Economic Survey 2017-18

Highlights of Economic Survey 2018

Growth

• 2018/19 Growth seen at 7 Percent to 7.5 Percent.
• 2017/18 GDP growth seen at 6.75 Percent. 
• 2017/18 industry growth seen at 4.4 Percent.
• 2017/18 farm sector growth seen at 2.1 Percent.
• Economic management will be challenging in the coming year.
• Biggest source of upside to growth to be from exports.
• Cyclical conditions may lead to lower tax and non-tax revenues in 2017/18.
• Private investment poised to rebound.

FISCAL DEFICIT

• Target for fiscal consolidation specially in a pre-election year can carry a high risk of credibility.
• Current account deficit for 2017/18 expected to average 1.5-2 pct of GDP.

INFLATION, POLICY RATES

• Persistently high oil prices remain a key risk, to affect inflation.
• If inflation doesn't deviate from current levels policy rates can be expected to remain stable.
• Average CPI inflation seen at 3.7 pct in 2017/18.

Points to Remember

• The Department of Economic Affairs, Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget.
• It is prepared under the guidance of the Chief Economic Adviser, Finance Ministry.
• It is the ministry's view on the annual economic development of the country.

Economic Survey Draws Attention to 10 New Economic Facts on Indian Economy

The Economic Survey presented by the Union Finance Minister Shri Arun Jaitley in Parliament today has relied upon analysis of the new data to highlight ten new economic facts:

1.      Goods and Services Tax (GST) has given a new perceptive of the Indian economy and new data has emerged.  There has been a fifty percent increase in the number of indirect taxpayers. There has also been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises wanting to avail themselves of input tax credits.

The Survey also stated that fears of major producing states that the shift to the new system would undermine their tax collections have been allayed as the distribution of the GST base among the states got closely linked to the size of their economies.

Similarly, there has been an addition of about 18 lakh in individual income tax filers since November 2016. 

2.      India’s formal sector, especially formal non-farm payroll, is substantially greater than what it currently is believed to be. It became evident that when “formality” was defined in terms of social security provisions like EPFO/ESIC the formal sector payroll was found to be about 31 percent of the non-agricultural work force. When “formality” was defined in terms of being part of the GST net, such formal sector payroll share was found to be 53 percent.

3.      For the first time in India’s history, data on the international exports of states has been  dwelt in the Economic Survey.  Such data indicates a strong correlation between export performance and states’ standard of living.  States that export internationally and trade with other states were found to be richer.  Such correlation is stronger between prosperity and international trade. 

4.      India’s exports are unusual in that the largest firms account for a much smaller share of exports than in other comparable countries. Top one percent of Indian firms account only for 38% of exports unlike in other countries where they account for substantially greater share – (72, 68, 67 and 55 percent in Brazil, Germany, Mexico and USA respectively).  Such tendencies were also found to be true for the top five or ten per cent of the Indian companies.

5.      It was pointed out that the Rebate of State Levies (ROSL) has increased exports of ready-made garments (man-made fibers) by about 16 per cent but not of others. 

6.      The data highlighted another seemingly known fact that Indian society exhibits a strong desire for a male child.  It pointed out that most parents continued to have children until they get number of sons.  The survey gave details of various scenarios leading to skewed sex ratios and also gave a comparison on sex ratio by birth between India and Indonesia.

7.      The survey pointed out that tax departments in India have gone in for contesting against in several tax disputes but also with a low success rate which is below 30 per cent. About 66 per cent of pending cases accounted for only 1.8 per cent of value at stake.   It further stated that 0.2 per cent of cases accounted for 56 per cent of the value at stake.

8.       Extrapolating the data the survey indicated that growth in savings did not bring economic growth but the growth in investment did. 

9.      The survey mentions that collections of direct taxes by Indian states and other local governments, where they have powers to collect them is significantly lower than their counterparts in other federal countries. A comparison has been given between ratios of direct tax to total revenues of local governments in India, Brazil and Germany.

