KPMGFLASHNEWS
KPMGinINDIA
IndianEconomicSurvey2013-14KeyHighlights
9July2014
22
21February2013
ThefinanceministerpresentedtheEconomicSurvey
Persistentuncertaintyintheglobaloutlook,caused
201314beforetheParliamenton9July,2014.This
bythecrisisintheEuro-areaandgeneral
flagshipannualdocumentoftheMinistryofFinance,
slowdownintheglobaleconomyimpactingthe
GovernmentofIndia,reviewsthedevelopmentsinthe
demandforexports,compoundedbydomestic
Indianeconomyinfinancialyear2013-14,summarises
structuralconstraintssuchaslowmanufacturing
theperformanceonmajordevelopmentprogrammes,
base,delaysinprojectapprovalsamongothers,
andhighlightsthepolicyinitiativesofthegovernment
andinflationarypressures,hasresultedina
andtheprospectsoftheeconomyintheshortto
protractedslowdown.
mediumterm.Followingarekeyhighlightsofthe
GDPperformancein201314fromtheproduction
survey:
side
(comprising
agriculture,
industry
and
services)
Chapter1Thestateoftheeconomy
IndiasGDP,during201314,grewandmarginally
Performanceduring201213and201314
improvedto4.7percentascomparedto4.5per
centin201213.
TheIndianeconomyhasbeengoingthrough
Thiswasduetohighgrowthinagricultureand
challengingtimesthatculminatedinlowerthan5
alliedsectors,whichgrewat4.7percentcompared
percentgrowthofGrossDomesticProduct(GDP)
totheirlong-runaverageof3percent(during
atfactorcost,atconstantprices,fortwoconsecutive
19992000and201213),owingtofavourable
years,i.e.201213and201314.
monsoons.
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Concernsaroundindustrialgrowthpersistasslowdown
Outlookfor201415
intheindustrycontinuedduetodecelerationinmining
andquarrying,andadisappointingperformanceofthe
Withexpectationofbetterperformancein
manufacturingsector,withgrowthaveraging0.2percent
manufacturing,improvedbalanceofpayments
perannuminthepasttwoyears.Thus,industrialrevival
situationandmodestglobalgrowthrevival,the
iscentraltosustainedrevivalofoverallgrowth.
economyisexpectedtogrowintherangeof5.4
Theservicessectoralsorecordedslowgrowthdueto
5.9percentin201415.Thisisbecause
dismalperformanceoftrade,transport,andstorage.
investmentrevivalwillhappengradually;stillan
elevatedlevelofinflationlimitstheRBIsscopeto
GDPperformancein201314fromthedemandside
reducepolicyrates;alongwiththeexpectationofa
(comprisingconsumption,investmentandnetexports)
below-normalmonsoon.
Onthedemandside,growthofprivatefinalconsumption
Growthin2014-15isexpectedtoremainmoreon
declinedto4.8percent,in201314,from5percentin
thelowersideoftherangegiventheabove,forthe
201213.
followingreasons:(i)stepsundertakentorestart
Fixedinvestmentratedeclinedsteeplyin201314due
theinvestmentcycle(includingprojectclearances
toreductioningrossfixedcapitalformationby2.1per
andincentivesgiventoindustry)areperceivedto
cent,whichismainlyduetodeclineinprivatecorporate
beplayingoutonlygradually;(ii)thebenigngrowth
investment.Thisdeclineisbecauseofhighinterestrates
outlookinsomeAsianeconomies,particularly
andtightliquidityresultingfromcontractionarymonetary
China;(iii)stillelevatedlevelsofinflationthatlimit
policyfollowedtocontrolinflationandpreventrupee
thescopeoftheRBItoreducepolicyrates;and(iv)
fromdepreciating.
theexpectationofabelow-normalmonsoon.
Downsideriskalsoemergesfromprolongingof
Moderaterevivalofexports,coupledwithdeclinein
geo-politicaltensions.Ontheupside,suchfactors
imports,helpedimprovenetexports.Theshareof
asinstitutionalreformtoquickenimplementationof
exportsinGDPincreasedfrom24percentin201213
largeprojectsandastronger-than-expected
to24.8percentin201314,whiletheshareofimports
recoveryinmajoradvancedeconomieswouldhelp
declinedfrom30.7percentto28.4percent,resultingin
theIndianeconomyclockahigherrateofgrowth.
improvementinnetexportsby3.1percentpointsofthe
GDP.
Despitesomemeasuresundertakentoaddress
structuralconstraints,reversiontoagrowthrateof
Inflation,fiscaldeficitandCurrentAccountDeficit
around78percentcanoccuronlybeyondthe
(CAD)
ongoingandthenextfiscalyear.
Prioritiesforboostinggrowthincludereviving
AlthoughtheaverageWholesalePriceIndex(WPI)
investments,
strengthening
macro-economic
inflationdeclinedin201314to6percent,vis--vis8.9
stability,creatingnon-agriculturaljobs,developing
percentin201112and7.4percentin201213,itis
infrastructure
and
fostering
agricultural
stillabovecomfortlevelandcontinuestoposesignificant
development.
challenges.
Chapter2:Issuesandpriorities
Fiscaldeficitof4.5percentoftheGDPin201314,as
comparedtothebudgetedtargetof4.8percentofGDP,
A.Issues
isindicativeofcontinuedfocusonfiscalconsolidation.
Withashortfallintaxrevenuesanddisinvestment
Post2008,theeconomyhaswitnesseda
receipts,alongwithhigher-thanbudgetedsubsidiesand
interestandpensionpayments,fiscalconsolidationwas
worseningoftheeconomicoutlookanda
mainlyachievedthroughreductioninexpenditurefrom
downswingintheinvestmentcycle.Adverseglobal
thebudgetedlevels.
conditionswereundoubtedlyonereasonforthe
slowdowninbusinesscycleconditionsinIndia.
Raisingthetax-GDPratioandfurtheranceofsubsidy
However,itwouldbeuntruetosaythatdomestic
reformsareessentialforfiscalconsolidation.
factorssuchasinflationuncertainty,tightliquidity
CADreducedto1.7percentin201314from4.7per
conditionsanddifficultiesincontractingand
centin201213.Thiswasduetoimprovementinnet
financinginfrastructureprojectsdidnotcontribute
exportsbroughtaboutbyrestrictionsonnon-essential
tothemacro-economicoutcomeswitnessedfrom
importsanddemandslowdown.ImprovedCADalso
2006-07to2012-13.
broughtaboutimprovementinbalanceofpayments.
