)
THE GOOD
Trade Deficit:
In the Financial year 2013-14, there were encouraging signs on the foreign trade front as India’s trade deficit recorded a sharp fall. The export-import deficit fell by 27.8%, from US$190.3 billion during 2012-13 to $137.5 billion. In the first quarter of FY 15, trade deficit declined by another 42.4%.
Credit flow to agricultural sector exceeds target:
Credit flow to agriculture stood at Rs 730,765 crore as against the target of Rs 700,000 crore in 2013-14. Due to higher procurement, stocks of food grains in central pool stood at 69.84 million tonne as on June 1, 2014. Currently, India is in an anomalous situation of having large stocks of foodgrains with high food inflation.
Agriculture Production:
India recorded a peak production of milk at 132.43 million tonnes in the year 2012-13 according to the Economic Survey for 2013-14.The country ranks first in global milk production accounting for 17 per cent of world production.
The agriculture sector will see a record production of food grains and oilseeds in the year 2013-14. Production of food grains is likely to touch a record output of 264.4 million tonnes (mt) in 2013-14 showing an increase of 2.88% over the previous year. Similarly, oilseeds are likely to have a record output of 32.4 mt showing an increase of 4.85% over the previous year. Overall, the agricultural sector is expected to grow at the rate of 4.7% in the year 2013-14.
Service Sector:
India ranked 12th in terms of services GDP among the world’s top 15 countries. India has the second fastest growing services sector with its CAGR at 9.0 per cent, just below China. Services constitute a 57 per cent share in GDP at factor cost in 2013-14.
External Debt:
India’s external debt has remained within manageable limits due to the external debt management policy. External debt stock at end of March 2013 stood at US $ 404.9 billion, recording an increase of US$ 44.1 billion (12.2 per cent) over the previous year’s level of US $ 360.8 billion.
Forex Reserves:
India’s foreign exchange reserves increased from US $ 292.0 billion at end March 2013 to US $ 304.2 billion at end march 2014.
THE BAD
Moderate deployment of credit to Industries:
Deployment of credit to industries moderated in 2013-14, even as credit to agriculture and allied activities, services, and personal loans picked up. Gross bank credit deployment to medium and large industries has been comparatively lower in 2013-14. Deceleration in credit growth has been observed in the mining, infrastructure, cement, coal, metals, and gems and jewellery sectors while in sectors such as food processing, construction, leather, rubber, glass and paper, a pick-up has been witnessed.
Overall credit flow to industry increased by 14.9 per cent in 2013-14, lower in comparison with the 20.9 per cent growth achieved in 2011-12 and 17.8 per cent in 2012-13. Credit flow to mining remained near stagnant at 0.05 per cent during 2013-14.
Performance of Core Industries and Infrastructure services:
While the growth in production of power and fertilizers was comparatively higher than in 2012-13, coal,steel,cement, and refinery production posted comparatively lower growth. Crude oil and natural gas production declined during 2013-14. Among infrastructure services, growth in freight traffic by railways and cargo handled by major ports and the civil aviation sector (except import cargo) has been comparatively higher during 2013-14. In the road sector, the National Highways Authority of India (NHAI) posted negative growth of 33 per cent during 2013-14 as compared to the 26.5 per cent growth during 2012-13.
Domestic production of coal was subdued at 556 MT in 2012-13 and 566 MT in 2013-14. Overall domestic demand for coal during these two years was in the range of 715-720 MT. Demand was mainly driven by the power generation sector, whereas demand in the iron and steel and cement sectors had moderate growth rates. To fill the gap between domestic demand and supply, the country imported about 146 MT during 2012-13 and about 169 MT of coal during April-January 2013-14 (provisional).
THE UGLY
Industrial growth:
Industry grew by just 1.0 per cent in 2012-13 and slowed further in 2013-14, posting a modest increase of 0.4 per cent.
India’s Human Development Rank slips further:
According to the United Nations Human Development Report (HDR) 2013, India has slipped down in HDI with its overall global ranking at 136 (out of the 186 countries) as against 134 (out of 187 countries) as per HDR 2012. It is still in the medium human development category with countries including China, Egypt, Indonesia, South Africa and Vietnam. India’s HDI of 0.554 in 2012 has slipped down a notch from 0.551 in 2011.
The existing gap in health and education indicators in India as compared to developed countries and also many of the developing countries highlights the need for much faster and wider spread of basic health and education.
The Indian performance in mean years of schooling (4.4 years) is even below that of Bangladesh and Pakistan which have lower per capita incomes.
Employment:
During 2004-05 to 2011-12, employment growth (Compound Annual Growth Rate[CAGR]) was only 0.5 per cent, compared to 2.8 per cent during 1999-2000 to 2004-05 as per usual status.
Declining share of agriculture:
The Economic Survey states that as a concomitant of growth, the share of agriculture and allied sector in gross domestic product (GDP) declined to 15.2% during the Eleventh Plan and further to 13.9% in 2013-14 (provisional estimates—PE).
Growth rates of productivity in agriculture sector are far below global standards; productivity levels of rice and wheat have declined after the green revolution of the 1980s. Another issue is soil degradation due to declining fertilizer-use efficiency.
Fewer cultivators:
Though agriculture still accounts for about 54.6% of total employment (Census 2011), there has been a decline in the absolute number of cultivators, which is unprecedented, from 127.3 million (Census 2001) to 118.7 million (Census 2011).
