 -879504 -801083
Rate of Change Export 5 na 24.9 18.2 -19.3 -8.1 11.7 2.7 -0.7 -7.3 3.6 10.2 0.3 2.8 3.8 15.8 2.9 -0.7 42.8 3.6 13.3 4.1 8.6 4.8 22.6 28.0 31.9 21.2 27.4 5.2 5.9 12.1 4.6 16.3 12.8 11.0 20.2 -7.2 14.3 25.9 29.1 36.7 17.7 35.3 21.9 29.9 18.5 28.6 11.7 9.5 7.4 14.2 27.6 2.7 22.1 15.0 27.9 21.6 25.3 14.7 28.2 0.6 35.2 28.3 9.4
(per cent)
Import 6 na -1.5 46.4 -21.1 -13.1 14.8 10.6 8.7 23.1 -12.5 6.1 16.8 -2.9 3.8 8.1 10.3 4.4 47.5 -3.4 -4.9 -17.1 3.3 11.7 2.3 58.3 52.9 16.5 -3.6 18.6 13.1 34.2 37.3 8.4 5.0 10.8 8.2 14.7 2.2 10.7 26.9 25.1 22.3 10.8 32.4 15.3 23.1 36.4 13.2 11.0 15.7 20.7 7.3 6.2 21.2 20.8 39.5 31.8 27.3 20.4 35.8 -0.8 23.4 39.3 14.8
Source : Directorate General of Commercial Intelligence & Statistics (DGCI&S), Kolkata. P : Provisional a Growth rate on provisional over revised basis and based on Department of Commerce methodology. Note : For the years 1956-57, 1957-58, 1958-59 and 1959-60, the data are as per the Fourteenth Report of the Estimates Committee (1971-72) of the erstwhile Ministry of Foreign Trade.
http://indiabudget.nic.in A—82
Economic Survey 2012-13
A83
7.1 (B) : EXPORTS, IMPORTS AND TRADE BALANCE (US$ million) Year
Exports (including re-exports)
1 1949-50 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (P)a (April-December)
2 1016 1269 1490 1212 1114 1233 1275 1259 1171 1219 1343 1346 1381 1437 1659 1701 1693 1628 1586 1788 1866 2031 2153 2550 3209 4174 4665 5753 6316 6978 7947 8486 8704 9107 9449 9878 8904 9745 12089 13970 16612 18143 17865 18537 22238 26330 31797 33470 35006 33218 36822 44076 43827 52719 63843 83536 103091 126414 163132 185295 178751 251136 304624 214100
Imports
Trade Balance
Rate of Change Export
Import (per cent)
3 1292 1273 1852 1472 1279 1456 1620 1750 2160 1901 2016 2353 2281 2372 2558 2813 2944 2923 2656 2513 2089 2162 2443 2415 3759 5666 6084 5677 7031 8300 11321 15869 15174 14787 15311 14412 16067 15727 17156 19497 21219 24075 19411 21882 23306 28654 36678 39133 41484 42389 49671 49975 51413 61412 78149 111517 149166 185735 251654 303696 288373 369769 489181 361272
4 -276 -4 -362 -260 -165 -223 -345 -491 -989 -682 -673 -1007 -900 -935 -899 -1112 -1251 -1295 -1070 -725 -223 -131 -290 135 -550 -1492 -1419 76 -715 -1322 -3374 -7383 -6470 -5680 -5862 -4534 -7163 -5982 -5067 -5527 -4607 -5932 -1546 -3345 -1068 -2324 -4881 -5663 -6478 -9171 -12849 -5899 -7587 -8693 -14307 -27981 -46075 -59321 -88522 -118401 -109621 -118633 -184558 -147172
5 na 24.9 17.4 -18.7 -8.1 10.7 3.4 -1.3 -7.0 4.1 10.2 0.2 2.6 4.1 15.4 2.5 -0.5 -3.8 -2.6 12.7 4.4 8.8 6.0 18.4 25.8 30.1 11.8 23.3 9.8 10.5 13.9 6.8 2.6 4.6 3.8 4.5 -9.9 9.4 24.1 15.6 18.9 9.2 -1.5 3.8 20.0 18.4 20.8 5.3 4.6 -5.1 10.8 19.7 -0.6 20.3 21.1 30.8 23.4 22.6 29.0 13.6 -3.5 40.5 21.3 -5.5
6 na -1.5 45.5 -20.5 -13.1 13.8 11.3 8.0 23.4 -12.0 6.0 16.7 -3.1 4.0 7.8 10.0 4.7 -0.7 -9.1 -5.4 -16.9 3.5 13.0 -1.1 55.7 50.7 7.4 -6.7 23.9 18.0 36.4 40.2 -4.4 -2.6 3.5 -5.9 11.5 -2.1 9.1 13.6 8.8 13.5 -19.4 12.7 6.5 22.9 28.0 6.7 6.0 2.2 17.2 0.6 2.9 19.4 27.3 42.7 33.8 24.5 35.5 20.7 -5.0 28.2 32.3 -0.7
Source : DGCI&S, Kolkata. P : Provisional a Growth rate on provisional over revised basis and based on Department of Commerce methodology. Note : For the years 1956-57, 1957-58, 1958-59 and 1959-60, the data are as per the Fourteenth Report of the Estimates Committee (1971-72) of the erstwhile Ministry of Foreign Trade.
http://indiabudget.nic.in A—83
A84
Economic Survey 2012-13 7.2 (A) : PRINCIPAL IMPORTS Quantity : Thousand tonnes Value : ` crore & US$ million 1960-61
1
2
1970-71
` cr $ million
1980-81 ` cr
$ million
3
4
5
6
7
8
9
10
11
...
214
449
...
242
321
...
380
481
3747.7
181
380
3343.2
213
282
400.8
100
127
Qty.
Qty.
` cr
$ million
Qty.
I.
Food and live animals chiefly for food (excl. cashew raw) of which:
I.1
Cereals and cereal preparations
II.
Raw materials and intermediate manufactures
...
527
1105
...
889
1176
...
9760
12341
II.1
Cashewnuts (unprocessed)
na
...
...
169.4
29
39
25
9
11
II.2
Crude rubber (including synthetic and reclaimed)
36.2
11
23
7.8
4
5
26.2
32
40
...
101
212
...
127
168
...
164
208
0.2
...
...
15.8
9
12
68.8
97
122
II.3
Fibres of which:
II.3.1 Synthetic and regenerated fibres (man-made fibres) II.3.2 Raw wool
1.9
1
2
19
15
20
18.8
43
55
II.3.3 Raw cotton
237.1
82
172
139.1
99
131
na
...
...
II.3.4 Raw jute
100.4
8
17
0.7
...
0
8
1
1
800
69
145
12767
136
180
23537
5264
6656
...
5
10
...
39
51
...
709
896
31.1
4
8
84.7
23
31
1633.3
677
857
...
88
185
...
217
286
...
1490
1884
307
13
27
2392.7
86
113
5560.2
818
1034
II.6.2 Chemical elements and compounds
...
39
82
...
68
90
...
358
453
II.6.3 Dyeing, tanning and colouring material
...
1
2
...
9
12
...
21
26
II.6.4 Medicinal and pharmaceutical products
...
10
21
...
24
32
...
85
107
II.6.5 Plastic material, regenerated cellulose and artificial resins
...
9
19
...
8
11
...
121
154
II.4
Petroleum, oil and lubricants
II.5
Animal and vegetable oils and fats of which:
II.5.1 Edible oils II.6
Fertilizers and chemical products of which:
II.6.1 Fertilizers and fertilizer mfg
II.7
Pulp and waste paper
80.3
7
15
71.7
12
16
36.9
18
23
II.8
Paper, paper board and manufactures thereof
55.6
12
25
159
25
33
371.4
187
236
...
6
13
...
33
44
...
555
702
...
1
2
...
25
33
...
417
527
1325.2
123
258
683.4
147
194
2031.1
852
1078
...
47
99
...
119
158
...
477
604
III.
Capital
goods a
...
356
747
...
404
534
...
1910
2416
III.1
Manufactures of metals
...
23
48
...
9
12
...
90
113
III.2
Non-electrical machinery apparatus and appliances including machine tools b
...
203
426
...
258
341
...
1089
1377
III.3
Electrical machinery, apparatus and appliancesb
...
57
120
...
70
93
...
260
328
Transport equipment
...
72
151
...
67
88
...
472
597
Total Imports
...
1122
2353
...
1634
2162
...
12549
15869
II.9
Non-metallic mineral manufactures of which:
II.9.1 Pearls, precious and semiprecious stones, unworked or worked II.10
Iron and steel
II.11
Non-ferrous metals
III.4
Contd...
http://indiabudget.nic.in A—84
A85
Economic Survey 2012-13 7.2 (A) : PRINCIPAL IMPORTS
Quantity : Thousand tonnes Value : ` crore & US$ million 1990-91
2000-01
` cr
$ million
13
14
15
16
17
18
19
20
...
...
...
...
...
...
...
...
...
308.3
182
102
69.9
90
20
251.5
545
119
...
...
...
...
...
...
...
...
...
82.6
134
75
249.7
962
211
501.0
2650
578
105.1
226
126
119.1
695
152
587.7
8074
1771
...
...
...
...
...
...
...
...
...
II.3.1 Synthetic and regenerated fibres (man-made fibres)
21.2
56
31
42.6
275
60
81.5
957
210
II.3.2 Raw wool
29.4
182
102
53.7
458
100
94.4
1435
315
0.2
1
0
212.3
1185
259
56.5
624
137
32.1
20
11
67.3
84
18
83.1
302
67
29359
10816
6028
...
71497
15650
... 482282
105964
...
...
...
...
...
...
...
...
...
525.8
326
182
4267.9
6093
1334
6677.6
29860
6551
...
...
...
...
...
...
...
...
...
7560.3
1766
984
7423.4
3034
664 20658.9
31533
6885
II.6.2 Chemical elements and compounds
...
2289
1276
...
1542
338
...
13278
2914
II.6.3 Dyeing, tanning and colouring material
...
168
94
...
874
191
...
5368
1178
II.6.4 Medicinal and pharmaceutical products
...
468
261
...
1723
377
...
11114
2436
II.6.5 Plastic material, regenerated cellulose and artificial resins
...
1095
610
...
2551
558
...
31304
6874
1
2
I.
Food and live animals chiefly for food (excl. cashew raw) of which:
I.1
Cereals and cereal preparations
II.
Raw materials and intermediate manufactures
II.1
Cashewnuts (unprocessed)
II.2
Crude rubber (including synthetic and reclaimed)
II.3
Fibres of which:
II.3.3 Raw cotton II.3.4 Raw jute II.4
Petroleum, oil and lubricants
II.5
Animal and vegetable oils and fats of which:
II.5.1 Edible oils II.6
Fertilizers and chemical products of which:
II.6.1 Fertilizers and fertilizer mfg
` cr $ million
2010-11
12
Qty.
Qty.
` cr
$ million
Qty.
II.7
Pulp and waste paper
678.2
458
255
1050.9
1290
282
2634.5
5208
1145
II.8
Paper, paper board and manufactures thereof
286.4
456
254
585.6
2005
439
2145.0
9614
2111
II.9
Non-metallic mineral manufactures of which:
...
...
...
...
797
174
...
...
...
...
3738
2083
...
22101
4838
1920.5
2113
1178
1613.6
3569
781
II.9.1 Pearls, precious and semiprecious stones, unworked or worked II.10
Iron and steel
... 157596 9843.9
34620
47275
10376
II.11
Non-ferrous metals
...
1102
614
...
2462
539
... 212153
46677
III.
Capital goodsa
...
10466
5833
...
25281
5534
... 231712
50907
III.1
Manufactures of metals
...
302
168
...
1786
391
...
15167
3332
III.2
Non-electrical machineryb apparatus and appliances including machine tools
...
4240
2363
...
16915
3703
...
118928
26111
III.3
Electrical machinery, apparatus and appliancesb
...
1702
949
...
2227
487
...
17510
3845
III.4
Transport equipment
...
1670
931
...
4353
953
...
52112
11467
Total Imports
...
43198
24075
... 230873
49975
... 1683467
369769
http://indiabudget.nic.in A—85
A86
Economic Survey 2012-13 7.2 (A) : PRINCIPAL IMPORTS Quantity : Thousand tonnes Value : ` crore & US$ million 2011-12
1
2
2011-12 (April-Nov.)
2012-13 (April-Nov.)(P)
Qty.
` cr
$ million
Qty.
` cr
$ million
Qty.
` cr
$ million
21
22
23
24
25
26
27
28
29
...
...
...
...
...
...
...
...
...
64.5
352
74
45.4
235
50
72.3
294
54
I.
Food and live animals chiefly for food (excl. cashew raw) of which:
I.1
Cereals and cereal preparations
II.
Raw materials and intermediate manufactures
...
...
...
...
...
...
...
...
...
II.1
Cashewnuts (unprocessed)
809.8
5339
1136
681.2
4439
960
697.2
4133
751
II.2
Crude rubber (including synthetic and reclaimed)
665.3
11990
2509
403.9
7558
1637
495.3
8807
1617
II.3
Fibres
...
...
...
...
...
...
...
...
...
170
of which: II.3.1 Synthetic and regenerated fibres (man-made fibres)
107.8
1383
291
79.6
988
214
60.0
923
II.3.2 Raw wool
76.3
1877
395
54.1
1299
281
51.3
1280
235
II.3.3 Raw cotton
77.4
1059
223
36.9
601
132
177.4
1911
354
121.3
322
71
97.4
235
44
... 460320
99324
... 603818
110984
II.3.4 Raw jute II.4
Petroleum, oil and lubricants
II.5
Animal and vegetable oils and fats of which:
II.5.1 Edible oils II.6
181.3
449
96
...
743075
154906
8445.0
46255
9668
5673.4
30960
10936 18620.1
6654
7176.4
42863
7874
Fertilizers and chemical products of which:
II.6.1 Fertilizers and fertilizer mfg
27840.1
53311
34922
7365 18452.6
38178
6998
II.6.2 Chemical elements and compounds
...
16595
3482
...
11528
2485
...
12911
2368
II.6.3 Dyeing, tanning and colouring material
...
7003
1462
...
4754
1020
...
5322
977
II.6.4 Medicinal and pharmaceutical products
...
14288
2970
...
9017
1933
...
11129
2040
II.6.5 Plastic material, regenerated cellulose and artificial resins
...
36134
7516
...
22962
4927
...
31080
5709
II.7
Pulp and waste paper
3215.9
6524
1367
2058.9
4295
928
2166.6
4659
855
II.8
Paper, paper board and manufactures thereof
2586.0
12305
2571
1780.8
8313
1788
1745.9
8726
1602
II.9
Non-metallic mineral manufactures of which: ...
134266
28200
...
91313
19781
...
72466
13351
7062.4
II.9.1 Pearls, precious and semiprecious stones, unworked or worked II.10
Iron and steel
10601.9
57552
11959
6848.8
36798
7884
39840
7310
II.11
Non-ferrous metals
...
317683
66531
...
211223
45574
... 199873
36793
III.
Capital goodsa
...
311627
64748
... 189940
38882
... 208311
40835
III.1
Manufactures of metals
20423
4235
11791
2539
14460
2656
III.2
Non-electrical machineryb apparatus and appliances including machine tools
...
158611
33077
... 100249
21600
110736
20332
...
III.3
Electrical machinery, apparatus and appliancesb
...
22899
4773
...
14658
3153
...
16250
2982
III.4
Transport equipment
...
67474
13899
...
37635
8041
...
40480
7422
Total Imports
...
2345463
489181
... 1503493
323622
... 1748577
321175
Source : DGCI&S, Kolkata. ... Not available. P : Provisional a From the year 1987-88 onwards, Capital goods include Project goods. b From the year 1991-92 onwards, Items III.2 & III.3 exclude electronic goods.
http://indiabudget.nic.in A—86
Economic Survey 2012-13
A87
7.2 (B) : SHARE AND PERCENTAGE GROWTH/CHANGE OF MAJOR IMPORTS Percentage changea
Percentage share Commodity Group
2010-11
2011-12
3.5
0.8
34.8
37.9
11.5
0.0
0.0
14.3
-38.5
-46.6
6.8
0.4
0.4
0.4
-24.1
18.8
11.3
9.2
0.2
0.2
0.3
0.2
-9.5
91.6
151.5
-20.6
1.8
2.0
2.1
2.5
17.4
47.3
55.3
18.0
31.3
35.3
34.3
38.0
20.8
49.2
52.3
9.8
5. Coald
2.7
3.6
3.7
3.5
9.4
77.9
70.1
-6.5
6. POL
28.7
31.7
30.7
34.6
21.6
46.2
50.6
11.7
III. Fertilizers e
1.9
2.3
2.3
2.2
3.4
60.7
32.2
-6.8
IV. Paper board manufactures & newsprint
0.6
0.5
0.6
0.5
40.3
21.7
26.3
-10.5
13.8
13.3
12.6
11.9
17.6
27.9
25.6
-6.5
7. Machinery except elec & machine tool
6.4
6.2
6.1
5.7
11.7
26.3
27.1
-6.2
8. Electrical machinery
1.0
1.0
1.0
0.9
23.4
24.3
26.6
-5.5
9. Transport equipment
3.1
2.9
2.5
2.3
-2.2
23.1
13.1
-8.3
10. Project goods
1.7
1.8
1.7
1.5
31.2
43.4
35.1
-12.2
VI. Others, of which
49.6
45.7
47.1
43.9
41.3
22.1
29.6
-7.5
11. Chemicalsg
5.2
4.9
5.0
5.1
27.9
23.1
24.3
1.1
12. Pearls precious semi precious stones
9.4
5.7
6.1
4.1
114.0
-19.0
4.3
-32.3
13. Iron & steelh
2.8
2.5
2.4
2.3
25.9
15.7
11.0
-7.7
14. Non-ferrous metals i
1.1
1.0
1.0
1.0
35.7
19.8
23.0
-4.7
11.5
12.6
13.0
10.5
43.0
44.5
59.2
-20.4
16. Professional instruments, optical goods, etc.
1.1
1.1
1.0
1.1
16.5
24.5
14.2
5.4
17. Electronic Goods
7.2
6.7
7.0
6.5
26.7
23.0
22.2
-7.7
100.0
100.0
100.0
100.0
28.2
32.3
36.2
-0.8
I.
2010-11
2011-12
Food and allied products, of whichb
2.9
3.0
3.1
1. Cerealsc
0.0
0.0
2. Pulses
0.4
3. Cashew Nuts 4. Edible Oils II. Fuel, of which
V. Capital goods, of whichf
15. Gold & Silver
Total Imports
2011-12 2012-13 (Apr.-Nov.) (Apr.-Nov.)P
2011-12 2012-13 (Apr.-Nov.) (Apr.-Nov.)P
Source : DGCI&S, Kolkata. P : Provisional a
In terms of US dollar.
b
Including tea, sugar, milk and cream, spices, fruits & nuts.
c
Including wheat, rice, creals preparations.
d
Includes coke and briquettes.
e
Includes fertilizers crude; fertilizers manufactured.
f
Including manufactures of metals.
g
Including organic chemical, inorganic chemical, che. materials & products and dyeing, tanning & colouring material.
h
Including primary steel, pig iron based items.
i
Excluding gold and Silver.
http://indiabudget.nic.in A—87
A88
Economic Survey 2012-13 7.3 (A) : PRINCIPAL EXPORTS Quantity : Thousand tonnes Value : ` crore & US$ million 1960-61
2
` cr $ million
1980-81
Qty.
` cr
Qty.
` cr
3
4
5
6
7
8
9
10
11
...
284
596
...
487
644
...
2057
2601
19.7
7
15
32.2
25
33
87.3
214
271
Qty. 1
1970-71 $ million
$ million
I.
Agricultural and allied products: of which
I.1
Coffee
I.2
Tea and mate
199.2
124
260
199.1
148
196
229.2
426
538
I.3
Oil cakes
433.8
14
29
878.5
55
73
886.0
125
158
I.4
Tobacco
47.5
16
34
49.8
33
43
91.3
141
178
I.5
Cashew kernels
43.6
19
40
60.6
57
76
32.3
140
177
I.6
Spices
47.2
17
36
46.9
39
51
84.2
11
14
I.7
Sugar and molasses
99.6
30
60
473.0
29
39
97.0
40
50
I.8
Raw cotton
32.6
12
25
32.1
14
19
131.6
165
209
I.9
Rice
...
...
...
32.8
5
7
726.7
224
283
I.10
Fish and fish preparations
19.9
5
10
32.6
31
40
69.4
217
274
I.11
Meat and meat preparations
...
1
2
...
3
4
...
56
70
I.12
Fruits, vegetables and pulses (excl. cashew kernels, processed fruits & juices)
...
6
13
...
12
16
...
80
101
...
1
2
...
4
6
...
36
45
...
52
109
...
164
217
...
414
523
28.4
...
...
26.7
16
21
16.7
18
22
I.13
Miscellaneous processed foods (incl. processed fruits and juices)
II.
Ores and minerals (excl. coal) of which
II.1
Mica
II.2
Iron ore (million tonne)
3.2
17
36
21.2
117
155
22.4
303
384
III.
Manufactured goods of which
...
291
610
...
772
1021
...
3747
4738
III.1
Textile fabrics & manufactures (excl. carpets hand-made) of which
...
73
153
...
145
192
...
933
1179
III.1.1 Cotton yarn,fabrics, made-ups etc.
...
65
136
...
142
188
...
408
516
III.1.2 Readymade garments of all textile materials
...
1
2
...
29
39
...
550
696
III.2
Coir yarn and manufactures
...
6
13
...
13
17
...
17
22
III.3
Jute manufactures incl.twist & yarn
790.0
135
283
560.0
190
252
660.0
330
417
III.4
Leather & leather manufactures incl. leather footwear,leather travel goods & leather garments
...
28
59
...
80
106
...
390
493
...
11
23
...
73
96
...
952
1204
...
1
2
...
45
59
...
618
782
III.5
Handicrafts (incl. carpets hand-made)c of which:
III.5.1 Gems and jewellery III.6
Chemicals and allied productsa
...
7
15
...
29
39
...
225
284
III.7
Machinery, transport & metal manufactures including iron and steelb
...
22
46
...
198
261
...
827
1045
Mineral fuels and lubricants (incl.coal)d
...
7
15
...
13
17
...
28
35
Total Exports
...
642
1346
...
