Gist of Economic Survey (Volume - 2) - 2018-19 Notes | EduRev

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UPSC : Gist of Economic Survey (Volume - 2) - 2018-19 Notes | EduRev

 Page 1


 
                 
 
 
  
 
 
Economic Survey 
Chapter wise
 
                 
Economic Survey –Volume 
Chapter wise summary document 
 
 
            
  
Volume 2 
             
Page 2


 
                 
 
 
  
 
 
Economic Survey 
Chapter wise
 
                 
Economic Survey –Volume 
Chapter wise summary document 
 
 
            
  
Volume 2 
             
 
                 
 
Volume 2 of Economic Survey (2018
Topics covered:-  
1. State of the economy......................................................
 
2. Fiscal Developments....................................................
 
3. Monetary management and
 
4. Price and Inflation............................................................
 
5. Sustainable development and Climate Change.................
 
6. External Sector.............................................................
 
7. Agriculture and Food Management
 
8. Industry and Infrastructure.............................
 
9. Services Sector...............................................................
 
10. Social Infrastructure, E
 
                 
 
Volume 2 of Economic Survey (2018-19) 
 
economy..................................................................
................................................................
Monetary management and Financial Intermediation.......................
......................................................................
development and Climate Change.......................
..................................................................................
Agriculture and Food Management............................................
Industry and Infrastructure.............................................................
................................................................................
Social Infrastructure, Employment and Human Development........
  
..........................1 
.............................4 
.........................6 
.......................11 
.......................13 
..........................21 
.......................25 
.......................34 
.........................43 
opment.................50 
Page 3


 
                 
 
 
  
 
 
Economic Survey 
Chapter wise
 
                 
Economic Survey –Volume 
Chapter wise summary document 
 
 
            
  
Volume 2 
             
 
                 
 
Volume 2 of Economic Survey (2018
Topics covered:-  
1. State of the economy......................................................
 
2. Fiscal Developments....................................................
 
3. Monetary management and
 
4. Price and Inflation............................................................
 
5. Sustainable development and Climate Change.................
 
6. External Sector.............................................................
 
7. Agriculture and Food Management
 
8. Industry and Infrastructure.............................
 
9. Services Sector...............................................................
 
10. Social Infrastructure, E
 
                 
 
Volume 2 of Economic Survey (2018-19) 
 
economy..................................................................
................................................................
Monetary management and Financial Intermediation.......................
......................................................................
development and Climate Change.......................
..................................................................................
Agriculture and Food Management............................................
Industry and Infrastructure.............................................................
................................................................................
Social Infrastructure, Employment and Human Development........
  
..........................1 
.............................4 
.........................6 
.......................11 
.......................13 
..........................21 
.......................25 
.......................34 
.........................43 
opment.................50 
                               
 
 
 
Chapter 1- State of the economy in 2018
View 
Global economic Scenario:  
? India’s contribution to GDP of 
Economies and world economy
? World Economic Outlook
economy will be boosted mainly by the growth in India and China and 
their increasing weights in 
? World output declined to 3.6% in 2018
Indian Economic Scenario: 
? India is still the fastest growing major economy and 7th largest 
economy in terms of GDP in 2018
? India’s GDP at current international dollar with 
ranks 3rd in the world. 
? Growth of India’s GDP moderated to 6.8% in 
2017-18.  
Various reasons behind moderation 
? “Agriculture and allied”
contraction in food prices.
? Lower growth in trade, 
service related to broadcasting.
? Moderation in public administration and defence sectors
? Election related uncertai
? Deceleration in manufacturing sector has hindered growth of 
industry sector. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the s
? Slowdown in auto sec
? Stress in NBFC’s also contributed to slowdown. 
 
