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Strong Macro-Economic Fundamentals And Reforms for Sustained Growth
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....trong Macro-Economic Fundamentals And Reforms for Sustained Growth <br>Income Tax<br>Dated:- 25-10-2017<br><BR>Press Information Bureau Government of India Ministry of Finance 24-October-2017 18:25 IST Strong Macro-Economic Fundamentals And Reforms for Sustained Growth Following are the highlights of the presentation made by ministry of finance secretaries at the press conference held today I. India a haven of Macroeconomic Stability Strong economic growth* India grew at a very strong pace of 7.5% p.a. in the three years of 2014-17 with growth exceeding 8% in 2015-16. There was a temporary slippage in growth in the last two quarters thanks to transitional effect of Demonetisation and GST. That effect is now over, with all indicators - IIP, Core Sector, Index, automobile, consumer spending etc. pointing out a strong growth pick up, there is expectation of very good growth from second quarter of current year itself. * The current global economic outlook is marked by relatively stronger activity in both advanced economies and emerging market & developing economies. Global economic activity is on the course of gradual improvement and the world GDP is projec....
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....ted to grow at the rate of 3.6 per cent and 3.7 per cent in 2017 and 2018 respectively, after remaining subdued in 2016, when it was 3.2 per cent. Significant improvement in investment, trade, and industrial production, coupled with strengthening business and consumer confidence, are supporting the recovery. This would also help in growth of exports which is reflected in strong export growth of 25.6% in September 2017 with April-September growth averaging nearly 12%. Inflation has been brought under control * The decisive steps taken by the Government along with decline in crude prices from its high levels in 2013-14 and benign global prices of tradables helped the economy to get out from inflationary spiral to relatively stable prices. Inflation declined from nearly double digits in 2012-13 and 2013-14 to an average of less than 5 per cent since then. Between July 2016 and July 2017, the inflation rate was close to 2 per cent. Inflation based on CPI is currently within the target of 4 per cent and is expected to be close to 3.5 per cent for the financial year 2017-18. Inflation is currently well within the target of 4 per cent. However, the RBI has projecting it to increa....
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....se to 4.2-4.6 per cent in the second half of the current financial year, a little higher than 4 per cent target, but within the range of 4+/-2 per cent. * Headline inflation based on Consumer Price Index (Combined) averaged 4.9 per cent in 2015-16 as compared to 5.9 per cent in 2014-15. CPI inflation for 2016-17 averaged 4.5 per cent. The year-on-year inflation in April-September 2017 was 2.6 per cent as compared to 5.4 per cent in the corresponding period of the previous year. External sector indicators have improved significantly despite global sluggishness * Along with lower inflation, lower level of current account deficit has brought about much of macro-economic stability in the last 3-4 years. Current account deficit was at dangerously high level of over 4 per cent in 2011-12 and 2012-13, leading to a significant instability in the exchange rate of the rupee. With significant improvement in the current account balance as reflected by lower levels of current account deficit, the volatility in the exchange rate also declined considerably. * World trade volume (goods and services) growth continued to decelerate in 2016 to 2.2 per cent from 2.8 per cent in 2015 (IMF....
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....'s WEO, October 2017). It is projected to pick up with growth of 4.2 per cent in 2017 and 4.0 per cent in 2018. India's Merchandise trade * Exports declined in 2015-16 primarily on account of the sluggish global demand and imports declined due to steep decline in international crude oil prices as well as the decline in the prices of other commodities. During 2016-17, exports grew by 5.2 per cent while imports increased by 0.9 per cent, helping in narrowing the trade deficit. Merchandise exports and imports grew by 11.5 per cent and 25.1 per cent respectively in dollar terms during April-September 2017, resulting in widening of trade deficit from US$ 43.4 billion in April-September 2016 to US$ 73.1 billion in April-September 2017. * The current account deficit (CAD) for 2015-16 was 1.1 per cent of GDP as compared to 1.3 per cent of GDP in 2014-15. The CAD further narrowed to 0.7 per cent of GDP in 2016-17 on the back of the contraction in the trade deficit that narrowed to US$ 112.4 billion in 2016-17 from US$ 130.1 billion in 2015-16. However, current account deficit widened to US$ 14.3 billion (2.4 per cent of GDP) during Q1 2017-18 from US$ 0.4 billion (0.1 per cent of GDP) ....
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....during Q1 2016-17, mainly on account of higher trade deficit in this period. Robust foreign direct investment The gross FDI flows to India in 2016-17 amounted to US$ 60.2 billion, as compared to US$ 55.6 billion in 2015-16 and US$ 45.1 billion in 2014-15, indicating the improved global confidence on the Indian economy. During April-August 2017, the gross FDI inflow in the economy was US$ 30.4 billion, higher as compared to the inflow of US$ 23.3 billion in the corresponding period of the previous year. Foreign exchange reserves Foreign exchange reserves stood at US$ 370 billion at the end of March 2017 as compared to 360.2 billion as at end March, 2016. As on 13th October 2017 the foreign exchange reserves exceeded US$ 400 billion. With increase in reserves in the last couple of years, most reserve-based external sector vulnerability indicators have improved. Steady improvement in fiscal situation and fiscal consolidation is on track There has been a steady consolidation of fiscal deficit in the last few years. Fiscal deficit of the central government had reached alarmingly high level of close to 6 per cent 2011-12 and averaged over 5 per cent between 2011-12 and 2013-14. Th....