1535
2031
...
6711
8486
IV.
Contd...
http://indiabudget.nic.in A—88
Economic Survey 2012-13
A89
7.3 (A) : PRINCIPAL EXPORTS Quantity : Thousand tonnes Value : ` crore & US$ million 1990-91 Qty. 1
2
2000-01
` cr $ million
2010-11
Qty.
` cr
$ million
Qty.
` cr $ million
12
13
14
15
16
17
18
19
20
...
6317
3521
...
28582
6256
...
111393
24448
I.
Agricultural and allied products: of which
I. 1
Coffee
I. 2
Tea and mate
I. 3
Oil cakes
I. 4
Tobacco
87.1
I. 5
Cashew kernels
55.5
I. 6
Spices
103.3
239
I. 7
Sugar and molasses
191.0
38
I. 8
Raw cotton
374.4
I. 9
Rice
I. 10
Fish and fish preparations
86.5
252
141
184.9
1185
259
232.6
3010
662
199.1
1070
596
202.4
1976
433
238.3
3354
736
2447.8
609
339
2417.8
2045
448
6936.9
11070
2438
263
147
108.3
871
191
215.9
3985
875
447
249
83.8
1883
412 12156.5
2853
627
133
244.9
1619
354
762.7
8043
1768
21
769.0
511
112
2086.3
5633
1246
846
471
30.2
224
49
1885.8
13160
2910
505.0
462
257
1534.4
2943
644
2471.4
11586
2545
158.9
960
535
502.6
6367
1394
825.3
11917
2623
I. 11
Meat and meat preparations
...
140
78
...
1470
322
...
8960
1971
I. 12
Fruits, vegetables and pulses (excl.cashew kernels, processed fruits & juices)
...
216
120
...
1609
352
...
6350
1397
I. 13
Miscellaneous processed foods (incl. processed fruits and juices)
...
213
119
...
1094
239
...
3669
806
II.
Ores and minerals (excl. coal) of which
...
1497
834
...
4139
906
...
39098
8581
II.1
Mica
42.0
35
19
63.2
64
14
125.8
189
42
II.2
Iron ore (million tonne)
32.5
1049
585
20161.4
1634
358
46.9
21416
4715
III.
Manufactured goods of which
...
23736
13229
... 160723
35181
789433
173263
III. 1
Textile fabrics & manufactures (excl. carpets hand-made) of which
...
6832
3807
...
...
...
III.1.1 Cotton yarn,fabrics, made-ups etc.
...
2100
1170
...
16030
3509
...
13160
2910
III.1.2 Readymade garments of all textile materials
...
4012
2236
...
25478
5577
...
52861
11614
III. 2
Coir yarn and manufactures
III. 3
Jute manufactures incl.twist & yarn
...
48
27
...
221
48
...
726
159
220.0
298
166
...
932
204
...
2092
459
III. 4
Leather & leather manufactures incl. leather footwear,leather travel goods & leather garments
...
2600
1449
...
8914
1951
...
17818
3909
III. 5
Handicrafts (incl. carpets hand-made) of which
...
6167
3437
...
5097
1116
...
5877
1293
III. 5.1 Gems and jewellery
...
5247
2924
...
33734
7384
...
184420
40509
III. 6
Chemicals and allied productsa
...
2111
1176
...
22851
5002
...
131544
28905
III. 7
Machinery, transport & metal manufactures including iron and steelb
...
3872
2158
...
31870
6976
...
226805
49815
IV.
Mineral fuels and lubricants (incl.coal)d
...
948
528
...
8822
1931
192639
42280
Total Exports
...
32553
18143
... 203571
44076
1142922
251136
c
Contd...
http://indiabudget.nic.in A—89
A90
Economic Survey 2012-13 7.3 (A) : PRINCIPAL EXPORTS Quantity : Thousand tonnes Value : ` crore & US$ million 2011-12 Qty.
1
2
I.
Agricultural and allied products: of which
I. 1
Coffee
I. 2
Tea and mate
I. 3
Oil cakes
I. 4
Tobacco
I. 5
Cashew kernels
I. 6
Spices
2011-12 (April-Nov.)
` cr $ million
2012-13 (April-Nov.)(P)
Qty.
` cr
$ million
Qty.
` cr
$ million
21
22
23
24
25
26
27
28
29
...
180279
37618
...
100120
21556
...
142269
26118
278.9
4535
953
180.0
2822
614
164.3
3055
561
592
159.6
2767
507
1341 3299.4
7636
1402 445
292.4
4079
848
185.1
2774
7406.4
11796
2420
4070.3
6272
197.2
4006
836
122.3
2378
512
154.3
2422
14763.2
4450
928 11167.6
2873
619 6824.2
2695
494
935.9
13220
2750
591.2
703.9
11035
2023
8453
1813
I. 7
Sugar and molasses
3125.5
8971
1881
1944.4
5724
1238 2682.7
7600
1394
I. 8
Raw cotton
2003.6
21624
4328
797.0
9042
1854
743.3
7400
1374
I. 9
Rice
7176.0
24109
4940
3070.5
11976
2556 6460.1
20406
3739
I. 10
Fish and fish preparations
972.2
16585
3444
661.7
11502
2448
658.8
12850
2361
I. 11
Meat and meat preparations
...
14111
2921
...
8429
1806
...
10675
1961
I. 12
Fruits, vegetables and pulses (excl.cashew kernels, processed fruits & juices)
...
7587
1579
...
4739
1019
...
5033
927
I. 13
Miscellaneous processed foods (incl. processed fruits and juices)
...
5491
1139
...
3286
706
...
4468
820
...
40953
8546
...
24413
5256
...
20148
3699
II.
Ores and minerals (excl. coal) of which
II.1
Mica
131.1
238
50
89.3
155
33
88.0
187
34
II.2
Iron ore (million tonne)
47.2
22184
4597
25.9
13111
2818
12.8
6327
1171
III.
Manufactured goods of which
...
964388
201237
...
624536
134463
...
656290
120482
III. 1
Textile fabrics & manufactures (excl. carpets hand-made) of which
III.1.1 Cotton yarn,fabrics, made-ups etc.
...
21624
4328
...
9042
1854
...
7400
1374
III.1.2 Readymade garments of all textile materials
...
65613
13711
...
40326
8737
...
43635
8008
III. 2
Coir yarn and manufactures
...
1018
212
...
639
137
...
702
129
III. 3
Jute manufactures incl.twist & yarn
...
2226
465
...
1426
308
...
1427
262
III. 4
Leather & leather manufactures incl. leather footwear,leather travel goods & leather garments
...
22973
4803
...
14929
3224
...
17014
3117
III. 5
Handicrafts (incl. carpets hand-made) of which
...
5383
1123
...
3410
735
...
4297
789
...
214889
44888
...
138848
29922
...
156336
28635
c
III. 5.1 Gems and jewellery III. 6
Chemicals and allied products
...
177872
37032
...
110458
23782
...
139140
25537
III. 7
Machinery, transport & metal manufactures including iron and steelb
...
279702
58555
...
178962
38742
...
196474
36084
IV.
Mineral fuels and lubricants (incl.coal)d
...
273231
57015
...
178939
38526
...
192048
35256
Total Exports
... 1465959
304624
...
933050
200961
...
1017819
186861
Source : DGCI&S, Kolkata a b c d
a
P : Provisional
Chemicals and allied products figures relate to "Basic Chemicals" and "Plastic Linoleum Products". Also includes electronic goods and computer software. Gems and Jewellery excluded from Handicrafts and reported as individual item since 1997-98. During 1990-91 and 2000-01 crude oil exports amount to Nil.
http://indiabudget.nic.in A—90
Economic Survey 2012-13
A91
7.3 (B) : SHARE AND PERCENTAGE GROWTH/CHANGE OF MAJOR EXPORTS Percentage changea
Percentage share Commodity Group
2010-11
1 I.
II.
2011-12 2012-13 (Apr.-Nov.) (Apr.-Nov.)P
2010-11
2011-12
2011-12 2012-13 (Apr.-Nov.) (Apr.-Nov.)P
3
4
5
6
7
8
9
10.7
14.0
36.1
53.9
60.8
21.1
Agricullture & allied, of which
9.7
12.4
1
Tea
0.3
0.3
0.3
0.3
18.7
15.6
27.0
-15.0
2
Coffee
0.3
0.3
0.3
0.3
54.2
43.2
71.6
-7.7
3
Cereals
1.3
2.1
1.6
3.0
11.5
91.1
84.3
68.1
4
Unmfg. Tobacco
0.3
0.2
0.2
0.2
-9.4
-12.5
-22.5
21.2
5
Spices
0.7
0.9
0.9
1.1
36.0
56.3
68.5
11.3
6
Cashewnuts
0.2
0.3
0.3
0.3
5.0
48.3
66.0
-20.0
7
Oil Meals
1.0
0.8
0.7
0.8
47.2
1.3
17.9
3.8
8
Fruits & Vegetables & Pulses
0.6
0.5
0.5
0.5
3.8
13.6
9.3
-9.4
9
Marine Products
1.0
1.1
1.2
1.3
25.3
32.3
44.9
-4.8
10 Raw Cotton
1.2
1.5
1.0
0.7
43.7
56.2
69.1
-30.2
Ores and Minerals, of which (Excl.Coal)
3.4
2.8
2.6
2.0
-1.3
-0.4
-14.3
-29.6
11 Iron Ore
1.9
1.5
1.4
0.6
-21.4
-1.5
-21.2
-58.9
12 Processed minerals
0.9
0.6
0.6
0.7
76.8
-16.3
-31.9
19.1
13 Other ores & minerals III.
2
2011-12
0.6
0.6
0.6
0.6
11.0
25.9
47.6
-9.9
69.0
66.1
66.9
64.5
44.2
16.2
27.7
-10.4
14 Leather & Manufactures
1.0
1.0
1.0
1.1
15.8
26.1
39.3
0.6
15 Leather footwear
0.6
0.6
0.6
0.6
17.2
16.8
30.4
-9.1
16.1
14.7
14.9
15.4
39.6
10.8
38.6
-4.0
17 Drugs, Pharmaceuticals & fine chemicals
4.3
4.4
4.2
5.0
19.7
23.8
28.4
12.3
18 Dyes/intmdts. & Coaltar chemicals
1.2
1.3
1.2
1.5
29.1
28.6
39.8
8.6
Manufactured goods, of which
16 Gems & Jewellerly
19 Manufactures of metals
3.4
3.1
2.9
3.6
53.1
13.3
3.0
13.9
20 Machinery & instruments
4.7
4.7
4.6
5.2
24.1
20.9
29.1
5.3
21 Transport equipments
6.4
6.9
7.3
6.3
63.3
31.7
30.0
-20.2
22 Primary & semi-finished Iron & Steel
1.6
1.7
1.7
1.6
38.6
29.1
28.3
-12.7
23 Electronic Goods
3.3
3.1
3.1
3.0
46.7
13.4
22.7
-9.0
24 Cotton yarn, fabs, made-ups etc.
2.3
2.2
2.2
2.5
57.0
17.6
24.4
2.2
25 Readymade Garments
4.6
4.5
4.3
4.3
8.4
18.0
32.2
-7.7
26 Handicrafts
0.1
0.1
0.1
0.1
14.3
8.2
27.7
-11.3
16.8
18.7
19.2
18.9
46.8
34.9
55.8
-8.5
0.9
0.5
0.5
0.7
-12.9
-34.8
-37.8
19.5
100.0
100.0
100.0
100.0
40.5
21.3
32.7
-7.0
IV
Crude & Petroleum Products (incl. Coal)
V
Other & unclassified items Total Exports
Source : DGCI&S, Kolkata. P : Provisional a
In terms of US dollar.
http://indiabudget.nic.in A—91
II
I
71181 44540 11891 8610 5397 4256 3705 1853 1653 1619 1488 817 677 386 473 343 237 259 85 45 125 196 92 93 58 88 37 36 20 26589 24802 961 821 5 0 51 0 28 19 1 3 31956 12574 7141 27 109
2 323857 202779 54136 39179 24562 19395 16867 8422 7528 7368 6776 3718 3079 1765 2154 1566 1081 1181 389 203 580 900 420 424 263 400 167 164 93 120843 112740 4339 3742 21 1 235 1 130 86 5 14 145456 57265 32525 122 504
3
2010-2011 (US$ (` million) crore)
91541 57295 15719 10451 7593 5414 3833 2672 2051 2004 1802 1076 713 658 620 426 417 394 311 233 202 142 137 116 98 91 56 45 22 34078 32308 843 922 5 1 169 106 27 19 15 2 43062 16975 9971 51 46
4 438486 274454 75356 50006 36250 25905 18417 12952 9855 9513 8624 5169 3408 3154 2954 2023 2007 1892 1491 1156 978 661 658 551 454 436 266 213 106 163249 154626 4152 4447 22 3 783 478 131 88 73 12 205796 81362 47643 254 228
5
2011-2012 (US$ (` million) crore)
28.6 28.6 32.2 21.4 40.7 27.2 3.5 44.2 24.1 23.8 21.1 31.7 5.4 70.4 31.1 24.2 75.5 52.1 263.9 418.1 60.9 -27.9 48.9 24.4 70.0 3.2 52.4 24.2 8.5 28.2 30.3 -12.3 12.3 -0.4 168.2 229.3 88141.7 -2.6 -0.9 1345.1 -26.0 34.8 35.0 39.6 91.9 -58.0
6
Change (4) over (2) (Per cent)
18.7 11.7 3.2 2.1 1.6 1.1 0.8 0.5 0.4 0.4 0.4 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7.0 6.6 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.8 3.5 2.0 0.0 0.0
7
Share (Per cent)
61168 38150 10528 6774 5400 3643 2469 1595 1312 1388 1256 684 469 430 424 305 220 259 222 79 170 122 87 88 81 64 38 29 15 22881 21839 496 542 4 0 136 92 23 15 4 0 28488 10993 6719 22 19
8 283984 177002 48952 31310 25078 16876 11485 7459 6090 6382 5847 3163 2166 1989 1957 1406 1005 1207 1042 360 809 561 405 406 368 298 174 137 71 106368 101469 2360 2518 19 2 614 410 111 70 21 1 131762 50943 31096 107 92
9
April-Nov. 2011 (US$ (` million) crore)
7.4 (A) : DIRECTION OF IMPORTS : IMPORTS BY REGIONS AND COUNTRIES
Europe (a) EU Countries (27) 1) GERMANY 2) BELGIUM 3) UK 4) ITALY 5) FRANCE 6) NETHERLAND 7) FINLAND 8) SWEDEN 9) SPAIN 10) AUSTRIA 11) CZECH REPUBLIC 12) POLAND 13) DENMARK 14) HUNGARY 15) ROMANIA 16) IRELAND 17) PORTUGAL 18) ESTONIA 19) LITHUANIA 20) LATVIA 21) SLOVENIA 22) GREECE 23) BULGARIA 24) SLOVAK REP 25) LUXEMBOURG 26) MALTA 27) CYPRUS (b) Other WE Countries 1) SWITZERLAND 2) NORWAY 3) TURKEY 4) ICELAND 5) LIECHTENSTEIN (c) East Europe 1) ALBANIA 2) CROATIA 3) BOSNIA-HRZGOVIN 4) MACEDONIA 5) UNION OF SERBIA & MONTENEGRO Africa (a) Southern Africa 1) SOUTH AFRICA 2) BOTSWANA 3) SWAZILAND
1
COUNTRIES/REGIONS
53487 35070 9465 6409 4422 3385 2698 1930 755 1230 1206 684 456 571 326 180 210 270 248 192 40 50 78 70 53 71 32 23 14 18343 17052 557 732 1 1 74 30 8 19 15 1 27774 10500 4854 40 44
10 290820 190911 51535 34774 24077 18475 14728 10525 4095 6703 6587 3695 2477 3110 1780 984 1145 1474 1353 1048 216 273 424 383 289 385 176 124 75 99511 92502 3029 3969 8 3 398 162 45 102 83 6 151238 57212 26432 217 239
11
-12.6 -8.1 -10.1 -5.4 -18.1 -7.1 9.3 21.0 -42.4 -11.4 -4.0 0.1 -2.7 33.0 -23.0 -40.9 -4.5 4.4 11.5 143.5 -76.5 -59.1 -10.4 -20.0 -34.6 11.2 -15.3 -22.0 -10.7 -19.8 -21.9 12.3 35.0 -63.3 82.9 -45.6 -67.4 -64.9 24.9 243.6 303.6 -2.5 -4.5 -27.8 78.2 124.4
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
http://indiabudget.nic.in
A—92
Contd...
16.7 10.9 2.9 2.0 1.4 1.1 0.8 0.6 0.2 0.4 0.4 0.2 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.7 5.3 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.6 3.3 1.5 0.0 0.0
13
Share (Per cent)
A92 Economic Survey 2012-13
http://indiabudget.nic.in
A—93
(d)
(c)
(b)
4) NAMIBIA 5) LESOTHO 6) ANGOLA 7) ZAMBIA 8) MOZAMBIQUE 9) ZIMBABWE West Africa 1) NIGERIA 2) COTE D’ IVOIRE 3) CAMEROON 4) SENEGAL 5) GHANA 6) GUINEA BISSAU 7) BENIN 8) CONGO P REP 9) GUINEA 10) GABON 11) TOGO 12) EQUTL GUINEA 13) NIGER 14) GAMBIA 15) BURKINA FASO 16) LIBERIA 17) MALI 18) SIERRA LEONE 19) MAURITANIA 20) CAPE VERDE IS 21) ST HELENA 22) SAO TOME Central Africa 1) MALAWI 2) UGANDA 3) CONGO D. REP. 4) C AFRI REP 5) BURUNDI 6) RWANDA 7) CHAD East Africa 1) TANZANIA REP 2) KENYA 3) MADAGASCAR 4) MAURITIUS 5) REUNION 6) ETHIOPIA SOMALIA 7) 8) COMOROS
1
COUNTRIES/REGIONS
37 1 5112 32 103 12 12863 10788 251 138 206 160 59 153 543 103 308 92 0 10 15 4 18 3 7 2 2 0 0 46 20 14 10 2 0 0 1 580 327 124 32 17 18 33 9 9
2 170 5 23273 145 468 53 58505 49005 1152 628 940 729 276 700 2480 478 1412 421 1 49 68 19 81 15 30 9 10 1 1 207 90 62 45 7 1 0 3 2635 1481 566 146 75 84 149 42 38
3
2010-2011 (US$ (` million) crore) 10 3 6623 168 98 4 18061 14623 492 478 429 404 298 286 259 262 146 147 77 74 40 18 11 6 5 4 3 0 0 49 20 19 7 2 1 0 0 537 232 119 80 39 29 27 3 3
4 47 15 31858 830 468 19 85864 69430 2376 2235 2057 1884 1434 1308 1280 1260 719 705 393 371 186 85 51 30 23 20 16 0 0 238 97 94 32 10 4 1 1 2600 1141 566 387 184 139 130 16 14
5
2011-2012 (US$ (` million) crore) -72.9 178.8 29.6 424.6 -4.9 -66.0 40.4 35.5 96.3 246.4 108.6 152.6 401.3 86.1 -52.4 153.8 -52.5 59.7 63716.7 603.7 172.4 341.8 -38.4 85.2 -28.0 111.8 58.2 -61.1 -81.8 7.9 0.4 42.2 -31.3 34.2 254.2 400.0 -73.7 -7.3 -28.9 -4.2 149.5 136.3 57.8 -16.2 -62.9 -66.0
6
Change (4) over (2) (Per cent) 0.0 0.0 1.4 0.0 0.0 0.0 3.7 3.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
7
Share (Per cent)
8 2 4075 79 66 3 11986 9790 300 324 290 329 275 259 87 117 46 93 1 0 38 18 9 3 3 2 2 0 0 32 13 12 5 1 0 0 0 302 100 85 42 29 20 20 2 1
8 38 10 18913 373 301 14 55103 44956 1400 1466 1350 1503 1316 1175 409 531 214 435 3 0 174 84 39 15 16 8 9 0 0 148 59 57 24 6 1 1 1 1401 467 396 192 133 92 92 11 6
9
April-Nov. 2011 (US$ (` million) crore) 5 3 5136 193 201 24 12003 9023 313 100 254 213 100 225 446 74 738 123 245 69 25 13 9 21 4 5 2 0 0 72 29 20 16 2 0 0 5 480 279 70 56 20 18 23 6 3
10 29 15 27995 1055 1099 131 65343 48981 1718 544 1387 1164 548 1238 2455 407 4053 674 1351 387 137 69 51 117 20 27 11 1 1 388 158 109 82 9 1 1 28 2614 1518 382 302 112 98 126 35 19
11
-34.6 30.3 26.0 145.6 207.2 732.5 0.1 -7.8 4.3 -69.2 -12.2 -35.3 -63.8 -13.3 414.0 -37.2 1489.2 33.2 37660.0 98542.9 -34.1 -28.3 11.0 557.2 9.5 203.1 -1.0 42.9 0.0 128.0 133.2 63.6 206.2 31.2 -11.5 -21.4 3420.0 59.0 178.7 -17.9 34.2 -29.9 -9.0 16.4 169.3 187.4
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (A) : DIRECTION OF IMPORTS : IMPORTS BY REGIONS AND COUNTRIES (Contd.)
Contd...
