Economic Overview - Review and Outlook of Indian Economy

Transcription

ECONOMIC OVERVIEW
Review & Outlook of Indian Economy
Executive Summary

World economy is at crossroads and 2016 in all probability it will not be the most pleasant year.
All indicators are pointing towards a correction in asset markets. The contraction in China’s GDP
due to its rebalancing will accentuate this trend. Rebalancing will impact the GDP of many economies who relied on exporting raw materials to China.

The Indian economy continued to exhibit resilience and strength of its domestic absorption to
register a growth of 7.2% during H1 FY16. Global deflation need not lead to depression in the
Indian context because causes of deflation are not debt induced as is the case in Europe and US.
In particular, economy, especially industrial activity should see an upswing in 2016, pulling up
the services sector alongside. If the US remains strong, capital flows to emerging economies particularly India, will increase. Liberalisation of key sectors, should increase fund flows for financing
infrastructure investment.

The outlook for inflation is conditional on international prices and the state of domestic demand.
Oil prices are likely to remain depressed. Commodity prices too will remain quiescent. In
particular, the speed with which alternative energy technologies are developing and combining
with technological improvements in shale oil extraction will ensure that there is almost minimal
chance of oil prices breaking through the $50 barrier.

India’s public debt remains sustainable given manageable interest rate costs and expected
recovery in the economy’s growth rate. The captive domestic investor base is likely to mitigate
the impact of any real interest rate shocks.

India’s financial system remains stable and the relatively stronger macroeconomic fundamentals
lend resilience to face the still prevailing uncertainty and emerging risks in the global economy
and financial markets.

The effects of some of the major steps taken by Government like activation of some of the
auction allocated coal blocks and some other mines, road contracts awarded through EPC and
hybrid annuity schemes, power transmission contracts, urban infrastructure projects, etc. will
start showing visible results over the next few months.
Economic Research Department, State Bank of India, Mumbai
February 2016
GLOBAL ECONOMY
Global Growth
Table 1: Global Growth Forecast (%)
“The financial history of the last century shows a
2013
2014
2015
2016 (F)
2017 (F)
World
2.4
2.60
2.40
2.90
3.10
steady increase in the amount of public indebtedness.
High income
1.2
1.70
1.60
2.10
2.10
Nobody believes that the states will eternally drag the
Uni ted Sta tes
1.5
2.40
2.50
2.70
2.40
burden of these interest payments. It is obvious that
EU
-0.2
0.90
1.50
1.70
1.70
sooner or later all these debts will be liquidated in
Ja pa n
1.6
-0.10
0.80
1.30
0.90
some way or other, but certainly not by payment of
Rus s i a
1.3
0.60
-3.80
-0.70
1.30
interest and principal according to the terms of the
Developing countries
5.3
4.90
4.30
4.80
5.30
Chi na
7.7
7.30
6.90
6.70
6.50
Indi a
6.9
7.30
7.30
7.80
7.90
contract.”
Ludwig Von Mises (Human Action)

Source: Worl d Ba nk
Global economic growth for the calendar year
Graph 1: Growth of international bank credit
2016 and 2017 is expected to see only a gradual
pick up. As per the latest World Bank forecast, the
global growth for 2016 is projected at 2.9%.

The developing countries may see a contraction
as prices of commodities are unlikely to recover
due to appreciation in dollar post Fed hike. Developed countries are reeling under unresolved post
crisis problems namely continued build up of public debt, debt induced deflation and unemployment and social unrest. Labour market slack is
perhaps more extensive than suggested by claimant-based unemployment rates alone. Broader
measures of unemployment, incorporating part-
Source: Bank of International Settlement
Table 2: Global debt issuances by issuers ($ trillion)
NonInternaGeneral Financial
financial Housetional
Govern- CorporaTotal
Corpora- hold Organizament
tions
tions
tions
time workers and inactive persons wanting to
work, remain well above pre-crisis norms in many
economies.

The global debt levels over the last seven years
have magnified. The expansion in central bank
balance sheet has not entirely met the desired
outcome namely inflation and credit expansion.
Many countries—US, EU and China—are witnessing across the board fall in prices. This trend may
continue in future as easy money that was the
cause of debt build up cannot cure the malice it
has created.

China deserves a special focus not only due to its
sheer size and connectivity but also due to its
conscious strategy to rebalance the economy towards consumption—the New Normal.
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Jun-14
35.2
41.5
44.2
45.0
46.8
47.6
41.1
42.3
41.4
40.1
40.6
41.1
8.4
9.3
10.0
11.1
12.0
12.4
0.3
0.3
0.3
0.2
0.2
0.2
0.8
1.0
1.3
1.3
1.6
1.6
85.8
94.3
97.1
97.8
101.2
102.9
Sep-14
Dec-14
Mar-15
46.0
45.1
44.2
39.8
39.3
38.2
12.3
12.3
12.3
0.2
0.2
0.2
1.5
1.5
1.4
99.9
98.5
96.4
Compounded
annual
growth
4.34%
-1.40%
7.45%
-3.23%
10.49%
2.22%
Percent in
total (Mar
15)
45.9
39.6
12.8
0.2
1.5
100.0
Source: Bank of International Settlement
Prepared By Economic Research Department, State Bank of India, Corporate Centre, Mumbai
2
GLOBAL ECONOMY

The ongoing structural slowdown in China has de-
Graph 2: Thomson Reuters CRB Index & Crude Prices
pressed the demand for oil, iron ore and other commodities, thereby dragging down growth in
Brazil, Australia and other commodity suppliers.

Recent correction in Chinese stocks may have no
direct impact on consumption as China’s household exposure to stock is around 16%. However, it
is the drop in collateral value of stocks that may
indirectly impact its banking system thus creating a
broader systemic risk. With over 60% of the household savings parked in bank deposits the impact on
Source: Bloomberg
real economy (viz. consumption) through the
Graph 3: Trends in GDP of China
banking channel far outweighs the loss in con10
sumption due to negative wealth effects of declin-
9
ing equity prices.
8
Three major conflicts hogged most of the lime light
7
in 2015 and will decide the course in 2016 and
6
2017. These include the Ukraine crisis, the South
5
China Sea Crisis and the Middle East Crisis. If the
After rising by around 150% between Jun’14 and
2015Q3
2015Q2
2015Q1
2014Q4
2014Q3
2014Q2
2014Q1
2013Q4
2013Q3
2013Q2
2013Q1
2012Q4
2012Q3
2012Q2
1
0.5
China. Such nominal effective appreciation of the
Industrial Production
Nov'15
0
India in the context of overvalued exchange rate of
Yuan over the years may have reduced China’s
2012Q1
2011Q4
2011Q3
1.0
2
Oct'15
this might prove to be a blessing in disguise for
3
Sep'15
ral. Though this has caused financial turbulence,
4
Aug'15
adjustment, the devaluation of the Yuan was natu-
1.5
5
Jul'15
With the Chinese economy undergoing structural
6
Jun'15