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....e government is committed to fiscal consolidation path and has shown a steely resolve to reduce the fiscal deficit to 3.5 per cent of GDP in 2016-17 and further to 3.2 per cent as per the Budget estimates in 2017-18. Fiscal deficit of the Government of India as a ratio of GDP was 3.9 per cent in 2015-16 and 3.5 per cent for 2016-17 [Revised Estimate] and is budgeted to be 3.2 per cent in 2017-18. Focus on expenditure rationalization with plugging loopholes in public expenditure and innovative revenue raising efforts have helped to achieve this. From the angle of internal and external public debt stock, India does not face serious fiscal solvency related issues. Government of India's total outstanding liabilities-to-GDP ratio is budgeted to decline from 46.7 per cent by year-end 2016-17(RE) to 44.7 per cent by year-end 2017-18. Tax revenue (net to Centre) is increased by 16.8 per cent in 2016-17 (Provisional Actual) and it is budgeted to grow by 11.3 per cent in 2017-18. Fiscal deficit during April-August is 96 per cent of the full-year budgeted fiscal deficit on account of front loading of expenditure, but we are reasonably confident that full year budgeted ratio of fiscal defi....
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....cit of 3.2 per cent of GDP will not be breached. II. Transformational Reforms Landmark Reform in the form of GST Subsuming a large number of Central and state indirect taxes, the GST has been a landmark reform that has been implemented with effect from 1st July 2017. The launch of the GST represents an historic economic and political achievement, unprecedented in Indian tax and economic reforms, which has rekindled optimism on structural reforms. This has resulted in unified tax across the country and has helped in removing transport restrictions on the movement of goods resulting in their faster movement and help in creating common market, reduction in corruption and leakage and further help in Make in India programme. It is expected to provide boost to revenues, investment, and medium-term economic growth. Despite the teething troubles that the government and the GST Council are addressing, initial results in the form of revenue raised seem encouraging. Insolvency and Bankruptcy Code Another game changing reform has been The Insolvency and Bankruptcy Code, 2016 (Code) that was enacted on May 28, 2016, with an aim to consolidate the laws relating to insolvency of companies a....
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....nd limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a single legislation. The Code provides a comprehensive, modern and robust insolvency and bankruptcy regime, at par with global standards and even better in some aspects. The Government moved at a quick pace to implement the Code. About 2050 applications have been filed before NCLT so far, of which, 112 applications have been admitted and another 146 have been rejected or withdrawn. The default underlying admitted applications range from a few lakh of rupees to a few thousands of crores. The announcement of 12 large defaulters by the RBI will expand this sharply. Crusade against Black Money including demonetization The initiatives like: (a) Special Investigation Team on Black Money, constituted in May, 2014 for monitoring investigations and reviewing the framework for curbing black money; (b) Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, enacted w.e.f. 1st July 2015; (c) the Income Declaration Scheme, 2016; and (d) enactment....
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.... of the comprehensive Benami Transactions (Prohibition) Amendment Act, 2016, w.e.f. 1st November, 2016 had made varying degrees of success in the fight against black money generation and holding. The follow-up to these measures in terms of demonetization of the high denomination notes w.e.f. the expiry of 8th November, 2016 effected a body blow on black money. Housing Development Government has announced various measures in the Budget 2017-18 to promote growth of the economy which, inter alia, include push to infrastructure development by giving infrastructure status to affordable housing, higher allocation to highway construction, focus on coastal connectivity. The other growth promotion measures include: lower income tax for companies with annual turnover up to Rs. 50 crore; allowing carry-forward of MAT credit up to a period of 15 years instead of 10 years at present; further measures to improve the ease of doing business; and, major push to digital economy. The Budget also targeted to provide higher agricultural credit and to increase employment significantly. Institutional reforms Institutional reforms including expenditure rationalization and progressive elimination of l....
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....eakages in public delivery through stress on targeting and direct benefit transfer; instituting a profoundly impactful financial inclusion programme; measures to improve policy transparency in governance and decision-making; Ujwal DISCOM Assurance Yojana (UDAY) programme for DISCOMs; liberalization of FDI norms in various sectors; and approval of National Intellectual Property Rights Policy for laying down the future roadmap for intellectual property in India. Improved ease of doing business The complementarities built around the flagship Make-in-India programme, including comprehensive measures for improving the ease of doing business, encouragement to budding entrepreneurial talent under the Start-up India and Stand-up India Initiatives and advertisement and global campaign, have evidently improved India's global ranking as a business destination. India has launched eBiz platform for creating a business and investor friendly ecosystem by making all business and investment related clearances and compliances available on a 24x7 single portal, with an integrated payment gateway. Radical changes in FDI policy regime; most sectors on automatic route for FDI The Government radicall....