0.0 0.0 1.6 0.1 0.1 0.0 3.7 2.8 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.2 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
13
Share (Per cent)
Economic Survey 2012-13
A93
9) SEYCHELLES 10) DJIBOUTI III America (a) North America 1) USA 2) CANADA (b) Latin America 1) VENEZUELA 2) BRAZIL 3) CHILE 4) ARGENTINA 5) MEXICO 6) COLOMBIA 7) PERU 8) COSTA RICA 9) TRINIDAD 10) PANAMA REPUBLIC 11) FR GUIANA 12) ECUADOR 13) NETHERLANDANTIL 14) URUGUAY 15) PARAGUAY 16) EL SALVADOR 17) GUYANA 18) HONDURAS 19) DOMINIC REP 20) GUATEMALA 21) SURINAME 22) CUBA 23) BOLIVIA 24) BAHAMAS 25) FALKLAND IS 26) HAITI 27) GUADELOUPE 28) JAMAICA 29) NICARAGUA 30) BARBADOS 31) BR VIRGN IS 32) ST LUCIA 33) DOMINICA 34) VIRGIN IS US 35) BELIZE 36) ANTIGUA 37) GRENADA 38) TURKS C IS
1
COUNTRIES/REGIONS
9 2 36287 22081 20051 2030 14206 5210 3549 1550 1023 1163 856 187 95 80 188 0 169 3 17 5 5 9 1 16 40 1 1 7 5 1 1 0 1 1 0 1 0 0 0 0 16 0 0
2 42 11 165178 100602 91359 9243 64576 23748 16064 7056 4690 5269 3866 853 436 367 863 1 755 16 79 25 25 42 7 72 180 4 5 30 20 6 6 0 4 4 1 4 1 2 2 1 73 0 0
3
2010-2011 (US$ (` million) crore)
3 2 44539 25932 23389 2544 18607 6667 4315 2058 1053 2578 559 470 204 205 163 106 62 54 31 11 11 9 8 8 7 5 4 4 3 2 2 2 2 1 1 1 0 0 0 0 0 0 0
4 12 9 213679 124410 112106 12304 89269 32129 20630 9930 4967 12397 2719 2218 979 955 746 507 307 251 143 55 54 42 39 38 34 22 19 19 16 11 10 9 8 5 4 2 2 1 1 0 0 0 0
5
2011-2012 (US$ (` million) crore)
-73.1 -19.1 22.7 17.4 16.6 25.3 31.0 28.0 21.6 32.7 2.9 121.6 -34.7 150.9 114.1 156.0 -13.4 50600.0 -63.1 1455.9 76.4 115.3 106.1 -6.1 437.1 -50.1 -81.8 420.5 267.0 -39.6 -22.4 74.1 54.9 3680.0 110.4 12.1 453.3 -42.5 40.6 -17.6 -38.2 -57.1 -99.6 200.0 -87.5
6
Change (4) over (2) (Per cent)
0.0 0.0 9.1 5.3 4.8 0.5 3.8 1.4 0.9 0.4 0.2 0.5 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
7
Share (Per cent)
1 1 29060 17446 15810 1636 11614 3962 2703 1220 850 1368 393 354 127 203 154 106 41 49 23 11 7 7 4 5 5 3 3 3 3 2 1 1 1 1 1 0 0 0 0 0 0 0 0
8 7 6 134940 81146 73477 7670 53793 18399 12512 5628 3944 6288 1854 1624 586 944 699 507 198 228 105 52 35 32 18 23 24 13 14 15 15 11 4 5 5 3 4 2 1 1 1 0 0 0 0
9
April-Nov. 2011 (US$ (` million) crore)
2 3 37087 18396 16647 1750 18691 8308 3407 1644 968 2059 1165 307 135 3 89 1 440 10 22 8 5 4 10 7 5 8 2 2 0 1 1 0 2 76 0 1 0 0 1 0 0 0 0
10 8 15 202125 100317 90777 9540 101807 45287 18718 8891 5257 11117 6367 1668 737 16 486 3 2348 55 120 45 27 20 56 40 27 43 13 12 1 6 4 2 10 419 0 3 1 2 7 1 1 0 0
11
2.7 113.1 27.6 5.4 5.3 6.9 60.9 109.7 26.0 34.8 13.8 50.5 196.4 -13.4 6.7 -98.5 -42.1 -99.5 973.0 -80.0 -5.1 -24.0 -35.0 -47.6 177.6 47.7 -7.5 178.9 -23.9 -29.3 -97.1 -57.9 -8.0 -77.5 62.3 10104.1 -89.6 62.5 -11.5 146.2 1008.3 366.7 283.3 0.0 0.0
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (A) : DIRECTION OF IMPORTS : IMPORTS BY REGIONS AND COUNTRIES (Contd.)
http://indiabudget.nic.in
A—94
Contd...
0.0 0.0 11.5 5.7 5.2 0.5 5.8 2.6 1.1 0.5 0.3 0.6 0.4 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
13
Share (Per cent)
A94 Economic Survey 2012-13
CAYMAN IS BERMUDA MARTINIQUE MONTSERRAT ST VINCENT ST KITT N A
IV) Asia (a) East Asia 1) AUSTRALIA 2) NEW ZEALAND 3) PAPUA N GNA 4) SOLOMON IS 5) TIMOR LESTE 6) NAURU RP 7) FIJI IS 8) SAMOA 9) TUVALU 10) VANUATU REP 11) TONGA 12) KIRIBATI REP (b) ASEAN 1) INDONESIA 2) MALAYSIA 3) SINGAPORE 4) THAILAND 5) VIETNAM SOC REP 6) MYANMAR 7) BRUNEI 8) PHILIPPINES 9) LAO PD RP 10) CAMBODIA (c) WANA 1) U ARAB EMTS 2) SAUDI ARAB 3) KUWAIT 4) QATAR 5) OMAN 6) BAHARAIN IS 7) EGYPT A RP 8) ALGERIA 9) MOROCCO 10) SUDAN 11) TUNISIA 12) LIBYA 13) IRAQ
39) 40) 41) 42) 43) 44)
1
COUNTRIES/REGIONS
0 0 0 0 0 0 220254 11641 10789 625 217 0 2 4 3 0 0 0 0 0 30608 9919 6524 7139 4272 1065 1018 234 429 0 8 105616 32753 20385 10314 6820 4002 641 1355 1816 840 614 301 969 9008
2 0 0 0 0 0 0 1003045 53071 49188 2854 985 0 8 19 14 1 0 0 1 2 139439 45136 29746 32546 19460 4848 4651 1065 1950 1 36 480859 149123 92855 46976 31036 18184 2920 6158 8273 3842 2793 1376 4402 40977
3
2010-2011 (US$ (` million) crore)
0 0 0 0 0 0 297627 15940 14855 825 198 22 22 15 2 0 0 0 0 0 42564 14650 9556 8577 5418 1733 1325 752 456 90 8 145324 35724 30993 16370 12924 3330 883 3008 2177 1615 438 162 39 18940
4 0 0 0 0 0 0 1426817 76371 71129 3960 989 109 101 72 9 1 0 0 0 0 203154 69893 45776 40614 25962 8373 6352 3512 2195 442 36 697637 170784 149001 79163 61896 15723 4212 14383 10521 7801 2046 782 198 90652
5
2011-2012 (US$ (` million) crore)
-66.7 0.0 0.0 0.0 0.0 0.0 35.1 36.9 37.7 31.9 -8.9 56025.0 1204.1 274.8 -36.5 -16.7 0.0 0.0 0.0 0.0 39.1 47.7 46.5 20.1 26.8 62.8 30.2 221.0 6.1 40595.5 -4.9 37.6 9.1 52.0 58.7 89.5 -16.8 37.7 122.1 19.9 92.4 -28.6 -46.2 -96.0 110.2
6
Change (4) over (2) (Per cent)
0.0 0.0 0.0 0.0 0.0 0.0 60.8 3.3 3.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.7 3.0 2.0 1.8 1.1 0.4 0.3 0.2 0.1 0.0 0.0 29.7 7.3 6.3 3.3 2.6 0.7 0.2 0.6 0.4 0.3 0.1 0.0 0.0 3.9
7
Share (Per cent)
0 0 0 0 0 0 197671 10656 9964 538 108 13 22 10 2 0 0 0 0 0 29030 10202 6190 6076 3538 1116 918 615 324 46 5 94235 23843 20430 9812 8261 2719 554 2117 1499 1096 360 102 1 12619
8 0 0 0 0 0 0 918092 49490 46243 2503 531 60 98 47 8 0 0 0 0 0 134394 47299 28627 27964 16415 5215 4283 2824 1524 220 24 437692 110438 95209 45835 38217 12599 2544 9814 7106 5126 1643 475 4 58329
9
April-Nov. 2011 (US$ (` million) crore)
0 0 0 0 0 0 196260 8807 8239 502 30 9 0 21 1 0 0 5 0 0 28519 9468 7299 4667 3644 1323 939 735 357 78 8 100004 25760 21507 11391 11362 1207 465 1935 490 1018 103 143 1029 12907
10
12
0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 1068602 -0.7 48022 -17.4 44916 -17.3 2740 -6.8 165 -72.3 48 -30.8 1 -99.5 115 108.5 5 -47.5 2 416.7 0 0.0 29 0.0 0 0.0 0 0.0 155351 -1.8 51560 -7.2 39802 17.9 25445 -23.2 19830 3.0 7206 18.6 5125 2.2 3954 19.5 1947 10.3 437 68.7 45 59.1 544112 6.1 140334 8.0 116831 5.3 61997 16.1 61967 37.5 6563 -55.6 2516 -15.9 10500 -8.6 2675 -67.3 5548 -7.1 563 -71.3 775 40.6 5621 125391.5 70175 2.3
11
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (A) : DIRECTION OF IMPORTS : IMPORTS BY REGIONS AND COUNTRIES (Contd.)
http://indiabudget.nic.in
A—95
Contd...
0.0 0.0 0.0 0.0 0.0 0.0 61.1 2.7 2.6 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.9 2.9 2.3 1.5 1.1 0.4 0.3 0.2 0.1 0.0 0.0 31.1 8.0 6.7 3.5 3.5 0.4 0.1 0.6 0.2 0.3 0.0 0.0 0.3 4.0
13
Share (Per cent)
Economic Survey 2012-13
A95
http://indiabudget.nic.in
A—96 369769
10928 2254 819 1744 36 18 76110 43480 10475 8632 9415 3961 2 144 0 2173 502 447 333 513 202 146 31 5664 193 138 21 10 23 1 5471 3600 1418 203 204 38 7 0 4427
2
1683467
49725 10263 3744 7966 162 84 346632 198079 47712 39309 42825 18037 9 659 1 9888 2279 2031 1514 2339 917 662 145 25811 879 630 94 45 105 5 24932 16417 6459 911 940 172 32 1 20120
3
2010-2011 (US$ (` million) crore)
489181
13541 2555 1452 974 180 20 98741 57554 13100 12185 10679 5189 22 10 1 2498 721 585 422 427 204 119 20 8395 253 166 62 17 7 1 8143 4681 2375 843 176 61 6 1 4016
4
2345463
65368 12291 7001 4820 899 97 473473 276185 62961 58575 50872 24719 109 49 4 11913 3435 2796 2021 2015 975 579 92 40633 1213 804 290 80 35 3 39420 22667 11511 4034 891 287 27 2 19361
5
2011-2012 (US$ (` million) crore)
32.3
23.9 13.4 77.3 -44.2 406.2 10.8 29.7 32.4 25.1 41.2 13.4 31.0 1027.9 -92.9 330.0 15.0 43.7 31.0 26.9 -16.8 1.0 -18.2 -36.5 48.2 30.9 20.2 198.5 73.6 -69.2 -44.2 48.8 30.0 67.5 314.1 -13.6 60.5 -17.4 316.7 -9.3
6
Change (4) over (2) (Per cent)
100.0
2.8 0.5 0.3 0.2 0.0 0.0 20.2 11.8 2.7 2.5 2.2 1.1 0.0 0.0 0.0 0.5 0.1 0.1 0.1 0.1 0.0 0.0 0.0 1.7 0.1 0.0 0.0 0.0 0.0 0.0 1.7 1.0 0.5 0.2 0.0 0.0 0.0 0.0 0.8
7
Share (Per cent)
323622
7454 1621 977 667 89 13 67183 39212 8539 7899 7742 3759 21 10 0 1741 525 395 256 340 130 79 17 4852 151 90 46 13 2 0 4701 2762 1442 383 60 47 5 0 2385
8
1502481
34516 7520 4586 3237 433 61 312606 182583 39804 36772 35859 17434 105 49 1 8077 2436 1833 1183 1570 606 373 76 22636 697 416 213 59 7 2 21939 12904 6751 1746 295 217 23 2 11067
9
April-Nov. 2011 (US$ (` million) crore)
321175
7698 1549 719 627 76 18 62055 37107 9010 7901 5111 2913 13 0 1 1593 487 347 380 231 102 42 5 5929 115 85 14 3 10 2 5815 2938 1600 1060 174 41 1 0 639
10
1748577
41845 8431 3905 3347 421 97 338139 202188 49103 43066 27842 15870 65 1 3 8660 2652 1879 2066 1255 558 226 25 32308 625 465 76 18 57 9 31684 15993 8726 5791 942 225 5 1 3483
11
-0.8
3.3 -4.4 -26.4 -6.0 -14.7 33.5 -7.6 -5.4 5.5 0.0 -34.0 -22.5 -41.8 -98.6 144.0 -8.5 -7.3 -12.1 48.5 -32.1 -21.3 -47.1 -72.6 22.2 -23.9 -4.9 -69.8 -74.1 547.5 260.5 23.7 6.4 10.9 176.6 187.7 -12.7 -82.2 -59.6 -73.2
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (A) : DIRECTION OF IMPORTS : IMPORTS BY REGIONS AND COUNTRIES (Contd.)
Source: Department of Commerce based on DGCI&S provisional data.
Total Imports
14) IRAN 15) ISRAEL 16) JORDAN 17) YEMEN REPUBLC 18) SYRIA 19) LEBANON (d) NE Asia 1) CHINA P RP 2) KOREA RP 3) JAPAN 4) HONG KONG 5) TAIWAN 6) MONGOLIA 7) KOREA DP RP 8) MACAO (e) South Asia 1) SRI LANKA DSR 2) BANGLADESH PR 3) PAKISTAN IR 4) NEPAL 5) BHUTAN 6) AFGHANISTAN TIS 7) MALDIVES V CIS & Baltics (a) CARs Countries 1) KAZAKHSTAN 2) UZBEKISTAN 3) TURKMENISTAN 4) TAJIKISTAN 5) KYRGHYZSTAN (b) Other CIS Countries 1) RUSSIA 2) UKRAINE 3) AZERBAIJAN 4) BELARUS 5) GEORGIA 6) ARMENIA 7) MOLDOVA VI Unspecified Region
1
COUNTRIES/REGIONS
100.0
2.4 0.5 0.2 0.2 0.0 0.0 19.3 11.6 2.8 2.5 1.6 0.9 0.0 0.0 0.0 0.5 0.2 0.1 0.1 0.1 0.0 0.0 0.0 1.8 0.0 0.0 0.0 0.0 0.0 0.0 1.8 0.9 0.5 0.3 0.1 0.0 0.0 0.0 0.2
13
Share (Per cent)
A96 Economic Survey 2012-13
II
I
Europe (a) EU Countries (27) 1) NETHERLAND 2) UK 3) GERMANY 4) BELGIUM 5) ITALY 6) FRANCE 7) SPAIN 8) MALTA 9) SWEDEN 10) GREECE 11) POLAND 12) DENMARK 13) PORTUGAL 14) IRELAND 15) AUSTRIA 16) HUNGARY 17) FINLAND 18) CZECH REPUBLIC 19) ROMANIA 20) SLOVENIA 21) LITHUANIA 22) ESTONIA 23) BULGARIA 24) LATVIA 25) SLOVAK REP 26) CYPRUS 27) LUXEMBOURG (b) Other WE Countries 1) TURKEY 2) SWITZERLAND 3) NORWAY 4) ICELAND 5) LIECHTENSTEIN (c) East Europe 1) CROATIA 2) UNION OF SERBIA & MONTENEGRO 3) ALBANIA 4) MACEDONIA 5) BOSNIA-HRZGOVIN Africa (a) Southern Africa 1) SOUTH AFRICA 2) NAMIBIA
1
COUNTRIES/REGIONS
49926 46078 7681 7312 6754 5784 4554 5210 2566 747 628 365 666 691 527 271 594 213 255 216 426 187 83 53 70 103 59 43 19 3704 2749 691 179 84 0 144 98 24 12 8 3 19713 5619 3912 55
2 227218 209708 34967 33296 30733 26347 20702 23688 11687 3413 2858 1657 3030 3142 2395 1230 2693 968 1160 982 1942 852 379 241 317 471 271 197 86 16854 12510 3141 816 386 1 657 445 107 52 38 15 89745 25639 17885 252
3
2010-2011 (US$ (` million) crore) 57762 52570 9145 8597 7939 7161 4878 4564 2982 849 825 789 786 757 525 423 342 316 314 272 269 227 135 110 109 96 95 57 9 5008 3537 1103 334 34 0 184 115 42 13 9 6 24661 6218 4731 64
4 276549 251788 43878 41169 37944 34204 23248 22049 14279 4092 3951 3769 3764 3616 2499 2052 1631 1516 1513 1307 1284 1086 657 531 521 460 455 273 42 23883 16840 5317 1566 160 1 878 549 198 61 43 28 118668 29878 22727 308
5
2011-12 (US$ (` million) crore) 15.7 14.1 19.1 17.6 17.5 23.8 7.1 -12.4 16.2 13.7 31.4 116.4 17.9 9.6 -0.4 56.2 -42.5 48.5 23.4 26.0 -36.8 21.1 61.8 108.4 56.0 -6.8 59.3 30.7 -52.5 35.2 28.6 59.8 86.3 -59.7 -12.5 27.2 17.3 77.1 9.8 6.2 80.6 25.1 10.7 20.9 16.1
6
Change (4) over (2) (Per cent) 19.0 17.3 3.0 2.8 2.6 2.4 1.6 1.5 1.0 0.3 0.3 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.6 1.2 0.4 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 8.1 2.0 1.6 0.0
7
Share (Per cent)
38821 35323 6342 5768 5316 4798 3342 2703 1928 816 534 616 518 500 363 267 230 204 194 174 191 147 62 74 73 62 63 34 6 3371 2404 693 249 25 0 127 80 30 8 5 3 15667 4030 3109 44
8 180104 163964 29582 26762 24599 22173 15435 12552 8918 3922 2468 2884 2399 2309 1678 1263 1065 943 901 807 884 681 289 346 337 289 292 157 29 15552 11074 3232 1132 114 0 588 372 139 38 24 15 72897 18746 14471 206
9
April-Nov. 2011 (US$ (` million) crore)
7.4 (B) : DIRECTION OF EXPORTS : EXPORTS BY REGIONS AND COUNTRIES
34920 31362 6480 5359 4517 3317 2679 3303 1858 265 425 180 496 446 310 229 203 204 195 165 168 151 81 63 91 64 70 36 5 3409 2508 731 154 15 0 149 82 46 12 5 4 17919 4595 3214 37
10 190026 170680 35184 29211 24607 18040 14582 17967 10121 1439 2317 980 2703 2433 1690 1247 1108 1110 1061 897 916 825 444 343 498 349 383 194 29 18535 13631 3979 840 84 1 811 443 253 63 30 22 97629 25048 17531 200
11
-10.0 -11.2 2.2 -7.1 -15.0 -30.9 -19.9 22.2 -3.6 -67.5 -20.4 -70.8 -4.2 -10.8 -14.5 -14.3 -11.8 0.1 0.4 -5.2 -11.9 2.9 32.4 -14.6 25.8 2.5 12.2 4.6 -15.8 1.1 4.3 5.4 -38.0 -38.0 -10.0 17.7 2.2 54.3 42.6 4.2 20.0 14.4 14.0 3.4 -16.8
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
http://indiabudget.nic.in
A—97
Contd...
18.7 16.8 3.5 2.9 2.4 1.8 1.4 1.8 1.0 0.1 0.2 0.1 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.8 1.3 0.4 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 9.6 2.5 1.7 0.0
13
Share (Per cent)
Economic Survey 2012-13
A97
http://indiabudget.nic.in
A—98
(d)
(c)
(b)
3) BOTSWANA 4) SWAZILAND 5) LESOTHO 6) MOZAMBIQUE 7) ANGOLA 8) ZAMBIA 9) ZIMBABWE West Africa 1) NIGERIA 2) GHANA 3) BENIN 4) SENEGAL 5) TOGO 6) CONGO P REP 7) COTE D’ IVOIRE 8) CAMEROON 9) GUINEA 10) MALI 11) NIGER 12) SIERRA LEONE 13) BURKINA FASO 14) LIBERIA 15) GAMBIA 16) GABON 17) MAURITANIA 18) EQUTL GUINEA 19) GUINEA BISSAU 20) SAO TOME 21) CAPE VERDE IS 22) ST HELENA Central Africa 1) UGANDA 2) MALAWI 3) RWANDA 4) CHAD 5) BURUNDI 6) CONGO D. REP. 7) C AFRI REP East Africa 1) KENYA 2) TANZANIA REP 3) MAURITIUS 4) DJIBOUTI 5) ETHIOPIA 6) SOMALIA
1
COUNTRIES/REGIONS
34 87 19 605 675 118 113 4297 2099 580 264 210 205 242 94 121 96 65 47 54 46 44 42 38 34 11 3 1 1 0 465 293 101 32 12 16 7 4 5347 2182 1475 854 320 274 89
2 153 392 84 2759 3061 539 514 19538 9542 2637 1199 957 932 1100 429 552 439 296 214 247 208 200 189 171 153 52 14 5 2 1 2116 1332 463 147 54 73 31 16 24311 9948 6701 3861 1453 1245 406
3
2010-2011 (US$ (` million) crore)
50 23 21 533 454 211 129 6452 2700 798 655 365 353 348 284 192 132 98 88 86 85 79 64 47 47 17 12 1 0 0 708 435 148 48 39 24 7 6 6591 2278 1611 1401 475 464 145
4 242 112 101 2547 2205 1016 619 31066 13042 3829 3085 1783 1725 1637 1406 930 626 475 417 416 407 379 309 227 224 82 62 4 2 0 3405 2094 708 232 188 117 35 31 31731 10988 7678 6769 2295 2241 713
5
2011-12 (US$ (` million) crore)
50.2 -73.5 13.7 -11.8 -32.7 78.1 14.3 50.2 28.6 37.6 148.4 73.7 72.3 43.7 201.9 58.6 36.8 50.3 87.9 58.5 85.9 78.6 53.8 25.0 38.8 50.2 304.6 -26.7 -6.0 -78.9 52.2 48.6 46.1 48.7 224.3 49.6 3.0 78.4 23.3 4.4 9.2 64.0 48.6 69.6 62.2
6
Change (4) over (2) (Per cent)
0.0 0.0 0.0 0.2 0.1 0.1 0.0 2.1 0.9 0.3 0.2 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 2.2 0.7 0.5 0.5 0.2 0.2 0.0
7
Share (Per cent)
35 14 15 344 253 134 84 4054 1717 517 492 171 180 256 117 113 93 58 68 50 57 46 41 29 30 12 6 1 0 0 456 278 103 28 27 15 2 3 4215 1397 1138 869 297 297 80
8 163 64 71 1578 1181 624 388 18868 8043 2403 2261 798 840 1174 553 528 427 271 311 230 261 213 192 138 139 53 28 3 2 0 2123 1292 480 130 127 68 11 14 19637 6509 5282 4044 1390 1390 382
9
April-Nov. 2011 (US$ (` million) crore)
31 37 9 694 338 152 83 4196 1844 488 247 307 166 132 282 152 141 41 34 113 50 82 36 37 25 11 4 1 1 0 562 299 84 49 14 20 93 4 4800 2509 991 283 249 463 138
10 167 205 52 3778 1838 825 452 22860 10051 2660 1346 1679 902 719 1534 828 769 223 185 615 271 451 197 203 135 60 23 4 5 0 3067 1630 457 266 76 110 508 21 26171 13655 5422 1543 1356 2531 750
11
-11.9 173.2 -37.9 102.1 33.6 13.1 -0.9 3.5 7.4 -5.6 -49.8 79.6 -7.8 -48.5 141.3 34.5 52.5 -29.5 -49.8 127.2 -12.0 78.9 -12.3 26.6 -17.0 -3.7 -21.2 20.7 100.0 0.0 23.4 7.7 -18.9 72.1 -48.0 39.2 3897.0 34.6 13.9 79.6 -12.9 -67.5 -16.3 55.8 71.9
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (B) : DIRECTION OF EXPORTS : EXPORTS BY REGIONS AND COUNTRIES (Contd.)