? Trade deficit increased from US$ 162.1 billion in 2017
billion in 2018-19. 
? FDI inflows grew by 14.2% in 2018
attracting FDI equity infl
were the major categories. 
? Direct taxes grew by 13.4
corporate tax. However, indirect taxes fell short of budget estimates
by about 16% following a shortfall in GST revenues.
                               SUMMARY DOCUMENT                                                         
         
State of the economy in 2018-19 : A Macro 
India’s contribution to GDP of Emerging Markets and Developing 
and world economy has increased over the years.  
utlook report of IMF states that growth of world 
economy will be boosted mainly by the growth in India and China and 
their increasing weights in world’s income.  
World output declined to 3.6% in 2018 
fastest growing major economy and 7th largest 
y in terms of GDP in 2018-19. 
India’s GDP at current international dollar with PPP adjustments 
Growth of India’s GDP moderated to 6.8% in 2018-19 from 7.2% in 
Various reasons behind moderation are mainly due to:  
“Agriculture and allied”- Decline in rabbi crop production and 
contraction in food prices. 
Lower growth in trade, hotel, transport, communication and 
vice related to broadcasting. 
Moderation in public administration and defence sectors. 
Election related uncertainty may have contributed too.  
Deceleration in manufacturing sector has hindered growth of 
r. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the same quarter of previous year. 
Slowdown in auto sector. 
Stress in NBFC’s also contributed to slowdown.  
increased from US$ 162.1 billion in 2017-18 to US$ 184 
ows grew by 14.2% in 2018-19. Among the top sectors 
attracting FDI equity inflows, services, automobiles and chemicals 
were the major categories.  
by 13.4% owing to improved performance of 
, indirect taxes fell short of budget estimates 
by about 16% following a shortfall in GST revenues. 
                                                          
  
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
Page 4


 
                 
 
 
  
 
 
Economic Survey 
Chapter wise
 
                 
Economic Survey –Volume 
Chapter wise summary document 
 
 
            
  
Volume 2 
             
 
                 
 
Volume 2 of Economic Survey (2018
Topics covered:-  
1. State of the economy......................................................
 
2. Fiscal Developments....................................................
 
3. Monetary management and
 
4. Price and Inflation............................................................
 
5. Sustainable development and Climate Change.................
 
6. External Sector.............................................................
 
7. Agriculture and Food Management
 
8. Industry and Infrastructure.............................
 
9. Services Sector...............................................................
 
10. Social Infrastructure, E
 
                 
 
Volume 2 of Economic Survey (2018-19) 
 
economy..................................................................
................................................................
Monetary management and Financial Intermediation.......................
......................................................................
development and Climate Change.......................
..................................................................................
Agriculture and Food Management............................................
Industry and Infrastructure.............................................................
................................................................................
Social Infrastructure, Employment and Human Development........
  
..........................1 
.............................4 
.........................6 
.......................11 
.......................13 
..........................21 
.......................25 
.......................34 
.........................43 
opment.................50 
                               
 
 
 
Chapter 1- State of the economy in 2018
View 
Global economic Scenario:  
? India’s contribution to GDP of 
Economies and world economy
? World Economic Outlook
economy will be boosted mainly by the growth in India and China and 
their increasing weights in 
? World output declined to 3.6% in 2018
Indian Economic Scenario: 
? India is still the fastest growing major economy and 7th largest 
economy in terms of GDP in 2018
? India’s GDP at current international dollar with 
ranks 3rd in the world. 
? Growth of India’s GDP moderated to 6.8% in 
2017-18.  
Various reasons behind moderation 
? “Agriculture and allied”
contraction in food prices.
? Lower growth in trade, 
service related to broadcasting.
? Moderation in public administration and defence sectors
? Election related uncertai
? Deceleration in manufacturing sector has hindered growth of 
industry sector. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the s
? Slowdown in auto sec
? Stress in NBFC’s also contributed to slowdown. 
 