2.0
7
May'15
in Jul’14.
8
Apr'15
sharply but it is still above the level it had reached
Mar'15
Jun’15, China's Shanghai Composite index plunged
Graph 4: Inflation and industrial production China
Nov'14

Source: National Bureau of Statistics of China
Feb'15
ment.
Jan'15
peace will escalate in lackluster growth environ-
2011Q2
2011Q1
4
trends continue the ongoing cost of maintaining
Dec'14

Inflation (RHS)
growth, that in turn has translated into a drop of
Graph 5: Shanghai Composite Index
GDP growth in poor countries. The weaker Yuan
would help make China’s exports more competitive, boosting the nation’s economy and eventually
5800
5300
4800
4300
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Oct-14
1800
Nov-14
was the first since Jun’14 .
2300
Sep-14
in yuan-denominated terms. The jump in exports
2800
Aug-14
pectations in Dec’15 to rise 2.3% from a year ago
3300
Jul-14
imports. Interestingly, Chinese exports defied ex-
3800
Jun-14
prompt a recovery in economies from where China
3
INDIAN ECONOMY: OUTPUT
Domestic Growth

Graph 7: GDP growth projection for India & China
The Indian economy has continued to exhibit resilience and the strength of its domestic absorption
to register a growth of 7.2% during H1 FY16. That
this has been attained, despite the highly tentative
global economic environment that has not shown
credible signs of improvement and despite sub-par
monsoon rains that for the second year in succes-
7.5
6.3
7.8
6.7
7.8
6.7
7.3
6.5
7.5
6.5
sion resulted in low growth in agriculture sector, is
indeed an encouraging development.

In addition to robust growth, the year thus far has
witnessed macro-economic stability aided by favourable factors such as comforting inflation indicators, benign fiscal situation and improving external current account balance. All these factors have
resulted in India emerging as the fastest growing
economy among the large economies, and, most
international organisations predict that it will continue to remain so in the medium term. Further,
India’s growth will surpass China in 2016.
Expenditure Side

Growth in consumption expenditure, particularly
in private final consumption expenditure (PFCE)
has been the major driver of the overall real GDP
Source: Various Reports; SBI Research
Graph 8: Growth in PFCE & GFCF (%)-constant prices
13.0
11.0
growth in the last few quarters. However, the
9.0
most visible change on the demand side is the pick
7.0
-up in the growth of the gross fixed capital formation (GFCF) at constant prices. This indicates
that the ensuing growth is likely to be more investment-driven and that the reliance of economic
growth on purely a consumption buoyancy may
7.9
6.8
5.0
3.0
2.4
1.0
-1.0
-3.0
Q1
Q2
Q3
2012-13
Q4
Q1
Q2
Q3
Q4
2013-14
Q1
Q2
Q3
2014-15
Q4
Q1
Q2
2015-16
-5.0
-7.0
Private final consumption expenditure (%)
Gross fixed capital formation (%)
gradually diminish.
Source: CSO; SBI Research
Outlook

It would suffice to say that global deflation need not lead to depression in general in Indian context because
causes are not debt induced as is the case in Europe and US. In particular, economy, especially industrial
activity should see an upswing in 2016, pulling up the services sector alongside. If the US remains strong,
capital flows to emerging economies particularly India, will increase significantly. Liberalisation of key
sectors, should increase fund flows for financing infrastructure investment. Inflation should be largely under
control.
4
GLOBAL ECONOMY
Table 3: Merchandise trade volume and real GDP,
Trade forecast

2014-2016* (%)
2014
2015P
World merchandise trade volume is expected to
rise 2.8% in 2015, down from the previous
estimate of 3.3%, as slowing import demand in
Volume of world
China, Brazil and other emerging economies
merchandise trade
will reduce exports of trading partners.

Trade growth in 2016 should pick up to 3.9%,
Developed
down slightly from the last estimate of 4.0% but
mies
Developing econo-
still below the average for the last 20 years (1995
- 2015) of 5%.

Risks to the forecast are firmly on the downside,
the most prominent being a further slowing of
economic activity in developing economies and
financial instability stemming from eventual
interest rate raises in the United States.
US Unemployment Rate (%)

The US introduced the smallest dose of austerity,
econo-
mies
North America
South and Central
2.5
2016P
2.8
3.9
EX
IM
EX
IM
EX
IM
2.0
2.9
3.0
3.1
3.9
3.2
3.1
1.8
2.4
2.5
3.8
5.2
4.2
4.6
4.4
6.4
3.9
5.2
-1.3 -2.4 0.5 -5.6 3.1 5.7
America
Europe
1.6
2.3 2.8 3.2
3.7 3.4
Asia
4.7
3.4 3.1 2.6
5.4 4.3
Other regions**
-0.4 -1.4 0.5 -1.5 0.5 0.5
* Figures for 2015 and 2016 are projections
** Other regions comprise the Africa, CIS and Middle East
Source: SBI Research, WTO
and it has enjoyed the best economic perforGraph 6: US Unemployment Rate (%)
mance. But even in the US, there are roughly
16
there were before the crisis.
14
The number of persons working part-time involuntarily also remains unusually high suggesting
12
10
8
still not so strong labor market conditions. When
6
the involuntary part-time workers are added to
4
the unemployed pool the level exceeds 8%.
8.8
5.0
Jan-05
Jun-05
Nov-05
Apr-06
Sep-06
Feb-07
Jul-07
Dec-07
May-08
Oct-08
Mar-09
Aug-09
Jan-10
Jun-10
Nov-10
Apr-11
Sep-11
Feb-12
Jul-12
Dec-12
May-13
Oct-13
Mar-14
Aug-14
Jan-15
Jun-15
Nov-15

434,000 fewer public-sector employees than
Unemployment rate (%)
Unemployment rate excluding part-time workers (%)
Source: BLS; SBI Research
Global Outlook for 2016 and implications for India

World economy is at crossroads and 2016 in all probability will not be the most pleasant year. All indicators
are pointing towards a correction in asset markets. The contraction in China’s GDP due to its rebalancing will
accentuate this trend. Rebalancing will impact the GDP of many economies who relied on exporting raw material to China.

There will be trends towards decoupling in many economies. The build up of dollar denominated external
debt originating from non-financial corporations has been the fastest growing. The servicing of this debt after
a hike in Federal Funds rate will be the focus for banks in 2016.

The good news is that rate of growth of MSCI Emerging Markets Index capturing trends in large and mid-cap
companies across 23 emerging markets, has increased over the years, exhibiting better prospects. However,
this has been accompanied by increased dispersion in emerging market returns indicating higher uncertainty
in the global financial system. India with its much better macros stands to gain significantly from such positive
market volatility in the coming days.
5
INDIAN ECONOMY: INFLATION
Inflation under control

On retail inflation side, CPI rose by 5.61% on yoy
basis in Dec’15 compared to 5.41% in the previous
month. Overall in H2 2015, the average CPI stood
at 4.64% vis-à-vis 5.18% in H1 2015.