Contd...
0.0 0.0 0.0 0.4 0.2 0.1 0.0 2.2 1.0 0.3 0.1 0.2 0.1 0.1 0.2 0.1 0.1 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.2 0.0 0.0 0.0 0.0 0.0 0.0 2.6 1.3 0.5 0.2 0.1 0.2 0.1
13
Share (Per cent)
A98 Economic Survey 2012-13
7) MADAGASCAR 8) REUNION 9) SEYCHELLES 10) COMOROS III America (a) North America 1) USA 2) CANADA (b) Latin America 1) BRAZIL 2) BAHAMAS 3) MEXICO 4) COLOMBIA 5) PERU 6) CHILE 7) ARGENTINA 8) VENEZUELA 9) ECUADOR 10) PANAMA REPUBLIC 11) GUATEMALA 12) URUGUAY 13) DOMINIC REP 14) HONDURAS 15) TRINIDAD 16) PARAGUAY 17) COSTA RICA 18) HAITI 19) NICARAGUA 20) NETHERLANDANTIL 21) EL SALVADOR 22) CUBA 23) JAMAICA 24) BELIZE 25) BOLIVIA 26) GUYANA 27) SURINAME 28) BARBADOS 29) GUADELOUPE 30) MARTINIQUE 31) VIRGIN IS US 32) DOMINICA 33) FR GUIANA 34) FALKLAND IS 35) ST LUCIA 36) GRENADA
1
COUNTRIES/REGIONS
79 38 27 9 36882 26645 25296 1349 10238 4024 2173 913 561 418 508 404 176 121 124 113 85 83 63 63 42 61 61 30 52 24 26 22 14 16 16 12 5 6 5 1 2 4 0 3 1
2 360 174 123 39 168015 121352 115212 6140 46662 18336 9930 4157 2555 1900 2313 1843 799 553 565 514 388 377 288 287 189 279 275 136 240 109 116 102 65 71 73 55 25 28 22 6 11 16 0 12 5
3
2010-2011 (US$ (` million) crore)
124 48 35 11 50014 36375 34353 2022 13639 5769 2244 1369 887 564 522 473 250 232 232 191 141 103 92 82 67 65 48 46 39 38 37 27 26 25 22 10 8 7 6 4 3 2 1 1 1
4 597 230 167 53 239498 174295 164527 9768 65203 27574 10561 6585 4268 2718 2513 2276 1203 1124 1115 922 675 491 442 395 323 316 231 219 185 181 174 128 125 121 102 51 36 34 30 19 14 8 7 6 5
5
2011-12 (US$ (` million) crore)
55.8 25.6 28.5 27.5 35.6 36.5 35.8 49.9 33.2 43.4 3.2 49.9 58.1 35.0 2.8 17.1 41.8 90.6 87.0 69.8 64.8 25.0 45.3 31.0 61.1 6.5 -20.2 52.3 -25.0 55.9 43.7 19.3 82.5 58.2 34.2 -13.5 38.8 14.2 29.0 179.7 14.2 -55.0 3350.0 -48.4 2.0
6
Change (4) over (2) (Per cent)
0.0 0.0 0.0 0.0 16.4 11.9 11.3 0.7 4.5 1.9 0.7 0.4 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
7
Share (Per cent)
76 33 22 6 32726 23664 22439 1225 9062 3790 1655 854 569 343 332 318 155 172 149 121 100 72 57 52 44 38 34 31 29 23 27 18 17 14 16 6 5 5 5 1 2 1 1 1 1
8 354 153 104 29 151554 109628 103922 5706 41926 17536 7553 3965 2649 1596 1544 1483 722 822 694 563 467 331 266 241 205 178 156 146 133 109 124 82 79 64 73 27 24 23 21 5 8 7 3 3 3
9
April-Nov. 2011 (US$ (` million) crore)
101 32 20 14 36522 26447 25173 1274 10075 3997 1898 1044 610 421 456 344 163 114 170 150 97 75 76 52 50 52 44 37 43 34 24 21 16 34 15 15 4 5 4 1 1 1 0 1 0
10 551 177 109 76 198924 144088 137148 6940 54836 21733 10311 5688 3323 2296 2488 1879 888 622 928 820 533 409 418 283 272 286 241 205 234 187 132 114 89 185 80 80 23 25 20 6 8 4 0 4 3
11
33.9 -0.8 -9.8 120.4 11.6 11.8 12.2 4.0 11.2 5.5 14.7 22.2 7.1 22.7 37.4 8.2 4.9 -33.8 14.4 24.4 -2.4 3.8 33.6 -0.6 13.7 36.2 31.5 19.5 46.9 46.5 -9.3 18.5 -3.5 149.8 -7.0 148.2 -16.4 -9.2 -18.4 -1.8 -16.6 -44.0 -100.0 2.9 -30.0
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (B) : DIRECTION OF EXPORTS : EXPORTS BY REGIONS AND COUNTRIES (Contd.)
http://indiabudget.nic.in
A—99
Contd...
0.1 0.0 0.0 0.0 19.5 14.2 13.5 0.7 5.4 2.1 1.0 0.6 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
13
Share (Per cent)
Economic Survey 2012-13
A99
1
BERMUDA BR VIRGN IS CAYMAN IS ANTIGUA ST KITT N A ST VINCENT MONTSERRAT TURKS C IS
IV Asia (a) East Asia 1) AUSTRALIA 2) NEW ZEALAND 3) FIJI IS 4) PAPUA N GNA 5) TIMOR LESTE 6) VANUATU REP 7) SAMOA 8) KIRIBATI REP 9) SOLOMON IS 10) TONGA 11) NAURU RP 12) TUVALU (b) ASEAN 1) SINGAPORE 2) INDONESIA 3) MALAYSIA 4) VIETNAM SOC REP 5) THAILAND 6) PHILIPPINES 7) BRUNEI 8) MYANMAR 9) CAMBODIA 10) LAO PD RP (c ) WANA 1) U ARAB EMTS 2) SAUDI ARAB 3) OMAN 4) KUWAIT 5) QATAR 6) BAHARAIN IS 7) EGYPT A RP 8) ALGERIA 9) SUDAN 10) MOROCCO 11) TUNISIA
37) 38) 39) 40) 41) 42) 43) 44)
COUNTRIES/REGIONS
1 0 0 1 1 0 1 0 127346 2506 1713 191 28 22 546 2 2 0 1 1 0 0 25628 9825 5701 3871 2651 2274 881 23 321 67 13 54222 33822 4684 1086 1856 375 652 1982 782 488 319 282
2 4 2 1 4 3 2 2 0 579221 11387 7803 868 130 100 2458 11 7 1 5 3 1 1 116658 44732 25925 17677 12045 10346 4005 105 1459 305 59 246627 153866 21296 4942 8447 1709 2933 9026 3558 2224 1449 1282
3
2010-2011 (US$ (` million) crore)
1 1 1 1 1 1 0 0 152361 2806 2466 252 37 36 7 3 2 1 1 1 0 0 36650 16795 6667 3977 3714 2952 992 895 544 99 15 59483 35858 5669 1322 1181 802 447 2421 835 718 372 286
4 5 5 4 4 3 3 1 1 731313 13569 11938 1209 175 170 37 13 10 6 6 4 1 0 175447 80045 32044 19088 18058 14206 4758 4062 2635 478 73 285411 171942 27139 6416 5661 3921 2151 11729 3990 3409 1789 1369
5
2011-12 (US$ (` million) crore)
13.3 147.6 237.9 -7.4 -10.8 69.4 -47.2 240.0 19.6 12.0 44.0 32.0 29.3 63.6 -98.6 7.2 43.8 830.8 3.5 6.9 90.9 -91.7 43.0 70.9 16.9 2.7 40.1 29.8 12.6 3781.6 69.5 48.6 14.2 9.7 6.0 21.0 21.7 -36.4 113.7 -31.5 22.1 6.8 47.0 16.8 1.1
6
Change (4) over (2) (Per cent)
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 50.0 0.9 0.8 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12.0 5.5 2.2 1.3 1.2 1.0 0.3 0.3 0.2 0.0 0.0 19.5 11.8 1.9 0.4 0.4 0.3 0.1 0.8 0.3 0.2 0.1 0.1
7
Share (Per cent)
1 1 1 1 0 0 0 0 97256 1648 1422 168 27 26 2 2 2 0 1 0 0 0 23556 11257 3917 2423 2241 1829 644 885 291 62 6 38154 23318 3544 703 784 488 271 1402 553 524 237 179
8 3 4 4 2 2 1 1 0 451159 7673 6620 781 124 117 10 8 7 1 3 2 0 0 108822 51843 18095 11185 10548 8493 2987 4009 1349 288 26 176992 108186 16360 3294 3639 2310 1260 6534 2555 2425 1101 829
9
April-Nov. 2011 (US$ (` million) crore)
1 0 0 1 1 0 0 0 94193 1909 1634 218 29 20 1 3 1 0 1 1 0 0 19180 8180 3238 2279 2150 2176 759 22 290 71 15 43426 23747 6077 1704 681 444 358 1914 757 502 268 197
10 5 2 1 4 3 1 0 1 513268 10411 8915 1193 158 110 8 14 5 2 4 4 0 0 104332 44451 17623 12402 11697 11855 4141 121 1576 388 79 236842 129615 33121 9261 3717 2428 1951 10371 4138 2743 1458 1078
11
43.5 -57.5 -70.8 36.5 35.1 -10.5 -85.7 187.5 -3.1 15.8 15.0 30.3 8.4 -21.3 -27.1 40.2 -43.0 88.2 32.8 49.0 0.0 0.0 -18.6 -27.3 -17.3 -6.0 -4.1 19.0 17.9 -97.5 -0.6 14.9 157.4 13.8 1.8 71.5 142.3 -13.1 -8.9 32.3 36.5 36.9 -4.2 13.0 10.1
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (B) : DIRECTION OF EXPORTS : EXPORTS BY REGIONS AND COUNTRIES (Contd.)
http://indiabudget.nic.in
A—100
Contd...
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 50.4 1.0 0.9 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.3 4.4 1.7 1.2 1.2 1.2 0.4 0.0 0.2 0.0 0.0 23.2 12.7 3.3 0.9 0.4 0.2 0.2 1.0 0.4 0.3 0.1 0.1
13
Share (Per cent)
A100 Economic Survey 2012-13
http://indiabudget.nic.in
A—101 251136
132 0 2920 2493 485 678 514 493 176 37316 15521 10320 5092 3730 2302 329 21 1 11659 3510 3243 2168 2040 422 176 100 2682 303 172 60 26 26 18 2379 1690 514 36 73 39 20 8 14587
2
304624
1142922
P : Provisional
61 0 4043 2399 805 766 730 536 232 45082 17903 12933 6318 4332 3331 228 35 1 13033 4376 3758 2523 1535 512 205 125 3056 424 239 89 44 31 21 2632 1780 491 122 122 72 38 8 16770
4
1465959
302 0 19337 11449 3898 3718 3501 2567 1123 216769 86586 61881 30460 20663 15901 1104 168 7 62706 20938 18230 12113 7417 2432 978 598 14708 2034 1143 430 212 147 102 12674 8553 2364 597 590 350 184 36 78543
5
2011-12 (US$ (` million) crore)
601 1 13284 11337 2202 3075 2352 2239 803 169671 70414 47038 23183 16965 10479 1491 94 7 53019 15962 14753 9871 9255 1921 802 456 12215 1378 784 275 119 117 83 10836 7706 2334 165 332 175 90 34 66507
3
2010-2011 (US$ (` million) crore)
21.3
-53.8 -92.9 38.4 -3.8 65.9 13.0 42.0 8.7 32.0 20.8 15.3 25.3 24.1 16.1 44.7 -30.6 66.7 2.1 11.8 24.7 15.9 16.4 -24.8 21.1 16.3 24.4 14.0 40.0 38.7 47.9 68.3 18.5 16.2 10.6 5.3 -4.4 235.2 67.1 85.3 93.1 -0.4 15.0
6
Change (4) over (2) (Per cent)
100.0
0.0 0.0 1.3 0.8 0.3 0.3 0.2 0.2 0.1 14.8 5.9 4.2 2.1 1.4 1.1 0.1 0.0 0.0 4.3 1.4 1.2 0.8 0.5 0.2 0.1 0.0 1.0 0.1 0.1 0.0 0.0 0.0 0.0 0.9 0.6 0.2 0.0 0.0 0.0 0.0 0.0 5.5
7
Share (Per cent)
200961
17 0 2602 1676 506 436 415 361 139 28750 11233 8454 3607 2977 2349 115 14 1 8061 2892 2043 1586 968 342 147 83 2020 280 160 59 27 20 14 1740 1174 323 102 78 34 24 5 14470
8
931991
79 0 12015 7752 2376 2041 1913 1672 650 133777 52606 39197 16703 13772 10895 533 65 6 37418 13394 9510 7343 4529 1571 685 386 9440 1302 744 277 126 91 64 8137 5474 1504 497 365 161 112 24 66837
9
April-Nov. 2011 (US$ (` million) crore)
186861
128 0 2410 1785 466 963 663 206 155 24467 8385 7724 3726 2656 1829 124 21 1 8977 2421 3167 1807 1063 311 125 82 2363 351 174 79 54 22 21 2013 1469 350 37 73 52 27 5 944
10
1017819
696 0 13136 9761 2537 5262 3604 1121 844 133298 45578 42183 20331 14455 9952 676 118 4 48868 13168 17243 9844 5794 1693 682 445 12883 1912 951 432 291 120 116 10971 8009 1908 201 395 284 147 28 5089
11
-7.0
654.0 0.0 -7.4 6.5 -7.9 120.8 59.9 -42.8 11.1 -14.9 -25.4 -8.6 3.3 -10.8 -22.1 7.7 50.3 -31.9 11.4 -16.3 55.0 14.0 9.8 -9.1 -14.8 -1.7 17.0 25.2 8.8 33.7 97.9 12.3 54.6 15.7 25.1 8.4 -64.0 -6.4 51.1 12.4 -1.2 -93.5
12
April-Nov.(P) Change 2012 (10) over (US$ (` (8) (Per million) crore) cent)
7.4 (B) : DIRECTION OF EXPORTS : EXPORTS BY REGIONS AND COUNTRIES (Contd.)
Source: Department of Commerce based on DGCI&S provisional data.
Total
12) LIBYA 13) CANARY IS 14) ISRAEL 15) IRAN 16) JORDAN 17) IRAQ 18) YEMEN REPUBLC 19) SYRIA 20) LEBANON (d) NE Asia 1) CHINA P RP 2) HONG KONG 3) JAPAN 4) KOREA RP 5) TAIWAN 6) KOREA DP RP 7) MONGOLIA 8) MACAO (e) South Asia 1) SRI LANKA DSR 2) BANGLADESH PR 3) NEPAL 4) PAKISTAN IR 5) AFGHANISTAN TIS 6) BHUTAN 7) MALDIVES V CIS & Baltics (a) CARs Countries 1) KAZAKHSTAN 2) UZBEKISTAN 3) TURKMENISTAN 4) KYRGHYZSTAN 5) TAJIKISTAN (b) Other CIS Countries 1) RUSSIA 2) UKRAINE 3) BELARUS 4) GEORGIA 5) AZERBAIJAN 6) ARMENIA 7) MOLDOVA VI Unspecified Region
1
COUNTRIES/REGIONS
100.0
0.1 0.0 1.3 1.0 0.2 0.5 0.4 0.1 0.1 13.1 4.5 4.1 2.0 1.4 1.0 0.1 0.0 0.0 4.8 1.3 1.7 1.0 0.6 0.2 0.1 0.0 1.3 0.2 0.1 0.0 0.0 0.0 0.0 1.1 0.8 0.2 0.0 0.0 0.0 0.0 0.0 0.5
13
Share (Per cent)
Economic Survey 2012-13
A101
A102
Economic Survey 2012-13 7.5 : INDIA’S SHARE IN WORLD EXPORTS BY COMMODITY DIVISIONS AND GROUPS (US $ million)
Div. Sl. No.
1
Code Group
Commodity Division/Group
1970 World
2
3
01
Meat and meat preparations
03
Fish, crustaceans and molluscs & preparations
04
Cereals and cereal preparations 042
4
India
5
1975 India’s share (%) 6
7 7378
India
8
India’s share (%) 9
3584
4
...
...
...
...
...
...
6775
9
0.1
25133
16
0.1
9
0.1
925
6
0.6
1984
12
0.6
05
Vegetables and fruits
1471
17
1.2
10104
154
1.5
06
Sugar, sugar preparations and honey
2700
26
1.0
11663
554
4.8
07
Coffee, tea, cocoa, spices and manufactures
5437
280
5.1
9133
438
4.8
071
Coffee and coffee substitutes
3205
31
1.0
4580
73
1.6
074
Tea and mate
587
196
33.4
933
292
31.3
Spices
255
52
20.5
548
73
13.3
...
...
...
...
...
...
2.5
3827
124
3.2
075
Rice
0.1
World
08
Feeding stuff for animals
12
Tobacco and tobacco manufactures
1713
43
Unmanufactured tobacco and refuse
1058
42
4.0
2357
119
5.0
655
1
0.2
1470
5
0.4
121 122
Manufactured tobacco
22
Oilseeds and oleaginous fruit
...
...
...
...
...
...
28
Metalliferous ores and metal scrap
7357
193
2.6
13446
253
1.9
Iron ore and concentrates
2373
158
6.7
4601
247
5.4
51
281
Organic chemicals
6648
9
0.1
20219
22
0.1
52
Inorganic chemicals
...
...
...
...
...
...
53
Dyeing, tanning and colouring materials
1615
8
0.5
3642
23
0.6
Medicinal and pharmaceutical products
54
2687
11
0.4
6503
29
0.4
55
541
Essential oils and perfume materials soap, cleansing etc.
916
10
1.1
3059
18
0.6
58
Artificial resins, plastic materials, cellulose esters & ethers
...
...
...
...
...
...
59
Chemical materials and products n.e.s.
61
Leather, leather manufactures & dressed fur skins
...
...
...
...
...
95
9.1
2380
200
8.4
611
Leather
701
94
13.4
1540
189
12.3
612
Manufactures of leather or of composition leather
132
1
0.6
355
4
1.0
613
Fur skins,tanned or dressed etc.
214
...
...
486
8
1.6
11371
461
4.1
23798
599
2.5
65
66
... 1047
Textile yarn, fabrics, made-up articles 652
Woven cotton fabrics
1436
98
6.8
3149
161
5.1
653
Woven fabrics of man made fibres
3967
189
4.8
8038
191
2.4
654
Woven fabrics other than of cotton or man-made fibres
270
2
0.8
547
5
0.9
667
Pearls, precious and semi-precious stones
2431
53
2.2
5707
128
2.2
14540
132
0.9
40789
116
0.3
4328
27
0.6
12053
74
0.6
Power-generating machinery & equipment
20884
25
0.1
54327
97
0.2
72
Machinery specialized for particular industries
10670
17
0.2
67016
102
0.2
73
Metal-working machinery
...
...
...
...
...
...
74
General industrial machinery & equipment & machine parts thereof
...
...
...
...
...
...
75
Office machinery and ADP equipment
...
...
...
...
...
...
76
Telecommunication and sound recording and reproducing apparatus and equipment
...
...
...
...
...
...
77
Electrical machinery, apparatus and appliances
...
...
...
...
...
...
78
Road vehicles (including air cushion vehicles)
...
...
...
...
...
...
67
Iron and steel
69
Manufactures of metals n.e.s.
71
79
Other transport equipment
84
Articles of apparel and clothing accessories Total Exports
...
...
...
...
...
...
109
...
...
308
...
...
313804
2031
0.6
876094
4665
0.5 Contd...
http://indiabudget.nic.in A—102
Economic Survey 2012-13
A103
7.5 : INDIA’S SHARE IN WORLD EXPORTS BY COMMODITY DIVISIONS AND GROUPS (US$ million) Div. Sl. No.
1
Code Group
Commodity Division/Group
1980 World
2
3
10
India
11
1985 India’s share (%) 12
World
13
India
14
India’s share (%) 15
01
Meat and meat preparations
17832
67
0.4
15755
61
0.4
03
Fish, crustaceans and molluscs & preparations
12258
242
2.0
14335
337
2.4
Cereals and cereal preparations
41989
201
0.5
32643
211
0.6
4355
160
3.7
2916
162
5.6 1.4
04 042
Rice
05
Vegetables and fruits
24018
259
1.1
23606
332
06
Sugar, sugar preparations and honey
16183
46
0.3
10113
...
...
07
Coffee, tea, cocoa, spices and manufactures
22121
879
4.0
20779
971
4.7
071
Coffee and coffee substitutes
12979
271
2.1
11676
226
1.9
074
Tea and mate
1631
452
27.7
1973
517
26.2 19.3
075
Spices
1072
156
14.5
1188
229
10322
164
1.6
8515
127
1.5
Tobacco and tobacco manufactures
3423
151
4.4
7822
140
1.8
Unmanufactured tobacco and refuse
3423
151
4.4
3798
113
3.0
...
