Assam Budget 2024-25 – Highlights and Analysis

Highlights of Assam Budget 2024-25 – Detailed Analysis and Important Points

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Highlights of Assam Budget 2024-25

Assam Finance Minister, Ms. Ajanta Neog presented the state’s ₹774.47 cr deficit annual Budget for the financial year 2024-25 on February 12, 2024. With no new taxes proposed,  Neog mentioned that the total budget for the coming financial year will be ₹2.9 lakh crore.

Budget estimates for 2024-25 show receipt of ₹143,605.56 crore under consolidated fund of the state. With receipt of ₹144,550.08 crore under public account and ₹2,000 crore from contingency fund, the aggregate receipts amount to ₹290,155.65 crore. The minister mentioned that total expenditure from the consolidated fund in 2024-25 is estimated at ₹143,890.62 crore.

Important Policies/Yojana announced in Assam Budget 2024-25

Punya Tirtha Yojana: Among the budget’s key highlights was the announcement of Punya Tirtha Yojana scheme to send 25,000 pilgrims to visit the Ram Mandir at Ayodhya, with an earmarked budget of ₹25 crore.

Mukhya Mantri Nijut Moina: The government will support 10 lakh girls with financial grants as admission incentives for their higher education. Each girl student who joins class 11 will receive One-time incentives of ₹10,000 and those joining first year of graduation will be given ₹12,500. One-time incentives of Rs 15,000 will be paid to 10 lakh girl students for joining post-graduation (first year). This will be available for students taking admission in government colleges and institutions. A total outlay of ₹240 crore has been allocated for this in the budget. Aimed at eliminating child marriages, the incentive is only for unmarried girls who study in any government-run educational institution.

Mukhya Mantri Mahila Udyamita Abhiyaan: A minimum amount of Rs 47,500 will be provided to each woman member of self-help groups in rural and urban areas. This will be provided by a combination of grant, subsidy, and loan.

Mukhya Mantri Awaas Yojana (Gramin): 13,000 houses each will be allocated to eligible beneficiaries from tea garden communities and poorest of poor beneficiaries who were not included under the socio-economic caste census.

Rooftop solar: All new private and public buildings constructed in Assam will have to mandatorily install rooftop solar facility.

Farm mechanisation: The state government will distribute power tillers, tractors, threshers, and other farm equipment to support agricultural activities.

Social Equity in Government Recruitment: To bring social equity in Govt recruitment for all grade III and grade IV posts without compromising the quality of selection, from the 2024-25 fiscal, the government will provide 5% weightage in total marks to job applicants from families without any member in government service.

Safeguard for iconic sites: Budget proposals included bringing in legislation to ensure that the land surrounding “iconic and heritage locations” in Barpeta, Batadrava, Majuli, and Narayanpur is transferred only to indigenous persons or institutions. The move is to “safeguard the cultural significance” of these places.

Mukhya Mantri Sangrahalaya: The government has also decided to set up ‘Mukhya Mantri Sangrahalaya’ in Guwahati to document the legacies of all former Chief Ministers of the State.

 

ASHTADASH MUKUTOR UNNOYONEE MAALA:

Flagship Schemes 2024-25

  • Mukhya Mantri Nijut Moina (MMNM)
  • Mukhya Mantri Mahila Udyamita Abhiyaan
  • Orunodoi 2.0 – Expanding and More Inclusive
  • Assam Micro Finance Incentive and Relief Scheme – Category III 
  • Chief Minister’s Atmanirbhar Assam Abhijan
  • One Lakh Plus Jobs
  • Projects for Amrit Kaal
  • Creating Growth Corridors
  • Mukhya Mantri Awaas Yojana (Gramin)
  • Innovative integration of wetlands with River Brahmaputra
  • Green Growth for Greener Assam
  • Welfare of Tea Tribe Community 
  • Quest for Cultural Identity
  • Punya Tirth Yojana – Ayodhya Pilgrimage
  • Future for Children
  • Khel Maharan and Youth Clubs in 126 LACs 
  • Global Investors’ Summit in November, 2024 
  • Mukhya Mantri Sangrahalaya

 

Major Announcements for FY 2024-25

  • Reservation for Agniveers in Assam Police 
  • Self-sufficiency in egg, milk and fish production 
  • Promotion of small tea growers
  • Start-up Mission 
  • Setting up of Training Centre at Padmashree Hemaprova Chutia’s residence 
  • PM Vishwakarma Yojana 
  • Farm Mechanization 
  • Rooftop solarisation 
  • Climate Action 
  • Amrit-Guwahati Integrated Global City (Amrit-GiG City)
  • Ayushman Asom : A comprehensive healthcare initiative 
  • Comprehensive School health Programme under Chief Minister’s Ayushman Asom 
  • Village and Community Outreach Programme for MBBS Students in Assam under Chief Minister’s Ayushman Asom 
  • Championing Digital Transformation & Artificial Intelligence 
  • Gyan-Dhara – Integrating virtual reality technology with for experiential learning 
  • Third Assam Bhawan in New Delhi 
  • Standing with our employees – Apun Ghar, Apun Bahan 
  • Supporting the Employees of Different Societies (Ex-Gratia) 
  • Jeevika Sakhi Express 
  • Monthly remuneration to honorary Gaon Pradhans in the Forest areas 

 

Expenditures & Receipts of Govt of Assam

  • Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 1,36,699 crore, a decrease of 9% from the revised estimates of 2023-24. In addition, debt of Rs 7,192 crore will be repaid by the state.
  • Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 1,14,165 crore, a decrease of 5% as compared to the revised estimate of 2023-24.
  • Revenue surplus in 2024-25 is estimated to be 0.3% of GSDP (Rs 1,852 crore), as compared to a revenue deficit of 0.2% of GSDP (Rs 1,396 crore) at the revised estimate stage in 2023-24. Assam had budgeted a revenue surplus of 0.5% of GSDP in 2023-24.
  • Fiscal deficit for 2024-25 is targeted at 3.5% of GSDP (Rs 22,534 crore). In 2023-24, as per the revised estimates, fiscal deficit is expected to be 5.2% of GSDP.

 

Receipts in 2024-25 

  • Total revenue receipts for 2024-25 are estimated to be Rs 1,11,944 crore. Of this, Rs 43,020 crore (38%) will be raised by the state through its own resources, and Rs 68,924 crore (62%) will come from the centre. Resources from the centre will be in the form of state’s share in central taxes (36% of revenue receipts) and grants (26% of revenue receipts). 
  • Devolution: In 2024-25, state’s share in central taxes is estimated at Rs 40,000 crore.
  • Grants from the centre in 2024-25 are estimated at Rs 28,924 crore.

 

Assam’s own tax revenue


Assam’s total own tax revenue is estimated to be Rs 34,148 crore in 2024-25, an increase of 13% over the revised estimate of 2023-24. Own tax revenue as a percentage of GSDP is estimated at 5.3% in 2024-25, same as the revised estimates for 2023-24. As per the actual figures for 2022-23, own tax revenue as a percentage of GSDP was 5%.

In 2024-25, State GST is estimated to be the largest source of own tax revenue (50% share).

 

Assam’s expenditure on key sectors

  • Education: Assam has allocated 17% of its expenditure on education in 2024-25. This is higher than the average allocation for education by states in 2023-24 (14.7%). 
  • Health: Assam has allocated 6.1% of its total expenditure towards health, which is broadly similar to the average allocation for health by states (6.2%). 
  • Rural development: Assam has allocated 3.7% of its expenditure on rural development. This is lower than the average allocation for rural development by states (5%). 
  • Roads and bridges: Assam has allocated 7% of its expenditure towards roads and bridges. This is higher than the average allocation towards roads and bridges by states (4.6%). 
  • Agriculture: Assam has allocated 4.5% of its total expenditure towards agriculture. This is lower than the average expenditure on agriculture by states (5.9%). 
  • Irrigation: Assam has allocated 2.8% of its total expenditure towards irrigation, which is lower than the average allocation by states (3.4%).