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Investmentactivitystartedfacingdifficultiesduetoglobal
II)Sustainablepublicfinance:
crisis.Asdemandsloweddown,someexistingprojects
becameunviable.Manylargeprojects,relatedto
Puttingpublicfinancesonasustainablepathhas
environment,forest,andlandacquisitionorraw
threeelements:
materialsrequiredforcompletionwereunabletoget
timelyclearances.Thisresultedinanumberofprojects
Accounting
practices
and
budgetary
gettingstalled.
management:anewFiscalResponsibilityand
BudgetManagement(FRBM)actwhichhas
Theinvestmentdownturnhasbeenexacerbatedby
consequencesifitisnotmet.
difficultiesintheavailabilityandcostoffinance.Thecost
ofborrowingindomesticmarketssufferedasudden
Taxreform:Thetaxregimemustbesimple,
increaseafter15July2013.Aftertheonsetofthegreat
predictable,andstable.Thisrequiresasingle-rate
recessionintheperiodaftertheglobalfinancialcrisis,
GoodsandServicesTax(GST),asimpleDirect
advanced
economies
introduced
unconventional
TaxCode(DTC),andatransformationofthetax
monetarypolicytools.
administration.TaxreforminIndiacanbyitself
improvetheeaseofdoingbusinessandpromote
TheDoingBusinessReport2014,preparedbytheWorld
efficiencyandproductivitygrowth.
Bank,showsthatIndiaranks134outof189countriesin
2014intheeaseofdoingbusinesscategory,andranks
Expenditurereform:isrequiredforthe
158outof189countriesundertheheadpayingtaxes.
governmenttoachievedesiredoutcomeswith
Indiascomplextaxsystemsuffersfromproblemsinboth
minimumcost.Thisrequiresachangeinthe
structuresandadministration.
budgetingprocessandaccountingpractices,
subsidyreform,afocusonpublicgoods,and
mechanismsforfeedbackandaccountability.Some
B.Reforms
keyareasinthisregardinclude:
Subsidy:Notallthemoneyputintosubsidy
ThedefiningchallengeinIndiatodayisthatof
schemesreachesthepoor.Itisincreasingly
generatingemploymentandgrowth.Jobsarecreatedby
feasibletoidentifyhouseholdsbelowthepoverty
industrywhentheindustryinvestsandgrows.Hence,it
lineandgivethemdirectbenefit.
isimportanttocreateanenvironmentthatisconducive
fortheindustrytoinvest.Therecentbusinesscycle
Education:Therehasbeenremarkable
downturnhasseenasharpdeclineininvestment.
expansion
of
expenditure
on
elementary
Revivinginvestment,istherefore,ontopofthe
educationinrecentyears;however,the
governmentspriorities.
outcomes
indicate
that
the
design
of
Investmentsaremadeonthebasisoflong-termgrowth
government
programmes
in
elementary
prospects.ThekeytorevivinginvestmentinIndialiesin
educationneedsrevisiting.
revivingthetrendgrowthrateoftheeconomy.Reforms
areneededonthreefronts:creatingaframeworkfor
Health:Thereisaneedtofocusonthelimited
sustainedlowandstableinflation,settingpublicfinances
budgetaryresourcesonpublicgoods.Themost
onasustainablepathbytaxandexpenditurereform,
powerfulinterventionsforimprovedhealthmay
andcreatingthelegalandregulatoryframeworkfora
lieintheareaofwaterandsanitation.
well-functioningmarketeconomy.
Epidemiological
interventions
such
as
vaccination
programmes,
and
control
of
I)Creatingaframeworkforlowandstableinflation:
diseases,havethecharacteristicsofpublic
First,thegovernmenthastoworktowardsalowand
goods.
stableinflationratethroughfiscalconsolidation,moving
towardsestablishingamonetarypolicyframework,and
Infrastructure:Theroleofthegovernmentin
creatingaconduciveenvironmentforacompetitive
infrastructurecanbeusefullydividedinto
nationalmarketforfood.Since2010,therehasbeenan
planning,contracting,andregulating.Manyof
upsurgeinfoodinflationwhichhasspilledovertonon-
thedifficultiesofthelastdecadeinthefieldof
foodandgeneralinflation.Thereisneedforaformal
infrastructuremaybeattributedtoinadequate
monetarypolicyframeworkthroughwhichtheReserve
statecapacityforprocuringandcontracting
BankofIndiaisgivenclarityofobjective(aCPIinflation
complexPPPprojects.Separationofthis
target),andoperationalautonomyinpursuitofthat
function
would
require
establishing
an
target.Alowandstableinflationratehelpsmaintainthe
independent
organisation
with
specialised
valueofthecurrency,bothdomesticallyandexternally.
expertiseincontracting.
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III)Creatingthelegalandregulatoryframeworkfor
ThegrossTax-GDPratioisexpectedtobeat10
awell-functioningmarketeconomy
percentin2013-14(directtaxbeing5.6percent
andindirecttaxbeing4.4percent)ascomparedto
Indiacanincreaseitslong-termtrendgrowthby
10.2percentin2012-13(directtaxbeing5.5per
unleashingtheentrepreneurialspiritofmillionsacross
centandindirecttaxbeing4.7percent).
thecountry,bystrengtheningtheeconomicfreedomof
For2013-14,fiscal,effectiverevenueandprimary
thepeople.Thebiggestchallengetodayisimproving
deficitsareplacedat4.5percent,2percentand
statecapacitysuitableforamarket-basedeconomy.A
1.2percentofGDPrespectively.Theplan
long-term,carefulandsystematiceffortisrequiredfor
expenditurehasbeenestimatedatINR4,531
undertakinginstitutionalchange.Somekeyareasinthis
billion,equivalentto4percentoftheGDP.
regardinclude:
ExternaldebtoutstandingasapercentofGDPhas
Addressingmarketfailures:Thekeyinsightontherole
declinedandisplacedat1.6percentin2013-14,
ofthegovernmentinamarketeconomyistheideaofa
ascomparedto1.8percentin2012-13.Thetotal
marketfailure.Theconceptofamarketfailuregivesa
outstandingliabilitiesasapercentofGDPstandat
frameworkforguidingstateintervention.Beforeastate
49.4percentofGDPin2013-14,asagainst50.1
interventionisinitiated,itisimportanttodemonstrate
percentin2012-13.
thatthereisamarketfailure.Itshouldbeshownthatan
interventionwillsolvethemarketfailure.Further,the
Corporationtaxesconstituted3.5percentofGDP
coststosocietyasaresultofgovernmentintervention
in2013-14,similarto2012-13,whereaspersonal
shouldbeoutweighedbyitsbenefits.
incometaxstoodat2.1percentofGDPin2013-
14,asagainst1.9percentin2012-13.