? Trade deficit increased from US$ 162.1 billion in 2017
billion in 2018-19. 
? FDI inflows grew by 14.2% in 2018
attracting FDI equity infl
were the major categories. 
? Direct taxes grew by 13.4
corporate tax. However, indirect taxes fell short of budget estimates
by about 16% following a shortfall in GST revenues.
                               SUMMARY DOCUMENT                                                         
         
State of the economy in 2018-19 : A Macro 
India’s contribution to GDP of Emerging Markets and Developing 
and world economy has increased over the years.  
utlook report of IMF states that growth of world 
economy will be boosted mainly by the growth in India and China and 
their increasing weights in world’s income.  
World output declined to 3.6% in 2018 
fastest growing major economy and 7th largest 
y in terms of GDP in 2018-19. 
India’s GDP at current international dollar with PPP adjustments 
Growth of India’s GDP moderated to 6.8% in 2018-19 from 7.2% in 
Various reasons behind moderation are mainly due to:  
“Agriculture and allied”- Decline in rabbi crop production and 
contraction in food prices. 
Lower growth in trade, hotel, transport, communication and 
vice related to broadcasting. 
Moderation in public administration and defence sectors. 
Election related uncertainty may have contributed too.  
Deceleration in manufacturing sector has hindered growth of 
r. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the same quarter of previous year. 
Slowdown in auto sector. 
Stress in NBFC’s also contributed to slowdown.  
increased from US$ 162.1 billion in 2017-18 to US$ 184 
ows grew by 14.2% in 2018-19. Among the top sectors 
attracting FDI equity inflows, services, automobiles and chemicals 
were the major categories.  
by 13.4% owing to improved performance of 
, indirect taxes fell short of budget estimates 
by about 16% following a shortfall in GST revenues. 
                                                          
  
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
                               
 
                                   
 
Drivers of the growth: Consumption has always been a strong and major 
driver of growth in the economy for India. 
? Especially private final consumption has always been a strong and 
major driver of growth in the economy
share of private consumption in G
consumption has undergone some change over time.
        Changing pattern of consumption in India
? The pattern of consumption has undergone some change over 
time – from essentials to luxuries and from goods to services
This shows an increase in discretionary spending by the 
households as compared to the necessities. 
? This shift is also visible in the change in pattern of 
consumption of goods to services
share of goods in total fina
? The share of non-food expenditure has increased
expenditure share increasing for education, medical, conveyance 
and durable goods.  
 
? Second component of consumption is the government final 
consumption expenditure (GFCE). Growth of GFCE decelerated from 
15.0 per cent in 2017-18 to 9.2 per cent in 2018
? The third major component 
(Gross Capital Formation) accounts for nearly 32 per cent of GDP, 
within which fixed investment (Gross fixed capital formation) 
accounts for about 29 per cent of GDP. 
? Green shoots (fresh investments) in the investment a
be taking hold as also seen in the pickup in credit growth to industry. 
Credit to, large and micro, small & medium enterprises has also 
witnessed pickup in growth. 
? Investment rates have been declining since 2011
investment rate in services is displaying signs of bottoming out. In 
2017-18, investment rate in services sector became the highest. 
                               SUMMARY DOCUMENT                                                         
                                            
Consumption has always been a strong and major 
driver of growth in the economy for India.  
Especially private final consumption has always been a strong and 
major driver of growth in the economy (approx 60 %). Although the 
share of private consumption in GDP remains high, the pattern of 
ndergone some change over time.  
Changing pattern of consumption in India  
The pattern of consumption has undergone some change over 
from essentials to luxuries and from goods to services. 
s shows an increase in discretionary spending by the 
households as compared to the necessities.  
This shift is also visible in the change in pattern of spending from 
consumption of goods to services. There has been a decline in 
share of goods in total final consumption.  
food expenditure has increased with the 
expenditure share increasing for education, medical, conveyance 
 
 
Second component of consumption is the government final 
consumption expenditure (GFCE). Growth of GFCE decelerated from 
18 to 9.2 per cent in 2018-19.  
The third major component of demand is investment. Investment 
(Gross Capital Formation) accounts for nearly 32 per cent of GDP, 
within which fixed investment (Gross fixed capital formation) 
accounts for about 29 per cent of GDP.  
Green shoots (fresh investments) in the investment activity appear to 
be taking hold as also seen in the pickup in credit growth to industry. 
Credit to, large and micro, small & medium enterprises has also 
growth.  
Investment rates have been declining since 2011-12, though the 
rate in services is displaying signs of bottoming out. In 
18, investment rate in services sector became the highest. 
                                                          