 

Deficits, Debt, and FRBM Targets for 2024-25

The Assam Fiscal Responsibility and Budget Management Act, 2005 provides annual targets to progressively reduce the outstanding debt, revenue deficit and fiscal deficit of the state government. 

Revenue balance: It is the difference of revenue expenditure and revenue receipts. A revenue deficit implies that the government needs to borrow to finance those expenses which do not increase its assets or reduces its liabilities. The budget estimates a revenue surplus of Rs 1,852 crore (or 0.3% of the GSDP) in 2024-25. 

Fiscal deficit: It is the excess of total expenditure over total receipts. This gap is filled by borrowings by the government and leads to an increase in total liabilities. In 2024-25, the fiscal deficit is estimated to be 3.5% of GSDP. For 2024-25, the central government has permitted fiscal deficit of up to 3.5% of GSDP to states, of which 0.5% of GSDP will be available upon carrying out certain power sector reforms. As per the revised estimates, in 2023-24, the fiscal deficit of the state is expected to be 5.2% of GSDP. This is higher than the budget estimate of 3.7% of GSDP. Fiscal deficit is projected to be lowered to 1.4% of GSDP by 2029-30. 

Outstanding debt: Outstanding debt is the accumulation of total borrowings at the end of a financial year. At the end of 2024-25, the outstanding debt is estimated to be 25.2% of GSDP, higher than the budget estimate for 2023-24 (24.4% of GSDP).

Outstanding Government Guarantees: Outstanding debt of states do not include a few other liabilities that are contingent in nature, which states may have to honour in certain cases. State governments guarantee the borrowings of State Public Sector Enterprises (SPSEs) from financial institutions. As of March 31, 2023, the state’s outstanding guarantee is estimated to be Rs 1,167 crore, which is 0.2% of Assam’s GSDP in 2022-23.

 

GREEN BUDGETING

Green Budgeting is a Public Finance Management (PFM) tool to enable evidence and output based budgeting towards achieving climate and sustainability targets allowing for effi cient resource allocation towards Climate Change mitigation, adaptation, and environment sustainability. 

A Green Budget contributes to achieving various Sustainable Development Goals (SDGs), such as SDG 13 (Climate Action), SDG 11 (Sustainable Cities and Communities), SDG 7 (Aff ordable and Clean Energy), and other SDGs, fostering a more sustainable and resilient future in line with the United Nations’ Sustainable Development Goals (SDGs) and India’s Nationally Determined Contributions (NDCs) under the Paris Agreement and other national and state commitments. Green Budget share is 10.02% of total budget of 18 key departments amounting to Rs. 4636 Crore in FY 2024-25.

 

Highlights of Assam Economy 2024

The Gross State Domestic Product (GSDP) of Assam for 2024-25 (at current prices) is projected to be Rs. 6,43,089 crore, amounting to growth of 13% over 2023-24.

In 2022-23, Assam’s GSDP (at constant prices) is estimated to grow by 10.2% over the previous year. In comparison, India’s GDP is estimated to grow by 7.2% in 2022-23.

Sectors contribution: In 2022-23, agriculture, manufacturing, and services sectors are estimated to contribute 35%, 19%, and 45% of Assam’s economy, respectively (at current prices).

Per capita GSDP: In 2022-23, Assam’s per capita GSDP (at current prices) is estimated to be Rs 1,36,819, an increase of 17% over 2021-22. In 2022-23, India’s per capita GDP is estimated to increase by 15% over 2021-22 to Rs 1,96,983.

Important MCQ Questions on Assam Budget 2022-23

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Earlier Assam Budgets

Study Materials & Notes | Assam Current Affairs | Assam Current Affairs Quiz

Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) – Indian Economy Notes for APSC Exam

Tribal Cooperative Marketing Development Federation of India Limited (TRIFED)
Indian Economy Notes for APSC Exam

Indian-Economy - Assam Exam

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  • Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) was established in August 1987.
  • It is a national-level apex organization functioning under the administrative control of the Ministry of Tribal Affairs.
  • It is headquartered in New Delhi.

The objectives of TRIFED are

  • Socio-economic development of tribal people in the country.
  • To institutionalize trade of Minor Forest Produce (MFP) and Surplus Agriculture Produce (SAP) collected or cultivated by tribals as they are heavily dependent on these natural products for their livelihood.
  • To empower tribal people with knowledge, tools and pool of information so that they can undertake their operations in a more systematic and scientific manner.

In 2021, the Tribal Cooperative Marketing Development Federation of India (TRIFED), under the Ministry of Tribal Affairs, launched “Sankalp se Siddhi” – Village and Digital Connect Drive. The main aim of the drive is to activate the Van Dhan Vikas Kendras located in tribal villages.

It also organizes exhibitions like the National Tribal Craft Expo called “Aadi Mahotsav” etc. to promote and market tribal products.

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Union Budget 2023-24: Provisions & Fund Allocation for Assam and North East India

Union Budget 2023-24 – Fund Allocation & Provisions for Assam and North East India

 

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On February 21, 2023, Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023, which has provided much higher outlays for the Ministry of Development of North Eastern Region (MDoNER) during the Financial Year 2023-24.

With the objective of seeking a significant impact in the North Eastern Region (NER), emphasis has been laid on enhancing capital expenditure in the NE Region. By way of devolution Northeast India will get Rs 78,500 Crore. For flagship schemes the budget has allocated Rs 5000 Crore more this year.

  • Enhanced outlays are provided towards supporting the initiatives with special focus for the ST and SC communities; and the livelihoods of the women and the youth in NE Region.
  • There have been significant increases in the MDoNER Scheme-wise outlays also, that will increase the impact in infrastructure, social-development and livelihood sectors in the NER.
  • The quantum of funds to be earmarked by the various Central Ministries / Departments in the NER as per the 10% Gross Budgetary Support (GBS) stipulations have also been significantly enhanced.
  • Some of the major ongoing infrastructure projects in NER such as Capital Connectivity Roads and Rail-Lines, Air Connectivity, Power, Telecom, Petroleum & Natural Gas etc. are financed under 10% GBS.

Some of the announcements related to the Ministry of Development of North Eastern Region (DoNER) are: 

  • There is a step-jump in the budget outlay for the MDoNER during the Financial Year 2023-24. The total B.E. 2023-2024 allocation is Rs. 5892.00 crore; well over twice (~114% higher than) the RE 2022-23 allocation of Rs. 2755.05 crore.
  • Out of this, Rs 4093.25 crore (~70%) is provided for Capital expenditure. In addition, Rs. 1,324.03 crore further from within the amount of Rs. 1,798.75 crore provided for Revenue Expenditure is as grants for creation of capital assets.
  • This is tantamount to provisioning of Rs. 5,417.28 crore (~92%) out of Rs. 5,892.00 crores as B.E. 2023-24 outlay for MDoNER towards expenditure of capital nature.  
  • The total B.E. 2023-2024 allocation for the infrastructure targeted North East Special Infrastructure Development (NESID) Scheme is Rs. 2,491.00 crore; well over (~67% higher than) the RE 2022-23 allocation of Rs. 1,493.30 crore.
  • The total B.E. 2023-2024 allocation for the infrastructure, social development and livelihoods targeted Prime Ministers Development Initiative for North-East (PMDevINE) Scheme is Rs. 2,200.00 crore; four and a half times the RE 2022-23 allocation of Rs. 400.00 crore. PM-DevINE was announced in the union budget to address developmental gaps in the northeastern region.
  • The total B.E. 2023-2024 allocation for the overall wholistic development, social infrastructure and social development targeted Schemes of North Eastern Council (NEC) is Rs. 800.00 crore ; (~20% higher than) the RE 2022-23 allocation of Rs. 666.87 crore. 
  • As per Expenditure Profile of Union Budget 2023-24 Statement-11, the 10% GBS share for the NER comes to Rs. 94,679.53 (~31% higher than) the RE 2022-23 allocation of Rs. 72.540.28 crore under 10% GBS share of the 55 non-exempt Ministries / Departments.
  • The allocation for Tribal Sub Plan (TSP) out of the B.E. outlay for 2023-24 has been enhanced to Rs. 1690.00 crore or over twice (~101% higher than) the RE 2022-23 allocation of Rs. 839.95 crore for TSP. 
  • The allocation for Scheduled Caste Sub Plan (SCSP) out of the B.E. outlay for 2023-24 has been enhanced to Rs. 488.00 crore or nearly one and a half times (~48% higher than) the RE 2022-23 allocation of Rs. 330.54 crore for SCSP.
  • In comparison to the actual expenditure of Rs. 24,819.18 crore in 2014-15, the B.E. 2023-24 provision for 10% GBS shows an increase of Rs. 71,860.35 crore ; nearly thrice ( ~281% higher than) the actual expenditure in 2014-15.
  • In aggregate,  a total of Rs. 3,37,000 crore was spent in the period from 2014-15 to 2021-22. Together with the anticipated expenditures of Rs. 72,540.28 crore in 2022-23 and Rs. 94,679.53 crore in 2023-24, the aggregate expenditure in NER under the 10% GBS stipulation is likely to reach Rs. 5,00,000 crore in the decade from 2014-15 to 2023-24.
  • For the first time an amount of Rs 1.20 lakh crore has been earmarked for connecting the hilly and border areas of the region.