Reformingmarketsoffactorsofproductionsuchas
thoseforlabour,land,andcapital,however,remained
Collectionsfromcustomsdutiesreducedto1.5per
largelyunreformedandisanimmediatepriority.
centofGDPin2013-14,asagainst1.6percentin
2012-13.Collectionsfromunionexcisedutiesalso
Capitalcontrols:Thereisaneedtodrasticallysimplify
witnessedadeclineandstoodat1.5percentof
crossborderactivitiesasanelementofreducingthe
GDPin2013-14,asagainst1.7percentin2012-
costofdoingbusinessinIndia.Numerousemerging
13.Onthecontrary,collectionsfromservicetax
marketsaredoingbetterthanIndiaonthis.Forexample,
increasedat1.4percentofGDPin2013-14,as
asinglewindowforFDIcanbeeffectivelycreatedifall
against1.3percentin2012-13.
rulemakingunderFEMArestswithinadepartmentof
theGovernmentofIndia,andalltransactionsare
Fiscalconsolidationremainsimperativeforthe
permittedotherthanthoseintheexplicitnegativelist.
economy.While,itwouldbeachallengetostickto
thefiscalconsolidationroadmap,especiallyinlight
Liberalisingagriculture:StateAgriculturalProducts
oftheglobalanddomesticeconomicscenario,the
MarketCommittee(APMC)lawsareamajorhurdleto
introductionofgoodsandservicestax,rationalising
modernisationofthefoodeconomy.Alongsidethe
expenditure,improvementintaxbuoyancyand
removalofconventionalinterventionsinthefood
othertaxreformsshouldcontributetohigher
economy,thereisaneedtoplaceapriorityuponthe
growth.
threenational-levelpublicgoods:
Chapter4-Pricesandmonetarymanagement
Knowledgeofproduction
HeadlineWholesalePriceIndex(WPI)inflation,
Regulationsonfuturestrading
whichaveraged8.94percentin2011-12and7.35
percentin2012-13,moderatedto5.98percentin
Interventionstoaddressthemarketfailuresin
2013-14.Acrosscommoditygroups,theaverage
productionorwarehousing.
quarterlyinflationratewas9.43percentforfood
items,10.14percentforfuelandpower,and2.94
Chapter3-Publicfinance
percentfornon-foodmanufacturedproductsduring
2013-14.ConsumerPriceIndex(CPI)inflationalso
Thefiscaloutcomeofthecentralgovernmentin2013-14
moderatedto9.49percentin2013-14from10.21
wasinlinewiththefiscalconsolidationtargets,despite
percentin2012-13.TheRBIhastargetedbringing
macroeconomicchallengesofgrowthslowdown,high
downtheCPIinflationtoaround8percentby
globalcrudepricesandslowgrowthofinvestment.
January2015and6percentbyJanuary2016.
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TheMonetaryPolicyoftheReserveBankofIndias
ThetotalnumberofNonBankingFinance
(RBI)remainedtightasthefocusremainedon
Companies(NBFCs)registeredwiththeRBI
controllinginflation.During2013-14,theRBIchanged
declinedfrom12,385,asatJune2012,to12,225
thereporate4fourtimeswithratestandingat8percent
ason30June2013.Whilst,thedeposittaking
asatendMarch2014,whichis50bpshigherthanthe
NBFCsdeclinedfrom271to254,thesystemically
reporatestandingasatendMarch2013.Thecash
importantnon-deposittakingNBFCsincreasedto
reserveratioandstatutoryliquidityratioremained
417from370duringthesameperiod.
unchangedduring2013-14.
Thecumulativeamountmobilisedthroughequity
Consideringthesofteningofglobalpricepressureson
publicissuesdeclinedby14.2percent.Themean
tradeablecommodities,andreductioninexchangerate
sizeoftheinitialpublicofferings(IPO)listedatthe
volatility,inflationisexpectedtobemoderateinthe
NationalStockExchange(NSE)andBombayStock
comingfiscalyear.Further,fiscalconsolidationandthe
Exchange(BSE),withameanIPOsizeofINR33
addressingofsupplysideconstraintsthatexacerbate
crores,sharplywentdownby83.33percent
foodinflationshouldalsocreateroomformonetary
comparedto2012-13.
easingin2014-15.
Duringthelastfinancialyear,variousregulatory
Chapter5-Financialintermediation
changeshavebeenmadetodevelop/stimulatethe
growthofthecorporatebondmarket.
Theyear-on-yeargrowthofaggregatedepositsofbanks,
Capitalmarketscontinuedwiththeupside
bankcreditsandinvestmentsinapprovedsecuritiesin
momentumandthebenchmarkindicesi.e.,the
2013-14,vis--vis2012-13,haschangedasfollows:
SensexandtheNiftyrose18.8percentand18.0
Aggregatedepositsmarginallyreducedto14.1per
percentrespectivelyinthefiscalyear2013-14.
centin2013-14,from14.2percentin2012-13.
Theturnoverincashsegmentoftheequitymarket
andequityderivativesegmentincreasedby2.59
Bankcreditshaveincreasedby13.9percentin
percentand22.92percentrespectively,compared
2013-14,asagainsttheincreaseof14.1percentin
totheturnoverin2012-13.
2012-13.
Themajorpolicyinitiativesundertakenduringthis
fiscalincludenotificationofForeignPortfolio
Therateofgrowthofinvestmentsinapproved
Investors(FPI)regulationson7January2014,and
securitieshasdecreasedfrom15.4percentto10.3
theenhancementofthelimitsforforeign
percent.
institutionalinvestorsinvestmentinthedomestic
debtmarketfromUSD66billiontoUSD81billion
ScheduledCommercialBanks(SCBs)reflecteda
(USD51billionforcorporatebondsandUSD30
declineinthegrowthofprofits.Thegrowthinthe
billionforgovernmentsecurities).
consolidatedbalancesheetin2012-13was15.1per
cent,asagainstthegrowthof15.8percentin2011-12.
During2013-14,thefirstyearpremiumunderwriting
bylifeinsurersregisteredagrowthof11.44per
Thecapitaladequacy(underBaselII)ofthebanksatthe
cent.Premiumunderwrittenbytheprivatesector
system-wideleveldeclinedto13.88percentasatend
declinedby4.01percent,whereas,theLife
March2013,ascomparedto14.24percentasatend
InsuranceCorporation(LIC)registeredagrowthof
March2012.
17.64percentinfirstpremiumunderwriting.
ThegrossNonPerformingAssets(NPAs)togross
During2013-14,premiumunderwritingbynon-life
advancesratioshotupto3.6percentin2012-13from
insurersregisteredagrowthof12.23percent,with
3.1percentin2011-12.ToaddresstherisingNPAs,the
privateandpublicinsurersregisteringthegrowthof
RBIhastakenvariousstepsincludingtheissueof
15.37percentand9.86percentrespectively.
guidelinesonearlywarningsystemdated30January
2014.
Lifeandnon-lifeinsurancepenetrationcumulatively
hasgrownfrom2.3percentin2000to3.96per
Towardsthefinancialinclusionfront,publicsectorbanks
centin2012.
opened7,840branchesin2013-14ascomparedto
4,432in2012-13,andtheyhad96,853automatedteller
Keychallengesamongstothersincludeilliquidityin
machinesbyJanuary2014asagainst69,652attheend
thefinancialmarkets,developmentofthebond-
of2012-13.
currencyderivativenexustoequitymarketquality
levels,
financial
inclusion
and
infrastructure
financing.