...
...
4024
27
0.7
9487
30
0.3
7896
20
0.3
30239
465
1.5
23137
557
2.4
6515
411
6.3
6154
478
7.8
08
Feeding stuff for animals
12 121 122 22
Manufactured tobacco Oilseeds and oleaginous fruit
28
Metalliferous ores and metal scrap 281
Iron ore and concentrates
51
Organic chemicals
31841
17
0.1
36923
25
0.1
52
Inorganic chemicals
15491
26
0.2
16318
22
0.1 0.8
53 54
541
Dyeing, tanning and colouring materials
7986
65
0.8
8024
62
Medicinal and pharmaceutical products
13918
109
0.8
15920
130
0.8
7647
86
1.1
8136
56
0.7
3
...
28456
5
...
55
Essential oils and perfume materials Soap, cleansing etc.
58
Artificial resins, plastic materials, cellulose esters & ethers
27223
59
Chemical materials and products n.e.s.
15960
8
...
16613
28
0.2
61
Leather, leather manufactures & dressed fur skins
5967
405
6.8
6444
534
8.3
611
Leather
3415
342
10.0
4185
331
7.9
612
Manufactures of leather or of composition leather
975
62
6.3
1233
202
16.4
613 65
66
Fur skins,tanned or dressed etc. Textile yarn, fabrics, made-up articles
1577
1
0.1
1026
...
...
48884
1145
2.3
48218
1037
2.1
652
Woven cotton fabrics
6632
351
5.3
6804
327
4.8
653
Woven fabrics of man made fibres
9325
44
0.5
9735
20
0.2
654
Woven fabrics other than of cotton or man-made fibres
3188
204
6.4
3462
167
4.8 9.6
Pearls, precious and semi-precious stones
18563
579
3.1
12073
1165
67
667
Iron and steel
68231
87
0.1
61891
46
0.1
69
Manufactures of metals n.e.s.
36840
221
0.6
32884
125
0.4
71
Power-generating machinery & equipment
35722
88
0.2
38433
59
0.2
72
Machinery specialized for particular industries
58495
65
0.1
54707
97
0.2
73
Metal-working machinery
15671
32
0.2
12696
55
0.4
74
General industrial machinery & equipment & machine parts thereof
59443
67
0.1
53954
60
0.1
75
Office machinery and ADP equipment
24750
2
...
53604
30
0.1
76
Telecommunication and sound recording and reproducing apparatus and equipment
26799
11
...
47318
4
...
77
Electrical machinery, apparatus and appliances
60947
114
0.2
75739
121
0.2
78
Road vehicles (including air cushion vehicles)
127347
208
0.2
157446
126
0.1
79
Other transport equipment
41291
32
0.1
50709
27
0.1
84
Articles of apparel and clothing accessories
32365
590
1.8
38718
887
2.3
1997686
8486
0.4
1930849
8904
0.5
Total Exports
Contd...
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A104
Economic Survey 2012-13 7.5 : INDIA’S SHARE IN WORLD EXPORTS BY COMMODITY DIVISIONS AND GROUPS (US $ million)
Div. Sl. No.
1
Code Group
Commodity Division/Group
1990 World
2
3
16
India
17
2000 India’s share (%) 18
World
19
India
20
India’s share (%) 21
01
Meat and meat preparations
34118
77
0.2
44690
324
0.7
03
Fish, crustaceans and molluscs & preparations
32847
521
1.6
50875
1391
2.7
Cereals and cereal preparations
45314
285
0.6
53575
783
1.5
3995
254
6.4
6411
654
10.2
04 042
Rice
05
Vegetables and fruits
50225
400
0.8
68355
856
1.3
06
Sugar, sugar preparations and honey
14236
21
0.1
13866
118
0.9
07
Coffee, tea, cocoa, spices and manufactures
21131
842
4.0
27953
956
3.4
071
Coffee and coffee substitutes
8659
148
1.7
11559
264
2.3
074
Tea and mate
2650
585
22.1
3087
431
14.0
1415
109
7.7
2541
261
10.3
08
075
Feeding stuff for animals
15603
336
2.2
20295
469
2.3
12
Tobacco and tobacco manufactures
17860
145
0.8
21628
147
0.7
Unmanufactured tobacco and refuse
5187
107
2.1
5525
147
2.7
121 122 22 28 281
Spices
12674
39
0.3
16103
...
...
Oilseeds and oleaginous fruit
Manufactured tobacco
10477
83
0.8
14388
244
1.7
Metalliferous ores and metal scrap
35734
753
2.1
49515
510
1.0
7653
578
7.6
9229
363
3.9 1.1
Iron ore and concentrates
51
Organic chemicals
70721
232
0.3
134109
1491
52
Inorganic chemicals
26079
59
0.2
33117
99
0.3
53
Dyeing, tanning and colouring materials
19952
233
1.2
34105
481
1.4
54
Medicinal and pharmaceutical products
37753
453
1.2
107482
1255
1.2
55
541
Essential oils and perfume materials Soap, cleansing etc.
21027
240
1.1
44279
216
0.5
58
Artificial resins, plastic materials, cellulose esters & ethers
65712
29
...
123353
174
0.1
59
Chemical materials and products n.e.s.
33418
76
0.2
63411
437
0.7
61
Leather, leather manufactures & dressed fur skins
13226
832
6.3
24440
808
3.3
611
Leather
9295
447
4.8
16551
388
2.3
612
Manufactures of leather or of composition leather
2868
385
13.4
6831
421
6.2
613
Fur skins,tanned or dressed etc.
1063
...
...
1058
...
...
105147
2180
2.1
167528
6000
3.6
65
66
Textile yarn, fabrics, made-up articles 652
Woven cotton fabrics
15559
571
3.7
22387
1103
4.9
653
Woven fabrics of man made fibres
22021
156
0.7
32151
506
1.6
654
Woven fabrics other than of cotton or man-made fibres
8466
195
2.3
9432
370
3.9
667
Pearls, precious and semi-precious stones
27577
2710
9.8
54105
6477
12.0
106342
283
0.3
146147
1481
1.0
Manufactures of metals n.e.s.
66088
341
0.5
125259
1167
0.9
71
Power-generating machinery & equipment
81675
126
0.2
158329
218
0.1
72
Machinery specialized for particular industries
118617
236
0.2
167582
346
0.2
73
Metal-working machinery
31051
58
0.2
41413
117
0.3
74
General industrial machinery & equipment & machine parts thereof
130836
132
0.1
225981
78
...
75
Office machinery and ADP equipment
126743
112
0.1
378980
...
...
76
Telecommunication and sound recording and reproducing apparatus and equipment
100965
31
...
299356
...
...
77
Electrical machinery, apparatus and appliances
185364
241
0.1
640575
92
...
78
Road vehicles (including air cushion vehicles)
312550
344
0.1
549596
370
0.1
79
Other transport equipment
96250
15
...
157654
53
...
84
Articles of apparel and clothing accessories
94577
2211
2.3
201379
7093
3.5
3303563
18143
0.5
6254511
41543
0.7
67
Iron and steel
69
Total Exports
Contd...
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Economic Survey 2012-13
A105
7.5 : INDIA’S SHARE IN WORLD EXPORTS BY COMMODITY DIVISIONS AND GROUPS (US$ million) Div. Sl. No.
1
Code Group
2
042 05 06 07 071 074 075 08 12 121 122 22 28 281
541
58 59 61 611 612 613 65 652 653 654 66 67 69 71 72 73 74 75 76 77 78 79 84
2010 World
01 03 04
51 52 53 54 55
Commodity Division/Group
667
3
22
Meat and meat preparations Fish, crustaceans and molluscs & preparations Cereals and cereal preparations Rice Vegetables and fruits Sugar, sugar preparations and honey Coffee, tea, cocoa, spices and manufactures Coffee and coffee substitutes Tea and mate Spices Feeding stuff for animals Tobacco and tobacco manufactures Unmanufactured tobacco and refuse Manufactured tobacco Oilseeds and oleaginous fruit Metalliferous ores and metal scrap Iron ore and concentrates Organic chemicals Inorganic chemicals Dyeing, tanning and colouring materials Medicinal and pharmaceutical products Essential oils and perfume materials soap, cleansing etc. Artificial resins, plastic materials, cellulose esters & ethers Chemical materials and products n.e.s. Leather, leather manufactures & dressed fur skins Leather Manufactures of leather or of composition leather Fur skins,tanned or dressed etc. Textile yarn, fabrics, made-up articles Woven cotton fabrics Woven fabrics of man made fibres Woven fabrics other than of cotton or man-made fibres Pearls, precious and semi-precious stones Iron and steel Manufactures of metals n.e.s. Power-generating machinery & equipment Machinery specialized for particular industries Metal-working machinery General industrial machinery & equipment & machine parts thereof Office machinery and ADP equipment Telecommunication and sound recording and reproducing apparatus and equipment Electrical machinery, apparatus and appliances Road vehicles (including air cushion vehicles) Other transport equipment Articles of apparel and clothing accessories Total exports
India
23
2011 India’s share (%) 24
World
25
India
India’s share (%)
26
27
111800 101700 94500 20500 180400 46400 80400 29200 7200 6000 57500 35800 10800 25000 56200 298600 103600 334700 92300 66800 136000 122700
1821 2403 3136 2296 2338 1096 2233 558 720 927 2067 879 713 165 911 8475 6147 7735 972 1604 1357 1159
1.6 2.4 3.3 11.2 1.3 2.4 2.8 1.9 10.0 15.4 3.6 2.5 6.6 0.7 1.6 2.8 5.9 2.3 1.1 2.4 1.0 0.9
133737 121190 120681 24264 208167 57694 100842 41510 8175 7882 67130 41888 11433 30455 67927 379365 144720 404622 115746 78773 153968 141849
2722 3345 5704 4073 2838 2152 3276 921 900 1426 2754 798 571 227 1629 5637 4159 10154 1106 1909 1829 1605
2.0 2.8 4.7 16.8 1.4 3.7 3.2 2.2 11.0 18.1 4.1 1.9 5.0 0.7 2.4 1.5 2.9 2.5 1.0 2.4 1.2 1.1
108300
910
0.8
125829
1403
1.1
174100 28100 23400 3100 1600 259200 28400 36200 9900
2136 915 785 130 0 12833 1050 1987 518
1.2 3.3 3.4 4.2 0.0 5.0 3.7 5.5 5.2
207175 29711 24155 3574 1983 301357 33413 43971 11247
2527 1178 1010 168 0 15340 1526 2264 478
1.2 4.0 4.2 4.7 0.0 5.1 4.6 5.1 4.3
129700 417300 301600 330700 365200 69400 528000
22589 10612 4169 2335 2230 381 3886
17.4 2.5 1.4 0.7 0.6 0.5 0.7
166133 517589 360680 388609 447754 90354 629868
32592 10471 6063 2855 3342 475 4856
19.6 2.0 1.7 0.7 0.7 0.5 0.8
577100
619
0.1
592222
721
0.1
626000
2408
0.4
679072
5137
0.8
1247900 1063200 333600 369600
5522 8746 5804 11229
0.4 0.8 1.7 3.0
1346529 1252571 371477 432555
5576 9501 9457 14672
0.4 0.8 2.5 3.4
15064970
222576
1.5
17979656
302588
1.7
Source : Various issues of United Nations’ International Trade Statistics Year Book, and for the years 2010 & 2011 data accessed on 28th Jan 2013 from http://comtrade.un.org/ Note: A zero in India’s share means negligible or no share at all.
http://indiabudget.nic.in A—105
A106
Economic Survey 2012-13 7.6 : INDEX NUMBERS OF FOREIGN TRADE (Base : 1999-2000=100) Unit Value Index
Volume Index
Terms of trade
Year Exports
Imports
Exports
Imports
Gross
Net
Income
2
3
4
5
6
7
8 118
1 2000-01
102
109
125
99
79
94
2001-02
103
112
126
103
82
92
116
2002-03
106
128
150
109
73
83
125
2003-04
114
132
161
128
80
86
138
2004-05
131
157
179
150
84
83
149
2005-06
139
179
206
174
84
78
161
2006-07
158
206
227
191
84
77
175
2007-08
166
210
245
218
89
79
194
2008-09
194
239
267
262
98
81
216
2009-10
196
215
264
288
109
91
240
2010-11
223
243
304
311
102
92
280
2011-12
268
425
331
246
79
67
222
Source : DGCI&S, Kolkata. Note: 1. Net terms of trade, i.e., the ratio of overall export unit value index to similar import index. 2. Gross terms of trade, i .e., the ratio of overall import quantum Index to similar export index. 3. Income terms of trade = (NTT x QIE)/100. 4. QIE=Quantum Index of Exports.
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Economic Survey 2012-13
A107
8.1(A) : OVERALL EXTERNAL ASSISTANCE ( ` crore) Loans 1 A. AUTHORIZATION 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 P B. UTILIZATION 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 P
Grants
2
3
Total (2+3)
2766.5 2549.4 1700.8 4409.3 5337.0 5730.0 8203.1 12855.6 10105.8 7601.3 11805.8 13082.1 11618.8 12384.3 10833.2 14208.8 14865.0 8320.8 17703.7 17184.1 21630.0 19875.7 14754.4 22746.1 17309.1 28271.0 28988.4 28283.4 48968.8 35895.1 59376.5 23866.1
207.4 423.3 386.9 470.7 313.4 429.5 1062.2 214.2 720.2 522.1 901.8 1011.7 2415.1 1075.8 1330.0 2932.6 2101.0 209.8 2615.3 940.6 3465.0 1296.1 2350.7 3071.1 1628.8 3518.9 4294.4 1242.5 957.6 1536.5 1095.5 722.2
2973.9 2972.7 2087.7 4880.0 5650.4 6159.5 9265.3 13069.8 10826.0 8123.4 12707.6 14093.8 14033.9 13460.1 12163.2 17141.4 16966.0 8530.6 20319.0 18124.7 25095.0 21171.8 17105.1 25817.2 18937.9 31789.9 33282.8 29525.9 49926.4 37431.6 60472.0 24588.3
1519.4 1909.2 1962.4 1962.2 2493.1 3175.7 4574.4 4738.6 5137.8 6170.0 10695.9 10102.2 10895.4 9964.5 9958.6 10892.9 10823.4 12343.4 13330.7 13527.1 16111.7 13898.3 15271.0 14660.9 16097.8 16890.6 17177.7 24089.9 27617.8 35116.1 28863.1 16500.1
345.5 342.8 303.4 397.2 442.9 429.3 477.5 565.8 664.7 534.3 919.1 879.6 885.6 916.0 1063.6 1085.6 921.3 895.5 1073.9 727.2 1447.6 1835.8 2073.4 2490.7 2790.6 2528.4 2673.7 2803.8 3121.2 2789.5 3610.5 1722.0
1864.9 2252.0 2265.8 2359.4 2936.0 3605.0 5051.9 5304.4 5802.5 6704.3 11615.0 10981.8 11781.0 10880.5 11022.2 11978.5 11744.7 13238.9 14404.6 14254.3 17559.3 15734.1 17344.4 17151.6 18888.4 19419.0 19851.4 26893.7 30739.0 37905.6 32473.6 18222.1
P : Provisional (Up to 02.01.2013) Source : Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. Notes : 1. Figures of authorization have been arrived at by applying the average exchange rate of the rupee with individual donor currencies. 2. Figures of utilization are at current rates applicable on the date of transaction. 3. Figures of authorization and utilization include loans and grants on both Government and non-Government accounts. 4. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—107
A108
Economic Survey 2012-13 8.1(B) : OVERALL EXTERNAL ASSISTANCE (US$ million) Loans
1 A. AUTHORIZATION 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 P B. UTILIZATION 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 P
Grants
2
3
Total (2+3)
3084.9 2637.5 1644.8 3708.7 4362.1 4484.2 6326.7 8877.0 6069.9 4236.4 4766.0 4275.7 3717.5 3958.2 3249.8 4000.4 4006.8 1979.2 4091.4 3769.3 4438.7 4183.5 3300.8 5212.2 3912.2 6209.8 7182.2 6183.2 10318.0 7881.0 12414.7 4382.7
231.3 437.9 374.2 395.9 256.2 336.1 819.2 147.9 432.6 291.0 364.1 330.7 772.7 343.8 399.0 825.6 566.3 49.9 604.4 206.3 711.1 244.4 525.9 703.7 368.1 773.0 1064.0 271.6 201.8 337.4 229.1 132.6
3316.2 3075.4 2019.0 4104.6 4618.3 4820.3 7145.9 9024.9 6502.5 4527.4 5130.1 4606.4 4490.2 4302.0 3648.8 4826.0 4573.1 2029.1 4695.8 3975.6 5149.8 4427.9 3826.7 5915.9 4280.4 6982.8 8246.1 6454.9 10519.8 8218.3 12643.8 4515.3
1694.2 1975.2 1897.9 1650.4 2037.7 2485.3 3528.0 3272.1 3086.0 3438.7 4317.9 3301.8 3486.0 3184.8 2987.4 3066.8 2917.4 2936.0 3080.8 2967.2 3306.3 2946.6 3416.3 3359.5 3607.0 3918.0 4280.5 4769.3 6130.5 7866.5 5671.7 3010.0
385.3 354.6 293.4 334.1 362.0 336.0 368.2 390.7 399.2 297.8 371.0 287.5 283.4 292.7 319.1 305.6 248.3 213.0 248.2 159.5 297.1 386.6 463.8 570.7 625.3 586.5 666.3 555.1 692.8 624.9 709.5 314.1
2079.5 2329.8 2191.3 1984.5 2399.7 2821.3 3896.2 3662.8 3485.2 3736.5 4688.9 3589.3 3769.4 3477.5 3306.4 3372.4 3165.7 3149.0 3329.0 3126.7 3603.4 3333.2 3880.1 3930.2 4232.3 4265.5 4946.8 5324.4 6823.3 8491.4 6381.1 3324.2
P: Provisional (Up to 02.01.2013) Source : Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. Note : 1. Figures in this table are converted from the preceding table 8.1(A) based on the respective Rupee-US dollar rate. 2. Totals may not tally due to rounding off.
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Economic Survey 2012-13
A109
8.2(A) : AUTHORIZATION OF EXTERNAL ASSISTANCE BY SOURCE ( ` crore) Source and type of assistance 1 I.
2008-09
2006-07
2007-08
2
3
4
11918.5
21150.1
22206.9
19953.6
43501.0
28729.8
46742.6
923.0
2596.4
3928.2
6.2
868.8
1185.1
230.2
722.2
12841.5
23746.5
26135.1
19959.8
44369.8
29914.8
46972.8
18878.8
...
...
...
...
...
...
...
...
5
2009-10 6
2010-11 7
2011-12
2012-13P
2000-01
8
9
Consortium Members (a)
Loans
(b)
Grants Total
18156.6
Country-wise Distribution (i)
Austria Loans
(ii)
Belgium (a) Loans
...
...
...
...
...
...
...
...
(b) Grants
...
...
...
...
...
...
...
...
Total
...
...
...
...
...
...
...
...
(iii) Canada (a) Loans (b) Grants Total (iv)
Denmark
(v)
France
(vi)
Germany
Grants Loans (a) Loans (b) Grants Total
...
...
...
...
...
...
...
...
20.6
...
...
...
...
...
...
...
20.6
...
...
...
...
...
...
...
15.6
...
...
...
...
...
...
...
...
..
...
...
...
...
823.01
...
187.7
116.1
1034.8
762.3
2069.2
1504.0
2960.8
347.3
5.5
152.6
...
...
60.4
12.0
...
24.3
193.2
268.7
1034.8
762.3
2129.6
1516.0
2960.8
371.6
...
...
...
...
...
...
...
...
784.1
7009.1
8247.3
10445.3
11151.4
2557.4
16186.2
8694.0
2.2
2409.4
...
...
7.5
41.9
...
...
786.3
9418.5
8247.3
10445.3
11158.9
2599.3
16186.2
8694.0
(vii) Italy Loans (viii) Japan (a) Loans (b) Grants Total (ix)
Netherlands
(a)
Loans
...
...
...
...
...
...
...
...
(b)
Grants
6.5
...
...
...
...
...
...
...
6.5
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
474.7
...
3895.8
...
379.2
905.3
160.2
688.4
Total (x)
Sweden Grants
(xi)
U.K. Grants
(xii) U.S.A. (a)
Loans
...
...
...
...
...
...
...
...
(b)
Grants
0.8
...
...
...
...
156.6
...
...
Total
0.8
...
...
...
...
156.6
...
...
6816.8
6842.6
7777.9
3247.7
27684.3
8237.1
15419.6
2287.2
391.7
11.5
9.5
3.6
421.7
60.6
70.1
9.5
7208.5
6854.1
7787.4
3251.3
28106.0
8297.7
15489.7
2296.7
4129.9
7182.3
5146.8
5498.4
2596.2
16431.2
11353.0
6828.0
5.4
23.0
22.9
2.6
...
8.7
...
...
4135.3
7205.2
5169.7
5500.9
2596.2
16439.9
11353.0
6828.0
...
...
...
...
...
...
...
...
(xiii) I.B.R.D. (a) Loans (b) Grants Total (xiv) I.D.A. (a) Loans (b) Grants Total
Contd...
http://indiabudget.nic.in A—109
A110
Economic Survey 2012-13 8.2(A) : AUTHORIZATION OF EXTERNAL ASSISTANCE BY SOURCE (Concl.) (` crore)
Source and type of assistance 1 II.
2008-09
2006-07
2007-08
2
3
4
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
5265.6
7120.9
6781.5
8329.8
5467.8
7165.3
12633.9
5709.6
17.6
922.5
366.2
1236.3
88.8
351.5
865.2
...
5283.2
8043.4
7147.7
9566.1
5556.6
7516.8
13499.1
5709.6
...
...
...
...
...
...
...
...
5
2009-10 6
2010-11 7
2011-12
2012-13P
2000-01
8
9
Russia Fed. & East European Countries Loans Country-wise Distribution (i) Russia Fed.
Loans III. Others (a) Loans (b) Grants Total (i)
Switzerland Grants
(ii)
European Economic Community Grants O.P.E.C. Fund
...
844.3
...
1147.5
...
4.3
...
...
(iii)
Loans Saudi Arab Fund for
...
...
...
137.2
...
...
...
...
(iv)
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
... ...
186.7 64.5
65.2 0.4
276.9 2.6
197.9 4.94
87.9 ...
