A comprehensive overview of the Economic Survey (2000-01) focusing on various sectors of the Indian economy. The analysis covers aspects such as GDP growth, sector-wise performance, inflation, fiscal deficit, external trade, and suggested reforms. It offers a detailed understanding of the economic landscape during that period.
HIGHLIGHTS OF ECONOMIC SURVEY 2000-01
Economic Survey (2000-01)
- Real GDP growth in 2000-01 is estimated at 6 per cent compared with 6.4 per cent achieved in 1999-2000 and 6.6 per cent in 1998-99.
- Despite decline in real GDP growth for the second consecutive year, the Indian economy continues to be one of the fastest growing economies of the world.
- The economy has shown remarkable resilience in face of rapid increase in international prices of crude oil over the last two years.
- The estimated lower overall GDP growth in 2000-01 is due to lower growth of the service sector. Among services, the decline is sharpest for community, social and personal services group.
- In the industry sector, in terms of growth of value added, mining and quarrying have performed well in the current year. Manufacturing has experienced reduction in growth.
- Agricultural prospects are subdued for 2000-01 due to the uneven pattern of rainfall in the country leading to sporadic occurrence of floods and droughts.
- In terms of growth of value added, agriculture and allied sectors, as well as industry are expected to record marginally higher growth in 2000-01 compared to 1999-2000.
- Gross domestic savings have improved marginally to 22.3 per cent in 1999-2000. The household sector has continued to be the biggest contributor. While private corporate savings have been stagnant, public sector savings remained negative in 1999-2000.
- The growth rate of real gross domestic capital formation has improved significantly to 9.4 per cent in 1999-2000 from 2.3 per cent in 1998-99 due to sharp rise in both public and private sector investment.
- The Index of Industrial Production has been lower in the current year due to subdued performance by manufacturing and electricity.
- Core infrastructure industries have displayed mixed trends in 2000-01. Steel and coal have been the better performers while cement and electricity have had poor growth.
- Aggregate central Government expenditure on social sector has had an almost four-fold increase between 1992-93 to 2000-01.
- The 55th Round of the Household Consumer Expenditure Survey of the NSSO(covering July 1999 to June 2000) has indicated significant decline in poverty. The all-India poverty estimates are placed at 26.1 per cent and at 23.3 per cent respectively under two different estimates. These two sets of estimates may not be strictly comparable to the earlier estimates of poverty.
- Inflation, in terms of WPI, increased in 2000-01 due to pressure on energy prices. The point-to-point annual inflation of primary products as on January 27, 2001 was 3.5 per cent and for manufactured products 4.2 per cent.
- In terms of CPI for industrial workers, inflation declined steadily for almost the whole of 2000.
- Money supply grew by 15.8 in the current year as against 13.9 per cent in 1999-2000. Non–food credit also had a higher growth.
- Sanctions by All India Financial Institutions improved significantly in the current year but disbursements had a lower rate of growth.
- Capital markets were relatively subdued in 2000-01. Resource mobilization through public issues and rights were much lower than the last year.
- The Centre’s gross fiscal deficit is estimated at 5.5 per cent of GDP in 1999-2000.
- Gross fiscal deficit declined to Rs 64628 crore in April-December 2000 compared to Rs 67082 crore in April-December 1999 due to better revenue receipts and lower expenditure growth in the current year.
- While direct tax collections have been buoyant in 2000-01, indirect taxes have experienced shortfalls.
- The Government has taken several measures for controlling growth of non-plan, non-developmental expenditure.
- Exports improved significantly in 1999-2000 and maintained the healthy trend in 2000-01. While POL imports have increased sharply, they have been offset by decline in non-POL imports in 2000-01, leading to a marginally lower growth for imports.
- Foreign exchange reserves accumulated to US $ 41.1 billion at the end of January 2001.
- The current account deficit is expected to widen to 1.5-1.7 per cent of GDP in 2000-01 due to higher import bill.
- The exchange rate of Rupee against Dollar has been steady since November 2000. The Rupee-Dollar rate was Rs 46.4 per US Dollar at the end of January 2001.
- The external debt to GDP ratio declined to 20.7 per cent at the end of September 2000.
- Sustained high fiscal deficit, both at the central and state levels, is the key problem affecting the economy.
- Administered interest rates on pension and provident funds have remained invariant with inflation leading to high real interest rates on Government debt.
- Government must move out of production and concentrate solely on provision of public goods. This calls for privatisation of public units producing private goods.
- Expenditure management is a major plank of second-generation reforms.
- Subsidies need to be reduced in number and better targeted.
- Prices of fertilisers and natural gas should have parity with international prices.
- Management of food economy requires comprehensive reforms.
- Departmental enterprises should be corporatised to meet commercial challenges. Downsizing of Government should be implemented by reducing bureaucratic controls.
- CENVAT should be further rationalized. Customs duty rates should be reduced to Asian levels.
- The Government securities market has to be further deepened and broadened.
- Introduction of modern bankruptcy provisions, amendment of labour laws, repeal of land ceiling laws at state level and review of SSI reservation are important areas for domestic reforms.
- The economy has responded well to the changes initiated in various sectors. However, crucial action is required in key areas for releasing latent energies and generating higher levels of economic activity.
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