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Chapter6-Balanceofpayments
In2013-14,therupeestartedtodepreciateona
month-on-monthbasisstartingMay2013.This
IndiasBalanceofPayment(BoP)positionhasimproved
processwasmorepronouncedinJune2013and
significantlyin2013-14,particularlyinthelastthree
August2013whenitdepreciatedinexcessof5per
quarters.Thiswasmainlyduetodecreaseinimportof
centonamonth-on-monthbasis.Theaverage
goldandsilver.Further,measurestoaugmentcapital
exchangerateoftherupeereachedapeakin
flowsthroughquasi-sovereignbondsandliberalisationof
September2013atINR63.75perUSD.Thereafter,
externalcommercialborrowingsalsohelped.TheRBI
onthestrengthofthemeasurestakenbythe
alsoputinplaceaspecialswapwindowforforeign
governmenttoreducetheCAD,andtheRBIand
currencynon-residentdeposit(banks)andbanks
thegovernmenttoboostcapitalflows,therupee
overseasborrowingsthroughwhichUSD34billionwas
reboundedtoreachanaveragelevelofINR61.62
mobilised.
perUSDinthemonthofOctober2013.Therupee
Therewaspick-upinexportsandmoderationofimports
hassubsequentlybeenrangeboundandstablein
intheperiod2013-14.Thisledtocontractioninthetrade
2013-14.
deficit.Overalltheexportsfortheperiod2013-14
Indiasexternaldebtcontinuestobepredominantly
amountedtoUSD318.6billion,asagainstUSD306.6
consistingoflong-termborrowings.Long-term
billionin2012-13.Theimportsfortheperiod2013-14
externaldebtatUSD333.3billion,attheendof
reducedtoUSD466.2billionfromUSD502.2billionin
December2013,accountedfor78.2percentofthe
2012-13.ThetradedeficitwasUSD147.6billionwhich
totalexternaldebt,theremaining21.8percent
waslowerbyUSD48billionfromthe2012-13level.Asa
beingconstitutedofshort-termdebt.
proportionofGDP,tradedeficitonBoPbasiswas7.9
percentofGDPin2013-14,asagainst10.5percentin
BoPimprovedduringtheperiod2013-14mainlyon
2012-13.
accountoftherestrictiononnon-essentialimports
andotherincentivesforcapitalflowduringthe
TheCurrentAccountDeficit(CAD)moderatedsharplyto
period2013-14.However,sustainingthesamein
USD32.4billionin2013-14,asagainstUSD88.2billion
themedium-termisachallengeassomeofthe
in2012-13.TheCADat1.7percentofGDPin2013-14
restrictionsandincentivesmayhavetoberolled
comparesfavourablywiththelevelsinthepre-2008
back.Withclosemonitoringandpolicies,itislikely
crisisyears.
thattheCADmaybelimitedtoaroundUSD45
Thenetcapitalinflowfortheperiod2013-14amounted
billion(2.1percentofGDP)in2014-15,whichis
toUSD47.9billion,asagainstUSD92.0billioninthe
likelytobefinancedbystablesourcesof
previousyear.WhilenetFDIwasplacedatUSD21.6
capital/financialflows,leadingtoastableexchange
billion,portfolioinvestment(mainlyFII)atUSD4.8billion,
rateenvironmentwithouttheneedforanymajor
ECBsatUSD11.8billion,andNRIdepositsatUSD38.9
interventioninthisregard.
billion,thereweresignificantoutflowsonaccountof
short-termcreditatUSD5.0billion,bankingcapital
Chapter7-Internationaltrade
assetsatUSD6.6billion,andothercapitalatUSD10.8
billion.Thenetcapitalinflowsintandemwiththelevelof
Globaleconomicuncertaintycoupledwith
CADledtoareserveaccretionofUSD15.5billionon
subsequentslowdown,thoughofapassingnature,
BoPbasisin2013-14.
continuetocasttheirshadowsonthetradegrowth
ofemerginganddevelopingeconomies(EDEs)
Althoughtheforeignexchangereserveincreasedby
includingIndia.Thisisreflectedinthegrowthtrend
USD15.5billiononBoPbasis,innominaltermsit
ofexportswhichfellfromanastoundinggrowth
increasedonlybyUSD12.2billion.Thiswasonaccount
rateof30.1percentin2003-2007to16percent
ofvaluationlossinthenon-USdollarassetsheldowing
during2009-2013.Whiletheoutlookseemstobe
tocross-currencymovementsandthedeclineingold
improving,thesituationstillremainsfragileforboth
prices.Foreignexchangereserveswereplacedat
theworldandIndiantrade.
USD304.2billionatendMarch2014,asagainstalevel
ofUSD292.0billionatendMarch2013.
Merchandiseexportshaveregisteredagrowthin
absolutetermsof4.1in2013-14percentas
Thevulnerabilityofrupeeandcurrenciesofother
againsttocontractionin2012-13.Thishasresulted
emergingmarketanddevelopingeconomiescametothe
inanincreaseintheshareofworldexportsfrom
foreinMay2013asaresultoftheannouncementbythe
0.7percentin2000to1.7percentin2013.In
U.S.Fedabouttaperingofitsassetpurchases.The
2013,Indiawaspositionedonthe19thrankas
rupeewasalsoaffectedonaccountoftheelevatedCAD
against31st,in2000,inthetopmerchandise
andlargewithdrawalfromtheFIIdebtsegment.
exporterslistintheworld.
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Exportsgrewin2013-14primarilyduetocommendable
Chapter8-Agricultureandfoodmanagement
performancebythelabourintensiveexportsectors.
Whiletextileexportsgrewby14.6percentin2013-14,
Asaconcomitantofgrowth,theshareofagriculture
exportsinleatherandleathermanufacturerssector
andalliedsectoringrossdomesticproduct(GDP)
soaredby16.7percent,andofhandicraftsincluding
declinedto15.2percentduringtheEleventhPlan,
carpetswerealsoindoubledigitsat10.9percent.
andfurtherto13.9percentin2013-14(provisional
estimates(PE)).Whilethesectorstillaccountsfor
India'smerchandiseimportsatdeceleratedfrom0.3per
about54.6percentofthetotalemployment
centin2012-13toanegativeof8.3percentin2013-14.
(Census2011),therehasbeenadeclineinthe
Thiswasprimarilyduetothedeclineintheimportof
absolute
number
of
cultivators,
which
is
goldandcapitalgoods.Goldimportsfellsharplyin
unprecedented,from127.3million(Census2001)
2013-14onthebackofseveralmeasurestakenbythe
to118.7million(Census2011).Thisisindicativeof
government.Intermsofvalue,goldandsilverimports
ashiftfromfarmtonon-farmemployment,causing
fellby40.1percenttoUSD33.4billionin2013-14.
realfarmwagestorisebyover7percentannually
inrecentyears.