Increase in food prices, however, has outliers. For
example, excluding pulses, CPI inflation was at
4.64% in Dec’15, much lower than the RBI inflation
target of 5% as on March 2017.

CPI Inflation
Core CPI
CPI Ex Pulses
CPI Food
WPI Inflation
Core WPI
WPI Food
Dec-15
5.61
4.73
4.64
6.31
-0.73
-1.99
8.17
Source: MOSPI, Office of the Economic Adviser & SBI Research
Core CPI stood at 4.73%. WPI, though still in nega-
Graph 9: Divergence between WPI & Core WPI (%)
tive territory (-0.73% in Dec’15) is also on rising
trend. Core WPI inflation
Table 4: Retail & Wholesale Inflation
Aug-15 Sep-15
Oct-15 Nov-15
CPI Inflation
3.74
4.41
5.00
5.41
4.15
4.32
4.42
4.62
3.23
3.82
4.12
4.45
2.92
4.29
5.34
6.08
WPI Inflation
-5.06
-4.59
-3.7
-1.99
-1.92
-1.93
-2.10
-1.95
-1.02
0.84
3.33
5.20
printed at negative
1.99%.
Divergence between Headline & Core

Interestingly, trend inflation indicates that headline and core inflation are moving in opposite direction.

Since Aug’15, WPI is showing a rising trend but
core WPI is indicating a declining trend. This is pri-
Source: Office of EA; SBI Research
marily due to rise in food prices inflation.

Graph 10: CPI Weighted Contribution
In CPI and Core CPI, the divergence is also mainly
due to rise in food inflation.

Further, Core CPI remained flat in 2015. CPI has
also remained flat in 2015.
Stability of Core CPI

The distribution of core CPI over the last 14
months indicates a nicely shaped Bell curve, with
mean CPI at 4.4%. Interestingly, if we look at 95%
confidence interval, all the CPI numbers are within
that range, indicating that core CPI has nicely
Source: MOSPI; SBI Research
settled in the sub 4.5% range, with little or no negative surprises.

This also substantiates that RBI has done a commendable job in delinking inflationary expectations spilling over from food to becoming broad-
Graph 11: Distribution Curve of Core CPI
5.00
µ + 2* δ = 4.9
4.80
4.60
µ = 4.4
4.40
based over the last one year. Thus, even as food
prices rose, core CPI has largely been under control.
4.20
4.00
µ - 2*δ = 4.0
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
3.80
Source: MOSPI, SBI Research
6
INDIAN ECONOMY: INFLATION
Table 5: Cross Country Analysis of CPI & PPI
CPI and PPI Difference: Challenge for Monetary Policy
Month
CPI (%)
PPI (%)
Difference
US
Country
Nov-15
0.5
-0.9
1.4
Euro Area
Dec-15
0.2
-2.2
2.4
China
Japan
Dec-15
Nov-15
1.6
0.3
-5.9
-3.2
7.5
3.5
Germany
UK
Dec-15
Nov-15
0.3
0.1
-2.5
-1.5
2.8
1.6
France
Dec-15
0.2
-2.4
2.6
Brazil
Italy
Dec-15
Dec-15
10.7
0.1
11.3
-3.3
-0.6
3.4
India*
Russia
Dec-15
Dec-15
5.6
12.9
-1.4
13.9
7.0
-1.0
Canada
Nov-15
1.4
-0.2
1.6
Crude Oil Dynamics in 2016
South Korea
Dec-15
1.3
-4.6
5.9

Spain
Mexico
Dec-15
Dec-15
0
2.1
-2.6
1.3
2.6
0.8
Indonesia
Dec-15
3.4
9.1
Source: SBI Research * Manufacturing WPI
-5.8
Worldwide
Global oil inventory builds in the Q3 2015 averaged 1.8 million barrels per day (mbd), down from
2.0 mbd in the Q2, which had the largest inventory
builds since the Q4 2008.

The pace of inventory builds has slowed in the
fourth quarter to roughly 1.4 mbd. In 2016, inventory builds are expected to slow further to an average of 0.6 mbd, but still enough to hit oil prices on
the downside.
Graph 12: Crude Oil Demand & Supply (million barrels per day)
2.5
98
2.0
96
1.5
94
1.0
92
0.5
90
0.0
88
-0.5
86
-1.0
84
Excess Demand (-)/Supply (+)
Supply_RHS
Q4 2016

Q3 2016
the 2016.
Q2 2016
(demand), leading to inventory builds throughout
Q1 2016
consumption
Q4 2015
outpace
Q3 2015
to
Q2 2015
continues
Q1 2015
(supply)
Q4 2014
Global petroleum and other liquid production
Q3 2014
tary policy, at least in India.
Q2 2014
enough room for accommodative domestic mone-
Q1 2014
policy worldwide, though we believe there is still
Q4 2013
This will continue to pose challenge for monetary
Q3 2013

Q2 2013
most of the countries under review.
Q1 2013
in positive territory, PPI is in negative territory in
Q4 2012
Index) are showing a diverging trend. While CPI is
Q3 2012
the countries, both CPI and PPI (Producer Price
Q2 2012
Country-wise recent data indicates that in most of
Q1 2012

Demand_RHS
Source: EIA; SBI Research
Outlook
 The outlook for inflation would of course depend on international prices and the state of domestic demand.
Oil prices are likely to remain depressed. Commodity prices too will remain quiescent.

In particular, the speed with which alternative energy technologies are developing and combining with technological improvements in shale oil extraction will ensure that there is almost minimal chance of oil prices
breaking through the $50 barrier. It is more likely that prices will remain at $30 levels or so, especially in view
of the Chinese economy showing significant strain and India pursuing an alternate energy policy with much
rigor. Additionally, Iran’s supply of oil to India is good news as the sour oil from Iran is better suited for our
refineries thus increasing the life of those assets.

Further, the outlook for prices will also depend on the output gap or the slack in the economy that will act as
a buffer against price increases. Declining nominal GDP growth as well as capacity under- utilization in important sectors suggest that the output gap has not narrowed significantly. This should serve to moderate
future price increases.
7
INDIAN ECONOMY: PUBLIC FINANCE
Graph 13: Maturity Profile of Outstanding Central G-Sec as on Mar 15
Target Vs. Utilisation

The budget estimate of the fiscal deficit
and
4%
revenue deficit for FY16 are 3.9% and 2.8%

Less than 1 year
13%
respectively.
1-5 Years
25%
Already 74% of the budgeted fiscal deficit has
5-10 Years
28%
been utilised. Revenue deficit as a percentage of
10-20 Years
gross fiscal deficit stands at 70%.
30%
20 years and above
Debt Management
Internal
debt
of
the
Central
Government
constituted 92.9 % of public debt for FY15 (RE).
93% of the Government’s public debt is internal,
Graph 14: Redemption profile of the Central Government’s market debt
reflecting stable and adequate domestic sources of
(Rs Cr)
rollover risk . Average time to maturity increased
to 10.23 years on end-March 2015 indicating low /
2027-28
Graph 15: Central and State Government Securities Holding Pattern
March-09
With the entry of co-operative banks, regional
rural banks, pension funds, mutual funds and
2%
8%
Insurance Cos
investor base for public debt has been reasonably
Financial Institutions
21%
diversified and the markets have deepened.
RBI
Schedule Commercial
Banks
3%
1% 5%
non-banking finance companies, the institutional
Mutual Funds
7th Pay Commission Impact

2026-27
Source: RBI, SBI Research
very modest rollover risk.