10.  The survey captures the footprints of climate change on the Indian territory and consequent adverse impact on agricultural yields.  Extreme temperature increases and deficiency in rainfall have been captured on the Indian map and the graphical changes in agricultural yields are brought out from such data.  The impact was found to be twice as large in un-irrigated areas as in irrigated ones.        

PROPOSED COMMON SYLLABUS -GROUP-I & II

The TSPSC has proposed to have a Telangana Civil Services Examination, as part of which both Group-I and II services would be combined and a recruitment test be conducted for both. The candidates will be given postings based on the merit secured in the recruitment test followed by an interview. This proposal is on the lines of the Union Civil Services examination conducted by Union Public Service Commission for recruiting IAS, IPS and IFS officers among other posts.

The proposal has come up after recommendations of a three-member expert committee which studied the recruitment procedure in the State. Currently, separate examinations are conducted for recruitment to Group-I and II services. This apart, plans were on to recruit engineers and medical officers through a single recruitment test, again on the lines of UPSC.

FOR DETAILED PROPOSED COMMON  SYLLABUS 
                                                                     
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CURRENT AFFAIRS-11TH DECEMBER

*China Starts World's Biggest Floating Solar Project

     A unit of China Three Gorges Corp. is building a 1 billion yuan ($151 million) floating solar power plant, the world’s biggest, in the nation’s eastern province of Anhui. China Three Gorges New Energy Co. started building the 150-megawatt project in July and part of the plant was connected to the grid.      

     The project features panels fixed to floats on the surface of a lake that formed after a coal mine collapsed, according to the unit. The entire facility is expected to come online by May 2018.

*NOBEL PEACE PRIZE

              The Geneva-based International Campaign to Abolish Nuclear Weapons (ICAN) received the 2017 Nobel Peace Prize

The International Campaign to Abolish Nuclear Weapons (ICAN), is a global civil society coalition working to promote adherence to and full implementation of the Treaty on the Prohibition of Nuclear Weapons. ICAN was launched in 2007 and counts 468 partner organizations in 101 countries as of 2017.

*ASEAN-India Connectivity Summit, New Delhi (December 11-12, 2017)

      Theme: Powering Digital and Physical Linkages for Asia in the 21st Century

Association of Southeast Asian Nations (ASEAN) The Association of Southeast Asian Nations (ASEAN) was formed in 1967 to promote political and economic cooperation and regional stability. ..
Members-10 observors-2

*Yeraringan Award to Prof. M.S. Swaminathan.

UPSC CIVIL SERVICES MAINS EXAM 2017: General Studies Paper – 4 Question Paper

SECTION – A

Q1. Conflict of interest in the public sector arises when

(a) official duties,

(b) public interest, and

(c) personal interest

are taking priority one above the other.

How can this conflict in administration be resolved? Describe with an example. (150 Words, 10)

Q2. Examine the relevance of the following in the context of civil service: (150 Words, 10)

(a) Transparency

(b) Accountability

(c) Fairness and justice

(d) Courage of conviction

(e) Spirit of service

Q3. Young people with ethical conduct are not willing to come forward to join active politics. Suggest steps to motivate them to come forward. (150 Words, 10)

Q4. (a) One of the tests of integrity is complete refusal to be compromised. Explain with reference to a real life example. (150 Words, 10) 

(b) Corporate social responsibility makes companies more profitable and sustainable. Analyse. (150 Words, 10)

Q5. (a) “Great ambition is the passion of a great character. Those endowed with it may perform very good or very bad acts. All depends on the principles which direct them.” – Napoleon Bonaparte.

