Economic Survey 2018 Set-1 - Multidimensional analysis - UPSC/RBI/IBPS/SBI/State PCS Video Lecture | Indian Economy for Government Exams (Hindi) - Bank Exams

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hello everyone and welcome to steady IQ
in this video we will start with the
economic survey series before we move on
to the content of the economic survey I
would like to clarify a few things about
the economic survey first of all an
aspirant should understand that economic
survey is not concerned with the subject
economics most of the aspirants will
have a misunderstanding that economic
survey as the name suggests it's
something related to economics no it is
a misunderstanding so economic survey
has nothing to do with the subject
economics it discusses about the economy
as a whole
it will include not only economic issues
it will also discuss political issues
environmental issues even international
issues and the economy as a whole
so Economic Survey has nothing to do
with the subject economics this is the
first clarity an aspirant must have
secondly economic surveys
multi-dimensional so as we said it
discusses about various issues not only
economic issues but political issues
international issues environmental
issues social issues etc so this is
multi-dimensional and it covers many
dimensions another clarity I would like
to bring us many aspirins we'll have a
question whether it is enough to read
the summary of the economic survey many
coaching Institute's are providing
summary or gist of the economic survey
whether it is enough that I go through
the summary no I would say that it is
necessary for a serious aspirant to go
through the survey document itself the
government is providing the economic
survey document and a serious aspirin
should always go through the government
document because there is nothing that
you can avoid in a survey so if you take
any examination examinations can be
either objective type or descriptive
type so especially when it comes to
objective type examination where you
will be given four options it is very
necessary that you should have a clear
understand
of the economic survey so that you can
pick the right choice and coming to the
descriptive type examinations here also
survey will help you a lot so it is very
necessary that you go through each and
every line of the economic survey for
better understanding so in this series
of videos we are trying to go through
each and everything that is given in the
economic survey and bring in clarity
with this document so let us start if
you have seen the economic survey this
year you will see that the survey begins
with 10 new facts on the Indian economy
so we also begin our lecture with
discussing the 10 new facts on the
Indian economy let us see what are the
10 new facts the first one there has
been a large increase in registered
indirect and direct tax payers so see
here the service is that with regard to
indirect and direct taxpayers there has
been an increase so as we know taxes are
of two types direct taxes and indirect
taxes so direct taxes are paid directly
by the person and indirect taxes
indirectly
so according to the survey there has
been an increase in the number of
taxpayers both in terms of direct and
indirect and the survey itself gives
reasons for this the service is that a
50 percentage increase in unique
indirect taxpayers under the GST
compared with the pre GST system so the
first reason the survey provides is the
introduction of GST so we know that the
GST was rolled out in the last financial
year so the first reason survey provides
is that with the GST coming into the
picture the number of indirect taxpayers
increased so as we know GST has subsumed
all the indirect taxes and it has a
direct impact on the number of indirect
taxpayers so according to the survey
document there has been up 50 percentage
increase in indirect taxpayers as
compared to the previous t system
again coming to the second point
similarly there has been an addition of
about 1.8 million in individual income
tax filers since November 2016 what does
it mean individual income tax filers
means direct taxpayers we can say that
this is an indirect impact of GST so
this is also an impact of GST but
indirect impact so according to the
survey with the GST coming into the
picture the number of taxpayers with
regard to indirect as well as direct
taxpayers has increased so what does it
mean when the number of direct and
indirect tax payers increased it means
that the tax base of the economy has
increased when tax base of the economy
increases what does it mean it means
that the tax base has widened on the
revenue in the form of tax collection
for the government has increased so with
regard to the revenue of the government
the revenue from taxation has increased
so this is the indicator so the first
new fact the economic survey provides is
that there has been a large increase in
registered indirect and direct tax
payers and this is a result of the
rolling out of GST this has increased
the tax base and also increase the
revenue for the government and this is
explained in both the figures figure a
and figure B in the figure a this has
been with regard to the indirect tax
payers and figure B is with regard to
the direct tax payers so if we observe
the figure we will get more clarity and
now coming to the second new fact
economic survey provides it says that
formal non-agricultural payroll is much
greater than believed so what is meant
by formal non-agricultural payroll it
means that people who are employed in
the formal sector and also in the non
agricultural sector so this is with
regard to non agricultural sectors other
than agriculture
also formal sector it is commonly
believed that in India majority of
people work in the informal sector or in
the unorganized sector so this is a