2025-26
maturity profile of outstanding debt to limit
2024-25
RBI is also following a strategy of elongating the
2023-24

2022-23
to 8.09% in FY15 from 7.81% in FY11.
2021-22
stocks has remained broadly stable and has grown
2020-21
Weighted average coupon rate of outstanding
2019-20
from its peak of 83% in FY04.
2018-19
as percentage of GDP has declined to 67% in FY15
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
2017-18
financing. The share of Center and State liabilities

2016-17

60%
The recommendations of Pay Commission in the
past have led to significant increase in steel and
Provident Funds
Others
cement production. Post 5th Pay Commission,
steel and cement production spiked during 19992000 and increased by 15.0% and 14.6%, respectively.

Post 6th Pay Commission the impact was more
March-15
3%
1%
2%
2%
Schedule Commercial Banks
3%
Co-operative Banks
10%
Insurance Cos
9%
Financial Institutions
prolonged and both steel and cement production
increased for next 2-3 years.

Going by this trend, the current set of recommen-
Mutual Funds
Provident Funds
24%
43%
highly employment elastic.
Corporates
FIIs
dations may act as an enabler for steel and cement sectors and construction sector which is
RBI
3%
Others
8
Graph 16: Budgeted and Actual
Fiscal Deficit: Budgeted vis-à-vis Actual
6
including tax cuts and increases in expenditures.
5
The post-crisis recovery of the Indian economy is
4
Except
the
two
years
with
Bugeted Deficit as % of GDP
exceptional
2015-2016
2014-2015
Overshot
2013-2014
2012-2013
Overshot
Undershot
2011-2012
Overshot
2009-2010
2010-2011
Overshot
Undershot
2008-2009
the past decade on a consistent basis.
Overshot
0
2007-2008
However, India has an extremely good track rec-
Overshot
1
2006-2007
2
towards a regime of prudence.
ord of undershooting the budgeted fiscal deficit in

3
Overshot
witnessing a correction of the fiscal policy path

7
measures
2005-2006
counter-cyclical
Overshot
with
2004-2005
responded
Overshot
During the global financial crisis fiscal policy
2003-2004

Actual Deficit as % of GDP
Source: incometaxindiaefiling.gov.in; SBI Research
circumstances, the actual budget deficit as % of
Graph 17: e-filing of IT Returns
GDP has always stayed well within the budgeted
deficit.
% yoy
growth
15%

309.5
296.8
E-filing of returns, refund banker scheme and the
243.3
214.7
newly introduced e-verification of income-tax re-
164.3
turns for the assessment year 2015-16 are some of
90.5
the key initiatives undertaken by the Department
21.7
for making filing of returns simple and easy for the
FY08
48.3
50.7
FY09
FY10
FY11
FY12
FY13
FY14
FY15
common taxpayer.

The e-filing of income tax returns has already
last year. During FY15, a total of 3.41 crore returns
were e-filed, 15% more than the FY14 level.

As per income range-wise, most of the returns
filed were income upto 5 lakh range, with a
growth of 31% during Apr-Dec’15. A noticeable
growth is also visible in the income range of more
than 1 crore, where 1-lakh mark crossed in AprDec period, with a growth of 19%.
IT Refunds

FY15
FY16
(till Dec) (till Dec)
crossed the 3 crore mark this fiscal (till Dec’15),
with a growth of 27% compared to same period
27%
341.7
IT e-filing
Graph 18: Income range wise e-filing of IT Returns
300
31%
200
FY15 (Apr-Dec)
235.3
250
FY16 (Apr-Dec)
180.0
150
17%
100
55.8
65.4
15%
50
5.4
17%
6.2
1.2
1.4
19%
0.9
1.1
0
upto 5 Lakh
5-20 Lakh
20-50 Lakh
50 Lakh to 1
Crore
More than 1
Crore
Graph 19: Direct Tax Refund (Number in Lakh)
Direct tax refunds have increased by 6.3% to Rs
40.4
89,060 crore during FY14. As on 07.09.2015 Central Processing Centre issued refunds to 22.14 lakh
40.3
28.6
27.6
taxpayers for the A.Y.2015-16 (FY14) compared to
25.7
22.1
a total of 25.7 lakh in entire FY14.

Through a special drive, 18.3 lakh refunds involving a sum of Rs 1,793 crore have been issued between 01 Dec’15 and 10 Jan’16 for claims below Rs
50,000.
FY10
FY11
FY12
FY13
FY14
FY15 (upto 7
Sep15)
Source: CAG; SBI Research
9
Graph 20: Quality of fiscal consolidation (FD)
Fiscal Deficit: Composition and Quality
75.0
The capital expenditure is growing at a steady
65.0
pace and grabbing a higher pie in the fiscal deficit
55.0
45.0
share, after declining from a high of 42% in FY11.
25.0
expenditure is expected to breach the FY11 mark.
15.0
As compared to Apr-Nov 14, when the capital
-5.0
expenditure as a % of fiscal deficit stood at 23%,
-15.0
the ratio for Apr-Nov 15 stands at 33% showing a
In broad terms, public investment is complemen-
Year
structure, as historical evidence in several coun-
by public sector.
FY16 (BE)
17.2
14.9
18.0
12.3
4.8
3.9
-0.4
9.4
18
20
Bulgaria
15
20
United Kingdom
19
20
Austria
21
20
21
Spain
Czech Republic
and around 166 countries have acknowledged the
France
21
Belgium
22
23
21
23
Poland
Netherlands
23
GST has been commonly accepted in the world
Greece
10
same. In India, the GST aims at smoothing tax
application, management and governance of
indirect taxes going forward .
India
New Zealand
milestone in the streamlining and simplifying the
Germany
Implementing the GST will be an important
Italy

Hungary
structure and increasing inter-state trade.
Australia

27
Goods and Services Tax (GST)
Public sector
Graph 21: Peak Rate of GST in Select Economies (%)
Portugal
large part of India’s investment boom was also led
24
ings. Interestingly, even in years prior to crisis, a
23
through an increase in aggregate output and sav-
Ireland
private output and augment overall resources
25
productivity of capital, increase the demand for
Sweden
possibility for private investment and raise the
25
Public investment of this type can enhance the
Private Sector
2005-06
45.0
2006-07
19.1
2007-08
32.8
2008-09
-29.5
2009-10
19.0
2010-11
21.1
2011-12
-12.5
2012-13
-3.2
Source: SBI Research, MOSPI
Denmark

FY15 (RE)
Table 6: Growth Rate of Gross Capital Formation
(Constant Prices)
tary to private investment if it is related to infratries, including developed ones like US suggests.
FY14
Source: MOSPI; SBI Research
Romania

FY13
Recoveries of loans + other receipts (disinvestment) as % of FD
Capital Expenditure as % FD
Revenue Deficit as % of FD
change in favour of capital expenditure in the
quality of fiscal consolidation.
FY12
FY11
5.0
24

35.0
As per FY16 budget estimates the capital
Finland

Source: EY; SBI Research: India: Under Discussion
Outlook

India’s public debt remains sustainable given manageable interest rate costs and expected recovery in the
economy’s growth rate. The captive domestic investor base is likely to mitigate the impact of any real
interest rate shocks.