 

Read Highlights of Union Budget 2023-24

 

Funds for Railway Development in Assam & North East States

Adequate fund has been allotted for the overall development of railway infrastructure in all Northeastern states. Union Budget 2023 has allocated 19 projects of Rs. 75,795 crore for the Railways in Assam and NorthEast. 19 projects covering 2,008 Km is are currently in process at Assam and other Northeastern regions. 

Under Amrit Bharat Station Scheme, 59 stations in the North East will be developed with world-class amenities/facilities. The list of stations that will be benefited under the scheme are: Naharalagun (Itanagar), Amguri, Arunachal, Chaparmukh, DhemajiDhubriDibrugarh, Diphu, Duliajan, Fakiragram Jn., Gauripur, Gohpur, Golaghat, Gosaigaon hat. Haibargaon, Harmuti, HojaiJagiroad, Jorhat Town, Kamakhya. Kokrajhar, Lanka, Ledo, Lumding, Majbat, MakumJn, Margherita, Mariani, Murkongsolek, Naharkatia, Nalbari. Namrup, Narangi, New Bongaigaon, New Haflong, New Karimganj, New Tinsukia, North Lakhimpur, Pathshala, Rangapara North, RangiyaJn, SarupatharSilapathar, Silchar, Simalguri, Sivasagar Town, Tangla, Tinsukia, Udalguri, ViswanathChariali, Imphal, Sairang (Aizawl), Dimapur, Rangpo, Agartala, Dharmanagar, Kumarghat, Udaypur.

15 stations each in all divisions of NFR to be developed under Amrit Bharat Station Scheme.

The Union Budget 2023-24 has earmarked Rs 10,988.80 crore for the development of railways in the North East. It is 13.75 per cent more than the previous year’s allotment (Rs 9,660.14 crore). 

Total railway infrastructure projects of Rs 75,795 crore are going on in the entire Northeastern region. An adequate allocation has been made for the early execution of all the ongoing works. Around Rs 1,100 crore has been allocated for Dimapur-Kohima new line projects while Rs 800 crore is earmarked for the execution of the Jiribam-Imphal new line projects.

  • Other capital connectivity projects in the Northeastern states such as Sivok – Rangpo new line projects in Sikkim gets Rs 2,350 crore while Rs 915 crore has been allocated for Bairabi-Sairang new line projects in Mizoram.
  • Among other new line projects, Rs 200 crore for Agartala-Akhaura international connectivity project between India and Bangladesh and around Rs 700 crore is allocated for Araria – Galgalia project.
  • Rs 600 crore for New Bongaigaon – Rangiya-Kamakhya and Rs 500 crore for New Bongaigaon-Goalpara-Kamakhya has been allocated for speedy execution of the ongoing track doubling works, he also said.
  • Moreover, Rs 115 crore has been allocated for the doubling works between Katihar-Kumedpur and Katihar-Mukuria sections to further improve train connectivity to and from Northeast.
  • Agthori station near Guwahati will be redeveloped with world-class facilities for Rs 517 crore.

 

Acknowledgment

Assam Chief Minister Himanta Biswa Sarma “Assam Govt will be richer by Rs 10,000 Crore following the Union budget 2023-24. CM Sarma said, “We have calculated and Assam will be richer by Rs 10,000 following the budget. This part only relates to untied fund. Once we calculate the money from the schemes it will be much more.”

While grant of Panchayats is increased by 15 percent grant of town committees is increased by 61 percent. “SDRF grant is increased by 5 percent and Central sector allocation is enhanced by 5 percent. The interest free loan amount of Assam is increased to Rs 6000 Crore.”

Assam will get an additional Rs 6400 crore of untied funds from the budget than the previous year. From some Rs 25,000 crore annually, this budget has allocated Rs 31, 950 Crore for Assam which is a hike of Rs 6,400 Crore. That means that now the state government will get around Rs 550 Crore more from the Centre monthly.”

Currently, the state government receives around Rs 18,000 Crore monthly from the Centre as untied funds which the state government can utilize at its own will.

 

Federation of Industry and Commerce of North Eastern Region (FINER) has hailed the Budget 2023, welcoming the budget, Bajrang Lohia said that the Finance Minister presented a citizen-centric, growth-oriented budget, which clearly sets the priorities going ahead, aiming at a stable tax regime. The budget focuses on the youth, women, and disadvantaged in general, and strives for enabling opportunities among the people.

The announcement of laying Rs.2491 crore for the North East Special Infrastructure Development Scheme is a huge relief to the industry fraternity of the region. Under the scheme, 100 percent centrally funding is provided to the State governments of North Eastern Region for the projects of physical infrastructure relating to water supply, power and connectivity enhancing tourism and social infrastructure relating to primary and secondary sectors of education and health.

Go to Economy of Assam APSC Notes

APSC CCE Prelim 2020 General Studies (GS) Paper 1 – Economy of India & Assam section Questions Analysis

APSC CCE Prelim 2020 General Studies (GS) Paper 1 Questions Analysis

Questions from Economy of India & Assam sections

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APSC prelims questions

Q5. The term Black Revolution in the present context of India is associated with

  1. Higher exportability of crude oil
  2. Self dependence in the production of crude oil
  3. Improvement in the quality of black soil
  4. Self dependence in milk production

Correct option: (B) Self-dependence in the production of crude oil

Black Revolution: To increase petroleum production, the Government planned to accelerate the production of ethanol and to mix it up with petrol to produce biodiesel. Ethanol is a renewable source of energy and is a by-product of sugar production produced from molasses. The blending of ethanol with petrol has been practiced in the USA and Brazil for over 70 years. The blending of ethanol with transport fuels would provide better returns to farmers, supplement scarce resources of hydrocarbons, and be environment-friendly by reducing pollutants as it helps combustion.

Topic to focus : Economic revolutions

 

Q23. Which statement among the following is not true about GST council?

  1. It is a statutory body
  2. It is chaired by the PM of the country
  3. It decides the rates of taxes on goods and services except some items
  4. It was constituted by the President of India

Correct option: (B) is not true

Union Finance Minister is the Chairman of the GST Council

In true sense, this Question is wrong.

GST Council is a constitutional body under Article 279A. It makes recommendations to the Union and State Government on issues related to Goods and Service Tax and was introduced by the Constitution (One Hundred and First Amendment) Act, 2016.

The GST Council is chaired by the Union Finance Minister and other members are the Union State Minister of Revenue or Finance and Ministers in-charge of Finance or Taxation of all the States.