    
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
GFCE comprises 
government’s (revenue) 
expenditure on 
compensation of 
employees, net 
purchase of goods and 
services and 
consumption of fixed 
capital 
Page 5


 
                 
 
 
  
 
 
Economic Survey 
Chapter wise
 
                 
Economic Survey –Volume 
Chapter wise summary document 
 
 
            
  
Volume 2 
             
 
                 
 
Volume 2 of Economic Survey (2018
Topics covered:-  
1. State of the economy......................................................
 
2. Fiscal Developments....................................................
 
3. Monetary management and
 
4. Price and Inflation............................................................
 
5. Sustainable development and Climate Change.................
 
6. External Sector.............................................................
 
7. Agriculture and Food Management
 
8. Industry and Infrastructure.............................
 
9. Services Sector...............................................................
 
10. Social Infrastructure, E
 
                 
 
Volume 2 of Economic Survey (2018-19) 
 
economy..................................................................
................................................................
Monetary management and Financial Intermediation.......................
......................................................................
development and Climate Change.......................
..................................................................................
Agriculture and Food Management............................................
Industry and Infrastructure.............................................................
................................................................................
Social Infrastructure, Employment and Human Development........
  
..........................1 
.............................4 
.........................6 
.......................11 
.......................13 
..........................21 
.......................25 
.......................34 
.........................43 
opment.................50 
                               
 
 
 
Chapter 1- State of the economy in 2018
View 
Global economic Scenario:  
? India’s contribution to GDP of 
Economies and world economy
? World Economic Outlook
economy will be boosted mainly by the growth in India and China and 
their increasing weights in 
? World output declined to 3.6% in 2018
Indian Economic Scenario: 
? India is still the fastest growing major economy and 7th largest 
economy in terms of GDP in 2018
? India’s GDP at current international dollar with 
ranks 3rd in the world. 
? Growth of India’s GDP moderated to 6.8% in 
2017-18.  
Various reasons behind moderation 
? “Agriculture and allied”
contraction in food prices.
? Lower growth in trade, 
service related to broadcasting.
? Moderation in public administration and defence sectors
? Election related uncertai
? Deceleration in manufacturing sector has hindered growth of 
industry sector. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the s
? Slowdown in auto sec
? Stress in NBFC’s also contributed to slowdown. 
 
? Trade deficit increased from US$ 162.1 billion in 2017
billion in 2018-19. 
? FDI inflows grew by 14.2% in 2018
attracting FDI equity infl
were the major categories. 
? Direct taxes grew by 13.4
corporate tax. However, indirect taxes fell short of budget estimates
by about 16% following a shortfall in GST revenues.
                               SUMMARY DOCUMENT                                                         
         
State of the economy in 2018-19 : A Macro 
India’s contribution to GDP of Emerging Markets and Developing 
and world economy has increased over the years.  
utlook report of IMF states that growth of world 
economy will be boosted mainly by the growth in India and China and 
their increasing weights in world’s income.  
World output declined to 3.6% in 2018 
fastest growing major economy and 7th largest 
y in terms of GDP in 2018-19. 
India’s GDP at current international dollar with PPP adjustments 
Growth of India’s GDP moderated to 6.8% in 2018-19 from 7.2% in 
Various reasons behind moderation are mainly due to:  
“Agriculture and allied”- Decline in rabbi crop production and 
contraction in food prices. 
Lower growth in trade, hotel, transport, communication and 
vice related to broadcasting. 
Moderation in public administration and defence sectors. 
Election related uncertainty may have contributed too.  
Deceleration in manufacturing sector has hindered growth of 
r. IIP of manufacturing sector grew at 0.3% 
compared to 7.5% in the same quarter of previous year. 
Slowdown in auto sector. 
Stress in NBFC’s also contributed to slowdown.  
increased from US$ 162.1 billion in 2017-18 to US$ 184 
ows grew by 14.2% in 2018-19. Among the top sectors 
attracting FDI equity inflows, services, automobiles and chemicals 
were the major categories.  
by 13.4% owing to improved performance of 
, indirect taxes fell short of budget estimates 
by about 16% following a shortfall in GST revenues. 
                                                          