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....y liberalized the FDI regime on 20thJune 2016, with the objective of providing major impetus to employment and job creation. This is the second major reform after the major changes announced in November 2015. Now most of the sectors would be under automatic approval route, except a small negative list. Changes introduced in the policy include increase in sectoral caps, bringing more activities under automatic route and easing of conditionalities for foreign investment. With these changes, India is now one of the most open economies in the world for FDI. Ambitious Disinvenstment Programme Progressively higher revenues have been raised from disinvestment in public sector undertakings in the last three years and the government has a very ambitious target of raising much higher revenues in the current financial year. Reaching Welfare Programme for poorest families in North-East Corners In order to help the poorest of the poor, and to improve their living conditions, particularly that of women, the government has provided over 3 crore LPG connections between May 2016 and June 2017 which will replace the dirtier traditional fuels that are health hazard. Similarly in order to se....
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....cure poor people from shocks of man-made and natural disasters, total enrolment under Pradhan Mantri Jeewan Jyoti Bima Yojana and Pradhan Mantri Swasthya Bima Yojana was14 crore persons by September 2017. III. Infrastructure Push Government has consistently increased Public Expenditure on Infrastructure in order to boost employment and provide renewed impetus to economic growth. Government of India's total expenditure this year has crossed Rs. 11.47 lakhs crores (upto Sept '17), out of the budgeted expenditure Rs. 21.46 lakhs cr. (an increase of Rs. 1.2 lakhs cr. over last year). Special thrust of this drive is on key development sectors including Rural Roads, Housing, Railways, Power, Highways and Digital Infrastructure. The Capex target of Government of India for 2017-18 is Rs. 3.09 lakhs crores, which is 31.28% higher than last year, out of which Rs. 1.46 lakhs crores has been spent on capital works till September 2017. In addition, Government of India had fixed a Capital expenditure target for CPSEs for 2017-18 at Rs. 3.85 lakhs crores, out which capex spending of Rs. 1.37 lakhs crores has been achieved by CPSEs till Sept'17. Railways * A target of Rs. 1,31,000 cro....
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....re has been made for Capital Expenditure for the Railways. Against the target, an expenditure of Rs. 50,762 crore has been achieved. The main thrust is on upgrading the infrastructure to improve safety, laying of new lines and providing passenger amenities. * The following are the key among the capital works completed : New Lines (Construction) (Rs.4531.93 cr), Gauge Conversion (Rs.1842.24 cr), EBR-Partnerships (Rs.11504.29 cr), Track Doubling (Rs.4069.60 cr), Traffic Facilities (Rs.517.05 cr), Rolling Stock (Rs.8214.11 cr), Leased Assets-Principal Component (Rs.7781.97 cr), Road Over/Under Bridges (Rs.1068.09 cr), Track Renewals (Rs.2837.72 cr), Electrification Projects (Rs.1119.17 cr), Passenger Amenities (Rs.539.73 cr), Investment in JV/SPVs (Rs.1263.52 cr), Metropolitan Transport Projects (Rs.446.16 cr), etc. Saubhagya (Pradhan Mantri Sahaj Bijli Har Ghar Yojana) * Under this program, Universal Electrification is being taken up to provide last mile connectivity and electricity connections to all remaining un-electrified households in the country by Mar '19. This is an addition to the ongoing Scheme of Rural Electrification (Deen Dayal Upadhay Gram Jyoti Yojana). *....
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.... Outlay proposed is Rs. 16,320 crores, involving GoI support of Rs. 12319.50 crores Rural roads - PM Gram Sadak Yojana (PMGSY) * In order to complete Phase-I and II of PMGSY, Government of India, along with States, proposes to spend Rs. 88,185 crores over 3 years starting 2017-18. This will result in construction of 1,09,302 km of rural roads covering 36,434 habitations. * In addition, roads worth Rs. 11,725 crores, involving 5411 km of upgradation of existing roads and construction of new roads in 44 LWE districts, will be completed by 2019-20. PM Awas Yojana (PMAY) - Urban & Gramin * Universal Affordable Housing for All is being implemented and accelerated to give a big boost to the construction sector. Under PMAY (Urban), 1.2 crore units will be built with an outlay of 1,85,069 crores over next 3 years. Under PMAY (Gramin), 1.02 crore units will be built (51 lakhs units this year) with an outlay of Rs. 126,795 crores by Centre and States by March '19. Bharatmala Pariyojana * Taking forward it's commitment to providing more efficient transportation, Government has debottlenecked the Roads sector and significantly stepped up the Highway development and road building pro....
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....gram. In order to further optimise the efficiency of movement of goods and people across the country, Government is launching a new Umbrella program. This Road Building Program, for 83,677 km of roads involving capex of Rs. 6.92 lakhs crores over next 5 years. * Out of this, Bharatmala Pariyojana to be implemented with an outlay of Rs. 5,35,000 crores will generate 14.2 crores mandays of jobs. * The following categories of roads (34,800 km) have been proposed under BMP * Economic Corridors (9000 km) * Inter Corridor and Feeder Route (6000 km) * National Corridors Efficiency Improvement (5000 km) * Border Roads and International Connectivity (2000 km) * Coastal Roads and Port Connectivity (2000 km) * Green field Expressways (800 km) * Balance NHDP works (10,000 km) * Bharatmala works have been proposed for completion in 5 years by 2021-22 through NHAI, NHIDCL, MoRTH and State PWDs. * Substantial delegation of powers has been provided to NHAI, NHIDCL and M....