TradedeficitforApril2013toJanuary2014atUSD137.5
billionwas27.8percentlowerthanUSD190.3billionin
AsperthePEfor2013-14,growthrateofthe
April2012toJanuary2013.
agricultureandalliedsectorsGDPwas1.4per
centand4.7percentrespectivelyduringthefirst
Moderateexportgrowth,coupledwithdeclineinimports,
twoyearsoftheTwelfthPlanperiod.Havingsaid
helpedimprovethenetexports.Measurestakenbythe
this,astructuralchangeinthecompositionof
governmentandtheRBIhaveresultedinadeclinein
Indiastradedeficit
agriculture,showingdiversificationintohorticulture,
,contributingtoalowerCADof1.7
livestock,andfisheries,isnoticeable.
percentofGDP.
OverallGrossCapitalFormation(GCF),bothpublic
InIndia,growthinservicesexportsbecameerraticinthe
andprivate,inagriculturalandalliedsectorhas
postglobalcrisisperiod.Reflectingtheimpactof
increasedfrom16.1percentofitsGDP,in2007-
uncertaintyintheglobaleconomyandweakgrowthin
08,to21.2percentin2012-13(2004-05prices).
advancedeconomies,servicesexportswitnesseda
AsapercentageofthissectorsGDP,private
growthof4percent,asagainstalowergrowthof2.4
investmenthasbeenrisingandwas18.1percent
percentinthecorrespondingperiodof2012-13.
in2012-13,indicatingthatmorethan85percentof
Importofserviceswhichgrewby3.2percentin2012-13
investmentinthissectorisbytheprivatesector.
declinedtoanegativeof2.8percentin2013-14,withall
AlthoughIndiaisoneofthetopcountriesin
majorcategoriesregisteringnegativegrowth.
agriculturalproduction,thecurrentleveloffarm
SurplusonaccountofIndia'sservicesexportshasbeen
mechanisation,
which
varies
across
states,
acushioningfactorforfinancingalargepartofthe
averagesaround25percentasagainstmorethan
merchandisetradedeficitinrecentyears.Withmoderate
90percentindevelopedcountries.
growthinservicesexportsandfallinserviceimports,the
Agriexports(includingmarine)grewby5.1per
surplusatUSD28-29billionperquarterresultingin
centin2013-14over2012-13,toUSD37,292
overallnetsurplusofUSD115.2billionin2013-14
million,ofwhichexportsofmarineproductsalone
financed49.4percentoftradedeficit.Withhigher
increasedby44.8percentoverthesameperiod.
exportsandlowerimportsthetradedeficitreducedto
Further,exportofricehasincreasedfrom
7.9percentin2013-14,asagainst10.5percentin
USD2575millionin2010-11toUSD7742millionin
2012-13.
2013-14,andexportsoftotaldairy,poultry,meat,
ThechallengesforIndiaonthetradefrontaremany.
andmarineproductshavedoubledtheirsharein
WhileIndiahassuccessfullydiversifieditsexportbasket,
agriexportsbetween2008-09and2013-14.
moreneedstobedoneontheproductdiversification
TheNationFoodSecurityAct(NFSA)wasnotified
front.Italsohastorepositionitselfinitsareaslikegems
on10September2013,withtheobjectiveof
andjewelleryandelectronicgoodswhereithaslost
providingfoodandnutritionalsecuritybyensuring
considerableground.
accesstoadequatequantityofqualityfoodat
Therearemanymicroandsector-specificissuesthat
affordableprices.Itprovidesforcoverageofupto
needurgentattention.Theseprimarilyarerelatedto
75percentoftheruralpopulationandupto50per
infrastructure,tradefacilitation,taxandtariffs,andcredit.
centoftheurbanpopulation.Theestimatedannual
Addressingtheseissuescanexponentiallypromote
foodsubsidyforimplementationoftheActat2014-
India'sexportgrowthby30percenttoachievea
15costsisaboutINR1,31,066crore.
respectableballparkfigureofatleast4percentsharein
theworldexportsinthenextfiveyears.
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.
Inordertoaddresstheissueofsupplychain
During2013-14,totalFDIinflowswereUSD36.4
managementinagriculturalmarketing,itisnecessaryto
billion.FDIequityinflowswereUSD24.30billion,
removemarketdistortionsincreatingacommonmarket
showinganincreaseof8percentascomparedto
topromoteefficiencyandgrowth,andfacilitatethe
thepreviousyear.CumulativeFDIinflowsfrom
creationofanationalagriculturalmarket.
April2000toMarch2014stoodatUSD323.9
billion.NetFDIinflowswereUSD21.6billionduring
Onapositivenote,thereappearstobenocausefor
2013-14.Further,inthepast,sectorslikeservices,
alarmontheElNiofrontasIndiaiswellplacedonfood
construction,
telecommunications,
computer
grainsavailability,withrecorddomesticproductionand
software
and
hardware,
drugs
and
hugestocksinthecentralpool.TheFoodand
pharmaceuticals,
automobile
industry,
power,
AgricultureOrganisation(FAO),initsCerealSupplyand
DemandBriefofJune2014,hasalsoforecast
metallurgicalindustries,andhotelsandtourism
a
haveattractedmaximumFDIinflows.
comfortableglobalscenariofor2014-15withhigh
stocks-to-useratiosofcerealsandstableprices.
Inviewoftheongoingindustrialslowdown,the
policyfocusneedstotargetkeygrowthdriversin
Chapter9-Industrialperformance
theshortterm.Oneofthecrucialdriverscanbethe
ThelatestGDPestimatesindicatethatindustrygrewby
revivalofprivatecorporatesectorinvestment,
ameagre1.0percentin2012-13andsloweddown
buildingaconduciveinvestmentclimateand
furtherin2013-14,postingamodestincreaseof0.4per
upliftingtheoverallbusinesssentiment,FDIin
cent.Industrialperformancein2013-14remained
varioussectors,conduciveexchangeratespolicies,
lacklustreforthesecondsuccessiveyear.
allowingFDIindefence,removalofrestrictionsin
SEZsandNationalInvestmentandManufacturing
ThemanufacturingandminingsectorGDPdeclinedby
Zones(NIMZs).Further,promotionofindustrial
0.7percentand1.4percentrespectivelyin2013-14.
clustersfordifferentsectorsindifferentregions
Keyreasonsforthepoorperformancehavebeen
wouldalsoattractinvestmentbecauseclusters
contractioninminingactivitiesanddecelerationin
havetheadvantageoflowerlogisticscosts,better
manufacturingoutput.Further,declineininvestment,
supply-chainlinkages,andeasyaccesstolabour
particularlybytheprivatecorporatesectorduring2011-
andtechnology.
2012and2012-2013haveaddedtothewoesofthis
sector.