India has a good track record of undershooting the budgeted fiscal deficit in the past decade on a consistent
basis and thus fiscal consolidation is not a cause for worry. India has also made rapid strides in associated
fiscal infrastructure for the convenience of tax payers and this is likely to continue.
10
INDIAN ECONOMY: MONEY , BANKING & FINANCIAL MARKETS
Graph 22: Transmission of Policy Rate
Monetary Policy Stance
RBI shifted its monetary policy stance on 15 Jan’15
to accommodative in view of significant waning of
inflationary pressures.
the customers. On an average, there has been a
decline in median base lending rate of banks by 63
basis points.
RBI Repo Rate
Base Rate (Major Banks)
Call Rate (Weighted Average)
10-Yr Gsec Yield
Dec. 25, 2015
Dec. 11, 2015
Nov. 27, 2015
Oct. 30, 2015
Nov. 13, 2015
Oct. 2, 2015
Oct. 16, 2015
Sep. 4, 2015
Sep. 18, 2015
Aug. 7, 2015
Aug. 21, 2015
Jul. 24, 2015
Jul. 10, 2015
Jun. 26, 2015
Jun. 12, 2015
May 29, 2015
May 1, 2015
May 15, 2015
Apr. 17, 2015
Mar. 27, 2015
Feb. 27, 2015
Mar. 13, 2015
ligned their interest rates to pass the benefits to
7
6.5
Jan. 30, 2015
Consequent to that almost all the banks have rea-
8
7.5
Feb. 13, 2015
Repo rate has been cut by 125 bps in 2015 (25 bps
another 50 bps to 6.75% on 29 Sep’15).

9
8.5
each on 15 Jan’15, 04 Mar’15 and 02 Jun’15 and

10
9.5
Jan. 2, 2015

10.5
Jan. 16, 2015

Term Deposit Rate >1 Yr
Source: RBI
Graph 23: Movement of Deposits & Advances Growth
RBI has moved to marginal cost of funding for determining bank base rates from Apr’16. The new
methodology will be dynamic in nature.
Banking Businesses

The business growth of the All Scheduled
Commercial Banks (ASCB) remained muted in the
period Apr-Sep’15. Post Oct’15, banking business
has picked up. Aggregate deposits of the ASCB
grew by 11.5% for the fortnight ended 11 Dec’15,
compared to last year (12 Dec’14) growth of 9.9%.
Meanwhile, credit off-take (YoY) has shown smart
Source: RBI
improvement and is at 11.5%, compared to last
ment, especially housing, reflecting resilience of
Interest Rate vs Incremental Credit Growth of ASCB
Incrementa
Credit
RBI Repo
Period
Base Rate l Credit (Rs Demand
Rate
Crore)
Index
Jan-Dec-2014
8.00% 10%-10.25% 605360
100
consumer demand.
Jan-Sep-2015
7.25%
9.35%-10.0%
359351
77
Though, the banking system has remained resili-
Oct-Nov-2015
6.75%
9.30%-9.70%
161869
145
year growth of 10.4%.

The smart pick up in credit growth after Sep’15,
has been mostly due to the personal loan seg-