Thus, both the option (A) and (B) are incorrect. But, if you have to choose one out of these, then its’ option (B).

Topic to focus : Economic bodies

 

Q24. The National Bamboo Mission strives to

(i) Increase the area under bamboo plantation in non-forest areas.

(ii) Rejuvenate the underdeveloped bamboo industry in India

(iii) Take over the sick paper mills in the country

(iv) Explore the export market for bamboo

  1. (i) and (ii)
  2. (i) and (iii)
  3. (i), (ii) and (iii)
  4. (i), (ii) and (iv)

Correct option: (A) (i) and (ii)

Objectives of the National Bamboo Mission

  1. To increase the area under bamboo plantations in non-forest Government and private lands to supplement farm income and contribute towards resilience to climate change as well as the availability of quality raw material requirement of industries. The bamboo plantations will be promoted predominantly in farmers’ fields, homesteads, community lands, arable wastelands, and along irrigation canals, water bodies, etc.
  2. To improve post-harvest management through the establishment of innovative primary processing units near the source of production, primary treatment and seasoning plants, preservation technologies, and market infrastructure.
  3. To promote product development keeping in view market demand, by assisting R&D, entrepreneurship & business models at micro, small and medium levels and feed bigger industry.
  4. To rejuvenate the underdeveloped bamboo industry in India.
  5. To promote skill development, capacity building, awareness generation for development of bamboo sector from production to market demand.
  6. To realign efforts so as to reduce dependency on import of bamboo and bamboo products by way of improved productivity and suitability of domestic raw material for industry, so as to enhance income of the primary producers.

Objective (nbm.nic.in)

Topic to focus : Economic Program/Missions

Q25. Which one of the following correctly describes Angel Tax

  1. A tax imposed on the super-rich people
  2. A tax relief for doing social work
  3. A type of capital gains tax imposed when startups receive funding, which is higher than the fair market value of shares sold.
  4. A tax relief given to startups for doing innovative work

Correct option: (C) A type of capital gains tax imposed when startups receive funding, which is higher than the fair market value of shares sold.

Angel Tax is a term basically used to refer to the income tax payable on the capital raised by unlisted companies via the issue of shares through off-market transactions. Angel tax is levied on the capital raised via the issue of shares by unlisted companies from an Indian investor if the share price of issued shares is seen in excess of the fair market value of the company. The excess realization is considered as income and therefore, taxed accordingly.

Topic to focus : Taxation types

 

ECONOMY – Assam

Q29. We often hear the term ‘CTC’ in the context of Assam Tea. What does CTC stand for?

  1. Crush, Tear, Curl
  2. Curl, Tear, Crush
  3. Check, thrash, curl
  4. Check, tear, curl

Correct option: (A) Crush, tear, curl

Crush, tear, curl is a method of processing black tea in which the leaves are passed through a series of cylindrical rollers with hundreds of sharp teeth that crush, tear, and curl the tea into small, hard pellets. This replaces the final stage of orthodox tea manufacture, in which the leaves are rolled into strips. Tea produced using this method is generally called CTC tea or mamri tea.

The first CTC machine was brought into service in 1930 at the Amgoorie Tea Garden in Assam under the supervision of Sir William McKercher.

Topic to focus : Assam Tea

 

Q32. Which of the following became the first state/UT in India to present an e-budget and stream it live on social media as well?

  1. Andhra Pradesh
  2. Kerala
  3. Assam
  4. Delhi

Correct option: (C) Assam

Andhra Pradesh is the first state to present its budget in the digital format in 2016. However, Assam is the first state to present e-budget and stream it live on social media.

Assam Budget 2018-19 – Highlights and Analysis – AssamExam

Topic to focus : Assam’s Financial Budget

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Union Budget of India (Important Provisions & Facts) – Economics Notes for APSC Exam

Union Budget of India (Important Provisions & Facts) – Economics Notes for APSC, UPSC and other competitive Exams

 

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The Union Budget of India also referred to as the Annual Financial Statement in the Article 112 of the Constitution of India, is the annual budget of the Republic of India.

Since 2017, the Government of India presents it on the first day of February so that it could be materialised before the beginning of new financial year in April. Before 2017, it was presented on the last working day of February by the Finance Minister in Parliament.

The budget, presented as the Finance bill and the Appropriation bill has to be passed by Lok Sabha before it can come into effect on 1 April, the start of India’s financial year.

On election years, an interim budget is presented in February month. An interim budget is not the same as a ‘Vote on Account’. While a ‘Vote on Account’ deals only with the expenditure side of the government’s budget. An interim budget is a complete set of accounts, including both expenditure and receipts. An interim budget gives the complete financial statement, very similar to a full budget.

Important Facts about Union Budget of India

The first Indian budget was presented by James Wilson, a Scottish economist and politician, in 1860. He did so as a ‘Finance Member of the India Council’. He is regarded as the founder of Standard Chartered Bank and ‘The Economist’ magazine.

As of now,Morarji Desai has presented 10 budgets which is the highest count followed by P Chidambaram’s 9 and Pranab Mukherjee’s 8. Yashwant Sinha, Yashwantrao Chavan and C.D. Deshmukh have presented 7 budgets each while Manmohan Singh and T.T. Krishnamachari have presented 6 budgets.

The first Union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947.

The Union budgets for the fiscal years 1959-61 to 1963-64, inclusive of the interim budget for 1962-63, were presented by Morarji Desai. On 29 February in 1964 and 1968, he became the only finance minister to present the Union budget on his birthday. The last four budgets he presented when he was both the Finance Minister and the Deputy Prime Minister of India.

Morarji Desai is the only Finance Minister to present two Budgets on his Birhtday i.e. February 29, 1964 and 1968.

After Desai, Indira Gandhi, the then Prime Minister of India, took over the Ministry of Finance to become the first woman to hold the post of the Finance Minister.

Pranab Mukherjee, the first Rajya Sabha member to hold the Finance portfolio, presented the annual budgets for the financial years 1982-83, 1983–84 and 1984-85.

Manmohan Singh under P. V. Narasimha Rao, in his next annual budgets from 1992–93, opened the economy, encouraged foreign investments and reduced peak import duty from 300 plus percent to 50 percent. This budget is crucial for the onset of Indian economy’s liberalization.

The Union Budget for 2019–2020 was presented by Nirmala Sitharaman on 5 July 2019. Sitharaman becoming India’s second female defence minister and also the second female finance minister after Indira Gandhi and first full-time female Finance Minister. She has also presented the Union Budget for 2019–2020.

Budget Presentation Date & Time

Until the year 1999, the Union Budget was announced at 5:00 pm on the last working day of the month of February. This practice was inherited from the Colonial Era and another reason was that until the 1990s, all that budgets seem to do was to raise taxes, budget presentation in the evening gave producers and the tax collecting agencies the night to work out the change in prices.

In 1999, Yashwant Sinha, the then Finance Minister of India in the NDA government, changed the ritual by announcing the 1999 Union Budget at 11 am.

In 2016, departing from the colonial-era tradition of presenting the Union Budget on the last working day of February, Minister of Finance Arun Jaitley, in the NDA government of Narendra Modi announced that it will now be presented on 1 February.

Rail Budget

Railway budget of India was the Annual Financial Statement of the state-owned Indian Railways, which handles rail transport in India. It was presented every year by the Minister of Railways, representing the Ministry of Railways, in the Parliament.

The Railway Budget was presented every year, a few days before the Union budget, till 2016. From 2017, the Rail Budget is merged with the General budgets, ending a 92-year-old practice of a separate budget for the nation’s largest transporter.

The last standalone Railway Budget was presented on 25 February 2016 by Mr. Suresh Prabhu.

Halwa Ceremony and Budget briefcase

The printing of budget documents starts roughly a week ahead of presenting in the Parliament with a customary ‘Halwa ceremony’ in which halwa is prepared and served to the officers and support staff involved. They remain isolated and stay in the North Block office until the Budget is presented. The Halwa is served by the Finance Minister. This ceremony is performed as a part of the Indian tradition of having something sweet before starting an important work.