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....inistry of Road Transport & Highways to enable speedy implementation. * Funding for BMP: Rs. 2.09 lakhs crores will be raised as debt from the market, Rs. 1.06 lakhs crores of private investments would be mobilized through PPP and Rs. 2.19 Lakhs crores is to be provided out of accruals to the Central Road Fund (CRF), ToT Monetisation proceeds and Toll collections of NHAI. * In addition to 34,800 km under Bharatmala, balance works of 48,877 km of works under other current schemes will be implemented in parallel by NHAI/MoRTH with an outlay of Rs. 1.57 lakhs crores. This will be financed by providing Rs. 0.97 lakhs crores from CRF and Rs. 0.59 lakhs crores as Gross Budgetary support. * ToT Monetisation: For the first time ever, monetisation of 82 operating highways under a low risk Toll - Operate- Maintain-Transfer (ToT) Model has been initiated with a private investment potential of Rs. 34,000 cr. The 1st bundle of 9 NH stretches of 680.64 Km has been put out to tender by NHAI with potential monetization value of Rs. 6258 cr. Given the strong macroeconomic fundamentals of the economy and the continued public spending at substantially enhanced levels in comparison to previous ....
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....years, Government has taken several steps to improve the investment climate in the country. The comprehensive economic reforms undertaken by the government have resulted in unprecedented levels of foreign direct investment in the last 3 years. However, the domestic investment of the private sector continued to be affected by the growing contamination of loans advanced in the past, which have now become unsustainable. Besides affecting the general investment climate these non-performing loans have also necessitated an unprecedented levels of provisioning, particularly in the public sector Banks. This in turn has affected their lending capabilities that has particularly affected the Medium and the Small scale sector. It may be seen that while many corporates have accessed the bond market in the recent past, it is the MSMEs that have been deprived of capital due to the inability of the Banks that are weighed down by the excessive burden of very demanding provisioning norms. This called for effective steps for creating a conducive environment in which PSBs could provide loans to the private sector, especially the Medium & Small Scale industries. IV. Recapitalization of public sector b....
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....anks * Government Commits to Unprecedented Strengthening of Public Sector Banks * Rs. 2,11,000 Crore Front-loaded Bank Recapitalisation to Clean Up Legacy of NPAs * Credit Growth to Take-off through Recapitalised Banks * Banks to Give Big Push to MSMEs for Jobs and Growth Government has decided to take a massive step to capitalise PSBs in a front-loaded manner, with a view to support credit growth and job creation. This entails mobilization of capital, with maximum allocation in the current year, to the tune of about Rs. 2,11,000 crore over the next two years, through budgetary provisions of Rs. 18,139 crore, recapitalisation bonds to the tune of Rs. 1,35,000 crore, and the balance through raising of capital by banks from the market while diluting government equity (estimated potential Rs. 58,000 crore). Government actions are not limited to addressing capitalisation of PSBs. Definite steps will be taken alongside capitalisation to enable them to play a major role in the financial system. PSBs having 70% market share in the banking space will be geared for greater growth and to contribute through enhanced credit off-take. The stage has been set with a 'MUDRA Prot....
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....sahan' campaign across the country. There will be a strong push on enabling growth of MSMEs through enhanced access to financing and markets, and a drive to finance MSMEs in 50 clusters. While Ministries concerned will spearhead and provide momentum, banks will undertake speedy processing of loan applications in a hassle-free manner. Fintech companies will be roped in to cut down the appraisal process and generate quality loan applications. MSMEs will be handheld by extending support through: ü Compulsory TReDS (Trade Receivables electronic Discount System) registration by major PSUs within next 90 days, for shortening the cash cycle ü Sector-specific Mudra financial products, such as Mudra Leather, Mudra Textiles, etc. ü 100 bank-approved MSME project templates for speedier credit ü Revamped udyamimitra.in portal, so that banks compete for financing MSME projects ü Drive for registering MSMEs on the GeM (Government electronic Marketplace) portal and e-commerce platforms It may be recalled that aggressive loaning to sectors with excess capacity and poor due diligence created large stressed assets, which grew to 11.9....
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....% by March 2014. Asset Quality Review (AQR) carried out in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of NPAs. Expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were reclassified as NPAs and provided for. PSBs initiated cleaning up by recognising NPAs and provided for expected losses. Gross NPAs in PSBs rose rapidly from 2015, from 5.43% (Rs. 2,78,466 crore) in March 2015 to 13.69% (Rs. 7,33,137 crore) as of June 2017. Provisioning for expected losses grew substantially. From 2014-15 to 2017-18 Q1, Rs. 3,79,080 crore provisioning was made, whereas during the preceding ten years total provisioning was Rs. 1,96,937 crore only. This was the right approach to dealing with expected losses on account of stressed loans. Realistic recognition of NPA STRESSED ASSESTS Amounts in crore Rs. 2,78,466 ~Rs. 1,75,000 cr. in just 12 cases referred to NCLT (25% of NPA) Mar-17 Government recapitalised and initiated other reforms alongside the cleaning-up exercise, to make PSBs transparent and more effic....
