Monthly Pib January 2020

Easy to PICK101 - “UPSC Monthly Magazine” close to Rs. 12, 000 on average per  Deceleration in GDP growth can be year during the same period. understood within the framework of a  From 2006-07 to 2019-20: slowing cycle of growth: o Affordability of vegetarian Thalis o Financial sector acted as a drag on improved 29 %. the real sector (investment-growth- o Affordability of non-vegetarian consumption). Thalis improved by 18 %.  Reforms undertaken during 2019-20 to India’s Economic Performance in 2019- boost investment, consumption and 20 exports:  India’s GDP growth moderated to 4.8 o Speeding up the insolvency resolution process under % in H1 of 2019-20, amidst a weak Insolvency and Bankruptcy Code environment for global manufacturing, (IBC). trade and demand. o Easing of credit, particularly for the  Real consumption growth has stressed real estate and NBFC recovered in Q2 of 2019-20, cushioned sectors. by a significant growth in government o Announcing the National final consumption. Infrastructure Pipeline 2019-  Growth for ‘Agriculture and allied 2025. activities’ and ‘Public administration, defense, and other services’ in H1 of  Survey expects an uptick in the GDP 2019-20 was higher than in H2 of growth in H2 of 2019-20: 2018-19. o 5 % GDP growth for 2019-20  India’s external sector gained further based on CSO’s first Advance stability in H1 of 2019-20: Estimates. o Current Account Deficit (CAD) o Expeditious delivery on reforms for enabling the economy to narrowed to 1.5 % of GDP in H1 of strongly rebound in 2020-21. 2019-20 from 2.1 % in 2018-19. o Impressive Foreign Direct Fiscal Developments Investment (FDI).  Revenue Receipts registered a higher o Rebounding of portfolio flows. o Accretion of foreign exchange growth during the first eight months of reserves. 2019-20, compared to the same period o Sharper contraction of imports as last year, led by considerable growth in compared to that of exports in H1 of Non-Tax revenue. 2019-20, with easing of crude  Gross GST monthly collections have prices. crossed the mark of Rs. 1 lakh crore for a total of five times during 2019-20  Headline inflation expected to decline (up to December 2019). by year end:  Structural reforms undertaken in o Increased from 3.3 % in H1 of taxation during the current financial 2019-20 to 7.35 % in December year: 2019-20 due to temporary increase  Change in corporate tax rate. in food inflation.  Measures to ease the implementation o Rise in CPI-core and WPI in of GST. December 2019-20 suggests  Fiscal deficit of states within the building of demand pressure. targets set out by the FRBM Act.

Easy to PICK102 - “UPSC Monthly Magazine”  Survey notes that the General Emirates (UAE), China and Government (Centre plus States) has Hong Kong. been on the path of fiscal o The merchandise exports to GDP consolidation. ratio declined, entailing a negative impact on BoP position. External Sector o Slowdown of world output had  Balance of Payments (BoP): an impact on reducing the export to GDP ratio, particularly from o India’s BoP position improved from 2018-19 to H1 of 2019-20. o Growth in Non-POL exports US$ 412.9 bn of forex reserves in dropped significantly from 2009- end March, 2019 to US$ 433.7 bn in 14 to 2014-19. end September, 2019.  Imports: o Current account deficit (CAD) o Top import items: Crude petroleum, gold, petroleum narrowed from 2.1% in 2018-19 to products, coal, coke & briquittes. 1.5% of GDP in H1 of 2019-20. o India’s imports continue to be o Foreign reserves stood at US$ 461.2 largest from China, followed by bn as on 10th January, 2020. USA, UAE and Saudi Arabia. o Merchandise imports to GDP  Global trade: ratio declined for India, entailing o In sync with an estimated 2.9% a net positive impact on BoP. growth in global output in 2019, o Large Crude oil imports in the global trade is estimated to grow import basket correlates India’s at 1.0% after having peaked in total imports with crude prices. 2017 at 5.7%. As crude price raises so does o However, it is projected to the share of crude in total recover to 2.9% in 2020 with imports, increasing imports to recovery in global economic GDP ratio. activity. o Significant Gold imports also o India’s merchandise trade correlate India’s total imports balance improved from 2009-14 with gold prices. However, share to 2014-19, although most of the of gold imports in total imports improvement in the latter period remained the same during 2018- was due to more than 50% 19 and the first half of 2019-20, decline in crude prices in 2016- despite an increase in prices, 17. possibly due to increase in import o India’s top five trading partners duty that reduced the import of continue to be USA, China, gold. o Non-POL-non-gold imports are UAE, Saudi Arabia and Hong positively correlated with GDP Kong. growth. o Non-POL-non-oil imports fell as  Exports: a proportion to GDP from 2009- 14 to 2014-19 when GDP growth o Top export items: Petroleum accelerated. o This may be because of products, precious stones, drug consumption driven growth while formulations & biologicals, gold and other precious metals. o Largest export destinations in 2019-20 (April-November): United States of America (USA), followed by United Arab

