1. India, The macroeconomic context
Dr. Rathin Roy
Director and Chief Executive
National Institute of Public Finance and Policy, New Delhi
June, 2016

2. Predicting Growth in India
Year
GDP Actual
IMF_projections
ADB_projections
WB_projections
2004
7.1
6.3
6.6
8.3
2005
9.5
6.9
9.2
2006
9.6
7.2
2007
9.3
8.1
7.8
8.8
2008
6.7
8.0
2009
8.6
6.5
7.4
2010
8.9
7.6
2011
8.2
7.5
2012
5.6
7.0
6.8
2013
6.0
2014
5.7
5.9
6.4
2015
2016
7.3
Source: The Actual GDP numbers for India are based at prices till FY’ 2014, FY’2015 are at prices

3. Macroeconomic Outlook- growth and inflation
Growth (GVA at basic prices)
CPI Inflation
Source: MoF, GoI
Source: Reserve Bank of India

4. Macroeconomic stabilization achieved in last two years
210 bps
350 bps
100 bps
$ 19 Bn
Source: MoF, GoI
Source: Reserve Bank of India

5. Macroeconomic stabilization achieved in last two years
Source: MoF, GoI

6. Macroeconomic Outlook- key deficit indicators- Centre
(% of GDP) RE BE
Revenue Deficit
3.1
2.9
2.5
2.3
Fiscal Deficit
4.4
4.1
3.9
3.5
Revenue Expenditure
12.1
11.8
10.9
11.5
Capital Expenditure
1.7
1.5
1.6
Source: Budget documents, Union Budget of Government of India

7. Fiscal deficit (as % of gdp)- action lies in the states
States have completed fiscal consolidation.
Source: Handbook of statistics on Indian economy, RBI

8. Revenue deficit (as % of gdp)
States no longer borrow to consume.
Source: Handbook of statistics on Indian economy, RBI

9. Revenue deficit (as % of gSdp)
States
Andhra Pradesh
2.3
1.0
2.5
1.8
1.6
1.1
0.0
Bihar
1.9
7.1
5.2
4.1
3.8
1.7
-1.4
-0.1
Gujarat
2.7
3.3
5.7
5.4
2.2
2.0
0.2
Kerala
3.6
4.3
4.7
3.1
Madhya Pradesh
3.7
1.3
4.4
-1.5
Maharashtra
3.0
2.4
0.8
Orissa
6.4
6.0
0.7
-0.6
Punjab
4.6
4.0
3.5
Rajasthan
3.2
0.5
Tamil Nadu
2.9
0.9
0.3
-0.8
Uttar Pradesh
5.3
8.2
0.4
West Bengal
4.2
6.9
5.6
5.1
4.8
3.9
All GCS
3.4
Source: Handbook of statistics on Indian economy, RBI

10. Revenue deficit (as % of gSdp)- action lies in the states
*(RE)
*(BE)
Andhra Pradesh
-0.9
0.0
-0.2
-0.3
-0.4
-0.5
-0.07
2.74
1.25
Bihar
-2.5
-4.1
-3.1
-1.8
-1.9
0.2
-1.87
1.12
-2.63
Gujarat
-0.6
-0.7
1.6
1.0
-0.62
-0.74
Madhya Pradesh
-2.3
-3.2
-2.1
-2.4
-2.6
-1.7
-1.35
-1.25
-1.00
Maharashtra
-0.1
-2.2
0.9
0.1
0.34
0.82
Odisha
-3.3
-2.0
-1.2
-1.22
-1.09
-1.47
Rajasthan
-0.8
0.4
1.8
0.20
0.73
-0.08
Tamil Nadu
-1.3
0.7
0.5
0.22
0.32
0.42
Uttar Pradesh
-1.5
-1.0
-1.17
-3.32
-3.20
Kerala
1.7
2.2
1.4
2.6
2.85
2.07
1.37
Punjab
2.5
2.7
2.3
2.06
1.78
1.60
West Bengal
3.2
4.3
5.4
3.7
2.1
2.68
1.29
0.00
All GCS
0.3
*RE=Revised Estimates *BE= Budget Estimates; NA= Not Available

11. Public Investment
“*” : For states, data is Budget Estimates

12. Macroeconomic vision of the government
Source: MoF, GoI

13. Implementation- FISCAL CONSOLIDATION
Adhering to fiscal deficit targets
Reviewing the implementation of FRBM Act
High quality of spending
Doing away with Plan-Non Plan classification
Sunset date and outcome review of new schemes

14. Implementation-Transforming tax ecosystem
Reducing litigation and uncertainty – Reducing discretionary tax officers, Dispute Resolution Scheme, CBEC withdrew ~7, 500 old cases for small taxpayers, etc.
Commitment to not resort to retrospective taxation
Incentivizing Make in India, Affordable Housing, and pensioned society

15. implementation- sustainable agriculture

16. Implementation- manufacturing growth

17. implementation- sustainable development
Mass Rapid Transit Systems projects implemented for cities including Ahmedabad, Bengaluru, Chennai, Chandigarh, Hyderabad, Delhi, Jaipur, Lucknow, Kochi, Kolkata, Patna, Pune, Surat through PPP model.
Multiple ring road projects to decongest cities.

18. implementation- infrastructure through public investment

19. implementation- robust financial system

20. implementation- transparent tax regime
Biggest indirect tax reform since 1947, leading to efficient economic integration of India.
99% will be approved in the monsoon session of the Parliament of India.
Revitalised systems/technology in tax administration with online tax filing facility and fast refund processing.
Refunds less than Rs. 50,000 approved automatically resulting in faster processing.
Single window clearance for customs.
Simplification of tax code and filing process.
New appraisal system for tax officials with increased focus on quality and less on meeting tax collection targets.
Dispute Resolution Scheme to reduce pending tax cases.

21. Achievements- governance reforms

22. Execution , Execution, Execution
Road ahead
Execution , Execution, Execution

23. THANK YOU