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....ient. Bank Board Bureau was set up, and steps were taken to appoint non-Executive Chairmen in PSBs. Amounts in crore Rs. Indradhanush Plan for recapitalising and revamping PSBs was announced by the Government on 14.8.2015. Government envisaged capital need of Rs. 1,80,000 crore till 2018-19. Accordingly, Government made provision of Rs. 70,000 crore and projected market-raising of capital by banks to the tune of Rs. 1,10,000 crore. So far, Government has infused capital of Rs. 51,858 crore in PSBs. PSBs, under stress due to AQR and NPA recognition, have so far been able to raise Rs. 21,261 crore from the market. The launch of Indradhanush before the sharing of AQR findings by RBI with PSBs in December 2015 enabled PSBs to successfully remain Basel III compliant despite high NPA and consequential provisioning requirement identified through AQR. The present decision further builds upon Indradhanush. Government also undertook several legislative changes to facilitate recovery and resolution of stressed assets. The Insolvency and Bankruptcy Code, 2016 was enacted as a unified framework for re....
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....solving insolvency and bankruptcy matters. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (which governs Debt Recovery Tribunals) were amended in 2016 to facilitate faster recovery. Further, the Banking Regulation Act, 1949 was amended this year to enable Government to authorize RBI to direct banks to initiate the insolvency resolution process under the Insolvency and Bankruptcy Code. These bold steps taken over the last three years not only addressed legacy issues but gave a strong impetus to reforms aimed at rebuilding the strength of PSBs. The process of building stronger, bigger banks has begun with the consolidation of State Bank of India and the announced recapitalisation will give it greater impetus. A differentiated approach will be followed for this, based on the strengths of each PSB. The unprecedented recapitalisation and the initiatives announced today are expected to have a noticeable impact in the near-term, contributing to accelerated economic activity, employment and growth of the economy. V. stronger economic ....
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....growth AHEAD The real growth of the economy as measured by the GDP growth showed a steady improvement when it averaged 7.5 per cent between 2014-15 and 2016-17 vis-à-vis 5.9 per cent in the previous two years. Although there has been some reduction in the growth in the last few quarters, one expects it to be a temporary blip and going by the available indicators the downslide seems to have bottomed out and can expect the GDP growth to start rising again. As per the 4thAdvance Estimates of production of food-grains released by Department of Agriculture, Cooperation and Farmers Welfare for 2016-17, the production of total food-grains is expected to be 275.7 million tonnes, 9.6 per cent higher as compared to last year's total food-grains production of 251.6 million tonnes. As per the 1st Advance Estimates for 2017-18, the foodgrains output for Kharif season is likely to be 134.67 million tonnes as against 138.52 million tonnes as per the 4thAdvance Estimates of 2016-17. Despite subdued global economic condition and resulting lower levels of demand for India's exports demand, the Index of Industrial Production (IIP) grew by 4.6 per cent during 2016-17 as compared to a growth ....
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....of 3.3 per cent in 2015-16 (as per the revised IIP series. During April-August 2017 the general IIP growth was 2.2 per cent as compared to a growth of 5.9 per cent in the same period of previous year. During August 2017, the IIP registered a growth of 4.3 per cent, significantly higher than the growth of (-) 0.2 per cent in June and 0.9 per cent in July 2017. The sales of passenger vehicles registered a growth of 11.3 per cent for September 2017 and 9.2 per cent for April-September. Similarly, the sales of commercial vehicles increased by 25.3 per cent in September 2017 and 6 per cent for April-September 2017. As per IMF's assessment in October 2017, India's growth is expected to be at 6.7 per cent in 2017 and 7.4 per cent in 2018. IMF has also projected that India's growth would increase to 8.2 per cent by 2022. China's growth in 2016 was 6.7 per cent and is expected to be at 6.8 per cent and 6.5 per cent in 2017 and 2018 respectively. We expect strong growth rebound in the quarters and years ahead - may be better than even IMF's projections. Click Here See PPT pdf file ***** DSM/SBS/KA ============= Document 1 The India Story: Speeding Up For Take Of....
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....f! Ensuring Strong Macro-Economic Fundamentals & Building Up On Them For Rapid Growth & Job Creation Improving Common Man's Life: Consistent Inflation Control 18 THEN 16 14 12 10 Average Inflation (Value) 8 6 420 NOW 1. AVERAGE INFLATION UNDER 5% FROM JAN-2014 2. JULY-16 TO JULY-17 AVERAGE INFLATION IS AROUND 2% 1.1 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Increasing Self Reliance: Current Account Deficit in safe range of less than 2% THEN -2 -4.3 -2.5 -4.8 -0.5 -1 -1.5 -3 -3.5 -4 བྷr ༷ སསྨཱ༞ ° -4.5 -5 NOW -0.7 -1.1 -1.3 -1.7 1. From FY14 CAD is less than 2% of GDP 2. FY 17 recorded lowest CAD of -0.7% of GDP since FY06 FY12 FY13 FY14 FY15 FY16 FY17 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Improved Global Trust in India: Forex reserves built up to top $ 400 billion 400 Then Now 390 380 370 360 350 340 330 320 1. Highest Forex ($400 bn) since Independence 310 Forex at the advent of 2. Accumulation of $100 bn since Jan-14 financial crisis 300 3. Import cover of more than 1 year 290 28....