Easy to PICK103 - “UPSC Monthly Magazine” investment rate declined, increase in FDI, portfolio flows and lowering non-POL-non-gold external commercial borrowings imports. (ECBs).  Continuous decline in investment rate Monetary Management and Financial Intermediation decelerated GDP growth, weakened  Monetary policy: consumption, dampened the o Remained accommodative in 2019-20. investment outlook, which further o Repo rate was cut by 110 basis reduced GDP growth and along with it points in four consecutive MPC meetings in the financial year due non-POL-non-gold imports as a to slower growth and lower inflation. proportion of GDP from 2018-19 to o However, it was kept unchanged H1 of 2019-20. in the fifth meeting held in December 2019.  Under trade facilitation, India o In 2019-20, liquidity conditions improved its ranking from 143 in were tight for initial two months; 2016 to 68 in 2019 under the indicator, but subsequently it remained “Trading across Borders”, monitored comfortable. by World Bank in its Ease of Doing  The Gross Non Performing Business Report. Advances ratio: o Remained unchanged for  Logistics industry of India: Scheduled Commercial banks at o Currently estimated to be around 9.3% between March and US$ 160 billion. September 2019 o Expected to touch US$ 215 billion o Increased slightly for the Non- by 2020. Banking Financial Corporations o According to World Bank's (NBFCs) from 6.1% in March Logistics Performance Index, 2019 to 6.3% in September 2019. India ranks 44th in 2018 globally, up from 54th rank in 2014.  Credit growth: o The financial flows to the  Net FDI inflows continued to be economy remained constrained as buoyant in 2019-20 attracting US$ credit growth declined for both 24.4 bn in the first eight months, banks and NBFCs. higher than the corresponding period o Bank Credit growth (YoY) of 2018-19. moderated from 12.9% in April 2019 to 7.1% as on December 20,  Net FPI in the first eight months of 2019. 2019-20 stood at US$ 12.6 bn. o Capital to Risk-weighted Asset Ratio of SCBs increased from  Net remittances from Indians 14.3% to 15.1% between March employed overseas continued to 2019 and September 2019. increase, receiving US$ 38.4 billion in H1 of 2019-20 which is more than Prices and Inflation 50% of the previous year level.  Inflation Trends:  External debt: o Remains low at 20.1% of GDP as at end September, 2019. o After significant decline since 2014- 15, India’s external liabilities (debt and equity) to GDP increased at the end of June, 2019 primarily by

Easy to PICK104 - “UPSC Monthly Magazine” o Inflation witnessing moderation o Volatility of prices for most of the since 2014 essential food commodities with the exception of some of the pulses has o Consumer Price Index (CPI) actually come down in the period inflation increased from 3.7 per 2014-19 as compared to the period cent in 2018-19 (April to December, 2009-14. 2018) to 4.1 per cent in 2019-20 (April to December, 2019). o Lower volatility might indicate the presence of better marketing o WPI inflation fell from 4.7 per channels, storage facilities and cent in 2018-19 (April to December, effective MSP system. 2018) to 1.5 per cent during 2019- 20 (April to December, 2019).  Regional variations: o CPI-C inflation has been highly  Drivers of CPI - Combined (C) variable across States ranging inflation: between (-)0.04 per cent to 8.1 per o During 2018-19, the major driver cent across States/UTs in financial was the miscellaneous group year (FY) 2019-20 (April- o During 2019-20 (April-December), December). food and beverages was the main o In most states, CPI-C inflation in contributor. rural areas is lower than the CPI-C o Among food and beverages, inflation in urban areas inflation in vegetables and pulses o Rural inflation has been more was particularly high due to low variable across states than urban base effect and production side inflation. disruptions like untimely rain.  Inflation dynamics:  Cob-web Phenomenon for Pulses: o Convergence of headline inflation towards core inflation as per the o Farmers base their sowing decisions CPI-C data from 2012 onwards. on prices witnessed in the previous Sustainable Development and Climate Change marketing period.  India moving forward on the path of o Measures to safeguard farmers like SDG implementation through well- designed initiatives procurement under Price  SDG India Index: o Himachal Pradesh, Kerala, Tamil Stabilisation Fund (PSF), Minimum Nadu, Chandigarh are front runners. Support Price (MSP) need to be o Assam, Bihar and Uttar Pradesh made more effective. come under the category of Aspirants.  Divergence Between Retail and Wholesale price:  India hosted COP-14 to UNCCD o Observed for essential agricultural which adopted the Delhi Declaration: commodities in four metropolitan Investing in Land and Unlocking cities of the country from 2014 to Opportunities. 2019. o Divergence particularly high for  COP-25 of UNFCCC at Madrid: vegetables like onion and tomato. This may be due to the presence of intermediaries and high transaction costs.  Volatility of Prices:

Easy to PICK105 - “UPSC Monthly Magazine” o India reiterated its commitment to of non-agricultural sectors, a natural implement Paris Agreement. outcome of development process.  GVA at Basic Prices for 2019-20 from o COP-25 decisions include efforts ‘Agriculture, Forestry and Fishing’ for climate change mitigation, sector is estimated to grow by 2.8 %. adaptation and means of  Agricultural productivity is also implementation from developed constrained by lower level of country parties to developing mechanization in agriculture which country parties. is about 40 % in India, much lower than China (59.5 %) and Brazil (75 %).  Forest and tree cover:  Skewed pattern of regional distribution o Increasing and has reached 80.73 of agricultural credit in India: million hectare. o Low credit in Hilly, Eastern and o 24.56 % of the geographical area of the country. North Eastern states (less than 1 % of total agricultural credit  Burning of agricultural residues, disbursement). leading to rise in pollutant levels and deterioration of air quality, is still a  Livestock income has become an major concern though the total number important secondary source of income of burning events recorded reduced for millions of rural families: due to various efforts taken. o An important role in achieving the goal of doubling farmers’ income.  International Solar Alliance (ISA) o Livestock sector has been growing o ‘Enabler’ by institutionalizing 30 at a CAGR of 7.9 % during last five Fellowships from the Member years. countries. o ‘Facilitator’ by getting the lines of  During the last 6 years ending 2017- credit worth US$ 2 Billion from 18, Food Processing Industries sector EXIM Bank of India and 1.5 Billion has been growing: from AfD, France. o Average Annual Growth Rate o ‘Incubator’ by nurturing initiatives (AAGR) of around 5.06 % like the Solar Risk Mitigation o Constitutes as much as 8.83 % and Initiative. 10.66 % of GVA in Manufacturing o ‘Accelerator’ by developing tools to and Agriculture sector respectively aggregate demand for 1000 MW in 2017-18 at 2011-12 prices. solar and 2.7 lakh solar water pumps.  While interests of the vulnerable sections of the population need to be Agriculture and Food Management safeguarded, Survey emphasizes on  Largest Proportion of Indian sustainability of food security operations by: population depends directly or o Addressing the burgeoning food indirectly on agriculture for subsidy bill. employment opportunities as compared o Revisiting the rates and coverage to any other sector. under NFSA.  The share of agriculture and allied sectors in the total Gross Value Added Industry and Infrastructure (GVA) of the country has been  The industrial sector as per Index of continuously declining on account of relatively higher growth performance Industrial Production (IIP) registered a growth of 0.6 per cent in 2019-20

Easy to PICK106 - “UPSC Monthly Magazine” (April-November) as compared to 5.0  The expenditure on social services % during 2018-19 (April-November).  Fertilizer sector achieved a growth of (health, education and others) by the 4.0 % during 2019-20 (April- November) as compared to (-) 1.3 per Centre and States as a proportion of cent during 2018-19 (April- November). GDP increased from 6.2 % in 2014-15  Steel sector achieved a growth of 5.2 % during 2019-20 (April-November) to 7.7 % in 2019-20 (BE). Human as compared to 3.6 % during 2018-19  India’s ranking in (April-November).  Total telephone connections in India Development Index improved to 129 in touched 119.43 crore as on September 30, 2019. 2018 from 130 in 2017:  The installed capacity of power generation has increased to 3, 64,960 o With 1.34 % average annual HDI MW as on October 31, 2019 from 3, 56,100 MW as on March 31, 2019. growth, India is among the fastest  Report of the Task Force on National Infrastructure Pipeline released on improving countries 31.12.2019 has projected total infrastructure investment of Rs. 102  Gross Enrolment Ratio at secondary, lakh crore during the period FY 2020 to 2025 in India. higher secondary and higher education Services Sector level needs to be improved.  Increasing significance of services  The share of regular wage/salaried sector in the Indian economy: o About 55 % of the total size of the employees has increased by 5 economy and GVA growth. percentage points from 18 % in 2011- o Two-thirds of total FDI inflows into 12 to 23 % in 2017-18. India. o About 38 per cent of total exports.  A significant jump of around 2.62 o More than 50 % of GVA in 15 out crore new jobs with 1.21 crore in rural of the 33 states and UTs. areas and 1.39 crore in urban areas in  Gross Value Added growth of the services sector moderated in 2019-20 this category. as suggested by various high-frequency indicators and sectoral data such as air  Total formal employment in the passenger traffic, port and shipping freight traffic, bank credit etc. economy increased from 8 % in 2011-  On the bright side, FDI into services 12 to 9.98 % in 2017-18. sector has witnessed a recovery in  Gender disparity in India’s labour early 2019-20 market widened due to decline in Social Infrastructure, Employment and Human Development female labour force participation especially in rural areas: Around 60 % of productive age (15-59) group engaged in full time domestic duties.  Access to health services inter-alia through Ayushman Bharat and Mission Indradhanush across the country has improved.  Mission Indradhanush has vaccinated 3.39 crore children and 87.18 lakh pregnant women of 680 districts across the country.  About 76.7 % of the households in the rural and about 96 % in the urban areas had houses of pucca structure.  A 10 Year Rural Sanitation Strategy (2019-2029) launched to focus on sustaining the sanitation behavior change and increasing access to solid and liquid waste management.