ent, asset quality of the banks remains under pressure. The banks have been tackling this problem
Note: Credit Index is calculated based on the incremental credit and refinance percentage
Graph 24: Sectoral Deployment of Credit Growth (Apr-Nov)
aggressively and the resolution rate will pick up
more pace as expectations of sellers of assets be-
11.9
11.0
9.5
come more realistic and valuations given by buyers also are better, sensing an imminent recovery.
7.9
FY 14
FY 15
With Government striving to bring in enabling
laws, a proper bankruptcy law and digitization of
1.9
the DRT process with ensuring time bound resolutions will also provide succor to the banks.
1.0
Agriculture &
Allied
0.4
Industry
0.8
Services
Personal Loans
Source: RBI
11
Graph 25: Recapitalisation of Banks
Recapitalization of Banks
 Although Indian banks are reasonably capitalized to
meet the Basel III norms, still more capital is re-
250
15
14.5
201
200
14
quired on account of stress in corporate assets.
 Empirical evidence suggests that there are scale
150
economies in banking when recapitalization is in-
100
140
120
125
12.7
100
12.3
69.9
troduced. Banks that receive sufficiently large recapitalization increase lending, raise additional
funding and clean up their balance sheets. In con-
79.4
12
50
19
5
0
12
0
11
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
BE
Recapitalisation of PSBs (Rs bn)
CRAR (%) RHS (Sep)
trast, banks that receive small recapitalization relative to their capital shortfall reduce lending, shrink
their risk weighted assets and suffer a drop in de-
13
Source: India Budget
posits and interbank borrowing.
Table 8: Capital Infusion in Banks: Cross Country
 As per the limited information in public domain,
Country
China had injected $127 billion into the banking
Period
Amount
($ Bn)
13
system during 2004-07, while the US Fed injected
India
2011-2016
$2.27 trillion following the 2008 crisis.
China
2004-2007
127
US
After 2008
2,270
 Government has estimated capital requirement
(excluding internal generated profit) for the next
Ireland
2010
11
four years (till FY19) at about Rs 1,80,000 crore.
Russia
2015
15
Portugal
2013
7
Greece
2013
63
2012-2014
51
Out of the total requirement, the Government proposes to infuse Rs 70,000 crores out of budgetary
allocations during the current and next three finan-
Spain
Source: SBI Research
cial years.
Table 9: Basel III Capital Norms: Selected Countries (%)
Minimum Common
Equity Ratio
Minimum Tier 1 Capital
Ratio
Minimum Total Capital
Ratio
Basel III (BCBS)
4.5
6.0
8.0
India
5.5
7.0
9.0
Singapore
6.5
8.0
10.0
South Africa
6.0
8.3
11.5
China
5.0
6.0
8.5
China (D-SIBs)
6.0
7.0
9.0
Russia
5.0
6.0
10.0
Brazil
-
-
11.5 till 2019
4.5-10
6.0-13.0
8.0-19.0
Jurisdiction
Switzerland
Source: BCBS
12
Graph 26: Equity Risk Premium
Equity Risk Premium
 Indian markets are a relatively attractive place to
invest, despite the recent decline in Sensex. The
equity risk premium (ERP) may be viewed as ‘risk
compensation’ for investing in equity markets as
80
60
40
20
0
-20
against assets that are relatively risk-free. Though
-40
-60
much above the level it had reached in Jan’12.
-80
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
ERP is showing a declining trend in India, it is still
Private Equity and FII Inflows
 Private equity investors poured about $4.2 billion
Source: SBI Research, estimated as the excess over risk free rate
Graph 27: Private equity and FII ($ Million)
between May to December 2015, despite the fact
that during the same period FII outflows worth $4.5
4000
billion occurred. This indicates their confidence in
3000
India’s potential.
2000
Domestic Investors are Bullish
Private Equity ($ Mn)
FII ($ Mn)
1000
 The fall in Sensex would have been much more, if it
was not supported by huge inflows by Domestic
institutional investors (DIIs). This indicates that domestic investors are confident about the state of
0
-1000
-2000
-3000
Indian economy. In Aug’15 when Sensex crashed by
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
around 1900 points, DIIs poured a net of Rs 15,770
crore into stocks, their highest monthly investment
in more than six years.
Graph 28: DII vs BSE Sensex
 Even in Jan’15, when Sensex plunged by around
infused a net of `6741 crore. During the same period ,FII outflows were `7604 crore.
Resource Flow to Commercial Sector
 Total resource flow to commercial sector in the
current fiscal has been significantly higher than like
5000
30000
4000
29000
28000
3000
27000
2000
26000
1000
25000
0
24000
-1000
-2000
01-Apr-15
16-Apr-15
28-Apr-15
12-May-15
26-May-15
05-Jun-15
17-Jun-15
29-Jun-15
10-Jul-15
22-Jul-15
06-Aug-15
18-Aug-15
28-Aug-15
09-Sep-15
22-Sep-15
06-Oct-15
19-Oct-15
30-Oct-15
11-Nov-15
24-Nov-15
08-Dec-15
18-Dec-15
31-Dec-15
12-Jan-16
1700 points (between 15 Dec to 01 Jan), DIIs
-3000
23000
22000
21000
20000
period in the previous year.
DII_Net Purchase/Sales (Rs Crore)
Sensex
Source
Table 10: Funds Flow to Corporate Sector (Rs Lakh Crore)
Period
2015
2014
Debt Raised By Companies
Apr-Nov
2.55
2.47
Equity
ECBs
FDI
Apr-Nov
Apr-Nov
Apr-Nov
0.82
0.89
1.07
0.38
1.01
0.88
Incremental NF Credit
Apr-Dec
3.79
1.68
Apr-Dec
1.15
10.27
1.02
7.44
Incremental CPs
Total
Source: RBI, CMIE, SBI Research
13
Jan Dhan to Jan Suraksha
Table 11: Progress of PMJDY Scheme*
Pradhan Mantri Jan Dhan Yojana (PMJDY)
Total No of Accounts (in crore)
20.02
 The biggest financial inclusion initiative in the
No Of Rupay Debit Cards (in crore)
16.91
world was announced by the Hon’ble Prime Minis- Balance in A/c (Rs crore)
ter on 15th Aug’14 and Mega launch was done on No of Zero Balance A/Cs (in crore)
28th Aug’14 across the country. The programme Balance Per A/C (Rs)
aims to open at least one account per household Source: PMJDY Website
with an objective to bring all the unbanked house-
holds into the banking ambit.
29809
6.3
2175
* as on 06 Jan'16
Graph 29: Trend and Progress of PMJDY Accounts
 The success of the PMJDY had shown the potential
of the enormous role that the financial inclusion
program can play in the rise of the economy. At
present more than 20 crore bank accounts have
been opened under PMJDY and the people have
deposited more than Rs.29,809 crore in these accounts.
 The trend of ‘zero balance a/cs’ share in total is
declining, implying people have started doing transactions in their a/cs. Interestingly, the share of Rural A/cs in total is at 64.5%.
 Additionally, deposits in the Jan Dhan a/cs is
Source: PMJDY
Graph 30: Monthly Trend of Avg A/C Balance (in Rs) of
PMJDY A/Cs
around 4.0% of the ‘Demand Deposits’ of ASCB,
which is a positive signs for banks to boost their
CASA.
Jan Suraksha
 Consequent to the Union Budget 2015-16 an-
nouncement, the Prime Minister launched three
new social security schemes under Jan Suraksha
initiative on 09 May 2015.
 The schemes include: (i) Pradhan Mantri Suraksha
Bima Yojana (PMSBY) covering accidental death risk
of Rs 2 lakh at a premium of Rs 12 per year i.e. Re 1
per month; (ii) Pradhan Mantri Jeevan Jyoti Bima
Source: RBI
Yojana (PMJJBY) covering both natural and acci-
Table 12: Progress of Jan Suraksha Schemes*
dental death risk of Rs 2 lakh. The premium will be
PMJJBY PMSBY
Rs 330 per year, or less than Re 1 per day, for the
Total Number of
age group of 18-50 Year; and (iii) Atal Pension Yoja-
Policies (in lakh)
Per Policy Premium
na (APY).
 The Jan Suraksha scheme has till now enrolled
around 12.4 crore people. The aim of the scheme
was to increase insurance and pension penetration
in the country.
(Rs)
Total Premium Col-
APY
Total
293.00
930.55
18.60
1,242
330.0
12.0
577.0
-
96688.7 11166.6 10732.1 118587.4
lected (Rs lakh)
Claim Paid (Rs lakh) 18251 2550.00
Source: Jan Suraksha *07 Jan'16
14
Graph 31: Insurance Penetration in India
spectively. With the increase in distribution of Jan
tration will increase to 3.5% in 2015 (SBI Research).
0.8
2.7
0.7
2.6
3.4
0.6
0.6
3.5
3.3
0.8
4.6
4.0
4.0
4.1
3.9
2.5
2.5
2.6
2.2
4.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
(P)
Life
Non-Life
Industry
with the world average of 6.2% and USD 662 reSuraksha schemes, we expect that insurance pene-
0.6
0.0
0.6
only at 3.3% and density at USD 55 only, compared
0.6
1.0
0.6
 As on 2014, the insurance penetration in India is
0.6
2.7
0.6
2.0
2.9
2.3
3.0
to GDP ) and Density (ratio of gross premium volume to total population in a country ).
3.2 3.1
3.3
0.7
of Insurance Penetration (ratio of premium volume
4.1
3.2
4.0
5.1
4.6
4.7
3.1
countries like US, UK and France but lags in terms
5.2
4.8
0.8
aspects of insurance, compared to the developed
5.0
0.7
6.0
4.4
 The Indian insurance sector has developed in many
0.7
Insurance Penetration
Source: IRDA, SBI Research
Graph 32: First Yr Premium Growth: LIC Vs Private Insurers
Life Insurance Industry
 The Life Insurance Sector First Year Premium regis-
80000
tered a YoY growth of 17.03% to Rs 74,550.96 crore
70000
as on 30th November 2015. LIC mobilized Rs
60000
52291.75 crore with a growth of 14.15% whereas
50000
Private Sector procured Rs 22259.21 crore posting
40000
a growth of 24.38%.
 Private sector experienced a growth in both Indi-
vidual New Business (NB) and Group NB whereas
LIC shown a growth in Group NB and decline in Individual NB. It is indeed good news that ULIP busi-
24.38
Apr-Nov'15
Apr-Nov'14
YoY %_RHS
24
22
20
18
17.03
16
30000
20000
14
14.15
12
10000
0
10
Private
LIC
Industry
ness growth is picking up, which was declining in
the last 2-3 years.
Source: Life Council, SBI Research
Outlook
 India’s financial system remains stable and the relatively stronger macroeconomic fundamentals lend resili-
ence to face the still prevailing uncertainty and emerging risks in the global economy and financial markets.
However, policy makers and stakeholders will need to remain watchful about the potential adverse impact of
developments in the global scenario, particularly increased volatility in financial markets and further slowdown in global trade.
 Going forward, banking sector will have an improved outlook with risk tilting towards lower side. There are
many factors responsible for this outlook. Firstly, the uncertainty with regard to direction of growth may clear
off helping banks in extending credit. Secondly, the enabling legislation for asset recovery will accrue benefits.
As the investment cycle gathers momentum, we do believe that credit demand will pick-up further. It is diffi-
cult to ascertain the direction of credit flows at this time. Some sectors like personal loans, housing may remain buoyant. There may be increased credit flow to sectors like Renewable Energy, Roads, Aviation, Power
and so on.
 The future of insurance industry looks promising with several changes in regulatory framework which will
lead to further change in the way the industry conducts its business and engages with its customers.
15
INDIAN ECONOMY: AGRICULTURE & RURAL DEMAND
Foodgrain Production
2014-15
2013-14
work ,compared to 3.56 crore households provid-
2012-13
2005-06
shows that 5.78 crore households were provided
2011-12
MGNREGA for the past five months (Aug-Dec’15)
2010-11
MGNREGA
2009-10
soon and unseasonal rains in Feb-Mar’15.
2008-09
million tonnes in FY15 crop year due to poor mon-
270
260
250
240
230
220
210
200
2007-08
vance estimate) to have declined 4.7% to 252.68