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....0 270 260 250 F Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-171 May-17 Sep-17 1 Percent of GDP Ensuring Solid Fundamentals: Steady Fiscal Consolidation on course to 3% level Then Now FY12 FY13 FY14 FY15 FY16 FY17 FY18 -2.0 -2.5 -5.9 -4.9 -4.5 -4.1 -3.9 -3.5 -3.2 -3.0 -3.5 -4.0 -4.5 -5.0 -5.5 1. Constant fiscal consolidation in last four years 2. Fiscal Deficit achieved constantly 3. Still increased devolution of taxes from 32% to 42% to States -6.0 Real GDP Growth: Poised for Take-Off Then Now Future 8.5 8.0 7.5 7.0 6.5 6.0 5.5 IMF FORECAST ⚫ Real GDP growth averaged 7.5% in last 3 year .8.2% growth achieved in 2015-16. • Temporary economic slowdown bottoming out • Projected to grow much faster in times to come 5.0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Note: IMF forecast is for Calendar year and CSO number for Fiscal Year. FY23 stands for 2022-23. Catalysing Growth & Investment: Transformational Reforms GST: Reducing Corruption, Furthering Formalisation & Productivity through Cooperative Federalism Reducing Corruption & Leakage Formalisation o....
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....f Production & Sales Cooperative Fiscal Federalism ΟΠCheck posts abolished ⚫ Boost to Make in India • Consumption based taxation • Cascading of taxes eliminated • Steps taken to reduce compliance burden on small businesses & exporters Unlocking Public Assets to Drive Growth: Highest Ever Disinvestment Target Disinvestment in Rs. crore 72500 75000 70000 65000 60000 55000 50000 45000 40000 35000 30000 25000 45500 20000 42132 37737 15000 29368 24581 25890 22846 10000 18088 5000 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 RE2017-18 BE New Infra for New India: Historic Infrastructure Push Increased Public Spending: More Investment, More Jobs, More Growth • Effective & targeted Government spending a key priority of Govt. Total expenditure this year is Rs 11.47 lakhs crores (upto Sept 17), out of Rs 21.46 lakhs cr. (an increase of Rs. 1.2 lakhs cr. over last year) Capex target of GOI for 2017-18: Rs 3.09 lakhs cr. 31.28% higher than last year, out of which 1.46 lakhs crores spent till Sept'17 Capex target of CPSES for 2017-18 is Rs 3.85 lakhs crores. Rs 1.37 lakhs crores achieved....
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.... till Sept'17 SPECIAL THRUST ON KEY DEVELOPMENT SECTORS INVOLVING CAPITAL EXPENDITURE Roads Housing Railways Power Digital Infrastructure A Historic Road Building Program: Building Roads to Progress & Prosperity Over the next 5 years: A 83,677 km of roads to built Rs.6.92 lakhs crore to be invested 14.2 cr.mandays of jobs to be generated Rapid completion 2021-22 to be ensured by NHAI, NHIDCL, MORTH and State PWDs Substantial delegation of powers recommended to enable speedy implementation of works BharatMala: Connecting India Like Never Before A 34,800 km of roads to be constructed 6 Hv Rs. 5,35,000 crores to be invested • • Economic Corridors (9000 km): To unlock full economic potential Inter Corridor and Feeder Route (6000 km): Ensuring holistic connectivity National Corridors Efficiency Improvement (5000 km): Enhancing efficiency Border Roads and International Connectivity (2000 km): Boosting Border Connectivity Coastal Roads and Port Connectivity (2000 km): Leveraging Ports for Progress Green field Expressways (800 km): Express speeds for Express gains • Balance NHDP works (10,000 km): Boosting all round connecti....
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....vity Shortest routes identified for connecting Economically Important Nodes Ludhiana - Ajmer: Preferred Route Shimla शिमला Ludhiana - Ajmer Shortest Route शिमला Ludhiana O PUNJAB Sirsa feren Salasar HIGHER Sikar सीकर CHANDIGARH Patiala 232 HARYANA AH1 Moga O Ludhiana PUNJAB Sirsa सिरसा Neemrana नीमराना DELHI New Delhi as farcoft 10 627 km Bha Jaipur जयपà¥à¤° 721 km, 9 hrs 15 mins CHANDIGARH Patiala ARYANA AHT Salasar सालासर Sikar सीकर Neemrana DELHI O New Delhi नई दिलà¥à¤²à¥€ 627 km (~100 km shorter than preferred route) 10 hr (45 min longer than preferred route) Sawai Madhopur Shortest route was identified for all Origin- Destination movement. 20% of them different from fastest route Shortest routes identified for connecting Economically Important Nodes Mumbai - Cochin: Preferred Route Mumbai - Cochin: Shortest Route Pyne MAHARASHTRA TELANGANA Kolhapur Belagavi 24 h 1.537 km....
