I thought I’d share the link of the economic survey of India
which I found from the union budget website.
This year’s survey is unique in many ways, first of which it
being freely available online .
They have for the first time employed Big Data analysis on
many interesting data fronts for e.g. Railways passenger ticketing data to
accurately understand migration and GSTN data to understand internal trade
patterns. This will help us understand post GST trade scenarios as well.
Sadly, there is a lot of propagandist commentary in the
Economic survey particularly on the subject of Demonetization and GST, without
providing statistical evidence of the impact .
Some of the learning I can share :
- Migration is reducing –
while the agricultural sector is receding : signaling at lower employment
in the real estate(construction) sector
- Credit rating agencies
hypocrisy and unprofessional-ism is apparent in the Credit/GDP and ratings
performance between India and China. India compared to China is less
dependent / causative on credit growth. India’s GDP growths seems to
stemming more from Re-investment of profits or savings.
- India’s demographic
dividend will peak much later, with a healthier ratio compared to similar
productivity economy. Although there is going to be plateau peaking
beginning at year 2025 – making it economy redefining moment for India.
- India’s economic
performance far more self reliant and internal. Robustly poised to handle
external shocks and strong foundation for economic growth.
- The economic survey
acknowledge over-indebtedness of the corporate sector and refinancing &
writeoff as a legitimate consideration. In my personal view I find this is
deplorable and dangerous. Corporate sector debt is in dangerous shape with
interest coverage ration less than 1 . It is the worst in the world
currently. PSU Banks have been to blame for their prudence. I guess sales
people overpowered the credit department in their hurry and excitement.
These banks are slated to become the greatest welfare scheme in the
country!
- Even after including the
demonetization losses (rather gains) , the overall money supply has come
down while interest rates have come down .Indirect taxation has still
risen due to still buoyant consumer confidence. This is a surprising and
good sign, though demonetization has hit consumer sentiments just
recently.
- Oil prices will rise. Costs
will come under stress. Inflationary economy will come back. Good for
businesses, bad for consumers.
- Universal Basic Income
is being touted as strong social welfare scheme. It will have negative
effect on productivity, result in poor availability of labor – fodder
for a dangerous youth pool in coming years. Govt. moving away from
performing welfare duties to provide welfare allowances in the long term.
Also the allocation is wrongly skewed. Tax money deployment seems
inefficient and juvenile.
- Probably the longest and
drab chapter is on demonetization , which provides no concluding remarks
or evidence of current success. Worth skipping – nothing new there.
- Migration trends are not
too surprising with the usual source and destination states being same.
The volume has grown over the past decade phenomenally but now tapering.
The big data analysis of railways has thrown a huge surprise of migration
from Gujarat to TN being a significant to the overall number. Reasons are
unknown. Overall outtake for us – housing requirements are rising,
people will not live in homes they own – and their relationship with their
residences will be unemotional.
- There is strong rhetoric
of urban expansion and increased influence of urban centers on Indian
economy. Cities seem to be the place to target for extracting future
growth . Rural India’s growth will come more from covering availability
and reach gaps and not so much increased economic activity.
