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BPM sector grew 8%, e-commerce sector up 19%: Economic Survey

BPM sector grew 8%, e-commerce sector up 19%: Economic Survey

"In 2016-17, annual growth in domestic passenger departures was 23.5 per cent as compared to 3.3 per cent in the USA and 10.7 per cent in China", said the Survey tabled in Parliament today.

Stating that India's share in global exports has stagnated at 1.7 per cent from 2011 to 2016 with intermittent falls to 1.6 per cent, the Survey said there is a need for a well thought-out strategy for the country to reach a "respectable share of at least 5 per cent". Subramanian also said that there has been convergence in price-earnings ratio of the Indian and the United States stock markets in the last couple of years although the two economies have followed different paths.

Growth has been hit by the introduction of a new national goods and services tax (GST) previous year and by a controversial 2016 move to withdraw all high-value banknotes from circulation.

But a couple of lurking risks could poop the party: surging crude oil prices that have risen 14 per cent in the past year and a stock market bubble that could go bust.

But the statement added that with the world economy likely to see a boost in 2018, India's overall economic performance would also see an improvement, especially with a likely increase in investment and a more stable response to the new tax system.

Every $10 rise in price of oil causes 0.2-0.3% drop in GDP, 0.4% rise in Current Account Deficit (CAD) and a rise inflation. The Survey said that growth in the economy as well as corporate earnings is required to sustain the current stock market valuations, otherwise the possibility of a correction can not be ruled out.

He said the government "has thrown in the towel" and hopes that the private sector will come to the rescue of the economy.

The Survey conceded that the Modi government could stray from the rigid path of fiscal consolidation but contended that such a decision would not be a cause for great concern.

"This pattern happens again and again and again in history".

In 2017-18 (April-December) trade deficit (on custom basis) shot up by 46.4 percent to US$ 114.9 billion with POL deficit growing by 27.4 percent and non-POL deficit by 65.0 per cent.

Similarly, for the first time, the Survey did a firm-level analysis on exports and found that export concentration by firms was much lower in India than in the U.S., Germany, Brazil, or Mexico - meaning that India had no "exports superstars" and that its export structure was "egalitarian" in nature. This means the interest rates could be lowered.

In the current fiscal till September, domestic airlines carried 57.5 million passengers, a growth rate of 16 percent over the year-ago period.

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