Stating examples mention the rulers (i) who have harmed society and country, (ii) who worked for the development of society and country. (150 Words, 10) 

(b) “If a country is to be corruption free and become a nation of beautiful minds, I strongly feel there are three key societal members who can make a difference. they are father, the mother and the teacher.” – A. P. J. Abdul Kalam. Analyse. (150 Words, 10) 

Q6. (a) How will you apply emotional intelligence in administrative practices? (150 Words, 10)

(b) Strength, peace and security are considered to be the pillars of international relations. Elucidate.  (150 Words, 10)

Q7. (a) The crisis of ethical values in modern times is traced to a narrow perception of the good life. Discuss. (150 Words, 10)

(b) Increased national wealth did not result in equitable distribution of its benefits. It has created only some “enclaves of modernity and prosperity for a small minority at the cost of the majority.” Justify. (150 Words, 10)

Q8. (a) Discipline generally implies following the order and subordination. However, it may be counter-productive for the organisation. Discuss. (150 Words, 10)

(b) Without commonly shared and widely entrenched moral values and obligations, neither the law, nor democratic government, nor even the market economy will function properly.

What do you understand by this statement? Explain with illustration in the contemporary times. (150 Words, 10) 

SECTION – B

Q9. You are an honest and responsible civil servant. You often observe the following:

(a) There is a general perception that adhering to ethical conduct one may face difficulties to oneself and cause problems for the family, whereas unfair practices may help to reach the career goals.

(b) When the number of people adopting unfair means is large, a small minority having a penchant towards ethical means makes no difference. 

(c) Sticking to ethical means is detrimental to the larger developmental goals

(d) While one may not involve oneself in large unethical practices, but giving and accepting small gifts makes the system more efficient. 

Examine the above statements with their merits and demerits. (250 Words, 20)

Q10. You are aspiring to become an IAS officer and you have cleared various stages and now you have been selected for the personal interview. On the day of the interview, on the way to the venue you saw an accident where a mother and child who happen to be your relatives were badly injured. They needed immediate help.

What would you have done in such a situation? Justify your action. (250 Words, 20)

Q11. You are the head of the Human Resources department of an organisation. One day one of the workers died on duty. His family was demanding compensation. However, the company denied compensation because it was revealed in investigation that he was drunk at the time of the accident. The workers of the company went to strike demanding compensation for the family of the deceased. The Chairman of the management board has asked for your recommendation.

What recommendation would you provide the management?

Discuss the merits and demerits of each of the recommendations. (250 Words, 20) 

Q12. You are the manager of a spare parts company A and you have to negotiate a deal with the manager of a large manufacturing company B. The deal is highly competitive and sealing the deal is critical for your company. The deal is being worked out over a dinner. After dinner the manager of manufacturing company B offered to drop you to the hotel in his car. On the way to hotel he happens to hit motorcycle injuring the motorcyclist badly. You know the manager was driving fast and thus lost control. The law enforcement officer comes to investigate the issue and you are the sole eyewitness to it. Knowing the strict laws pertaining to road accidents you are aware that your honest account of the incident would lead to the prosecution of the manager and as a consequence the deal is likely to be jeopardised, which is of immense importance to your company.

What are the dilemmas you face? What will be your response to the situation? (250 Words, 20) 

Q13. A building permitted for three floors, while being extended illegally to 6 floors by a builder, collapses. As a consequence, a number of innocent labourers including women and children died. These labourers are migrants of different places. The government immediately announced cash relief to the aggrieved families and arrested the builder.

Give reasons for such incidents taking place across the country. Suggest measures to prevent their occurrence. (250 Words, 20)

Q14. You are a Public Information Officer (PIO) in a government department. You are aware that the RTI Act 2005 envisages transparency and accountability in administration. The act has functioned as a check on the supposedly arbitrarily administrative behaviour and actions. However, as a PIO you have observed that there are citizens who filed RTI applications not for themselves but on behalf of such stakeholders who purportedly want to have access to information to further their own interests. At the same time there are these RTI activists who routinely file RTI applications and attempt to extort money from the decision makers. This type of RTI activism has affected the functioning of the administration adversely and also possibly jeopardises the genuineness of the applications which are essentially aimed at getting justice.

What measures would you suggest to separate genuine and non-genuine applications? Give merits and demerits of your suggestions. (250 Words, 20)