426.5 ...
... ...
Total (vii) IMF Trust Fund
...
251.2
65.6
279.5
202.8
87.9
426.5
...
Loans (viii) International Sugar Org.
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
(a) Loans (b) Grants
5265.6 ...
6934.2 ...
6716.3 ...
7915.7 ...
5269.9 ...
7077.5 ...
12207.4 ...
5709.6 ...
Total Spain
5265.6
6934.2
6716.3
7945.7
5269.9
7077.5
12207.4
5709.6
(a) Loans (b) Grants
... ...
... ...
... ...
... ...
... ...
... ...
... ...
... ...
Total Norway
...
...
...
...
...
...
...
...
(a) Loans (b) Grants
... ...
... ...
... ...
... ...
... ...
... ...
... ...
... ...
...
...
...
...
...
...
...
...
... ...
... ...
... ...
... ...
... ...
... ...
... ...
... ...
...
...
...
...
...
...
...
...
Development Loans (v)
(vi)
Kuwait Fund for Arabic Economic Development Grants IFAD (International Fund for Agricultural Development (a) Loans (b) Grants
(ix)
(x)
(xi)
Loans ADB
Total (xii) Australia (a) Loans (b) Grants Total (xiii) Other International Institutionsa Grants
...
13.7
365.8
86.1
83.8
347.2
865.2
...
Grand Total (a) Loans
18124.7 17184.1
31789.9 28271.0
33282.8 28988.4
29525.9 28283.4
49926.3 48968.8
37431.6 35895.1
60472.0 59376.5
24588.3 23866.1
(b) Grants
940.6
3518.9
4294.4
1242.5
957.5
1536.5
1095.5
722.2
Source : Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. P : Provisional (Upto 02.01. 2013) ... Nil or Negligible a Other International Institutions include UNDP, UNFPA, Global Fund, IDF(WB),UN-FAO and UPU (Universal Postal Union). Note : 1. Figures of authorization of external assistance include agreements signed on Government and non-Government accounts. 2. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—110
Economic Survey 2012-13
A111
8.2(B) : AUTHORIZATION OF EXTERNAL ASSISTANCE BY SOURCE (US$ million) Source and type of assistance
2006-07
2007-08
2
3
4
2614.3
4645.7
5502.0
4362.2
9165.9
6307.8
9773.2
202.5
570.3
973.2
1.4
183.1
260.2
48.1
132.6
2816.8
5216.0
6475.2
4363.6
9349.0
6568.0
9821.3
3466.8
...
...
...
...
...
...
...
...
(a) Loans
...
...
...
...
...
...
...
...
(b) Grants
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
1 I.
2008-09 5
2009-10 6
2010-11 7
2011-12
2012-13P
2000-01
8
9
Consortium Members (a)
Loans
(b)
Grants Total
3334.2
Country-wise Distribution (I)
Austria Loans
(Ii)
Belgium
Total (Iii) Canada (a) Loans (b) Grants Total (Iv)
Denmark
(v)
France
(vi)
Germany
Grants Loans (a) Loans (b) Grants Total
...
...
...
...
...
...
...
...
20.6
...
...
...
...
...
...
...
20.6
...
...
...
...
...
...
...
15.6
...
...
...
...
...
...
...
...
...
...
...
...
...
172.1
...
187.7
25.5
256.4
166.7
436.0
330.2
619.1
63.8
5.5
33.5
...
...
12.7
2.6
...
4.5
193.2
59.0
256.4
166.7
448.7
332.8
619.1
68.3
...
...
...
...
...
...
...
...
784.1
1539.6
2043.4
2283.5
2349.7
561.5
3384.3
1596.5
2.2
529.2
...
...
1.6
9.2
...
...
786.3
2068.8
2043.4
2283.5
2351.2
570.7
3384.3
1596.5
(vii) Italy Loans (viii) Japan (a) Loans (b) Grants Total (Ix)
Netherlands (a) Loans
...
...
...
...
1.6
...
...
...
(b) Grants
6.5
...
...
...
...
...
...
...
6.5
...
...
...
1.6
...
...
...
...
...
...
...
...
...
...
...
474.7
...
965.2
...
79.9
198.8
33.5
126.4
Total (x)
Sweden Grants
(xi)
U.K. Grants
(xii) U.S.A. Loans
...
...
...
...
...
...
...
...
(b) Grants
(a)
0.2
...
...
...
...
34.4
...
...
0.2
...
...
...
...
34.4
...
...
1495.3
1503.0
1927.1
710.0
5833.2
1808.5
3224.0
420.0
85.9
2.5
2.4
0.8
88.9
13.3
14.7
1.8
1581.2
1505.5
1929.4
710.8
5922.1
1821.8
3238.7
421.8
905.9
1577.6
1275.2
1202.0
547.0
3607.6
2373.7
1253.9
1.2
5.0
5.7
0.6
...
1.9
...
...
907.1
1582.7
1280.9
1202.6
547.0
3609.5
2373.7
1253.9
...
...
...
...
...
...
...
...
Total (xiii) I.B.R.D. (a) Loans (b) Grants Total (xiv) I.D.A. (a) Loans (b) Grants Total II.
Russia Fed. & East European Countries Loans
Contd...
http://indiabudget.nic.in A—111
A112
Economic Survey 2012-13 8.2(B) : AUTHORIZATION OF EXTERNAL ASSISTANCE BY SOURCE (Concl.) (US$ million)
Source and type of assistance
2000-01
1
2
2006-07 3
2007-08 4
2008-09 5
2009-10 6
2010-11 7
2011-12
2012-13 P
8
9
Country-Country-wise Distribution (I) Russia Fed. Loans
...
...
...
...
...
...
...
...
1155.0
1564.1
1680.2
1821.0
1152.1
1573.2
1282.0
1048.5
3.9
202.6
90.7
270.3
18.7
77.2
179.2
...
1158.9
1766.8
1770.9
2091.3
1170.8
1650.4
1461.2
1048.5
...
...
...
...
...
...
...
...
...
185.5
...
250.9
...
0.9
...
...
...
...
30.0
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
III. Others (a)
Loans
(b)
Grants Total
(i)
Switzerland Grants
(ii)
European Economic Community Grants
(iii) O.P.E.C. Fund Loans ... (iv) Saudi Arab Fund for Development Loans ... (v)
Kuwait Fund for Arabic Economic Development Grants
(vi)
IFAD (International Fund for Agricultural Development) (a)
Loans
...
41.0
16.2
60.5
41.7
19.3
...
...
(b)
Grants
...
14.2
0.1
0.6
1.04
...
...
...
Total
...
55.2
16.3
61.1
42.7
19.3
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
1155.0
1523.1
1664.0
1730.5
1110.4
1553.9
1282.0
1048.5
...
...
...
...
...
...
...
...
1155.0
1523.1
1664.0
1730.5
1110.4
1553.9
1282.0
1048.5
(vii) IMF Trust Fund Loans ... (viii) International Sugar Org. Loans ... (ix)
ADB (a)
Loans
(b)
Grants Total
(x)
(xi)
Spain (a)
Loans
...
...
...
...
...
...
...
...
(b)
Grants
...
...
...
...
...
...
...
...
Total
...
...
...
...
...
...
...
...
Norway (a)
Loans
...
...
...
...
...
...
...
...
(b)
Grants
...
...
...
...
...
...
...
...
Total
...
...
...
...
...
...
...
...
(xii) Australia (a)
Loans
...
...
...
...
...
...
...
...
(b)
Grants
...
...
...
...
...
...
...
...
Total
...
...
...
...
...
...
...
...
(xiii) Other International Institutionsa Grants
...
3.0
90.6
18.8
17.7
76.2
179.2
...
Grand Total
3975.6
6982.8
8246.2
6454.8
10519.8
8218.4
8019.2
4515.3
(a)
Loans
3769.3
6209.8
7182.2
6183.2
10318.0
7881.0
7829.9
4382.7
(b)
Grants
206.3
773.0
1064.0
271.6
201.8
337.4
189.3
132.6
Source : Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. P : Provisional (Upto 02.01. 2013) ... Nil or Negligible a Other International Institutions include UNDP, UNFPA, Global Fund, IDF(WB), UN-FAO and UPU (Universal Postal Union). Note : 1. Figures in this table are converted from the preceding table 8.2(A) based on the respective Rupee-US dollar rates. 2. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—112
Economic Survey 2012-13
A113
8.3(A) : UTILIZATION OF EXTERNAL ASSISTANCE BY SOURCE (` crore) Source and type of assistance 1
2000-01 2
2006-07 3
Consortium Members (a) Loans 11168.6 122468.4 (b) Grants 634.0 1650.9 Total 11802.6 124119.4 Country-wise Distribution (i) Austria (a) Loans ... ... (b) Grants ... ... Total ... ... (ii) Belgium Loans ... ... (iii) Canada (a) Loans ... ... (b) Grants 2.9 2.0 Total 2.9 2.0 (iv) Denmark (a) Loans ... ... (b) Grants 49.5 -15.4 Total 49.5 -15.4 (v) France (a) Loans 65.2 4.4 (b) Grants ... ... Total 65.2 4.4 (vi) Germany (a) Loans 318.9 180.3 (b) Grants 67.8 213.3 Total 386.7 393.5 (vii) Italy Loans ... ... (viii) Japan (a) Loans 2714 2125.3 (b) Grants 15.8 53.5 Total 2729.8 2178.8 (ix) Netherlands (a) Loans 49.5 ... (b) Grants 70.3 4.5 Total 70.3 4.5 (x) Sweden (a) Loans ... ... (b) Grants ... ... Total ... ... (xi) U.K. (a) Loans ... ... (b) Grants 307.3 1318.2 Total 307.3 1318.2 (xii) U.S.A. (a) Loans ... ... (b) Grants 81.1 44.6 Total 81.1 44.6 (xiii) I.B.R.D. (a) Loans 3222.4 4459.4 (b) Grants 24.5 15.3 Total 3246.9 4474.6 (xiv) I.D.A. (a) Loans 4848.1 4291.4 (b) Grants 14.8 15.0 Total 4862.9 4306.4 (xv) IFAD (International Fund for Agricultural Development) (a) Loans 40.1 111.9 (b) Grants ... ... Total 40.1 111.9 (xvi) IMF Trust Fund ... ...
2007-08 4
2008-09 5
2009-10 6
2010-11 7
2011-12 8
2012-13P 9
I.
12256.6 1797.7 14054.2
16845.3 1883.8 18729.1
21001.5 1819.5 22821.0
27286.3 2018.5 29304.8
22335.5 2601.2 24936.7
10879.9 1071.5 11951.4
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
...
...
...
...
...
...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... -2.0 -2.0
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
0.1 ... 0.1
22.8 ... 22.8
... ... ...
... ... ...
... ... ...
0.1 ... 0.1
146.2 99.0 245.2
844.5 98.6 943.1
486.4 78.0 564.4
1076.9 276.2 1353.1
1556.8 783.8 2340.6
407.6 51.1 458.7
...
1.9
...
...
...
...
3471.4 6.6 3478.0
5861.5 ... 5861.5
6553.4 2.6 6556.0
6582.2 1.5 6583.7
8474.8 43.5 8518.3
4290.7 ... 4290.7
... -1.2 -1.2
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... 1599.3 1599.3
... 1710.0 1710.0
... 1707.4 1707.4
... 1682.2 1682.2
... 1689.4 1689.4
... 856.4 856.4
... 64.1 64.1
... 57.2 57.2
... 14.2 14.2
... 30.6 30.6
... 55.1 55.1
... 10.5 10.5
4391.0 23.1 4414.1
4076.0 5.7 4081.7
7472.1 11.8 7483.8
14533.4 24.1 14557.5
4861.9 27.2 4889.1
3365.8 153.7 3519.5
3263.1 8.7 3271.8
5164.1 12.3 5176.4
5566.6 5.6 5572.2
4873.3 3.9 4877.2
7406.1 2.2 7408.3
2793.5 -0.2 2793.4
68.3 29.9 98.2 ...
38.5 10.6 49.0 ...
64.4 14.1 78.5 ...
99.1 0.3 99.4 ...
142.6 5.5 148.1 ...
108.9 ... 108.9 ... Contd...
http://indiabudget.nic.in A—113
A114
Economic Survey 2012-13 8.3(A) : UTILIZATION OF EXTERNAL ASSISTANCE BY SOURCE (Concl.) (` crore)
Source and type of assistance
2000-01
1 II.
2
2006-07
2007-08
3
2008-09
2009-10
2010-11
2011-12 2012-13P
4
5
6
7
8
9
Russia Fed.& East European Countries Loans
130.1
1407.7
984.9
874.5
923.0
220.5
35.9
22.1
130.1
1407.7
984.9
874.5
923.0
220.5
35.9
22.1
...
...
...
...
...
...
...
...
2228.5
4422.2
4921.2
7244.5
6616.2
7829.8
6527.7
5620.2
93.2
877.4
876.0
920.1
1301.7
771.0
1009.4
650.5
2321.7
5299.7
5797.2
8164.6
7918.0
8600.8
7537.0
6270.7
...
...
...
...
...
...
...
... ...
Country-wise Distribution (i)
Russia Federation Loans
(ii)
Reps. of Czech & Slovak Loans
III. Others (a)
Loans
(b)
Grants Total
Country-wise Distribution (i)
Abu Dhabi Fund Loans
(ii)
Switzerland (a)
Loans
...
1.5
...
...
...
...
...
(b)
Grants
...
1.0
...
-0.5
...
...
...
...
Total
...
2.6
...
-0.5
...
...
...
...
50.0
375.1
557.11
583.0
889.7
501.7
795.8
650.5
36.3
394.4
131.76
239.6
315.97
269.0
208.1
...
41.5
...
...
13.3
17.6
1.0
15.5
18.1
...
...
...
...
...
...
...
... ...
(iii) Other International Institutionsa Grants (iv)
European Economic Community
(v)
Oil Producing & Exporting
Grants Countries Loans (vi)
Saudi Arab Fund for Development Loans
(vii) Norway (a)
Loans
...
...
...
...
...
...
...
(b)
Grants
6.9
...
...
...
...
...
...
...
Total
6.9
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
(viii) Spain Loans (ix)
Kuwait Fund for Arabic Economic Development
(x)
(a)
Loans
...
...
...
...
...
...
...
(b)
Grants
...
...
...
...
...
...
...
...
Total
...
...
...
...
...
...
...
...
2146.9
4308.8
4836.0
7192.8
6534.3
7729.8
6369.5
5493.3
...
106.9
157.1
87.4
81.9
...
...
...
2146.9
4415.7
4993.1
7280.2
6616.2
7729.8
6369.5
5493.3
ADB (a)
Loans
(b)
Grants Total
(xi)
Australia Loans
Grand Total (a)
Loans
(b)
Grants
...
...
...
...
...
...
...
...
14254.3
19419.0
19851.4
26893.7
30739.0
37905.6
32473.6
18222.1
13527.1
16890.6
17177.7
24089.9
27617.8
35116.1
28863.1
16500.1
727.2
2528.4
2673.7
2803.8
3121.2
2789.5
3610.5
1722.0
Source : Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. P : Provisional (Upto 02.01.2013) ... Nil or Negligible a Other International Institutions include UNICEF, UNDP, ILO, WHO, UNFPA, UNESCO, UPU, WFP, Global Fund, IDF (WB), UN-FAO
and Ford Foundation. Notes : 1. Utilization figures are exclusive of suppliers’ credit and commercial borrowings. 2. Utilization of assistance is on Government and Non-Govt. accounts. 3. Authorization figures include agreement signed on Govt. and Non-Govt. accounts. 4. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—114
Economic Survey 2012-13
A115
8.3(B) : UTILIZATION OF EXTERNAL ASSISTANCE BY SOURCE (US$ million) Source and type of assistance 1 I.
Consortium Members (a) Loans (b) Grants Total Country-wise Distribution (i) Austria (a) Loans (b) Grants Total (ii) Belgium Loans (iii) Canada (a) Loans (b) Grants Total (iv) Denmark (a) Loans (b) Grants Total (v) France (a) Loans (b) Grants Total (vi) Germany (a) Loans (b) Grants Total (vii) Italy Loans (viii) Japan (a) Loans (b) Grants Total (ix) Netherlands (a) Loans (b) Grants Total (x) Sweden (a) Loans (b) Grants Total (xi) U.K. (a) Loans (b) Grants Total (xii) U.S.A. (a) Loans (b) Grants Total (xiii) I.B.R.D. (a) Loans (b) Grants Total (xiv) I.D.A. (a) Loans (b) Grants Total (xv) IFAD (International Fund for Agricultural Development) (a) Loans
2000-01 2
2006-07
2007-08
3
4
2008-09 5
2009-10 6
2010-11 7
2011-12 2012-13P 8
9
2449.8 139.1 2588.9
2892.2 383.0 3275.2
3054.2 448.0 3502.2
3335.1 373.0 3708.0
4661.8 403.9 5065.7
6112.5 452.2 6564.7
4389.0 511.1 4900.1
1984.8 195.5 2180.2
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
...
...
...
...
...
...
...
...
... 0.6 0.6
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... 10.9 10.9
... -3.6 -3.6
... -0.5 -0.5
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
14.3 ... 14.3
1.0 ... 1.0
... ... ...
4.5 ... 4.5
... ... ...
... ... ...
... ... ...
0.01 ... 0.01
70 14.9 84.9
41.8 49.5 91.3
36.4 24.7 61.1
167.2 19.5 186.7
108.0 17.3 125.3
241.2 61.9 303.1
305.9 154.0 459.9
74.4 9.3 83.7
...
...
...
0.4
...
...
...
...
595.3 3.5 598.8
493.0 12.4 505.4
865.0 1.7 866.7
1160.5 ... 1160.5
1454.7 0.6 1455.3
1474.5 0.3 1474.8
1665.3 8.5 1673.9
782.7 ... 782.7
... 15.4 15.4
... 1.1 1.1
... -0.3 -0.3
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... ... ...
... 67.4 67.4
... 305.8 305.8
... 398.5 398.5
... 338.5 338.5
... 379.0 379.0
... 376.8 376.8
... 332.0 332.0
... 156.2 156.2
... 17.8 17.8
... 10.3 10.3
... 16.0 16.0
... 11.3 11.3
... 3.1 3.1
... 6.8 6.8
... 10.8 10.8
... 1.9 1.9
706.8 5.4 712.2
1034.4 3.5 1038.0
1094.2 5.8 1100.0
807.0 1.1 808.1
1658.6 2.6 1661.2
3255.7 5.4 3261.1
955.4 5.3 960.7
614.0 28.0 642.0
1063.4
995.5
813.1
1022.4
1235.6
1091.7
1455.3
509.6
3.2 1065.6
3.5 998.9
2.2 815.3
2.4 1024.8
1.3 1236.9
0.9 1092.6
0.4 1455.7
... 509.6
8.8
26.0
17.0
7.6
14.3
22.2
28.0
19.9
(b) Grants Total
... 8.8
... 26.0
7.5 24.5
2.1 9.7
3.1 17.4
0.1 22.3
1.1 29.1
... 19.9
(xvi) IMF Trust Fund
...
...
...
...
...
...
...
... Contd...
http://indiabudget.nic.in A—115
A116
Economic Survey 2012-13 8.3(B) : UTILIZATION OF EXTERNAL ASSISTANCE BY SOURCE (Concl.) (US$ million)
Source and type of assistance 1
2000-01
2006-07
2007-08
2008-09
2009-10
2010-11
2
3
4
5
6
7
28.5
326.5
245.4
173.1
204.9
28.5
326.5
245.4
173.1
...
...
...
(a) Loans
488.8
1025.8
(b) Grants
20.4
203.5
509.2
2011-12
2012-13P
8
9
49.4
7.1
4.0
204.9
49.4
7.1
4.0
...
...
...
...
...
1226.3
1434.3
1468.6
1754.0
1282.7
1025.3
218.3
182.2
289.0
172.7
198.3
118.7
1229.3
1444.6
1616.4
1757.6
1926.7
1481.0
1144.0
...
...
...
...
...
...
...
...
(a) Loans
...
0.4
...
...
...
...
...
...
(b) Grants
...
0.2
...
-0.1
...
...
...
...
...
0.6
...
-0.1
...
...
...
...
11.0
87.0
138.8
115.4
197.5
112.4
156.4
118.7
8.0
91.5
32.8
47.4
70.14
60.3
40.9
...
9.1
...
...
2.6
3.9
0.2
3.1
3.3
...
...
...
...
...
...
...
...
(a) Loans
...
...
...
...
...
...
...
...
(b) Grants
1.5
...
...
...
...
...
...
...
1.5
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
(a) Loans
...
...
...
...
...
...
...
...
(b) Grants
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
...
470.9
999.5
1205.1
1424.0
1450.4
1731.6
1251.6
1002.1
...
24.8
39.2
17.3
18.2
...
...
...
470.9
1024.3
1244.2
1441.3
1468.6
1731.6
1251.6
1002.1
II. Russia Fed.& East European Countries Loans Country-wise Distribution (i)
Russia Federation.
(ii)
Reps. of Czech & Slovak
Loans Loans III. Others
Total Country-wise Distribution (i)
Abu Dhabi Fund
(ii)
Switzerland
Loans
Total (iii) Other International Institutionsa Grants (iv)
European Economic Community
(v)
Oil Producing & Exporting
Grants Countries Loans (vi)
Saudi Arab Fund for Development Loans
(vii) Norway
Total (viii) Spain Loans (ix)
Kuwait Fund for Arabic Economic Development
Total (x)
ADB (a) Loans (b) Grants Total
(xi)
Australia Loans
Grand Total (a) Loans (b) Grants Source : ... a Note :
...
...
...
...
...
...
...
...