common assumption and whenever we talk
about social issues we always say that
most of the employees in India or most
of the workforce in India work in the
informal sector or in the unorganized
sector but economic surveys putting some
light into it and according to the
survey there are two criterias which
define formality of employment formality
of employment means whether the
employment is in the formal sector or in
the informal sector so formality is
defined by the economic survey with two
conditions the first one is in terms of
social security benefits so if an
employee is getting some social security
benefits the service is that he works in
the formal sector so if a person is
getting social security benefits from
employment he or she is considered to be
in the formal sector of employment and
what is the second condition second one
is with regard to the GST if the
employer pays GST or if the employer
comes under the GST net the workers
under the employer or the employees
under the employer are considered to be
in the formal sector so these are the
two conditions provided by the Economic
Survey and let us see one by one
according to the first condition that is
whether the employee is getting any
social security benefits the service is
that more than 30 percentage of the
employees in India or workforce in India
enjoy some social security benefits like
the Employees Provident Fund or health
insurance or such kind of Social
Security benefits with regard to the
Social Security benefits the survey says
that the percentage is more than 30 and
secondly coming to the GST net the
service is that more than 50 percentage
has been defined under the formal sector
when we consider the GST net which means
more than 50 percentage of the employees
work under
those employers who pays GST or indirect
taxes or who are under the GST net so
this is the data provided by the survey
and this data is in contradiction to
what was already believed so in India as
we already said we had a belief that
most of the workforce is in the informal
sector and survey is putting some light
to it survey says that this is a false
data and actually this is the formality
or this is the data regarding the
formality of employment in the economy
now coming to the graph which is given
below the graph we will observe that
defined by Social Security that is
employees who enjoy some Social Security
benefits they are 31 percentage and
defined by tax net that is employers who
are paying the GST they are 53
percentage so there are 53 percentage of
the workforce who work under the
employers who pay the GST or come under
the GST net so the graph also provides a
clear picture with regard to this now
coming to the third fact the third fact
says that states prosperity is
correlated with their international and
interstate trade according to the survey
International Trade and Industry trade
plays a very important role with regard
to a state's prosperity the survey says
that in those states where the volume of
trade is high whether it is
international trade or interstate trade
the service is that when the volume of
trade is high the prosperity of the
state is also high so there is a direct
correlation between trade and prosperity
here the survey says that states that
export more internationally and trade
more with other states that is
international trade and also interstate
trade tend to be richer which means the
prosperity will be higher in those
states but the correlation is stronger
between prosperity and international
trade and when we compare interstate
trade and international trade where
there is more
national trade there is more prosperity
and the survey itself provides an
exception to it that is the state of
Kerala the services that the state of
Kerala is very prosperous but not
because of their international and just
a trade but this is because of their
foreign remittances so this is the only
state where there is a exception to this
but other ways if we look at the rich
estates or prosperous States we will
observe that the prosperity is because
of their increased volume of trade the
fourth fact that the survey discusses is
with regard to India's firm export
structure is substantially more
egalitarian than in other larger
countries it is with regard to the
export structure of our country so what
does the survey say about the export
structure service is that we are more
egalitarian it means we are more equal
according to the survey in case of
developed countries in case of the
developed countries few firms account
for majority of trade so few firms are
controlling majority of the trade in
developed countries and survey provides
examples of countries like Brazil
Germany Mexico USA etc so services that
in these countries are serviced
providing some examples of developed
countries and services that in those
countries the trade or the international
transactions or exports are majorly
handled by a few firms if we take the
example of Brazil the top one percentage
of the pumps have been handling
seventy-two percentage of the total
trade with regard to Germany 16
percentage of the total trade is done by
the top one percentage so with regard to
the developed countries the top one
percentage of the firm's or a few firms
are accountable for majority of the
trade in those countries but when it
comes to India the top one percentage of
Indian firms account for 38 percentage
but here in developed countries it is
more percentage so this is only 38
personnage with regard to India so we
can say that in India the trade
structure or the export structure is
more
Galit area not equal now coming to
India's case we will see that most of
the exports in our country is done by
ms/ms that is marginal small and medium
entrepreneurs so MSM is handle majority
of the trade in our country or exports