Until 2018, as a part of tradition, Finance ministers carried the budget in a leather briefcase. The tradition was established by the first Finance minister of India, Mr. RK Shanmukham Chetty. On 5 July 2019, Nirmala Sitharaman, broke this tradition by carrying the budget in a Bahi-Khata, which she continued in 2020 also.

Important Budgets

First Union Budget – Independent India’s first Union Budget was presented on 26th November, 1947 by the first Finance Minister of India R K Shanmukham Chetty.

People’s Budget – Union Budget for 1968-69 presented on 29th Februray, 1968 by Sri. Morarji Desai, then Finance Minster was termed as ‘People’s Budget’ due to its ground breaking proposals such as simplified assessment for manufacturers under erstwhile Excise Law regime, abolition of spouse allowance, discontinuance of separate surcharges on earned and unearned incomes, reducing the tax assessment time to two years from 4 years, heavy penalty for tax evaders and among others.

Carrot & Stick Budget – Union Budget for 1986-87 presented on 28th Februry, 1986 by Sri. V.P. Singh, got this nick name due to its serious attempts to removal of license raj from the administration, long-term fiscal policy in-line with five year plans, a beginning of major indirect tax reforms including Excise laws related proposals, introduction of modified Value Added Tax etc.


New India’s foundation stone laying Budget
– Union Budget for 1991 – 92 presented on 24th July, 1991 by Sri. Manmohan Singh, then Finance Minister could be termed as ‘New India’s foundation stone laying ceremony’ due to its path breaking proposals such attempts to overhaul India’s Export & Import policy, trade policy, slashing of import license, promotion of export sector to enable the Indian industry to compete with its global players, increase in foreign investment limits among others have shown a totally new path for the Indian economy.

Dream Budget – Union Budget for 1997 – 98 presented on 28th February, 1997 by Sri. P. Chidambaram, then Finance Minister was called the Dream Budget due to its significant proposals on Personal Income Tax and Corporate Tax regime. FM has brought down the highest Personal Income Tax rate from 40 percent to 30 percent, done away with number of surcharges, reduced royalty rates which were welcomed by larger section of the society. Another unconventional but path breaking proposal was ‘The Voluntary Disclosure of Income Scheme (VDIS) – 1997’ to allow people to come forward to disclose their undeclared wealth either in the form of cash or shares or gold or real estate assets, held in India or abroad without disclosing its source of funds. Since Scheme allowed to pay barely 30 and 35 percent of tax on such declared income, waiver hefty interest, penalty and immunity under various laws say, the Income tax law, wealth tax law and the foreign exchange law fetched very good response where more than 3,50,000 Indian citizens came forward to declare their undisclosed income or assets and committed to pay tax about Rs. 7,800 crore.

Millennium Budget – Union Budget for 2000-01 presented on 29th February, 2000 by Sri. Yashwant Sinha, then Finance Minister was a first Budget of the millennium. Finance Minister through this budget laid out a path to make India as a software hub. Introduction of Transfer Pricing Regulation under Income Tax Law to curb erosion of tax base India, phasing out of exemptions / subsidies granted for export regime, reduction in customs duty on computers from 20 per cent to 15 percent, mother boards from 20 per cent to 15 per cent, on specified capital goods for manufacture of semiconductors from 15 per cent to 5 per cent were truly shot in the arm for India’s growing software industry.

Ordinary Indians Budget – Union Budget for 2005 – 06 was presented 28th February, 2005 by Sri P. Chidambaram, then Finance Minister due to its pro poor and people oriented proposals known as Ordinary Indians or Aam Aadmi Budget. Hon’ble Finance Minister has presented one of the best union budgets in recent times. Tax proposals including upward changes in tax slabs, lowered corporate tax rates, reduction in customs duty on crude petroleum, collective Fringe Benefit Tax for employees, allowing Minimum Alternate Tax (MAT) Credit, introduction of National Rural Employment Guarantee Act (NREGA) and Right To Information Act (RTI) were truly common man’s needs.

 

Budget Documents & Its list

Besides the Finance Minister’s Budget Speech, there will be a set of Documents which also presented in the Parliament.

  1. Annual Financial Statement (AFS)
  2. Demands for Grants (DGs)
  3. Finance Bill of the coming Financial year
  4. Statements mandated under FRBM Act-

 Macro-Economic Framework Statement

 Fiscal Policy Strategy Statement

Medium Term Fiscal Policy Statement

  1. Expenditure Budget
  2. Receipts Budget
  3. Memorandum Explaining the Provisions in the Finance Bill
  4. Budget at a Glance
  5. Outcome Budget
  6. Economic Survey

 

Economic Survey

Economic Survey – The Central Government is bringing an ‘Economic Survey’ indicating survey on economic trends of the country. The Survey throw lights on agricultural, industrial production, infrastructure, employment, money supply, prices, imports, exports, foreign exchange reserves and other relevant macro and micro economic factors which have a direct impact on the Union Budget.

 

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Digital North East Vision 2022 (APSC Assam/Northeast Economy Notes)

Digital North East Vision 2022 (APSC Assam/Northeast Economy Notes)

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Digital North East Vision 2022

In 2018, the Union Ministry for Electronics and Information Technology released the ‘Digital North East Vision 2022’ aimed at maximum use of digital technology to transform lives of people. Digital North East is envisioned as an integral part of Digital India programme.

The Vision Document aims to provide a roadmap for translating the vision of Digital North East 2022 into firm action plan for each of the North East State. Objective of the initiative is “Maximum utilisation of digital technologies to transform lives of people of the north east region”.

 

Main Objectives of Digital North East 2022 are

  • To provide high speed broadband connectivity and mobile connectivity in all the uncovered villages in the northeastern region.

  • To create a Cloud- hub at Guwahati with Disaster Recovery Center for the NER.

  • To expand Common Service Centers to all Gram Panchayats in North East States.

  • To provide better access to quality health, educational and agricultural services using Digital Technology.

  • To promote local tourism, art and culture, handicraft, handloom.

  • To establish Start-ups and innovation Hub for North East.

  • To provide safe and secure cyberspace for digital north east by setting up specialized cyber security labs and by providing skill development through special trainings and IEC.

 

Eight thrust areas have been identified, these are

  • Digital Infrastructure

  • Digital services

  • Promotion of Electronics Manufacturing

  • Digital empowerment

  • Promotion of IT and ITes including BPOs at small cities of North East.

  • Digital Payments

  • Innovation & Startups

  • Cyber security.

 

Through these, it aims to empower the people of the North Eastern region. It has developed state-wise roadmaps for implementing digital initiatives in North East States. Union government will invest nearly Rs. 10,000 crore in the NE region over next 4 years to implement more than 400 projects. It will help in leveraging power of Information Technology to leapfrog the overall development of North East region and realize its full potential.

The implementation will require symbiotic and collaborative efforts between the Central Ministries and Departments concerned and the Governments of the North East States. The majority of the projects will be implemented by the Department of Telecom.

As part of the initiative, Union IT minister also inaugurated the first electronics manufacturing cluster in the North-Eastern region in Guwahati.

 

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North Eastern Regional Agricultural Marketing Corporation (NERAMAC) (APSC Assam Economy Notes)

North Eastern Regional Agricultural Marketing Corporation (NERAMAC) (APSC Assam Economy Notes)

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North Eastern Regional Agricultural Marketing Corporation (NERAMAC)

The NERAMAC Limited was incorporated in the year 1982 as a marketing organization in the field of Agri-Horti sector of the North-eastern region, under the administrative control of the Ministry of Development of North Eastern Region (DoNER). Its registered office is located at Guwahati.

It is a Government of India Enterprise operating under the administrative control of the Ministry of Development of North Eastern Region (DoNER). NERAMAC is a pioneer marketing organization in the field of Agri-Horti sector of the North-eastern region, involved in supporting farmers right from the fields and upto the markets to the end consumers through registered FPO/FPCs.