  
 
 
 
 
 
 
 
 
 
 
 
 
 
1 
                               
 
                                   
 
Drivers of the growth: Consumption has always been a strong and major 
driver of growth in the economy for India. 
? Especially private final consumption has always been a strong and 
major driver of growth in the economy
share of private consumption in G
consumption has undergone some change over time.
        Changing pattern of consumption in India
? The pattern of consumption has undergone some change over 
time – from essentials to luxuries and from goods to services
This shows an increase in discretionary spending by the 
households as compared to the necessities. 
? This shift is also visible in the change in pattern of 
consumption of goods to services
share of goods in total fina
? The share of non-food expenditure has increased
expenditure share increasing for education, medical, conveyance 
and durable goods.  
 
? Second component of consumption is the government final 
consumption expenditure (GFCE). Growth of GFCE decelerated from 
15.0 per cent in 2017-18 to 9.2 per cent in 2018
? The third major component 
(Gross Capital Formation) accounts for nearly 32 per cent of GDP, 
within which fixed investment (Gross fixed capital formation) 
accounts for about 29 per cent of GDP. 
? Green shoots (fresh investments) in the investment a
be taking hold as also seen in the pickup in credit growth to industry. 
Credit to, large and micro, small & medium enterprises has also 
witnessed pickup in growth. 
? Investment rates have been declining since 2011
investment rate in services is displaying signs of bottoming out. In 
2017-18, investment rate in services sector became the highest. 
                               SUMMARY DOCUMENT                                                         
                                            
Consumption has always been a strong and major 
driver of growth in the economy for India.  
Especially private final consumption has always been a strong and 
major driver of growth in the economy (approx 60 %). Although the 
share of private consumption in GDP remains high, the pattern of 
ndergone some change over time.  
Changing pattern of consumption in India  
The pattern of consumption has undergone some change over 
from essentials to luxuries and from goods to services. 
s shows an increase in discretionary spending by the 
households as compared to the necessities.  
This shift is also visible in the change in pattern of spending from 
consumption of goods to services. There has been a decline in 
share of goods in total final consumption.  
food expenditure has increased with the 
expenditure share increasing for education, medical, conveyance 
 
 
Second component of consumption is the government final 
consumption expenditure (GFCE). Growth of GFCE decelerated from 
18 to 9.2 per cent in 2018-19.  
The third major component of demand is investment. Investment 
(Gross Capital Formation) accounts for nearly 32 per cent of GDP, 
within which fixed investment (Gross fixed capital formation) 
accounts for about 29 per cent of GDP.  
Green shoots (fresh investments) in the investment activity appear to 
be taking hold as also seen in the pickup in credit growth to industry. 
Credit to, large and micro, small & medium enterprises has also 
growth.  
Investment rates have been declining since 2011-12, though the 
rate in services is displaying signs of bottoming out. In 
18, investment rate in services sector became the highest. 
                                                          
    
 
 
 
 
 
 
 
 
 
 
 
 
 
2 
GFCE comprises 
government’s (revenue) 
expenditure on 
compensation of 
employees, net 
purchase of goods and 
services and 
consumption of fixed 
capital 
                               
 
 
 
Investment rate in agriculture still continues to lag behind and now is 
half the investment rate in the industry sector. 
 
 
? There has been a decline in savings rate as well, with the household 
sector entirely contributing to the decline
                               SUMMARY DOCUMENT                                                         
           
Investment rate in agriculture still continues to lag behind and now is 
half the investment rate in the industry sector.  
been a decline in savings rate as well, with the household 
sector entirely contributing to the decline. 
 
                                                          
    
 
 
 
 
 
 
 
 
 
 
 
 
 
3 
  
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