3126.7
4265.5
4946.8
5324.4
6823.3
8491.4
6381.2
3324.1
2967.2
3918.0
4280.5
4769.3
6130.5
7866.5
5671.7
3010.0
159.5
586.5
666.3
555.1
692.8
624.9
709.5
314.1
Aid Accounts and Audit Division, Department of Economic Affairs, Ministry of Finance. P : Provisional (Upto 02.01.2013) Nil or Negligible Other International Institutions include UNICEF, UNDP, ILO, WHO, UNFPA, UNESCO, UPU, WFP, Global Fund, IDF (WB), UN-FAO 1. Figures in this table are converted from the preceding table 8.3(A)based on the respective Rupee-US dollar rates. 2. Totals may not tally due to rounding off.
http://indiabudget.nic.in A—116
http://indiabudget.nic.in
A—117
IV. EXPORT CREDIT a) Buyers’ credit b) Suppliers’ credit c) Export credit component of bilateral credit
MULTILATERAL A. Government Borrowing (i) Concessional a) IDA b) Others (ii) Non-concessional a) IBRD b) Others B. Non-Government Borrowing (i) Concessional (ii) Non-concessional a) Public Sector i) IBRD ii) Others b) Financial Institutions i) IBRD ii) Others c) Private Sector i) IBRD ii) Others II. BILATERAL A. Government Borrowing (i) Concessional (ii) Non-concessional B.Non-Government Borrowing i) Concessional a) Public Sector b) Financial Institutions c) Private Sector ii) Non-concessional a) Public Sector b) Financial Institutions c) Private Sector III. IMFa
I.
155,633 138,023 96,177 94,848 1,329 41,846 28,012 13,834 17,610 0 17,610 12,729 7,298 5,431 3,736 1,049 2,687 1,145 929 216 74,762 56,302 55,418 884 18,460 6,885 4,278 2,607 0 11,575 4,822 3,708 3,045 0 26,110 16,147 5,144 4,819
2002 142,683 129,727 102,559 101,122 1,437 27,168 19,069 8,099 12,956 0 12,956 9,255 4,378 4,877 3,177 525 2,652 524 298 226 79,921 60,243 59,688 555 19,678 8,013 5,152 2,861 0 11,665 5,116 3,571 2,978 0 23,750 13,421 5,139 5,190
2003 131,105 120,073 101,490 100,065 1,425 18,583 14,074 4,509 11,032 0 11,032 7,916 4,402 3,514 2,902 381 2,521 214 0 214 77,084 58,121 57,742 379 18,963 8,876 5,759 3,117 0 10,087 4,851 3,119 2,117 4,381 20,553 11,061 4,471 5,021
2004 138,897 127,782 105,114 103,671 1,443 22,668 16,500 6,168 11,115 0 11,115 8,000 4,462 3,538 2,789 252 2,537 326 0 326 74,530 57,458 57,207 251 17,072 7,471 5,653 1,818 0 9,601 4,353 2,847 2,401 4,503 21,976 13,040 3,961 4,975
2005 145,503 133,800 105,852 104,457 1,395 27,948 19,626 8,322 11,703 0 11,703 8,510 4,594 3,916 2,628 630 1,998 565 0 565 70,302 54,593 54,468 125 15,709 6,949 5,285 1,664 0 8,760 3,628 2,386 2,746 4,378 24,175 16,088 3,351 4,736
2006
2007 154,053 141,746 108,448 107,019 1,429 33,298 21,864 11,434 12,307 0 12,307 9,315 4,550 4,765 2,414 655 1,759 578 0 578 70,034 53,810 53,810 0 16,224 1,727 1,241 486 0 14,497 7,420 3,828 3,249 4,484 31,237 23,617 2,941 4,679
at end-March
157,901 144,627 107,395 105,947 1,448 37,232 22,631 14,601 13,274 0 13,274 10,352 4,690 5,662 2,350 593 1,757 572 0 572 78,802 59,391 59,391 0 19,411 1,737 1,226 511 0 17,674 10,097 3,735 3,842 4,479 41,296 33,134 2,998 5,164
2008
8.4 (A) : INDIA’S EXTERNAL DEBT OUTSTANDING
201,425 181,997 127,771 126,127 1,644 54,226 29,948 24,278 19,428 0 19,428 14,298 7,105 7,193 3,721 744 2,977 1,409 0 1,409 104,997 74,662 74,662 0 30,335 3,262 1,156 2,106 0 27,073 15,076 4,311 7,686 5,188 73,772 64,046 3,234 6,492
2009 193,436 170,722 116,046 114,552 1,494 54,676 28,874 25,802 22,714 0 22,714 14,919 8,544 6,375 5,385 1,343 4,042 2,410 0 2,410 101,976 71,584 71,584 0 30,392 3,169 1,121 2,048 0 27,223 13,845 3,436 9,942 27,264 76,011 66,849 2,937 6,225
2010 216,672 190,326 120,653 119,068 1,585 69,673 39,218 30,455 26,346 0 26,346 15,802 9,193 6,609 7,511 1,899 5,612 3,033 0 3,033 114,905 80,406 80,406 0 34,499 4,101 1,621 2,480 0 30,398 13,789 3,754 12,855 28,163 83,123 73,284 2,847 6,992
2011 257,091 222,582 138,691 136,816 1,875 83,891 45,331 38,560 34,509 0 34,509 19,407 11,092 8,315 10,290 2,707 7,583 4,812 0 4,812 136,275 91,641 91,641 0 44,634 6,821 4,137 2,684 0 37,813 14,250 3,886 19,677 31,528 97,150 85,953 3,228 7,969
2012PR
284,573 244,539 149,810 147,783 2,027 94,729 51,010 43,719 40,034 0 40,034 22,859 12,661 10,198 11,591 3,008 8,583 5,584 0 5,584 154,852 104,968 104,968 0 49,884 7,887 4,873 3,014 0 41,997 15,829 4,267 21,901 33,996 107,416 94,757 3,531 9,128
2012PR
Contd....
271,604 231,302 142,459 140,490 1,969 88,843 47,340 41,503 40,302 0 40,302 21,620 12,053 9,567 13,296 2,816 10,480 5,386 0 5,386 147,462 100,016 100,016 0 47,446 8,105 5,214 2,891 0 39,341 14,769 3,984 20,588 32,331 100,274 88,073 3,504 8,697
2012 QE
end-June end Sept.
(` crore)
Economic Survey 2012-13
A117
http://indiabudget.nic.in
A—118 0
2) Commercial banks 482,328
0 0
GRAND TOTAL ( VIII+IX )
0
e) External Debt Liabilities of: 1) Central Bank 498,804
0
0 0
0
0
495,459
0
0 0
0
0
17,930 0
1,321 17,930
19,251
476,208
10,539 1,317
11,856
135,618
3,698
50,346 41,567
95,611
2004
586,305
0
0 0
0
6,355
32,922 38,251
0 71,173
77,528
508,777
8,887 1,184
10,071
143,267
3,645
62,896 48,992
115,533
2005
620,522
0
0 0
0
624
38,788 47,743
0 86,531
87,155
533,367
8,112 1,072
9,184
161,834
3,371
73,508 41,112
117,991
2006
751,402
4,746
6,931 2,185
712
1,732
52,188 61,068
0 113,256
122,631
628,771
7,533 975
8,508
179,786
5,504
107,145 68,020
180,669
2007
2,363
6,255 3,892
534
10,522
118,936 84,409
0 203,345
220,656
921,469
6,935 825
7,760
210,118
6,998
219,925 91,286
318,209
2009
6,416 731
7,147
230,812
3,243
261,650 130,065
394,958
2011
6,220 702
6,922
299,840
2,553
375,371 158,641
536,565
2012PR
6,202 676
6,878
342,775
2,070
419,615 165,445
587,130
2012PR
6,199 675
6,874
353,167
1,866
407,474 165,294
574,634
2012 QE
3,162
6,301 3,139
467
15,153
126,391 87,876
0 214,267
236,188
4,011
4,704 693
225
24,214
157,806 103,200
0 261,006
290,149
17,497
18,368 871
326
48,066
200,454 132,748
0 333,202
399,962
8,134
9,115 981
319
46,556
254,628 142,392
0 397,020
453,010
8,175
9,163 988
302
43,351
264,643 127,883
0 392,526
445,342
942,450 1,075,780 1,365,371 1,517,620 1,486,346
6,709 771
7,480
217,062
3,694
202,350 113,177
319,221
2010
897,290 1,142,125 1,178,638 1,365,929 1,765,333 1,970,630 1,931,688
7,660
12,118 4,458
620
2,603
91,502 76,038
0 167,540
182,881
714,409
7,172 893
8,065
174,623
6,025
160,577 82,641
249,243
2008
( ` crore) end-June end Sept.
Source: Ministry of Finance (Department of Economic Affairs), Ministry of Defence,Reserve Bank of India, Securities & Exchange Board of India (SEBI). PR Partially Revised QE Quick Estimates IFC(W): International Finance Corporation, Washington D.C. FII : Foreign Institutional Investors a Relates to SDR allocations from March, 2004 onwards. b includes Financial Lease since 1996. c Also includes India Development Bonds (IDBs), Resurgent India Bonds (RIBs), India Millenium Deposits (IMDs),also includes Foreign Currency Convertible Bonds (FCCBs) and net investment by 100% FII debt funds. FCCB debt has been adjusted since end-March, 1998 after netting out conversion into equity and redemptions. d Figures include accrued interest. e Rupee denominated debt owed to Russia and payable through exports. Note : NRO Deposits are included under NRI Deposits from the quarter ended June 2005. Supplier’s Credits upto 180 days and FII investment in short-term debt instruments are included under short-term debt from the quarter ended March 2005. Vostro balances / Nostro overdrafts of commercial banks, balances of foreign central banks/international institutions with RBI and invsetment in T-bills/ securities by foreign central banks/ international institutions have been included in external debt from the quarter ended March 2007.
X.
0
d) Investment in Treasury Bills by foreign central banks and other international institutions etc.
12,860 0
9,320 12,860
4,724 8,672 8,672 0
22,180
476,624
11,946 1,459
13,396
c) FII Investment in Govt. Treasury Bills and other instruments
1) Above 6 Months 2) Upto 6 Months
a) NRI deposits (up to one year maturity)d b) Trade-Related Credits
IX. SHORT-TERM DEBT
468,932
13,198 1,609
a) Defence b) Civilian
VIII. TOTAL LONG TERM DEBT (I TO VII)
14,807
13,405
110,022
83,712
VII. RUPEE DEBTe
46,929 57,495
48,683 62,714
VI. NRI DEPOSITS(Above one year Maturity)d
106,843
113,908
2,419
b
2,511
a) Commercial bank loans b) Securitized borrowings c
COMMERCIAL BORROWINGS
2003
c) Loans/securitized borrowings etc., with multilateral/bilateral guarantee + IFC(W)
V.
2002
at end-March
8.4 (A) : INDIA’S EXTERNAL DEBT OUTSTANDING (Contd.)
A118 Economic Survey 2012-13
MULTILATERAL A. Government Borrowing (i) Concessional a) IDA b) Others (ii) Non-concessional a) IBRD b) Others B. Non-Government Borrowing (i) Concessional (ii) Non-concessional a) Public Sector i) IBRD ii) Others b) Financial Institutions i) IBRD ii) Others c) Private Sector i) IBRD ii) Others II. BILATERAL A. Government Borrowing (i) Concessional (ii) Non-concessional B. Non-Government Borrowing i) Concessional a) Public Sector b) Financial Institutions c) Private Sector ii) Non-concessional a) Public Sector b) Financial Institutions c) Private Sector III. IMFa IV. EXPORT CREDIT a) Buyers’ credit b) Suppliers’ credit c) Export credit component of bilateral credit
I.
29,994 27,271 21,560 21,258 302 5,711 4,009 1,702 2,723 0 2,723 1,945 920 1,025 668 110 558 110 63 47 16,802 12,664 12,547 117 4,138 1,685 1,083 602 0 2,453 1,076 751 626 0 4,995 2,823 1,081 1,091
0 5,368 3,311 1,069 988
2003
31,899 28,290 19,713 19,440 273 8,577 5,742 2,835 3,609 0 3,609 2,609 1,496 1,113 766 215 551 234 190 44 15,323 11,540 11,359 181 3,783 1,411 877 534 0 2,372 988 760 624
2002
http://indiabudget.nic.in
A—119 1,008 4,697 2,546 1,029 1,122
29,297 26,826 22,674 22,356 318 4,152 3,144 1,008 2,471 0 2,471 1,770 984 786 651 85 566 50 0 50 17,277 12,987 12,900 87 4,290 1,983 1,287 696 0 2,307 1,110 710 487
2004
1,029 5,022 2,980 905 1,137
31,744 29,204 24,023 23,693 330 5,181 3,771 1,410 2,540 0 2,540 1,828 1,020 808 637 58 579 75 0 75 17,034 13,132 13,074 58 3,902 1,708 1,292 416 0 2,194 995 650 549
2005
981 5,420 3,607 751 1,062
32,620 29,996 23,731 23,418 313 6,265 4,400 1,865 2,624 0 2,624 1,908 1,030 878 589 141 448 127 0 127 15,761 12,239 12,211 28 3,522 1,558 1,185 373 0 1,964 813 535 616
2006
2007
1,029 7,165 5,417 675 1,073
35,337 32,514 24,876 24,548 328 7,638 5,015 2,623 2,823 0 2,823 2,136 1,043 1,093 554 150 404 133 0 133 16,065 12,344 12,344 0 3,721 396 285 111 0 3,325 1,702 878 745
at end-March
1,120 10,328 8,287 750 1,291
39,490 36,171 26,859 26,497 362 9,312 5,660 3,652 3,319 0 3,319 2,589 1,173 1,416 587 148 439 143 0 143 19,708 14,853 14,853 0 4,855 435 307 128 0 4,420 2,525 934 961
2008
8.4 (B) : INDIA’S EXTERNAL DEBT OUTSTANDING
1,018 14,481 12,572 635 1,274
39,538 35,724 25,080 24,757 323 10,644 5,878 4,766 3,814 0 3,814 2,807 1,395 1,412 730 146 584 277 0 277 20,610 14,655 14,655 0 5,955 641 227 414 0 5,314 2,959 846 1,509
2009
6,041 16,841 14,811 651 1,379
42,857 37,825 25,711 25,380 331 12,114 6,397 5,717 5,032 0 5,032 3,305 1,893 1,412 1,193 298 895 534 0 534 22,593 15,860 15,860 0 6,733 702 248 454 0 6,031 3,072 761 2,198
2010
6,308 18,617 16,415 638 1,564
48,475 42,579 26,992 26,637 355 15,587 8,774 6,813 5,896 0 5,896 3,536 2,057 1,479 1,681 425 1,256 679 0 679 25,712 17,988 17,988 0 7,724 918 363 555 0 6,806 3,087 840 2,879
2011
6,163 18,996 16,801 631 1,564
50,453 43,686 27,221 26,853 368 16,465 8,897 7,568 6,767 0 6,767 3,808 2,177 1,631 2,018 531 1,487 941 0 941 26,725 17,987 17,987 0 8,738 1,339 812 527 0 7,399 2,791 762 3,846
2012
6,037 19,049 16,828 627 1,594
Contd....
6,135 19,000 16,713 665 1,622
50,702 43,147 26,574 26,207 367 16,573 8,831 7,742 7,555 0 7,555 4,037 2,248 1,789 2,496 525 1,971 1,022 0 1,022 27,601 18,657 18,657 0 8,944 1,512 973 539 0 7,432 2,779 746 3,907
2012QE
2012PR 49,727 42,707 26,163 25,809 354 16,544 8,909 7,635 7,020 0 7,020 3,996 2,211 1,785 2,032 525 1,507 992 0 992 27,136 18,332 18,332 0 8,804 1,377 851 526 0 7,427 2,789 749 3,889
end Sep.
end-June
(US $ million)
Economic Survey 2012-13
A119
VIII. TOTAL LONG TERM DEBT (I TO VII)
http://indiabudget.nic.in
A—120
GRAND TOTAL (VIII+IX) Memo Items : Concessional Debtf Concessional Debt to total external debt (per cent) Short-term debt Short-term debt to total external debt (per cent) 38,614 36.8 4,669 4.5
35,517 35.9 2,745 2.8
0 0 0 0
0 0 0 0 104,914
0
0
98,843
4,669 1,962 2,707 2,707 0
100,245
2,745 968 1,777 1,777 0
96,098
40,277 35.8 4,431 3.9
112,653
0 0 0 0
0
4,431 304 4,127 4,127 0
108,222
2,720 2,426 294
31,216
22,007 11,588 9,568 851
2004
41,107 30.7 17,723 13.2
134,002
0 0 0 0
1,452
17,723 0 16,271 7,529 8,742
116,279
2,302 2,031 271
32,743
26,405 14,375 11,197 833
2005
39,559 28.4 19,539 14.0
139,114
0 0 0 0
140
19,539 0 19,399 8,696 10,703
119,575
2,059 1,819 240
36,282
26,452 16,479 9,217 756
2006
2007
39,567 23.0 28,130 16.3
172,360
164 1,590 501 1,089
397
28,130 0 25,979 11,971 14,008
144,230
1,951 1,728 223
41,240
41,443 24,577 15,603 1,263
at end-March
44,164 19.7 45,738 20.4
224,407
155 3,031 1,115 1,916
651
45,738 0 41,901 22,884 19,017
178,669
2,017 1,794 223
43,672
62,334 40,159 20,668 1,507
2008
41,899 18.7 43,313 19.2
224,498
105 1,228 764 464
2,065
43,313 0 39,915 23,346 16,569
181,185
1,523 1,361 162
41,554
62,461 43,169 17,918 1,374
2009
43,931 16.8 52,329 20.1
260,935
103 1,396 695 701
3,357
52,329 0 47,473 28,003 19,470
208,606
1,658 1,487 171
47,890
70,726 44,832 25,075 819
2010
47,499 15.5 64,990 21.2
305,852
50 1,053 155 898
5,424
64,990 0 58,463 35,347 23,116
240,862
1,601 1,437 164
51,682
88,467 58,607 29,134 726
2011
47,901 13.9 78,179 22.6
345,357
64 3,590 170 3,420
9,395
78,179 0 65,130 39,182 25,948
267,178
1,354 1,216 138
58,608
104,879 73,372 31,008 499
2012
47,091 13.5 80,451 23.1
348,763
56 1,619 174 1,445
8,268
80,451 0 70,508 45,220 25,288
268,312
1,219 1,101 118
60,874
48,045 13.2 84,511 23.1
365,315
57 1,739 188 1,551
8,227
84,511 0 74,488 50,220 24,268
280,804
1,302 1,176 126
67,019
109,045 77,324 31,367 354
2012QE
2012PR 104,270 74,520 29,382 368
end-Sep.
end-June
(US $ million)
Source: Ministry of Finance (Department of Economic Affairs), Ministry of Defence,Reserve Bank of India, Securities & Exchange Board of India (SEBI). PR Partially Revised QE Quick Estimates IFC(W): International Finance Corporation, Washington D.C. FII : Foreign Institutional Investors a Relates to SDR allocations from March, 2004 onwards. b includes Financial Lease since 1996. c Also includes India Development Bonds (IDBs), Resurgent India Bonds (RIBs), India Millenium Deposits (IMDs), also includes Foreign Currency Convertible Bonds (FCCBs) and net investment by 100% FII debt funds. FCCB debt has been adjusted since End-March, 1998 after netting out conversion into equity and redemptions. d Figures include accrued interest. e Rupee denominated debt owed to Russia and payable through exports. f The definition of concessional debt here includes concessional categories under multilateral and bilateral debt and rupee debt under item VII. Note: NRO Deposits are included under NRI Deposits from the quarter ended June 2005. Supplier’s Credits upto 180 days and FII investment in short-term debt instruments are included under short-term debt from the quarter ended March 2005. Vostro balances / Nostro overdrafts of commercial banks, balances of foreign central banks/international institutions with RBI and invsetment in T-bills/securities by foreign central banks/ international institutions have been included in external debt from the quarter ended March 2007.
X.
IX. SHORT-TERM DEBT a) NRI deposits (up to one year maturity)d b) Trade-Related Credits 1) Above 6 Months 2) Upto 6 Months c) FII Investment in Govt. Treasury Bills and other instruments d) Investment in Treasury Bills by foreign central banks and other international institutions etc. e) External Debt Liabilities of: 1) Central Bank 2) Commercial banks
2,822 2,515 307
23,160
22,472 9,870 12,093 509
2003
3,034 2,704 330
17,154
VI. NRI DEPOSITS(Above one year maturity)d
VII RUPEE DEBTe a) Defence b) Civilian
23,320 9,962 12,851 507
COMMERCIAL BORROWINGS a) Commercial bank loans b b) Securitized borrowings c c) Loans/securitized borrowings etc., with multilateral/bilateral guarantee + IFC(W)
V.
2002
8.4 (B) : INDIA’S EXTERNAL DEBT OUTSTANDING (Contd.)
A120 Economic Survey 2012-13
Economic Survey 2012-13
A121
9.1 : SELECTED INDICATORS OF HUMAN DEVELOPMENT FOR MAJOR STATES Sl. No.
Life expectancya at birth (2006-2010)
State Male
1
2
Female
Infant Mortality Rate (per 1000 live births) (2011) Total
Male
Birth rate (per 1000)
Death rate (per 1000)
Female
Total
(2011)
(2011)
3
4
5
6
7
8
9
10
1
Andhra Pradesh
63.5
68.2
65.8
40
46
43
17.5
7.5
2
Assam
61.0
63.2
61.9
55
56
55
22.8
8.0
3
Bihar
65.5
66.2
65.8
44
45
44
27.7
6.7
4
Gujarat
64.9
69.0
66.8
39
42
41
21.3
6.7
5
Haryana
67.0
69.5
67.0
41
48
44
21.8
6.5
6
Karnataka
64.9
69.7
67.2
34
35
35
18.8
7.1
7
Kerala
71.5
76.9
74.2
11
13
12
15.2
7.0
8
Madhya Pradesh
61.1
63.8
62.4
57
62
59
26.9
8.2
9
Maharashtra
67.9
71.9
69.9
24
25
25
16.7
6.3
10
Odisha
62.2
63.9
63.0
55
58
57
20.1
8.5
11
Punjab
67.4
71.6
69.3
28
33
30
16.2
6.8
12
Rajasthan
64.7
68.3
66.5
50
53
52
26.2
6.7
13
Tamil Nadu
67.1
70.9
68.9
21
23
22
15.9
7.4
14
Uttar Pradesh
61.8
63.7
62.7
55
59
57
27.8
7.9
15
West Bengal
67.4
71.0
69.0
30
34
32
16.3
6.2
India
64.6
67.7
66.1
43
46
44
21.8
7.1
Source : Sample Registration System, Office of the Registrar General, India, Ministry of Home Affairs. a Bihar,
Madhya Pradesh and Uttar Pradesh excludes Jharkhand, Chhattisgarh and Uttarakhand respectivrly.
http://indiabudget.nic.in A—121
A122
Economic Survey 2012-13 9.2 : GROSS ENROLMENT RATIO IN CLASSES I-V AND VI-VIII AND I-VIII A. All Categories of Students
Sl. No.