Graph 33: Foodgrain Production (Million Tonnes)
India’s foodgrain production is estimated (4th ad-
2006-07

ed work in corresponding period last year, an increase of 62%. This increase is despite the fact that
Source: Ministry of Agriculture; SBI Research
in Jun-Dec every year, the demand for work is low,
82
80
60
0
-20
-1
-10
-27
-41 -43
-60
-32
-51
-27
-17 -17
-44
-57
Dec-15
Oct-15
Jul-15
Jun-15
Apr-15
May-15
Feb-15
Mar-15
Jan-15
Dec-14
Oct-14
Nov-14
-80
sum insured. There will be a uniform premium of
only 2% to be paid by farmers for all Kharif crops
-1 -1
-40
Sep-14
and ensuring early settlement of claim for the full
23
Jul-14
aiming to reduce the premium burden on farmers
16
20
Aug-14
is to be rolled out from the kharif season this year
40
Jun-14
scheme, Pradhan Mantri Fasal Bima Yojana which
40
Apr-14
Government has cleared new crop insurance
68 64
63
May-14

100
Nov-15
Crop Insurance
Sep-15
field work.
Graph 34: Household Provided Work (% YoY growth)
Aug-15
as most of the workers are busy in agricultural
Source: CMIE; SBI Research
and 1.5% for all Rabi crops. In case of annual
commercial and horticultural crops, the premium
to be paid by farmers will be only 5%. The
premium rates to be paid by farmers are very low
and balance premium will be paid by the
Table 13: Insurance Schemes- Comparison
Features
Premium rate
Government to provide full insured amount to the

NAIS
MNAIS
PM Crop Insurance Scheme
Low (3.5%
kharif crops)
High (2-15%)
Lower than even NAIS (2% kharif
crops, 1.5% rabi crops, 5% fruits
and horiculture crops)
farmers against crop loss on account of natural
one season - one premium
Yes
No
Yes
calamities.
Insurance Amount cover
Full
Capped
Full
On account Payment
No
Besides lower premium, the Ministry has proposed
Localised Risk coverage
No
there will not be a cap on the premium and
Post Harvest Losses coverage
No
reduction of the sum insured, 25% of the likely
Prevented Sowing Coverage
No
Yes
Hail storm, Land
Slide
Coastal areas- for
cyclonic rain
Yes
Yes
Hail storm, Land Slide,
Inundation
All India- for cyclonic and
unseasonal rain
Yes
Use of Technology
No
Intended
Mandatory
States covererd
14
6
there will be one insurance company for the entire
Awareness
No
No
All India
Yes (target to double coverage to
50% in 3 years up from 23%)
state, and farm level assessment of loss for
Source: SBI Research, PIB
claim will be settled directly on farmers account,
localised risks and post harvest loss.
Outlook

The monsoon season 2015 ended with a 14.3% deficit, making it the weakest monsoon since 2009. However, better food management by the Government will ensure that food prices remain largely under control.

Going forward, the new crop insurance scheme will act as a buffer as against any adverse monsoon. The
increased payouts under MGNREGA will also act as an enabler for rural demand.
16
INDIAN ECONOMY: INDUSTRY
Graph 35: IIP - 3-month Moving Average (%)
Industrial Growth
The contraction in November Index of Industrial
15
Production (IIP), at a four-year low of negative
11
3.2%, compared with 9.9% jump in the previous
7
month, is on account of seasonal factors and base
effect.
General
5
3
1
-3
At a disaggregated basis, only 7 out of 22 industry
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Mar-14
May-14
Jul-14
-5
Jan-14
On a moving average basis, average growth during
the 3 months in FY15 (and 0.1% in FY14).
Source: MOSPI; SBI Research; DOC: Date of Commencement
groups in the manufacturing segment showed
Graph 36: SBI Index and IIP Manufacturing
negative growth compared to 10 industry groups
20
in the corresponding period of the previous year.
15
However, there is visible threat to core sectors like
10
steel and aluminum in the face of dumping from
5
China. We need to carefully watch the emerging
trends for such sectors.
0
-5
SBI Composite Index (YoY %)
Jul-15
Oct-15
Apr-15
Jan-15
Jul-14
Oct-14
Apr-14
Jan-14
Oct-13
Jul-13
Jan-13
Apr-13
Oct-12
Jan-12
-10
Jul-12

