Welcome, Thursday, Oct 1, 2020

Indian Economy

The year 2017-18 was marked with strong Macro-Economic fundamentals. However, the growth of gross domestic product (GDP) moderated in 2017-18 vis-à-vis 2016-17. There was an improvement in export growth, fiscal trends remained attuned to the consolidation plans and inflation remained within the limits. The year also witnessed an increase in global confidence in Indian economy as well as improvement in ease of doing business ranking.

As per the estimates released by the Central Statistics Office, GDP is estimated to grow at 6.6 per cent in 2017-18, as compared to the growth of 7.1 per cent achieved in 2016-17. The growth in agriculture, industry and services is estimated at 2.1 per cent, 4.4 per cent and 8.3 per cent respectively in 2017-18 as opposed to 4.9 per cent, 5.6 per cent and 7.7 per cent respectively in 2016-17. Growth rate of industry sector declined in 2017-18 mainly on account of moderate growth in manufacturing sector. It was the services sector that contributed to more than half of the overall GVA growth rate of 6.1 per cent in 2017-18. From the demand side, the final consumption expenditure has been the major driver of GDP growth.

The production of food grains during 2017-18 is estimated at 277.5 million tonnes, as compared to 275.1 million tonnes in 2016-17. Procurement of Rice during Kharif Marketing Season 2017-18 was 30.1 million tonnes, whereas procurement of wheat during Rabi Marketing Season 2017-18 was 30.8 million tonnes. The production of pulses during kharif season 2017-18 is estimated at 8.7 million tonnes, sugarcane at 337.7 million tonnes, oilseeds at 20.7 million tonnes and cotton at 32.3 million bales of 170 kgs each. Agricultural credit in India has been growing consistently at above 17 percent annually during the last decade.

The eight core infrastructure supportive industries, viz. coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity, that have a total weight of nearly 40 per cent in IIP, registered a cumulative growth of 4.3 per cent in 2017 as compared to 5.1 per cent in 2016. The combined Index of Eight Core Industries stands at 138.0 in March, 2018, which was 4.1 per cent higher as compared to the index of March, 2017. Its cumulative growth during April to March, 2017-18 was 4.2 per cent. Coal production increased by 2.5 per cent during 2017-18 over previous year. Crude Oil production declined by 0.9 percent during 2017-18 over the previous year. Fertilizer production increased by 0.03 percent during 2017-18 over previous year. Steel production increased by 5.6 percent during 2017-18 over previous year.

In 2017-18, value of India’s exports was US$ 303.38 billion as against US$ 275.85 billion registering a positive growth of 9.98 percent over the previous year. Non-petroleum and Non Gems & Jewellery exports during 2017-18 were valued at US$ 222.45 billion as compared to US$ 200.55 billion for the corresponding period in previous year, registering an increase of 10.92%. Imports for 2017-18 were US$ 465.58 billion as against US$ 384.35 billion, registering a positive growth of 21.13 per cent over the last year. Oil imports during 2017-18 were valued at US$ 109.11 billion, which was 26.21 per cent higher than the oil imports of US$ 86.45 billion in the corresponding previous year. Non-oil imports during 2017-18 were valued at US$ 350.56 billion, which was 17.88 per cent higher than the level of such imports valued at US$ 297.39 billion in 2016-17.

The trade deficit for 2017-18 was estimated at US$ 162.2 billion, which was about 50 percent higher than the deficit of US$ 108.5 billion in 2016-17.

According to Department of Industrial Policy and Promotion (DIPP), the total FDI investments in India during April-December 2017 stood at US$ 35.94 billion, indicating that government’s effort to improve ease of doing business and relaxation in FDI norms is yielding results. Data for April-December 2017 indicates that the telecommunications sector attracted the highest FDI equity inflow of US$ 6.14 billion, followed by computer software and hardware – US$ 5.16 billion and services – US$ 4.62 billion. Most recently, the total FDI equity inflows for the month of December 2017 touched US$ 4.82 billion. During April-December 2017, India received the maximum FDI equity inflows from Mauritius (US$ 13.35 billion), followed by Singapore (US$ 9.21 billion), Netherlands (US$ 2.38 billion), USA (US$ 1.74 billion), and Japan (US$ 1.26 billion). Indian impact investments may grow 25 percent annually to US$ 40 billion from US$ 4 billion by 2025.

Foreign exchange reserves stood at US$ 424.4 billion on 30th March 2018, as compared to US$ 370.0 billion at end-March 2017.

The CPI inflation declined to 3.3% during 2017-18 with a broad-based decline in inflation across major commodity groups except housing and fuel & light. The economy has witnessed a gradual transition from a period of high and variable inflation to more stable prices in the last four years.