It was set up to support farmers/producers of North East getting remunerative prices for their produce and thereby bridge the gap between the farmers and the market and also to enhance the agricultural, procurement, processing and marketing infrastructure of the Northeastern Region of India.

NERAMAC is continuously making all efforts for the development of the farmers of the region and double their income by the end of 2022.

The Union Minister for Development of North Eastern Region (DoNER) laid the foundation stone of NERAMAC marketing complex in Guwahati, Assam. The marketing complex will be a destination to showcase the products of the North-Eastern region.

Role of North Eastern Regional Agricultural Marketing Corporation ( NERAMAC)

  • The main role of NERAMAC is to purchase the marketable surplus of fruits and vegetables from the growers of the North East, to make necessary arrangement for its processing and marketing and to support farmers and producers through input supplies for better productivity under the aegis of Central Sector Schemes.
  • It associated with the Ministry of Food Processing Industries (MoFPI) for development of food processing in the NE region apart from involving itself in Central Sector schemes like Mission for Integrated Development of Horticulture (MIDH).
  • It has also taken up assignment to co-ordinate and assist in attracting investment, create awareness on food processing and to assist MoFPI in administering the National Mission on Food Processing in the North East.
  • NERAMAC has sponsored a Techno-Economic Feasibility Study to look at the feasibility for setting up collection and procurement Centres of agro-horticulture commodities viz. Pineapple, Orange, Ginger, Apple, Kiwi and Passion fruit in nine places viz. Diphu, Haflong, Krishnai (Assam), Bomdila, Roing (Arunachal Pradesh), Churachandpur (Manipur), Vairangte (Bhaga) in Mizoram, Nongpo and Phulbari (Meghalaya).

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Karbi Anglong Autonomous Council (KAAC) Budget 2020-21 – Highlights and Analysis

Highlights of Karbi Anglong Autonomous Council (KAAC) Budget 2020-21

– Detailed Analysis and Important Points – 

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Karbi Anglong Autonomous Council (KAAC) Budget 2020-21

The Chief Executive Member (CEM) of Karbi Anglong Autonomous Council (KAAC) Tuliram Ronghang presented Rs 38.97 crore deficit budget for the year 2020-21 for the council.

An estimated expenditure is proposed at Rs. 225 crore (including HUDCO share of Rs. 40 crore) for the fiscal to carry out developmental activities, against the total estimated receipt of Rs. 146 crore (excluding HUDCO share of Rs.40 crore arpox.) leading to a deficit of Rs. 39 crore for the financial year 2020-21.

  • The KAAC revenue is derived from own sources as well as from State government and Government of India in the form of Grant-in-Aid and administrative charges. 
  • The Council’s main sources of revenue are derived mostly from forest products, entry tax, professional tax, trade callings, land revenue, share of motor vehicle tax, sale proceeds from weekly markets, ghats, fisheries and cattle pounds. Also other sources of revenue are sale of district council receipt, court fee stamps and royalty from mines and minerals etc.
  • In order to increase the revenue kitty, the CEM also proposed new fee hike on trading license, transfer of land and other trades.
  • The KAAC is likely to receive an amount of Rs 50 crore of administrative charges and share of motor vehicle tax from the state government. Similarly, the KAAC would receive excise and export revenues from 2021
  • The MAC development fund has been increased to Rs 30 lakh from Rs 15 lakh. The state government has assured that the excise and export revenues will be handed over to the KAAC fully and the amount may touch Rs 100 crore from April next year.

Main features of the Karbi Anglong Autonomous Council (KAAC) Budget 2020-21
  • An amount of Rs. 180.00 lakhs has been proposed for pension of living ex-Member of Autonomous Council (MAC) of Karbi Anglong Autonomous Council.
    Revenue receipt for 2020-2021 expected to get by Rs.1740.00 lakhs from Forest products.
    Under Major Works budget provision been made available of Rs.700 lakhs and constituency development fund for Rs.780 lakhs.
    MACs will be granted INR 30 lakh each for constituency development purposes.
  • Rs. 7 crore for major works, Rs 7.80 crore for constituency development;
  • Rs. 70 lakh to education department for scholarship and stipends for technical students (including IAS coaching);
  • Rs. 10 lakh for Centre for Studies in Karbi Language and Culture;
  • Rs. 50 lakh for Karbi Youth Festival;
  • Rs. 20 lakh for Karbi Lammet Amei;
  • Rs. 10 lakh for scholarship and stipends;
  • Rs. 10 lakh for purchase of vehicle for Karbi traditional king;
  • Rs. 3 lakh for TA & other allowances for Karbi traditional king and other customary heads;
  • Rs. 2 crore to urban development department for municipal and town committees;
  • Rs. 40 lakh for purchase of machinery and equipment; Under loans and advances,
  • Rs. 50 crore for construction of multi level parking at Diphu and multi storied commercial complex and KAAC Guest House at Diphu;
  • Rs. 7.50 crore for interest payment to HUDCO.

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APSC Main 2020 Test Series - assamexam


Download Assam Budget 2020-21 Highlights PDF

18 Flagship Schemes (Ashtadash Mukutor Unnoyonee Maala) in Assam Budget 2020-21

Assam Budget 2019-20

Assam Budget 2018-19

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Economic Survey 2019-20 – Highlights & Analysis ( PART 3 – Economic Sector-wise Performance)

Economic Survey 2019-20 – Highlights & Complete Coverage
( PART 3 – Economic Sector-wise Performance )

Economic Survey 2019-20 - Highlights & Important points

Get Assam 2020 Yearbook PDF

The Economic Survey of India is the flagship annual document of the Ministry of Finance, Govt of India. It is prepared under the guidance of the Chief Economic Adviser of India. This document is presented to both Houses of Parliament during the Budget Session. The first Economic Survey of India was presented in 1950-51 as part of the Union Budget. After 1964 it was separated from the Budget and presented each year during the Budget Session before the presentation of the budget. The document is non-binding.

The Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2019-20 in the Parliament on January 31, 2020. Krishnamurthy V. Subramanian is the Chief Economic Adviser of Ministry of Finance, Government of India.

We will present Highlights of the Economic Survey in PART 1, 2 and 3:

Study Materials & Notes | Assam Current Affairs | Assam Current Affairs Quiz 

 

Key Highlights of the Economic Survey 2019-20

( PART 3 – Indian Economic Sectors’ Performance )

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Agriculture and Food Management
  • Largest Proportion of Indian population depends directly or indirectly on agriculture for employment opportunities as compared to any other sector.
  • The share of agriculture and allied sectors in the total Gross Value Added (GVA) of the country has been continuously declining on account of relatively higher growth performance of non-agricultural sectors, a natural outcome of development process.
  • GVA at Basic Prices for 2019-20 from ‘Agriculture, Forestry and Fishing’ sector is estimated to grow by 2.8 %.
    · Agricultural productivity is also constrained by lower level of mechanization in agriculture which is about 40 % in India, much lower than China (59.5 %) and Brazil (75 %).
    · Skewed pattern of regional distribution of agricultural credit in India:
    o Low credit in Hilly, Eastern and North Eastern states (less than 1 % of total agricultural credit disbursement).
    · Livestock income has become an important secondary source of income for millions of rural families:
    o An important role in achieving the goal of doubling farmers’ income.
    o Livestock sector has been growing at a CAGR of 7.9 % during last five years.
    · During the last 6 years ending 2017-18, Food Processing Industries sector has been growing:
    o Average Annual Growth Rate (AAGR) of around 5.06 %
    o Constitutes as much as 8.83 % and 10.66 % of GVA in Manufacturing and Agriculture sector respectively in 2017-18 at 2011-12 prices.
    · While interests of the vulnerable sections of the population need to be safeguarded, Survey emphasizes on sustainability of food security operations by:
    o Addressing the burgeoning food subsidy bill.
    o Revisiting the rates and coverage under NFSA.
 