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.... 1,537 km, 24 h Completely on GQ and NS Rajahmundryo ok jjayawada ANDHRA Anantapur PRADESH Nellore Tirupati Chennai Bengaluru Karnataka 560001 TAMIL NADU Coimbatore Tiruchirappalli Madurai Kochi, Kerala KERALA ashtra O Pune ÐœÐПÐЛапіла Mahad, Maharashtra TELAI Chiplun, Mahara Kolhapu 1,346km (200 km shorter than preferred route) Belag O Panji 29 hr (5 hr longer than preferred route) OKa 29 h 1,346 km LAKSHADWEEP Mangaluru, Karnataka 575001-575022 Kannur, Kerala 670001 Coimbatore Tiruchirapp Kochi, Kerala KERALA Shortest route was identified for all Origin- Destination movement. 20% of them different from fastest route Act East and Seamless Connectivity with neighbours . India's mercantile trade with BBN $12 Bn • Roads transport ~65% Delhi BHUTAN Rupaidiha Sonauli Panitanki Jaigaon Hatisar Raxaul Jogbani Fulbari Dawki Changrabandha Hili Mahadipur Agartala Dhaka Petrapol Kolkata BANGLADESH Sutarkandi Silchar Moreh Kawarpuchiah • 24 Trade points identified Transit through B'desh to improve North East connectivity Linking BBIN¹ and IMT2 will make North-East hub....
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.... of East Asia trade Inter - country trade to be facilitated by improving infrastructure leading to border points HARYANA Border Connectivity LEGEND: Border Connectivity MENGHALAYA TRASAPER Development of 3,300 km of roads along eastern and western borders •~1000 km proposed to be developed in Phase 1 Developing border roads will enhance national security Coastal and Ports Connectivity KARNATAKA BELANGANA LEGEND: Coastal Connectivity Port Connectivity Existing Coastal NH TOPERA کیا۔ BAY OF ~2,100 km coastal roads to boost tourism, industrial development • ~2,000 km to be built for port connectivity • Connectivity to ports, Coastal road development in conjunction with Sagarmala ~2,000 km to be developed Phase 1 Development of coastal roads will improve port connectivity and enable Port-led development and coastal tourism Bharat Mala Pariyojana Funding for BMP: Rs.2.09 lakhs cr. from market & Rs.1.06 lakhs cr. from pvt. Investments, Rs. 2.19 Lakhs cr from CRF/ToT/Toll Balance works of 48,877 km of works under other schemes with an outlay of Rs.1.57 lakhs cr. will also be undertaken in parallel by NHAI/MORTH wi....
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....th 0.97 lakhs cr. from CRF and 0.59 lakhs crores from Budgetary support. Monetisation of 82 operating highways with investment potential of Rs 34,000 cr taken up, with 1st bundle of 9 NH stretches of 680.64 Km bid out with monetization value of Rs. 6258 cr. KMs National Highway Construction 9000 8000 7000 6000 5,013 5000 4,439 4000 3000 2000 1000 5,732 4,410 4.260 6.061 Expenditure on Road Construction Expenditure (Rs. Cr.) 8,231 100,000 80,000 60,000 +35% 82,091 68,992 -2% 40,000 35,186 33,546 32,471 24,288 20,000 II 0 2011 2012 2013 2014- 2015- 2016- 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 12 13 14 15 16 17 Roads To Prosperity: Big Push to Rural Connectivity • Rural roads-PMGSY: Rs. 88185 cr. to be spent by Centre and States over 3 years. 1,09,302 km of rural roads to be laid to cover 36,434 habitations. • In addition, roads worth Rs 11,725 cr. for 5411 km of upgradation and new roads in 44 LWE districts to be completed by 2019-20. KMs 50000 47,447 45000 40000 36,337 36,449 35000 30000 30,994 24,161 25,316 25000 20000 15000 10000 5000 2011-12 2012-13 2013-14 2014-15 2015-16 ....
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.... 2016-17 A Roof Over Every Head: 2.2 Crore Families To Get Their Own Home • Universal Affordable housing for All being implemented to give a big boost to the construction industry. •PMAY- Urban: 1.2 crore units to be built with an outlay of 1,85,069 cr. over next 3 years. • PMAY- Gramin: 1.02 crore units to be built (51 lakhs units this year) with an outlay of Rs. 126,795 cr., by Centre and States by March '19. Lighting Up Every Home: Power For All Saubhagya (Pradhan Mantri Sahaj Bijli Har Ghar Yojana) • • Universal electrification launched to ensure last mile connectivity and electricity connections to all remaining un-electrified households in the country by Mar '19 Outlay proposed Rs.16,320 crore involving Gol support of Rs.12319.50 crore सौà¤à¤¾à¤—à¥à¤¯ Pradhan Mantri Sahaj Bijli Har Ghar Yojana SAUBHAGYA Institute Access to electricity to all willing households Substitution to kerosene Improvement in educational services Improvement in health services Improvement in communications Improvement in public safety and info on Tech Increased job opportunities Better quality of life, especially for ....