Chapter10-Servicessector
Theconsumerdurablessegmentindexcontractedby
ServicesconstituteamajorportionofIndiasGDP
12.2percentin2013-14,asagainstagrowthof2.0per
witha57percentshareinGDPatfactorcost(at
centduringthepreviousyear.Thisisprimarilydueto
currentprices)in2013-14.Besidesbeingthe
severaldomesticandexternalfactorssuchashigher
dominantsectorinIndiasGDP,ithasalso
interest,infrastructurebottlenecks,inflationarypressure
contributedsubstantiallytoforeigninvestment
leadingtorisinginputcosts,dropindomesticand
flows,exports,andemployment.
externaldemandforsomesectors,whichhavetogether
Indiasservicessectorthatremainedresilienteven
contributedtolowgrowthinthemanufacturingsector.
duringandimmediatelyaftertheglobalfinancial
GrossCapitalFormation(GCF)intheindustrialsector
crisisbuckledunderthepressureofcontinued
comprisingofmining,manufacturing,electricityand
globalanddomesticslowdown,resultinginsub-
constructionhasdeclinedfrom31.8in2011-12to28.3in
normalgrowthinthelasttwoyears.However,early
2013-14.EventhoughdetailedestimatesofGFCFare
shootsofrevivalarevisiblein2014-15,withsigns
notavailablefor2013-14,theoveralldeclineingrowth
ofimprovementinworldGDPgrowthandtrade
ratesoffixedinvestmenthintsatfurtherdecelerationin
alsoreflectedinthepick-upinsomekeyservices
investmentinkeysegmentsofindustryduringtheyear.
likeIT,aviation,transportlogistics,andretail
trading.In2013-14thegrowthrateoftheservices
Overallrateofgrowthofcreditflowtoindustryincreased
sectorat6.8percentismarginallylowerthanin
by14.9percentin2013-14,lowerincomparisonwith
2012-13.Thisisduetodecelerationinthegrowth
the20.9percentgrowthachievedin2011-12and17.8
rateofthecombinedcategoryoftrade,hotels,and
percentin2012-13.
restaurants,
and
transport,
storage,
and
Postglobalfinancialcrisis,whiletheIIP-basedgrowth
communicationsto3.0percentfrom5.1percentin
rateofthecapitalgoodssectorwasrobustat14.8per
2012-13,despiterobustgrowthoffinancing,
centin2010-11,itfellby6percentin2012-13and
insurance,realestate,andbusinessservicesat
furtherby3.6percentin2013-14primarilyduetosteady
12.9percent.Construction,aborderlineservices
decelerationinfixedinvestmentinthepastthreeyears.
inclusion,whichhasnotbeenperformingwellsince
Theslowpaceofmegaprojectsimplementationanda
2012-13,grewbyonly1.6percentin2013-14.
declineinthenumberofnewprojectshasadversely
impactedthecapitalgoodssegment.
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternational
Cooperative(KPMGInternational),aSwissentity.Allrightsreserved.
ThecombinedFDIshareoffinancialandnon-financial
ThetotalForeignDirectInvestment(FDI)inflows
services,
construction
development,
intomajorinfrastructureregisteredagrowthof22.8
telecommunications,computerhardwareandsoftware,
percentin2013-14ascomparedtoacontradiction
andhotelsandtourism,canbetakenasarough
of60.9percentduring2012-13,withpositive
estimateoftheFDIshareofservices,thoughitcould
growthrecordedinrailway-relatedcomponents,
includesomenon-serviceelements.In2013-14,FDI
telecommunications,airtransport,andpower.Bank
inflowstotheservicessector(topfivesectorsincluding
creditfortheinfrastructuresectormoderatedfrom
construction)declinedsharplyby37.6percentto
anaverageof44.8percentin2011-12to17.7per
USD6.4billion,comparedtoanoverallgrowthinFDI
centin2013-14.
inflowsat6.1percent.Asaresulttheshareofthetop
fiveservicesintotalFDIfelltonearlyone-sixth.
Thegrowthinpowergenerationwas6percent
duringApril-March2014,ascomparedto4percent
Whileexportsofsoftwareservices,accountingfor46per
inthecorrespondingpreviousperiod.Thecapacity
centofIndiastotalservicesexports,deceleratedto5.4
additiontargetfor2013-14wassetat18,432.3MW
percentin2013-14from5.9percentin2012-13,travel,
andcapacityadditiontargetforTwelfthFiveYear
accountingforanearly12percentshare,witnessed
planissetat88,537Megawatt(MW).Thepower
negativegrowthof0.4percent.However,movingin
generationfromadditionalcapacitytobegenerated
tandemwithglobalexportsoffinancialservices,Indias
duringtheTwelfthPlancriticallydependson
exportsoffinancialservicesregisteredahighgrowthof
ensuringfuelsupply(coalaswellasgas),
34.4percentin2013-14.
improvingthefinancialhealthofthestateelectricity
boards,makingpowerpurchaseagreementsof
Someserviceslikesoftwareandtelecomwerebigticket
itemsthatgaveIndiaabrandimageinservices.While
independentpowerproducerseconomicallyviable.
furtherfocusontheseservicesisneededtoretainand
Thegapbetweencoaldemandandsupplyhas
furtherourlead,thetimehascometofocusonsome
consistentlybeenincreasing,whichwasabout100
otherhighpotentialbigticketitems(identifiedastourism
MTattheendoftheEleventhFiveYearPlanand
and
hospitality
sector;
port
services;
shipping,
nowincreasedto145to150MT.Tofillthegap
shipbuildingandshiprepair;andrailways)thathavehigh
betweendomesticdemandandsupply,thecountry
manufacturing-sectorandemploymentlinkages.
importedabout146MTofcoalatacostof
Chapter
11
-
Energy,
infrastructure
and
INR92,538croreduring2012-13,andabout169
MTatacostofINR95,175croreduring2013-14
communications
(provisional).
The
initiatives
identified
for
Thetotalinvestmentininfrastructuresectorduringthe
acceleratingcoalproductionintheshortterm
TwelfthFiveYearPlan(2012-17)isestimatedatUSD1
includes(i)buildingcriticalfeederroutesforcoal,
trillion,halfofwhichisexpectedtocomefromtheprivate
(ii)clearingpendingenvironmentandforest
sector.TheTwelfthFiveYearPlanhaslaidspecial
clearancesandrehabilitationissues,(iii)permitting
emphasisoninfrastructuredevelopmentasquality
commercialcoalminingbytheprivatesector,(iv),
infrastructureisimportantnotonlyforsustaininghigh
restructuringofCoalIndiaLimited(CIL).
growth,butalsoforensuringthatthegrowthisinclusive.
Atotallengthof21,787kmofnationalhighways
Sectorwiseperformanceofcoreindustriesand
hasbeencompletedtillMarch2014undervarious
infrastructureservicesshowedamixedtrend.Areaslike
phasesoftheNationalHighwaysDevelopment
powerandfertilisers,railways,civilaviationandcargo
Project
(NHDP).