in our country which means that we are
providing platform for everyone now
truly the top one percentage of the
firms are handling the whole of trade or
majority of the trade or export in our
country and this data is discussed in
the graph given below
coming to the fifth fact that is the
clothing incentive package boosted
exports of ready-made garment so this
fact is talking about some incentives
then incentive which has been provided
to the export sector of the readymade
garments this is a government provided
incentive so the survey says that the
relief from embedded state taxes
announced in 2016 boosted exports of
ready-made garments by about 16
percentage what does this mean here the
service is that the government has
provided an incentive and this incentive
has been provided to export of readymade
garments and this sector was considered
to be a weaker sector or a sector which
was vulnerable and needed some
government aid so in this fact the
survey says that a government incentive
can promote or boost the performance of
weaker sections or weaker sectors of the
economy so this is the idea conveyed in
this fact one thing you should remember
about the fact is that when government
provides some incentive to some vehicle
sections they will enjoy some benefits
or subsidies so here the government
should make sure that those incentives
or subsidies should not attract anti
dumping duties by other countries why
because when government is providing
some subsidies or incentives to some
particular sector the cost of production
of those sectors will come down so when
the cost of production decreases what
will happen the price also decreases so
this will have a competitive advantage
so with this
competitive advantage what will happen
the exports will increase because the
price is less so this will lead to other
countries imposing anti-dumping duties
so when you export something to other
countries on large scale and also at
reduced prices what will happen those
Goods will get flooded in the markets of
other countries which will not be
favourable for the other countries and
those countries will impose anti-dumping
duties so government should make sure
that the incentives or the subsidies
should not cross a particular limit so
that other countries will not impose
anti-dumping duties on our goods next
and a very important fact the survey
discusses is with regard to the Sun
Mehta preference that is existing in our
economy so as we said survey is
multi-dimensional it discusses not only
economic issues but also social issues
political issues international issues
etc so here this is a social issue so
the sixth fact about Indian economy is
that Indian society exhibit strong son
Mehta preferences what is meant by son
Mehta preference son the tap reference
means that parents may choose to keep
having children until they get the
desired number of sons so this is son
Mehta preference so if parents wants to
have a particular number of sons they
will keep on having children till they
acquire the particular number of sons
and as a result of this skewed sex
ratios are found
which means sex ratios that have not
been balanced so as a result of the son
Mehta preference what happens families
where a son is born are more likely to
stop having children than families where
a girl child is born so this will give
rise to unwanted girls so what is meant
by unwanted girls girls whose parents
wanted a boy but instead they had a girl
child so this will result in unwanted
girls so what will happen to this
unwanted girls they will get lesser
resources in terms of education health
care etc so these girls are considered
we unwanted girls sir we say that in
India we have around 21 million unwanted
girls so this is a very important fact
and in the coming session in a chapter
we will entirely on a chapter we will
discuss on this fact about the son Mehta
preference and this is very very
important we should discuss this in
detail and in the following lectures we
will be discussing this issue in detail
coming to the seventh fact that is the
substantial avoidable litigation in the
tax arena which government action could
reduce what does it mean the government
has to take more action in the tax arena
or with regard to the taxes the
government action should be increased so
let us see what is the explanation given
in the survey the tax departments
petition are high which means the
petition rate is high but the success
rate in litigation is low so number of
petitions with regard to the taxes are
high but litigation rate or the legal
action litigation means the legal action
that is taken so petition rate high and
legal action taken less also the survey
says that there has been a large number
of pending cases as well so legal action
or litigation takes a lot of time it is
a time consuming process and also in
India we see that the litigation process
has not been very successful so the
survey suggests that or survey provides
the fact that if government action can
be improved litigation can be avoided to
a particular extent so this is the
seventh fact that is given by the survey
now if we observe the table that is
given below we will see that with regard
to the direct tax cases the petition
rate in the Supreme Court has been 87
percentage success rate it is very less
that is 27 percentage coming to the high
court's 83 percentage petition rate and
13 percentage success rate coming to ITA
tea or cesta tea the petition rate again
coming to indirect tax cases the success
rate has been again
compared to the petition rate so survey
says that the petition rates are high
and success rate is less which means
litigation or legal action has proved to
be not very successful where the legal
action has proved to be not very
successful the government should take
some action and the survey suggests for