Industry and Infrastructure
  • The industrial sector as per Index of Industrial Production (IIP) registered a growth of 0.6 per cent in 2019-20 (April-November) as compared to 5.0 % during 2018-19 (April-November).
  • Fertilizer sector achieved a growth of 4.0 % during 2019-20 (April-November) as compared to (-) 1.3 per cent during 2018-19 (April-November).
  • Steel sector achieved a growth of 5.2 % during 2019-20 (April-November) as compared to 3.6 % during 2018-19 (April-November).
  • Total telephone connections in India touched 119.43 crore as on September 30, 2019.
  • The installed capacity of power generation has increased to 3, 64,960 MW as on October 31, 2019 from 3, 56,100 MW as on March 31, 2019.
  • Report of the Task Force on National Infrastructure Pipeline released on 31.12.2019 has projected total infrastructure investment of Rs. 102 lakh crore during the period FY 2020 to 2025 in India.
Services Sector
  • Increasing significance of services sector in the Indian economy:
  • About 55 % of the total size of the economy and GVA growth.
  • Two-thirds of total FDI inflows into India.
  • About 38 per cent of total exports.
  • More than 50 % of GVA in 15 out of the 33 states and UTs.
  • Gross Value Added growth of the services sector moderated in 2019-20 as suggested by various high-frequency indicators and sectoral data such as air passenger traffic, port and shipping freight traffic, bank credit etc.
  • On the bright side, FDI into services sector has witnessed a recovery in early 2019-20.
Social Infrastructure, Employment and Human Development
  • The expenditure on social services (health, education and others) by the Centre and States as a proportion of GDP increased from 6.2 % in 2014-15 to 7.7 % in 2019-20 (BE).
  • India’s ranking in Human Development Index improved to 129 in 2018 from 130 in 2017:
    o With 1.34 % average annual HDI growth, India is among the fastest improving countries
  • Gross Enrolment Ratio at secondary, higher secondary and higher education level needs to be improved.
  • The share of regular wage/salaried employees has increased by 5 percentage points from 18 % in 2011-12 to 23 % in 2017-18.
  • A significant jump of around 2.62 crore new jobs with 1.21 crore in rural areas and 1.39 crore in urban areas in this category.
  • Total formal employment in the economy increased from 8 % in 2011-12 to 9.98 % in 2017-18.
  • Gender disparity in India’s labour market widened due to decline in female labour force participation especially in rural areas:
    o 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.
Sustainable Development and Climate Change
  • India moving forward on the path of SDG implementation through well-designed initiatives
  • SDG India Index:
    o Himachal Pradesh, Kerala, Tamil Nadu, Chandigarh are front runners.
    o Assam, Bihar and Uttar Pradesh come under the category of Aspirants.
  • India hosted COP-14 to UNCCD which adopted the Delhi Declaration: Investing in Land and Unlocking Opportunities.
  • COP-25 of UNFCCC at Mandrid:
    o India reiterated its commitment to implement Paris Agreement.
    o COP-25 decisions include efforts for climate change mitigation, adaptation and means of implementation from developed country parties to developing country parties.
  • Forest and tree cover:
    o Increasing and has reached 80.73 million hectare.
    o 24.56 % of the geographical area of the country.
  • Burning of agricultural residues, leading to rise in pollutant levels and deterioration of air quality, is still a major concern though the total number of burning events recorded reduced due to various efforts taken.
  • International Solar Alliance (ISA)
    o ‘Enabler’ by institutionalizing 30 Fellowships from the Member countries.
    o ‘Facilitator’ by getting the lines of credit worth US$ 2 Billion from EXIM Bank of India and 1.5 Billion from AfD, France.
    o ‘Incubator’ by nurturing initiatives like the Solar Risk Mitigation Initiative.
    o ‘Accelerator’ by developing tools to aggregate demand for 1000 MW solar and 2.7 lakh solar water pumps.

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Union Budget 2020-21

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Economic Survey 2019-20 – Highlights & Analysis ( PART 2 – GDP and Economic Performance )

Economic Survey 2019-20 – Highlights & Complete Coverage
( PART 2 – GDP and Economic Performance )

Economic Survey 2019-20 - Highlights & Important points

Get Assam 2020 Yearbook PDF

The Economic Survey of India is the flagship annual document of the Ministry of Finance, Govt of India. It is prepared under the guidance of the Chief Economic Adviser of India. This document is presented to both Houses of Parliament during the Budget Session. The first Economic Survey of India was presented in 1950-51 as part of the Union Budget. After 1964 it was separated from the Budget and presented each year during the Budget Session before the presentation of the budget. The document is non-binding.

The Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman presented the Economic Survey 2019-20 in the Parliament on January 31, 2020. Krishnamurthy V. Subramanian is the Chief Economic Adviser of Ministry of Finance, Government of India.

We will present Highlights of the Economic Survey in PART 1, 2 and 3:

Study Materials & Notes | Assam Current Affairs | Assam Current Affairs Quiz 

 

Key Highlights of the Economic Survey 2019-20

( PART 2 – GDP and Economic Performance )

Get Assam 2020 Yearbook PDF

 