In
spite
of
several
traffic(exceptimportcargo)showedpositivegrowth,
constraintsduetotheeconomicdownturn,the
whereassectorslikecoal,steel,cement,refinery,crude
NHAIconstructed2844kmofroadlengthin
oilandnaturalgasproductionwitnessedlower/negative
2012-13,itshighesteverannualachievement.
growth.
During
2013-14,
a
total
of
1901
km
of
road
construction
was
completed.
The
Delayintheexecutionofprojectsonaccountofissues
governmenthasformulatedvariousinitiativesto
likeregulatoryapprovals,problemsinlandacquisition
expediteprojectsunderNHDPwhichinclude
andrehabilitation,timeoverruns,etc.continuestobe
project
preparation,
streamlining
of
land
oneofthemainreasonsforunderachievementinmany
acquisition/environmental
clearances,
dispute
infrastructuresectors.AsperthereportforFebruary
resolution,exitforequityinvestors,co-ordination
2014,totaloriginalcostofimplementationofdelayed
withotherministries,etc.
projectswasaboutINR7,39,882crore,andtheir
anticipatedcompletioncostislikelytobeINR8,97,684
crore,implyinganoverallcostoverrunofINR1,57,802
crore(i.e.21.3percentoftheoriginalcost).
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.
During2013-14,productionofcrudeoilremained
theallocationofspectrumisdelinkedfromthe
stagnantat37.8millionmetrictonnes(MMT),asagainst
licenceandhastobeobtainedseparatelyasper
37.9MMTin2012-13,whichisamarginaldecreaseof
prescribedprocedure,i.e.biddingprocess.
0.20percent.Theaveragenaturalgasproductionfor
2013-14wasabout35.4billioncubicmeters(BCM),as
Fromamacroeconomicperspective,theneedfor
against40.7BCMfor2012-13showingdeclineof13per
infrastructure
development
for
economic
cent.Atotalof254ProductionSharingContracts(PSCs)
prosperityandglobalintegrationcannotbe
havesofarbeensignedundernineroundsoftheNew
overemphasised.Thechallengeistoensure
ExplorationLicensingPolicy(NELP)bidding,ofwhich
strong,sustainable,andbalanceddevelopment
148blocksarecurrentlyoperationalandtheremaining
through
integration
of
economies
with
106havebeenrelinquishedbythecontractors.Under
environmentally
sustainable
development
of
CoalBeadMethane(CBM)policy,33explorationblocks
infrastructure.Concernsforstalledinfrastructure
havebeenawarded.Shalegasisconsideredtobean
projectslikesteppingupinfrastructureinvestment,
importantnewsourceofenergy,withamulti-
improvingproductivityandqualityofinfrastructure
organisationalteam(MOT)ofthevariouspublicsector
spending,andremovingproceduralbottlenecks
oilandgascompanieshavingbeenformedtoexamine
needtobeaddressedtoensureacceleratedand
theexistingdatasetandsuggestamethodologyfor
betterinfrastructuredevelopment.
shalegasdevelopmentinIndia.
Chapter12-Sustainabledevelopmentandclimate
Thefreightloading(excludingloadingbyKonkan
change
Railways)byIndianRailway(IR)during2012-13was
placedat1008.09milliontonnes,asagainst969.05
Therehasbeenasubstantialimprovementonthe
milliontonnesin2011-12,registeringanincreaseof4.03
developmentfrontwithmanycountriesachieving
percent.ThebroadobjectiveofIRistodevelopa
varioustargetssetaspertheMillennium
strategytobeapartofaneffectivemulti-modaltransport
DevelopmentGoals(MDG);energyintensityhas
systemandtoensureanenvironment-friendlyand
declined,globalpovertyhasbeenhalved,
economicallyefficienttransportmovement.
sanitationtargetsandavailabilityofdrinkingwater
DomesticpassengertraffichandledatIndianairports
hasbeenachievedinafewcountries.Indiahas
reached122.43millionduringApriltoMarch2013-14.
madesignificantprogressinmeetingthetargets
Thisisanincreaseof5.2percentoverthedomestic
setoutbyMDG.
passengertrafficthroughputof116.37millionforthe
Theglobalcommunity,followingtheRio+20
sameperiodduring2012-13.Internationalpassenger
mandate,isdevelopingasetofsustainable
traffichandledatIndianairportswasplacedat46.62
developmentgoals(SDGs).Thesegoalsmaybe
millionduring2013-14,asagainst43.03millionduring
integratedwiththeunfinishedMDGswhenthey
thecorrespondingperiodofthepreviousyear,thereby
endin2015.Themajorfocusareasidentifiedfor
recordingagrowthrateof8.34percent.International
theSDGsarepovertyeradication,foodsecurity
cargothroughputatIndianairportsduring2013-14was
andnutrition,healthandpopulationdynamics,
1.44MMT,ascomparedto1.41MMTduringthe
education,
gender
equality
and
women
previousyear.Duringthereferenceperiod,domestic
empowerment,waterandsanitation,energy,
cargothroughputstoodat0.84MMTasagainst0.78
sustainable
cities
and
human
settlement,
MMT,therebyrecordinganincreaseof7.7percent.
sustainableproductionandconsumption,andthe
During2013-14,majorandnon-majorportsinIndia
meansofimplementation.
accomplishedatotalcargothroughputof980.49million
Thegovernmentexpenditureonsocialservicesas
tonnesreflectinganincreaseofonly5percentoverthe
proportionofGDPincreasedfrom5.49percentin
sameperiodof2012-13.Themajorportscontributedto
2005-06to7.09percentin2012-13.ThePresident
anincreaseof1.8percent,whereasthenon-major
andthePrimeMinisterhaveannouncedthelaunch
portstrafficgrewat9.6percent,ascomparedtothe
ofSwachhBharatMissionforensuringhygiene,
correspondingperiodof2012-13.
wastemanagementandsanitationacrossIndia.
Thetelecomsectorhasbeenoneofthefastestgrowing
Indiaismakingprogressinimplementingnational
sectorsinrecentyearsbeingthesecondlargest
plansforclimatechange.Ithasimprovedthe
telephonenetworkintheworld,afteronlyChina.The
efficiencyofitseconomyandreducedtheCO2
totalamountofINR61,162croreobtainedthrough
emissionsperunitofGDPby20percentbetween
auctionofspectrumunderNationalTelecomPolicy,
1990to2011.Therenewablepowercapacityhas
2012,whichwasmorethanthevalueofthespectrumon
increasedandaccountsfor12percentofthetotal
offeratreserveprice.TheDepartmentofTelecomhas
powercapacityinthecountry.
finalisedguidelinesonunifiedlicense,pursuanttowhich
.
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.
Ason31May2014,44projectsworthINR160.35million
TheNationalVocationalEducationQualification
havebeenrecommendedtobefundedthroughthe
Framework(NVEQF)hasbeenalignedtothe
NationalCleanEnergyFund(NCEF).TheGovernment
NationalSkillQualificationFramework(NSQF)to
ofIndiahasinitiatedaconsultationprocesstodiscuss
standardiseskilllearningoutcomesandprovide
theinstitutionalinfrastructureneededtoaccessGlobal
mobility.