States/Union Territorries
1
2
Classes I-V (6-10 years)
Classes VI-VIII (11-13 yrs)
Classes I-VIII (6-13 yrs)
Boys
Girls
Total
Boys
Girls
Total
Boys
Girls
Total
3
4
5
6
7
8
9
10
11
99.7
99.4
99.5
80.3
79.9
80.1
92.2
91.8
92.0
184.5
176.9
180.8
108.5
102.6
105.5
155.7
148.2
152.0
93.1
95.6
94.3
67.2
68.7
67.9
83.0
85.1
84.0
1
Andhra Pradesh
2
Arunachal Pradesh
3
Assam
4
Bihar
131.3
123.6
127.7
68.4
60.4
64.6
106.9
98.5
102.9
5
Chhattisgarh
125.6
120.0
122.8
90.2
84.7
87.5
112.2
106.6
109.4
6
Goa
106.9
101.5
104.3
99.2
92.2
95.8
104.0
98.0
101.0
7
Gujarat
119.4
121.4
120.3
89.5
81.5
85.7
108.2
106.1
107.2
8
Haryana
90.6
100.2
94.9
82.3
84.8
83.5
87.5
94.2
90.5
9
Himachal Pradesh
109.1
109.4
109.2
116.0
111.4
113.8
111.7
110.1
111.0
10
Jammu & Kashmir
108.3
111.7
109.9
96.6
92.6
94.7
103.9
104.5
104.2
11
Jharkhand
145.9
148.5
147.1
81.7
81.0
81.3
120.6
121.5
121.0
12
Karnataka
105.2
104.1
104.7
92.2
89.1
90.7
100.2
98.3
99.3
13
Kerala
91.4
91.5
91.4
106.5
101.3
103.9
97.1
95.2
96.2
14
Madhya Pradesh
131.2
139.7
135.2
100.2
102.6
101.4
119.8
125.6
122.6
15
Maharashtra
105.5
103.7
104.7
95.1
89.6
92.4
101.5
98.3
100.0
16
Manipur
195.7
188.4
192.1
108.5
100.8
104.6
158.7
151.1
155.0
17
Meghalaya
193.7
196.3
195.0
85.9
96.2
91.0
150.8
156.3
153.6
18
Mizoram
191.7
180.0
186.0
108.2
101.3
104.8
155.6
145.8
150.7
19
Nagaland
103.7
102.8
103.3
59.4
60.7
60.0
85.4
85.4
85.4
20
Odisha
118.7
120.1
119.4
83.3
80.7
82.0
105.0
104.6
104.8
21
Punjab
109.1
108.3
108.8
95.8
91.7
94.0
104.1
101.9
103.1
22
Rajasthan
110.3
109.5
109.9
91.0
73.0
82.4
103.0
95.2
99.3
23
Sikkim
164.4
158.7
161.6
71.2
86.6
78.8
121.7
126.0
123.8
24
Tamil Nadu
111.0
112.6
111.8
113.0
111.5
112.3
111.8
112.2
112.0
25
Tripura
134.9
133.3
134.1
92.2
91.5
91.9
116.0
114.7
115.4
26
Uttar Pradesh
123.8
130.4
126.9
84.1
75.5
79.9
109.3
109.6
109.5
27
Uttarakhand
107.9
110.2
109.0
102.6
109.2
105.8
105.9
109.8
107.8
28
West Bengal
91.5
93.9
92.7
84.6
88.0
86.3
88.7
91.5
90.1
29
A&N Islands
87.5
84.9
86.2
89.4
86.4
87.9
88.3
85.5
86.9
30
Chandigarh
78.6
78.1
78.4
84.5
77.1
81.0
80.7
77.7
79.3
31
D&N Haveli
104.3
107.0
105.6
100.7
100.5
100.6
103.1
104.9
103.9
32
Daman & Diu
76.5
82.6
79.3
72.4
81.3
76.4
75.1
82.2
78.2
33
Delhi
126.0
129.6
127.7
110.9
106.4
108.8
120.0
120.2
120.1
34
Lakshadweep
81.4
80.8
81.1
74.0
93.0
83.0
78.4
85.6
81.9
35
Puducherry
104.8
102.3
103.6
106.8
99.7
103.2
105.6
101.2
103.4
INDIA
115.4
116.7
116.0
87.7
83.1
85.5
104.9
103.7
104.3
Source : Statistics of School Education- 2010-11 (Provisional).
http://indiabudget.nic.in A—122
Economic Survey 2012-13
A123
9.3 : NUMBER OF RECOGNISED EDUCATIONAL INSTIUTIONS IN INDIA (PROVISIONAL) Sl. States/ No. Union Territorries
1
PreDegree/Junior Colleges/Higher Sec. Schools
High/Post Basic Schools
Middle/ Sr. Basic Schools
3
4
5
6
7
8
5143
18776
15421
66834
31
4473
213
118
191
920
1941
2
23
3a
2
Primary/ Universities/ Colleges for Jr. Basic Deemed Professional Schools Universities Education
Polytechnics
9
1
Andhra Pradesh
2
Arunachal Pradesh
3
Assam
1081
5482
14133
31202
8
546
10
4
Bihar
2217
2286
25587
42573
20
1031
17
5
Chhattisgarh
2799
2029
15488
35274
9
584
15
6
Goa
82
378
438
1254
1
39
4
7
Gujarat
3575
6269
42145
0
26
1218
104
8
Haryana
3278
3493
3483
13987
12
1002
32b
9
Himachal Pradesh
1727
1466
5084
11376
7
582
26
10
Jammu & Kashmir
889
2216
8877
15446
10
303
0
11
Jharkhand
1044
1429
14863
26731
8
161
19b
12
Karnataka
3644
13447
33126
26302
29
979
273
13
Kerala
2223
1602
3059
6790
11
448
59b
14
Madhya Pradesh
5463
6658
96797
43662
21
1311
49
15
Maharashtra
5019
16455
27654
49095
42
3446
227c
16
Manipur
123
761
732
2435
1
73
3b
17
Meghalaya
125
676
2259
6627
2
118
3
18
Mizoram
98
538
1353
1821
1
29
2
19
Nagaland
69
337
465
1662
1
74
0
20
Odisha
1293
7974
22649
54150
15
874
24
21
Punjab
2733
2924
3792
13950
14
578
89
7616
14945
36788
47818
24
1610
71
59
126
244
749
3
18
2
3660
3112
9810
28218
43
1936
363
336
504
1246
2307
3
29
1
22
Rajasthan
23
Sikkim
24
Tamil Nadu
25
Tripura
26
Uttar Pradesh
9751
7893
53281
147376
36
3104
163
27
Uttarakhand
1633
1143
4365
15660
12
225
0
28
West Bengal
4341
4454
2623
49908
20
841
57
29
A&N Islands
53
46
67
212
0
5
2
30
Chandigarh
68
65
23
24
3
24
3
31
D&N Haveli
13
19
85
210
...
3
0
32
Daman & Diu
33
Delhi
34
Lakshadweep
35
Puducherry India
16
13
37
66
0
3
1
1392
480
588
2563
19
155
79c
12
3
10
23
0
3
0
121
180
108
301
2
90
0
71814
128370
447600
748547
436
25938
1914
Source: 1. Statistics of School Education 2010-11. 2. Statictics of Higher & Technical Education 2009-10. a
Notes:
repeated from 2007-08,
b
repeated from 2006-07,
c
repeated from 2008-09.
Professional Education includes Engineering & Technology, Architecture, Medical and Education/Teacher, Arts Science and Commerce Training Colleges.
http://indiabudget.nic.in A—123
A124
Economic Survey 2012-13 9.4 : STATE-WISE LITERACY RATES (1951–2011) (in per cent)
Sl.No. States/Union Territorries
1951
1961
1971
1981
1991
2001
2011P
na
12.95
21.71
30.64
na
55.52
68.74
1
Jammu & Kashmir
2
Himachal Pradesh
na
na
na
na
63.86
76.48
83.78
3
Punjab
na
na
34.12
43.37
58.51
69.65
76.68
na
na
70.43
74.80
77.81
81.94
86.43
18.93
18.05
33.26
46.06
57.75
71.62
79.63
4
Chandigarh
5
Uttarakhand
6
Haryana
na
na
25.71
37.13
55.85
67.91
76.64
7
Delhi
na
61.95
65.08
71.94
75.29
81.67
86.34
8
Rajasthan
8.5
18.12
22.57
30.11
38.55
60.41
67.06
9
Uttar Pradesh
12.02
20.87
23.99
32.65
40.71
56.27
69.72
10
Bihar
13.49
21.95
23.17
32.32
37.49
47.00
63.82
11
Sikkim
na
na
17.74
34.05
56.94
68.81
82.20
12
Arunachal Pradesh
na
7.13
11.29
25.55
41.59
54.34
66.95
13
Nagaland
10.52
21.95
33.78
50.28
61.65
66.59
80.11
14
Manipur a
12.57
36.04
38.47
49.66
59.89
70.53
79.85
15
Mizoram
31.14
44.01
53.80
59.88
82.26
88.80
91.58
16
Tripura
na
20.24
30.98
50.10
60.44
73.19
87.75
17
Meghalaya
na
26.92
29.49
42.05
49.10
62.56
75.48
18
Assam
18.53
32.95
33.94
na
52.89
63.25
73.18
19
West Bengal
24.61
34.46
38.86
48.65
57.70
68.64
77.08
20
Jharkhand
12.93
21.14
23.87
35.03
41.39
53.56
67.63
21
Odisha
15.80
21.66
26.18
33.62
49.09
63.08
73.45
22
Chhattisgarh
9.41
18.14
24.08
32.63
42.91
64.66
71.04
23
Madhya Pradesh
13.16
21.41
27.27
38.63
44.67
63.74
70.63
24
Gujarat
21.82
31.47
36.95
44.92
61.29
69.14
79.31
25
Daman & Diu
na
na
na
na
71.20
78.18
87.07
26
Dadra & Nagar Haveli
27
Maharashtra
na
na
18.13
32.90
40.71
57.63
77.65
27.91
35.08
45.77
57.24
64.87
76.88
82.91
28
Andhra Pradesh
na
21.19
24.57
35.66
44.08
60.47
67.66
29
Karnataka
na
29.80
36.83
46.21
56.04
66.64
75.60
30
Goa
23.48
35.41
51.96
65.71
75.51
82.01
87.40
31
Lakshadweep
15.23
27.15
51.76
68.42
81.78
86.66
92.28
32
Kerala
47.18
55.08
69.75
78.85
89.81
90.86
93.91
33
Tamil Nadu
na
36.39
45.40
54.39
62.66
73.45
80.33
33
Puducherry
na
43.65
53.38
65.14
74.74
81.24
86.55
35
Andaman & Nicobar Islands
30.30
40.07
51.15
63.19
73.02
81.30
86.27
ALL INDIA a
18.33
28.30
34.45
43.57
52.21
64.84
74.04
Source: Office of the Registrar General, India. Ministry of Home Affairs. na : Not available. P a
Provisional. India and Manipur figures exclude those of the three sub-divisions viz. Mao Maram, Paomata and Purul of Senapati district of Manipur as census results of 2001 in these three sub-divisions were cancelled due to technical and administrative reasons.
Note : Literacy rates for 1951, 1961 and 1971 Censuses relate to population aged five years and above. The rates for the 1981, 1991, 2001 and 2011 Censuses relate to the population aged seven years and above. The literacy rate for 1951 in case of West Bengal relates to total population including 0-4 age group. Literacy rate for 1951 in respect of Chhatisgarh, Madhya Pradesh and Manipur are based on sample population.
http://indiabudget.nic.in A—124
Economic Survey 2012-13
A125
9.5 : STATE-WISE INFANT MORTALITY RATE 2009 Sl. No.
2010
2011
States/Union Territorries Male
Female
Person
Male
Female
Person
Male
Female
Person
1 Kerala
10
13
12
13
14
13
11
13
12
2 Puducherry
25
20
22
22
22
22
17
20
19
3 Mizoram
33
38
36
36
39
37
31
37
34
4 Manipur
14
18
16
11
16
14
8
15
11
5 Andaman & Nicobar Islands
29
25
27
24
27
25
19
27
23
6 Lakshadweep
21
29
25
21
29
25
27
20
24
7 Chandigarh
26
23
25
20
25
22
21
19
20
8 Goa
7
14
11
6
15
10
7
14
11
9 Arunachal Pradesh
31
34
32
31
32
31
33
31
32
10 Jammu & Kashmir
41
51
45
41
45
43
40
41
41
11 Maharashtra
28
33
31
27
29
28
24
25
25
12 Tripura
33
30
31
25
29
27
29
29
29
13 Delhi
31
34
33
29
31
30
25
31
28
14 Meghalaya
59
59
59
55
56
55
52
52
52
15 Sikkim
35
33
34
28
32
30
23
30
26
16 Tamil Nadu
27
29
28
23
24
24
21
23
22
17 West Bengal
33
33
33
29
32
31
30
34
32
18 Punjab
37
39
38
33
35
34
28
33
30
19 Karnataka
41
42
41
37
39
38
34
35
35
20 Dadra & Nagar Haveli
38
37
37
36
40
38
35
36
35
21 Gujarat
47
48
48
41
47
44
39
42
41
22 Himachal Pradesh
44
45
45
35
47
40
36
39
38
23 Andhra Pradesh
48
50
49
44
47
46
40
46
43
24 Bihar
52
52
52
46
50
48
44
45
44
25 Haryana
48
53
51
46
49
48
41
48
44
26 Assam
58
64
61
56
60
58
55
56
55
27 Rajasthan
58
61
59
52
57
55
50
53
52
28 Uttar Pradesh
62
65
63
58
63
61
55
59
57
29 Madhya Pradesh
66
68
67
62
63
62
57
62
59
30 Odisha
65
66
65
60
61
61
55
58
57
31 Nagaland
23
28
26
19
28
23
15
26
21
32 Daman & Diu
21
28
24
22
23
23
17
27
22
33 Chhatisgarh
50
57
54
48
54
51
47
50
48
34 Jharkhand
42
46
44
41
44
42
36
43
39
35 Uttarakhand
41
42
41
37
39
38
34
38
36
All India
49
52
50
46
49
47
43
46
44
Source : Note :
Sample Registration System, Office of the Registrar General, India, Ministry of Home Affairs. Infant mortality rates for 2009, 2010 and 2011 in respect of smaller States and UTs are based upon the three year period 2007-09, 2008-10 and 2009-11.
http://indiabudget.nic.in A—125
A126
Economic Survey 2012-13 9.6 : ACCESS TO SAFE DRINKING WATER IN HOUSEHOLDS IN INDIA (in per cent)
Sl.
States/
No.
Union Territorries
1
Jammu & Kashmir
Tap/Handpump/Tubewell 1991
2001
2011
Total
Rural
Urban
Total
Rural
Urban
Total
Rural
na
na
na
65.2
54.9
95.7
76.8
70.1
Urban 96.1
2
Himachal Pradesh
77.3
75.5
91.9
88.6
87.5
97.0
93.7
93.2
97.8
3
Punjab
92.7
92.1
94.2
97.6
96.9
98.9
97.6
96.7
98.9
4
Chandigarh
97.7
98.1
97.7
99.8
99.9
99.8
99.3
98.7
99.4
5
Uttarakhand
a
a
a
86.7
83.0
97.8
92.2
89.5
98.7
6
Haryana
74.3
67.1
93.2
86.1
81.1
97.3
93.8
92.0
96.7
7
Delhi
95.8
91.0
96.2
97.2
90.1
97.7
95.0
87.9
95.2
8
Rajasthan
59.0
50.6
86.5
68.2
60.4
93.5
78.1
72.8
94.3
9
Uttar Pradesh
62.2
56.6
85.8
87.8
85.5
97.2
95.1
94.3
97.9
10
Bihar
58.8
56.5
73.4
86.6
86.1
91.2
94.0
93.9
94.7
11
Sikkim
73.1
70.8
92.8
70.7
67.0
97.1
85.3
82.7
92.2
12
Arunachal Pradesh
70.0
66.9
88.2
77.5
73.7
90.7
78.6
74.3
91.3
13
Nagaland
53.4
55.6
45.5
46.5
47.5
42.3
53.8
54.6
51.8
14
Manipur
38.7
33.7
52.1
37.0
29.3
59.4
45.4
37.5
60.8
15
Mizoram
16.2
12.9
19.9
36.0
23.8
47.8
60.4
43.4
75.8
16
Tripura
37.2
30.6
71.1
52.5
45.0
85.8
67.5
58.1
91.9
17
Meghalaya
36.2
26.8
75.4
39.0
29.5
73.5
44.7
35.1
79.5
18
Assam
45.9
43.3
64.1
58.8
56.8
70.4
69.9
68.3
78.2
19
West Bengal
82.0
80.3
86.2
88.5
87.0
92.3
92.2
91.4
93.9
20
Jharkhand
a
a
a
42.6
35.5
68.2
60.1
54.3
78.4
21
Odisha
39.1
35.3
62.8
64.2
62.9
72.3
75.3
74.4
79.8
22
Chhattisgarh
a
a
a
70.5
66.2
88.8
86.3
84.1
93.9
23
Madhya Pradesh
53.4
45.6
79.4
68.4
61.5
88.6
78.0
73.1
92.1
24
Gujarat
69.8
60.0
87.2
84.1
76.9
95.4
90.3
84.9
97.0
25
Daman & Diu
71.4
56.9
86.8
96.3
94.9
98.9
98.7
97.8
99.0
26
Dadra & Nagar Haveli
45.6
41.2
91.0
77.0
70.5
96.1
91.6
84.3
98.4
27
Maharashtra
68.5
54.0
90.5
79.8
68.4
95.4
83.4
73.2
95.7
28
Andhra Pradesh
55.1
49.0
73.8
80.1
76.9
90.2
90.5
88.6
94.5
29
Karnataka
71.7
67.3
81.4
84.6
80.5
92.1
87.5
84.4
92.3
30
Goa
43.4
30.5
61.7
70.1
58.3
82.1
85.7
78.4
90.4
31
Lakshadweep
11.9
3.4
18.8
4.6
4.6
4.6
22.8
31.2
20.2
32
Kerala
18.9
12.2
38.7
23.4
16.9
42.8
33.5
28.3
39.4
33
Tamil Nadu
67.4
64.3
74.2
85.6
85.3
85.9
92.5
92.2
92.9
34
Puducherry
88.8
92.9
86.1
95.9
96.6
95.5
97.8
99.6
97.0
35
Andaman & Nicobar Islands
67.9
59.4
90.9
76.7
66.8
97.8
85.5
78.2
98.1
ALL INDIA
62.3
55.5
81.4
77.9
73.2
90.0
85.5
82.7
91.4
Source : Office of the Registrar General, India. Ministry of Home Affairs. na : Not available as no census was carried out in Jammu & Kashmir during 1991. a
Created in 2001. Uttarakhand, Jharkhand and Chhattisgarh for 1991 are included under Uttar Pradesh, Bihar and Madhya Pradesh respectively.
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Economic Survey 2012-13
A127
9.7 : POPULATION OF INDIA (1951–2011) (in thousand) Sl.No. States/Union Territorries
1951
1961
1971
1981
1991
2001
2011P
1
Uttar Pradesh
60274
70144
83849
105137
132062
166198
199581
2
Maharashtra
32003
39554
50412
62783
78937
96879
112373
3
Bihar
29085
34841
42126
52303
64531
82999
103805
4
West Bengal
26300
34926
44312
54581
68078
80176
91348
5
Andhra Pradesh
31115
35983
43503
53551
66508
76210
84666
6
Tamil Nadu
30119
33687
41199
48408
55859
62406
72139
7
Madhya Pradesh
18615
23218
30017
38169
48566
60348
72597
8
Rajasthan
15971
20156
25766
34262
44006
56507
68621
Karnataka
19402
23587
29299
37136
44977
52851
61131
10
9
Gujarat
16263
20633
26697
34086
41310
50671
60384
11
Odisha
14646
17549
21945
26370
31660
36805
41947
12
Kerala
13549
16904
21347
25454
29099
31841
33387
13
Jharkhand
14
Assam
15
9697
11606
14227
17612
21844
26946
32966
8029
10837
14625
18041
22414
26656
31169
Punjab
9161
11135
13551
16789
20282
24359
27704
16
Haryana
5674
7591
10036
12922
16464
21145
25353
17
Chhatisgarh
7457
9154
11637
14010
17615
20834
25540
18
Delhi
1744
2659
4066
6220
9421
13851
16753
19
Jammu & Kashmir
3254
3561
4617
5987
7837
10144
12549
20
Uttarakhand
2946
3611
4493
5726
7051
8489
10117
21
Himachal Pradesh
2386
2812
3460
4281
5171
6078
6857
22
Tripura
639
1142
1556
2053
2757
3199
3671
23
Meghalaya
606
769
1012
1336
1775
2319
2964
24
Manipur c
578
780
1073
1421
1837
2294
2722
25
Nagaland
213
369
516
775
1210
1990
1980
26
Goa
547
590
795
1008
1170
1348
1458
27
Arunachal Pradesh d
na
337
468
632
865
1098
1383
28
Puducherry
317
369
472
604
808
974
1244
29
Chandigarh
24
120
257
452
642
901
1055
30
Mizoram
196
266
332
494
690
889
1091
31
Sikkim
138
162
210
316
406
541
608
32
Andaman & Nicobar Islands
31
64
115
189
281
356
380
33
Dadra & Nagar Haveli
42
58
74
104
138
220
343
34
Daman & Diu
49
37
63
79
102
158
243
35
Lakshadweep
a
b
ALL INDIAc
21
24
32
40
52
61
64
361088
439235
548160
683329
846421
1028737
1210193
Source : Office of the Registrar General of India, Ministry of Home Affairs. P Provisional. a The 1981 Census could not be held in Assam. Total population for 1981 has been worked out by Interpolation. b The 1991 Census could not be held in Jammu & Kashmir. Total population for 1991 has been worked out by Interpolation. c India and Manipur figures include estimated population for those of the three sub-divisions viz. Mao Maram, Paomata and Purul Senapati district of Manipur as census results of 2001 in these three sub-divisions were cancelled due to technical and administrative reasons. d Census conducted for the first time in 1961.
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