Is India’s GDP Growth Overstated? No!
  • GDP growth is a critical variable for decision-making by investors and policymakers. Therefore, the recent debate about accuracy of India’s GDP estimation following the revised estimation methodology in 2011 is extremely significant.
  • As countries differ in several observed and unobserved ways, cross-country comparisons have to be undertaken by separating the effect of other confounding factors and isolating effect of methodology revision alone on GDP growth estimates.
  • Models that incorrectly over-estimate GDP growth by 2.7 % for India post-2011 also misestimate GDP growth over the same period for 51 out of 95 countries in the sample.
  • Several advanced economies such as UK, Germany and Singapore have their GDPs misestimated with incompletely specified econometric model.
  • Correctly specified models that account for all unobserved differences and differential trends in GDP growth across countries fail to find any misestimating of growth in India or other countries.
  • Concerns of a misestimated Indian GDP are unsubstantiated by the data and are thus unfounded.
Thalinomics: The Economics of a Plate of Food in India
  • An attempt to quantify what a common person pays for a Thali across India.
  • A shift in the dynamics of Thali prices since 2015-16.
  • Absolute prices of a vegetarian Thali have decreased significantly since 2015-16 across India and the four regions; though the price has increased during 2019-20.
  • Post 2015-16:
    Average household gained close to Rs. 11, 000 on average per year from the moderation in prices in the case of vegetarian Thali. Average household that consumes two non-vegetarian Thalis gained close to Rs. 12, 000 on average per year during the same period.
  • From 2006-07 to 2019-20:
    Affordability of vegetarian Thalis improved 29 %. Affordability of non-vegetarian Thalis improved by 18 %.
India’s Economic Performance in 2019-20
  • India’s GDP growth moderated to 4.8 % in H1 of 2019-20, amidst a weak environment for global manufacturing, trade and demand.
  • Real consumption growth has recovered in Q2 of 2019-20, cushioned by a significant growth in government final consumption.
  • Growth for ‘Agriculture and allied activities’ and ‘Public administration, defense, and other services’ in H1 of 2019-20 was higher than in H2 of 2018-19.
  • India’s external sector gained further stability in H1 of 2019-20:
  • Current Account Deficit (CAD) narrowed to 1.5 % of GDP in H1 of 2019-20 from 2.1 % in 2018-19.
  • Impressive Foreign Direct Investment (FDI).
  • Rebounding of portfolio flows.
  • Accretion of foreign exchange reserves.
  • Sharper contraction of imports as compared to that of exports in H1 of 2019-20, with easing of crude prices.
  • Headline inflation expected to decline by year end:
  • Increased from 3.3 % in H1 of 2019-20 to 7.35 % in December 2019-20 due to temporary increase in food inflation.
  • Rise in CPI-core and WPI in December 2019-20 suggests building of demand pressure.
  • Deceleration in GDP growth can be understood within the framework of a slowing cycle of growth:
  • Financial sector acted as a drag on the real sector (investment-growth-consumption).
  • Reforms undertaken during 2019-20 to boost investment, consumption and exports:
  • Speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC).
  • Easing of credit, particularly for the stressed real estate and NBFC sectors.
  • Announcing the National Infrastructure Pipeline 2019-2025.
  • Survey expects an uptick in the GDP growth in H2 of 2019-20:
  • 5 % GDP growth for 2019-20 based on CSO’s first Advance Estimates.
  • Expeditious delivery on reforms for enabling the economy to strongly rebound in 2020-21.
Fiscal Developments
  • Revenue Receipts registered a higher growth during the first eight months of 2019-20, compared to the same period last year, led by considerable growth in Non-Tax revenue.
  • Gross GST monthly collections have crossed the mark of Rs. 1 lakh crore for a total of five times during 2019-20 (up to December 2019).
  • Structural reforms undertaken in taxation during the current financial year:
  • Change in corporate tax rate.
  • Measures to ease the implementation of GST.
  • Fiscal deficit of states within the targets set out by the FRBM Act.
  • Survey notes that the General Government (Centre plus States) has been on the path of fiscal consolidation.
External Sector
  • Balance of Payments (BoP):
  • India’s BoP position improved from US$ 412.9 bn of forex reserves in end March, 2019 to US$ 433.7 bn in end September, 2019.
  • Current account deficit (CAD) narrowed from 2.1% in 2018-19 to 1.5% of GDP in H1 of 2019-20.
  • Foreign reserves stood at US$ 461.2 bn as on 10th January, 2020.
  • Global trade:
  • In sync with an estimated 2.9% growth in global output in 2019, global trade is estimated to grow at 1.0% after having peaked in 2017 at 5.7%.
  • However, it is projected to recover to 2.9% in 2020 with recovery in global economic activity.
  • India’s merchandise trade balance improved from 2009-14 to 2014-19, although most of the improvement in the latter period was due to more than 50% decline in crude prices in 2016-17.
  • India’s top five trading partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.
  • Exports:
    Top export items: Petroleum products, precious stones, drug formulations & biologicals, gold and other precious metals.
  • Largest export destinations in 2019-20 (April-November): United States of America (USA), followed by United Arab Emirates (UAE), China and Hong Kong.
  • The merchandise exports to GDP ratio declined, entailing a negative impact on BoP position.
  • Slowdown of world output had an impact on reducing the export to GDP ratio, particularly from 2018-19 to H1 of 2019-20.
  • Growth in Non-POL exports dropped significantly from 2009-14 to 2014-19.
  • Imports:
    Top import items: Crude petroleum, gold, petroleum products, coal, coke & briquittes.
  • India’s imports continue to be largest from China, followed by USA, UAE and Saudi Arabia.
  • Merchandise imports to GDP ratio declined for India, entailing a net positive impact on BoP.
  • Large Crude oil imports in the import basket correlates India’s total imports with crude prices. As crude price raises so does the share of crude in total imports, increasing imports to GDP ratio.
  • Significant Gold imports also correlate India’s total imports with gold prices. However, share of gold imports in total imports remained the same during 2018-19 and the first half of 2019-20, despite an increase in prices, possibly due to increase in import duty that reduced the import of gold.
  • Non-POL-non-gold imports are positively correlated with GDP growth.
  • Non-POL-non-oil imports fell as a proportion to GDP from 2009-14 to 2014-19 when GDP growth accelerated.
  • This may be because of consumption driven growth while investment rate declined, lowering non-POL-non-gold imports.
  • Continuous decline in investment rate decelerated GDP growth, weakened consumption, dampened the investment outlook, which further reduced GDP growth and along with it non-POL-non-gold imports as a proportion of GDP from 2018-19 to H1 of 2019-20.
  • Under trade facilitation, India improved its ranking from 143 in 2016 to 68 in 2019 under the indicator, “Trading across Borders”, monitored by World Bank in its Ease of Doing Business Report.
  • Logistics industry of India:
  • Currently estimated to be around US$ 160 billion.
  • Expected to touch US$ 215 billion by 2020.
  • According to World Bank’s Logistics Performance Index, India ranks 44th in 2018 globally, up from 54th rank in 2014.
  • Net FDI inflows continued to be buoyant in 2019-20 attracting US$ 24.4 bn in the first eight months, higher than the corresponding period of 2018-19.
  • Net FPI in the first eight months of 2019-20 stood at US$ 12.6 bn.
  • Net remittances from Indians employed overseas continued to increase, receiving US$ 38.4 billion in H1 of 2019-20 which is more than 50% of the previous year level.
  • External debt:
  • Remains low at 20.1% of GDP as at end September, 2019.
  • After significant decline since 2014-15, India’s external liabilities (debt and equity) to GDP increased at the end of June, 2019 primarily by increase in FDI, portfolio flows and external commercial borrowings (ECBs).

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Monetary Management and Financial Intermediation

  • Monetary policy:
  • Remained accommodative in 2019-20.
  • Repo rate was cut by 110 basis points in four consecutive MPC meetings in the financial year due to slower growth and lower inflation.
  • However, it was kept unchanged in the fifth meeting held in December 2019.
  • In 2019-20, liquidity conditions were tight for initial two months; but subsequently it remained comfortable.
  • The Gross Non Performing Advances ratio:
  • Remained unchanged for Scheduled Commercial banks at 9.3% between March and September 2019
  • Increased slightly for the Non-Banking Financial Corporations (NBFCs) from 6.1% in March 2019 to 6.3% in September 2019.
  • Credit growth:
  • The financial flows to the economy remained constrained as credit growth declined for both banks and NBFCs.
  • Bank Credit growth (YoY) moderated from 12.9% in April 2019 to 7.1% as on December 20, 2019.
  • Capital to Risk-weighted Asset Ratio of SCBs increased from 14.3% to 15.1% between March 2019 and September 2019.

Prices and Inflation

  • Inflation Trends:
  • Inflation witnessing moderation since 2014
  • Consumer Price Index (CPI) inflation increased from 3.7 per cent in 2018-19 (April to December, 2018) to 4.1 per cent in 2019-20 (April to December, 2019).
  • WPI inflation fell from 4.7 per cent in 2018-19 (April to December, 2018) to 1.5 per cent during 2019-20 (April to December, 2019).
  • Drivers of CPI – Combined (C) inflation:
  • During 2018-19, the major driver was the miscellaneous group
  • During 2019-20 (April-December), food and beverages was the main contributor.
  • Among food and beverages, inflation in vegetables and pulses was particularly high due to low base effect and production side disruptions like untimely rain.
  • Cob-web Phenomenon for Pulses:
  • Farmers base their sowing decisions on prices witnessed in the previous marketing period.
  • Measures to safeguard farmers like procurement under Price Stabilisation Fund (PSF), Minimum Support Price (MSP) need to be made more effective.
  • Divergence Between Retail and Wholesale price:
  • Observed for essential agricultural commodities in four metropolitan cities of the country from 2014 to 2019.
  • Divergence particularly high for vegetables like onion and tomato. This may be due to the presence of intermediaries and high transaction costs.
  • Volatility of Prices:
    o Volatility of prices for most of the essential food commodities with the exception of some of the pulses has actually come down in the period 2014-19 as compared to the period 2009-14.
    o Lower volatility might indicate the presence of better marketing channels, storage facilities and effective MSP system.
  • Regional variations:
    o CPI-C inflation has been highly variable across States ranging between (-)0.04 per cent to 8.1 per cent across States/UTs in financial year (FY) 2019-20 (April-December).
    o In most states, CPI-C inflation in rural areas is lower than the CPI-C inflation in urban areas
    o Rural inflation has been more variable across states than urban inflation.
  • Inflation dynamics:
    o Convergence of headline inflation towards core inflation as per the CPI-C data from 2012 onwards.
 

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