During
2013-14,
National
Skill
ClimateFinanceresources.Furthervariousdomestic
DevelopmentCouncil(NSDC)partnerstrained
plansandschemesarebeingimplementedaspartofthe
10,05,074peopleacrossawidearrayofsectors
nationalactionplanonclimatechange.Innovative
rangingfromhealthcare,manufacturing,electronics
schemesliketheJawaharLalNehruNationalSolar
andhardware,tourism,hospitalityandtravelto
Missionsinstallationofsolarphotovoltaiclights,power
banking,financialservices,retail,information
plants,etc.areeligibleforfundingthroughNCEF.In
technology,andtextilesin366districts.Skill
2013,Indiahasregistered115CleanDevelopment
developmentisvitalnotonlyfortakingadvantage
Mission(CDM)projects,thehighestbyanycountry.
ofthedemographicdividend,butalsoformore
inclusivegrowth.
AsopposedtotheKyotoprotocolandtheMDGs,two
newagreementsonclimatechangeandsustainable
Expenditureonhealthisjust1.4percentofIndias
developmentapplicabletoallwillbetheglobal
GDP.In2013-14,therewasanincreaseinoutlay
frameworksforactionstobefinalisednextyear.The
forthehealthsectorby7.44percentoverthe
issueofhowdevelopedanddevelopingcountrieswillbe
previousyear,toINR327.45billion.Thecombined
treatedinthesenewglobalagreementswillbecrucial.
revenueandcapitalexpenditureofthecentreand
Theagreementsneedtoensurethatthedeveloping
statesonmedicalandpublichealth,familywelfare,
countriesaregiventheirfairshareofcarbonand
andwatersupplyandsanitationhasincreasedfrom
developmentspace.
INR535.57billionin2006-07toINR1,362.96billion
in2012-13(BE).Alotmoreneedstobedoneto
Chapter13-Humandevelopment
furtherimprovethehealthindicatorstoprovide
qualityandaffordablehealthcareforthelarge
AccordingtotheHumanDevelopmentReport(HDR)
Indianpopulation.
2013,IndiawithaHumanDevelopmentIndex(HDI)of
0.554in2012hasslippeddownafewnotcheswithits
Womenandchildrenconstitutingabout70percent
overallglobalrankingat136(outofthe186countries),
ofthetotalpopulationofthecountryarevulnerable
asagainst134(outof187countries)asperHDR2012.
andlaggingintermsofmanyeconomicandsocial
Demographicdividend(theaverageageofthe125
parameters.Theshareofthegenderbudgethas
billion-strongIndianpopulationwillbe29yearsin2020)
increasedfrom2.79percentin2005-06to5.83per
willbenefitIndiaifitspopulationiseducated,healthy,
cent(INR97,133.70billion)ofthegrossbudgetary
andadequatelyskilled.
supportin2013-14.Greaterinclusionofwomen
involvesnotjustagreatershareforthegender
During2004-05to2011-12,employmentgrowth
budgetbutalsogreatershareofwomeninthe
(compoundannualgrowthrate[CAGR])wasonly0.5per
decisionmakingprocess.
cent,comparedto2.8percentduring1999-2000to
2004-05,asperusualstatus.Thereissteepreductionin
Timelyactionforequippingtheyoungpopulation
unemploymentrateunderCurrentDailyStatus(CDS),
withhighexpectationswithhealth,education,
from8.2percentin2004-05to5.6percentin2011-12.
adequateskillsandsecurityisofparamount
Thefallinunemployment,despitemarginalgrowthin
importance.Forthis,massiveeffortsareneededin
employmentin2009-10and2011-12,couldalsobeon
theformofinvestmentinsocialinfrastructure,skill
accountofthedemographicdividend,asanincreasing
development,andempowermentofwomen.
proportionoftheyoungpopulationoptsforeducation
Leveragingmoderntechnologyforefficientdelivery
ratherthanparticipatinginthelabourmarket.
ofprogrammes,removingthemultiplelayersof
AsapercentageofGDP,expenditureoneducationhas
governance,simplifyingprocedures,andgreater
goneupfrom2.9percentin2008-09to3.3percentin
participatoryrolebythebeneficiariescanhelpin
2013-14(BE).Thereisneednotonlytoincreaseit
creatingabetterdeliverymechanism.
further,butalsotoaddressqualityissues.
WhileIndiahassomeofthebestinstitutionstheworld,in
termsofqualityofeducation,alotmoreneedstobe
done.Inthisdirectionrecentinitiativesareundertakenin
theareaofhigherandvocationaleducationwhichwill
focusonaccess,equity,quality,andinnovationthrough
creation;expansionandconsolidationofinstitutions,
research,andinnovationhavingnorm-basedfunding,
havebeenlaunchedforstrengtheningandreforming
highereducation.
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.
www.kpmg.com/in
Ahmedabad
Hyderabad
CommerceHouseV,9thFloor,
8-2-618/2
902&903,NearVodafoneHouse,
RelianceHumsafar,4thFloor
CorporateRoad,
RoadNo.11,BanjaraHills
PrahladNagar,
Hyderabad500034
Ahmedabad380051
Tel:+914030465000
Tel:+917940402200
Fax:+914030465299
Fax:+917940402244
Kochi
Bengaluru
SyamaBusinessCenter
MaruthiInfo-TechCentre
3rdFloor,NHByPassRoad,
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Vytilla,Kochi682019
Koramangala,Bangalore560071
Tel:+914843027000
Tel:+918039806000
Fax:+914843027001
Fax:+918039806999
Kolkata
Chandigarh
UnitNo.603604,
SCO22-23(IstFloor)
6thFloor,Tower1,
Sector8C,MadhyaMarg
GodrejWaterside,
Chandigarh160009
SectorV,SaltLake,
Tel:+911723935777/781
Kolkata700091
Fax:+911723935780
Tel:+913344034000
Fax:+913344034199
Chennai
No.10,MahatmaGandhiRoad
Mumbai
Nungambakkam
LodhaExcelus,ApolloMills
Chennai600034
N.M.JoshiMarg
Tel:+914439145000
Mahalaxmi,Mumbai400011
Fax:+914439145999
Tel:+912239896000
Fax:+912239836000
Delhi
BuildingNo.10,8thFloor
Pune
DLFCyberCity,PhaseII
703,GodrejCastlemaine
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Pune411001
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Theinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavourtoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactonsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.
2014KPMG,anIndianRegisteredPartnershipandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(KPMGInternational),aSwissentity.Allrightsreserved.
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Chapter 2: Issues and prioritiesChapter 3 - Public financeChapter 5 - Financial intermediationChapter 6 - Balance of paymentsChapter 7 - International tradeChapter 9 - Industrial performanceChapter 10 - Services sectorChapterChapter 13-Human development