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....women, in daily chores Bringing Railways Back On Track: New Lines, Renewed Focus Railways: Capex plan outlay for 2017-18 is Rs.1,31,000 Cr. • Rs. 50,762 crore spent till 31.8.2017. 1,000 800 € 600 400 200 New Lines 400 352 360 380 953 813 0 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Artine Operators Connecting India INDIA SAGARMALA NETWORK MAP JAMMU KASHMIR HIMACHAL Amritsa PRADESH Ludhiana C PUNJAB UTTARAKHAND HARYANA DeDelhi RAJASTHAN ARUNACHAL ASSAM MEGHALAYA TRIPURA NAGALAND MANIPUR GUJARAT Dankuni ZORAM MADHYA PRADESH BENGAL Kolkata MAHARASHTRA Mumbai Ratnagi KARNATAKA Mangalore Findou.com Paradip Visakhapatnam TELANGANA Bengalur Che TAMIL NADO LEGEND Freight Corridors Industrail Corridors Major Sea Ports Intermediate Sea Parts Major Cities Copyright ©2015 www.mapsofindia.com (Updated on 6th Oct, 2015) UDAN- Ude Desh Ka Aam Naagrik Sagarmala Project : Port Modernization and Port Connectivity Connecting India Chenani-Nashri Tunnel Dhola Sadia Bridge New Brahmaputra Bridge Narmada Bridge Bullet Train Project PSU capital expenditure of 3.85 lakh crore on track. Additional expendit....
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....ure of 25000 crore expected Strong economic fundamentals Big boost to public investment in infrastructure Stronger banks - catalyzing private investment Strengthening Banks for More Jobs, More Growth & Where we are, More Investment Lending in the past by PSBs Increased NPAs Increased provisioning Interventions Impact Actions taken - What is being done – Roadmap for PSBS Outcomes Strong push to MSMEs Lending by PSBS Gross Advances Amount in lakh crore Rs. 2014: Stressed assets grow to 11.9% Threefold increase in 6 yrs (34 lakh cr.) Mar-08 18.16 YoY growth 14% -25% 52.15 Mar-14 Mar-17 58.65 2014-17: Growth sustained 9.0 8.0 7.0 6.0 5.0 FY12 Actual Growth CSO IMF Forecast FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Increased NPA Proper Diagnosis for Proactive Resolution: Restructured Assets Recognised as NPA Realistic Recognition of NPA AQR Stressed Assets 4.5% 7.8% 7.2% Mar-14 ■NPA 2.9% Mar-15 Mar-16 Jun-17 Restructured Standard Assets Mar-14 Jun-17 36% NPA 82% NPA Unearthed old NPAs 4,55,000 increase 2,78,000 7,33,000 Mar 2015 Jun 2017 Rs. 1.75 lakh cr. in just 12 cases r....
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....eferred to NCLT (25% of NPA) Post AQR transparency brought in Provisioning impact Increased Provisioning to Cover Expected Losses 1,47,904 1,86,667 92% higher than preceding 10 years (1.82 lakh cr.) 1,96,937 3,79,080 Preceding 4 years Preceding 8 years Preceding 10 years 2014-15 to 2017-18 Action Taken Actions Taken - Capital Infusion Capital Infusion Rs. 62,734 cr. in 6 yrs 20,117 1,900 1,200 12,517 12,000 15,000 Rs. 58,848 cr. in 3 yrs 25,000 6,990 24,997 Indradhanush Banks Basel III compliant despite high provisioning 1,861 Other Measures Enacted IBC SARFAESI Act & DRT law made more effective SBI consolidation MoUs with 11 PSBS for turnaround FY'09 FY'10 FY'11 FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 Take-Off Time Take-Off Strong economic fundamentals Push to public investment in infrastructure Stronger banks - catalyzing private investment Asset quality reviewed NPA duly recognised Provisioning done Basel III compliant Capital Conservation Buffer built Therefore take-off time for next big step New India Unprecedented PSB Capitalisation for More Jobs, Growth & Investment Rs. 2 lakh 11 thousand crores Rs. P....
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....eople-oriented utter New India - PSBS Catalysing Private Investments RECAP BONDS Front-loaded Rs. 1,35,000 cr. BUDGETARY SUPPORT & Rs. 76,000 cr. MARKET-RAISING tock shut Bigger, stronger PSBs Differential Approach Focus on HR issues Globally competitive banks Adequate credit for the deserving Faster MSME growth Employment generation People-oriented Direct Benefit to MSME and Employment Enhanced Financing Access Compulsory TReDS registration for major PSUs in 90 days Revamped udyamimitra.in - Banks compete to finance mutterstock prescot 100 bank-approved project templates Sector-specific Mudra financing products shutterstock paul prescott shutterstock akt shuttersto shutterstick Direct Benefit to MSME and Employment Enhanced Market Access MSME registration drive on •GeM portal ⚫ eCommerce platforms utterstock Dmitry Kalinovsky Dmitry Kanovsky Special campaign in 50 high-employment clusters of MSME shut shutterstock Big Push to muda STAND UP India Endeavour and Prosper shutterstoc Thank You<BR> News - Press release - PIB....