more government action in the tax arena
now coming to the eight fact that is to
recognize growth raising investment is
more important than raising saving so
here the service is that in order to
improve growth raising the investment is
more important than raising or
increasing the saving so if we look at a
fact in economics if we consider
economic growth growth in an economy
there are two important factors which
will result in economic growth - the
rate of investment and the second one is
the rate of savings let us see how
coming to investments when there is more
investment in the country it will
provide more output so more output will
also provide more employment so this
will increase the GDP of the country
output will increase the GDP and
employment will increase the per capita
income so this will add on to the growth
of a country and coming to savings so
more the saving means more capital
formation so more savings will lead to
more capital formation more capital
formation will lead to more investment
and more investment again will lead to
increase in output and increase in
output will generate more employment
leading to growth in an economy so this
is a relationship between growth and
investment and growth and saving and
service is that investment is more
important than saving in an economy like
India in order to ignite the growth and
as an explanation
survey says that cross-country
experience shows that growth slowdowns
are preceded by investment slowdowns but
not necessarily by saving slow down what
does it mean so survey says that
cross-country experiences or the other
country XP
shows that where there has been a
reduction in the investment there has
been reduction in growth as well but
this is not always the case with saving
which means whenever the saving has
reduced it is not necessary that the
growth has also reduced so it is
necessary to increase the investment
than increasing the savings and one more
concept you should understand here is
the difference between an open economy
and a closed economy so as we know India
is an open economy we are liberalized
privatized and also globalized so in an
open economy there is always access for
other countries so there is always
access to India for other countries so
investment from other countries can also
increase in the form of FDI FII exira so
because all this options are available
in an open economy like India investment
is more vital than savings and this is
the eighth fact the Economic Survey
discusses about now coming to the ninth
fact the ninth fact is that on direct
tax collections by Indian states and
local governments are significantly
lower than those of their counterparts
in other federal countries so here
the survey is talking about the state
and local governments and their revenue
collection in the form of direct taxes
so as we all know India is a federal
country so we have a federal structure
we have Union at the top we have States
and also we have local government so we
have a three tired structure and under
the three tired structure in our country
Union has its own tax collection states
can have their own taxes and also local
governments are also given authority on
certain taxes so three of the tyres or
three levels have tax collections of
different items and the survey is
discussing about the under utilization
of the tax collections by the state as
well as law
so service is that with regard to India
that direct tax collections are
significantly lower than other
counterparts or than other countries
which have a federal structure so here's
our way saying that the states and the
local government they are not collecting
enough taxes or they are under utilizing
their available tax resources or revenue
resources so this is what the survey is
talking about in this fact the survey
says that this share is low relative to
the direct taxation powers they actually
have services that the state and the
local governments has certain taxation
powers as we said states can collect
some taxes within their jurisdiction
also local governments have their own
jurisdiction but they are not actually
utilizing or completely properly
utilizing their taxation powers this has
led to under utilization services that
if they properly utilize their taxation
powers their revenue will also increase
and this is a very important fact which
needs to be discussed in detail which we
will do later in this economic survey
series one whole chapter is dedicated
for this and we will discuss this issue
in detail in that chapter coming to the
tenth fact the survey provides the tenth
fact says that the footprint of climate
changes evident and extreme weather
adversely impacts the agricultural yield
so here the survey talks about climate
change
so survey said that the climate change
has been very extreme and it is badly
affecting the agricultural yield so as
an explanation survey says that the
impact of weather is felt not with
extreme temperature increases but also
rainfall deficiencies which means that
the impact of climate change are
multiple oneness there has been an
increase in temperature extreme
temperatures are being experienced and
secondly rainfall deficiencies shortage
of rainfall so these are the two major
impact of the climate change as
discussed by the economic survey and
secondly the survey says that this
impact is twice as
unmitigated areas as in irrigated once
we know that in India most of the
agricultural land are our naira gated
and the survey says that if it is under
gated land the impact is double which
means that the Indian agricultural
system or the Indian agricultural sector
is badly affected due to the climate
change because we mostly have under
egative agricultural land so this also
will be discussed in detail
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