Electricity
-1
Sep–Nov’ 15 was at 3.5%, compared to 1.7% for

Manufacturing
9
Apr-12

Mining
13
Nov-13

IIP Manufacturing (YoY %)
Table 14: Manufacturing Growth by Sub-Sector
Wt in
IIP
FY09 FY10 FY11 FY12 FY13 FY14 FY15 Apr-Oct FY15 Apr-Oct FY16
Food products a nd bevera ges
Toba cco products
Textil es
Wea ri ng a ppa rel ; dres s i ng a nd dyei ng of fur
Lea ther a nd l ea ther products
Wood a nd wood products
Pa per a nd pa per products
Publ i s hi ng, pri nting
Coke, refi ned petrol eum products & nucl ea r fuel
Chemi ca l s a nd chemi ca l products
Rubber a nd pl a s tics products
7.3
1.6
6.2
2.8
0.6
1.1
1.0
1.1
6.7
10.1
2.0
-8.2
4.4
-3.6
-10.2
-5.1
4.9
4.8
1.6
3.2
-2.9
5.1
-1.4 7.0 15.4 2.9 -1.1 4.5
-0.6 2.0 5.4 -0.4 0.8 1.0
6.1 6.7 -1.3 5.9 4.4 2.7
1.9 3.7 -8.5 10.4 19.5 5.4
1.3 8.1 3.7 7.3 5.2 9.6
3.1 -2.2 1.8 -7.1 -2.2 4.5
2.6 8.6 5.0 0.5 -0.1 2.7
-6.0 11.2 29.6 -5.1 0.3 -4.2
-1.3 -0.2 3.5 8.5 5.2 0.7
5.0 2.0 -0.4 3.8 8.9 -0.2
17.4 10.6 -0.3 0.2 -2.1 4.6
7.1
3.4
2.0
-4.9
8.2
0.0
2.1
-5.8
-1.1
-1.9
2.6
-6.2
-3.1
2.9
11.6
5.4
10.2
2.5
-8.2
4.8
6.1
1.7
Other non-metal l i c mi nera l products
Ba s i c metal s
Fa bri ca ted metal products
Ma chi nery a nd equi pment
Accounting & computing ma chi nery
El ectri ca l ma chi nery & a ppa ra tus
Ra di o, TV a nd communi ca tion equi pment & a ppa ra tus
Medi ca l , preci s i on & optica l i ns truments , wa tches a nd
cl ocks
Motor vehi cl es
Other tra ns port equi pment
Furni ture; ma nufa cturi ng
Overall Manufacturing
Source: CSO'< 0% Red; 0-4% Yel l ow; >4% Green
4.3
11.3
3.1
3.8
0.3
2.0
1.0
0.6
4.1
1.8
3.0
75.5
3.3
1.7
0.1
-7.6
-9.7
42.3
20.3
7.5
-8.7
3.8
7.4
2.5
7.8
2.1
10.2
15.8
3.8
-13.5
11.3
-15.8
29.8
27.7
7.1
4.8
5.2
14.1
-0.9
3.0
-39.2
21.9
-52.6
-1.7
-2.9
10.5
-2.8
1.0
-0.8
4.1
3.0
4.3
-3.1
14.7
-7.2
-6.9
9.2
1.6
59.1
5.1
4.1
8.8
15.3
29.4
-5.3
2.8
12.7
6.8
30.2
23.2
-7.5
9.0
4.8
8.7
11.2
-5.8
1.6
-22.2
4.3
10.9
10.8
11.9
-1.8
3.0
1.9
1.9
-4.7
-4.7
-13.9
0.6
5.6
-2.0
-5.3
-0.1
-5.1
1.3
1.1
0.3
-7.0
-4.7
-15.7
14.5
-27.3
-5.1
-9.6
5.9
-13.9
-0.8
2.6
12.7
-0.8
3.6
-38.0
21.0
-54.3
-2.2
2.4
6.4
7.4
2.3
17
INDIAN ECONOMY: INVESTMENT
Status of Projects (Rs 150 crore & above)

Graph 37: Projects Status (Rs 150 crore & above)
As of Sep’15, out of 783 projects (Rs 150 crore and
above), 7 projects are ahead of schedule, 146 projects are on schedule and 220 projects are de-
751
783
297
410
layed. 410 projects do not have fixed dates of
commissioning.

123
146
of projects that are delayed declined significantly
Sep-15
Total original cost of implementation of the 783
ed completion cost is likely to be Rs 12.5 lakh
crore, which reflects overall cost overruns of Rs
2.1 lakh crore (20.3% of original cost).
Status of Mega Projects (Rs 1,000 crore & above)
As of Sep’15, out of 269 projects, 2 projects were
ahead of schedule, 59 projects were on schedule,
114 projects were delayed with respect to the
original schedule of completion. However, the
number of delayed projects decreases to 96 if delay is calculated on the basis of the latest schedules of completion. Further, for 94 projects anticipated date of completion is not available.

220
Mar-15
projects was Rs 10.3 lakh crore and their anticipat-

Delayed projects
declined
significantly
Interestingly between Mar’15 and Sep’15, number
from 328 to 220.

328
The original cost of these 269 projects was reported to be Rs 8.9 lakh crore and the anticipated cost
On schedule
Delayed
Ahead of schedule
Without DoC
Table 15: Sector-wise Cost and Time Overrun of Projects (Rs 150 crore &
above)
Projects On time
Projects Delayed
% of
Sectors
No. of
Cost
No. of Time Overrun delayed
Projects Overrun (%) Projects (months)
projects
Atomi c Energy
4
Ci vi l Avi a tion
6
Coa l
81
Fertil i s ers
1
Mi nes
1
Steel
24
Petrochemi ca l s
1
Petrol eum
64
Power
106
Hea vy Indus try
1
Ra i l wa ys
296
Roa d Tra ns port &
160
Hi ghwa ys
Shi ppi ng & Ports
6
Tel ecommuni ca tions 2
Urba n Devel opment 30
Total
783
Source: MOSPI; SBI Res ea rch
28.4
5.9
1.2
0.0
0.0
6.3
80.1
8.2
14.7
122.8
72.8
4
3
44
0
0
9
1
37
59
1
31
17-84
6-80
8-104
6-36
44-44
1-71
4-123
75-75
3-261
100%
50%
54%
0%
0%
38%
100%
58%
56%
100%
10%
2.1
16
6-105
10%
9.6
0.0
3.8
20.3
3
1
11
220
61-117
61-61
2-34
-
50%
50%
37%
28%
of these projects was Rs 10.8 lakh crore implying a
cost overrun of 22.0%. Out of 114 delayed projects, three sectors viz. Power (45), Petroleum (22)
and Railways (21) comprise of 88 projects.

Factors responsible for time overruns: delay in
clearances, lack of supporting infrastructure facili-
Graph 38: Projects Status (Rs 1,000 crore & above)
262
269
67
94
144
ties, change in scope, delay in municipal permis-
Delayed projects
declined
significantly
114
sion, delay in shifting of utilities, delay in prepar-
50
59
edness of the pre-project activities, delay in supply
Mar-15
Sep-15
of equipment/services, funds constraint, etc.
On schedule
Delayed
Ahead of schedule
Without DoC
Outlook

The effects of some of the major steps taken by Government like activation of some of the auction allocated
coal blocks and some other mines, road contracts awarded through EPC and hybrid annuity schemes, power
transmission contracts, urban infrastructure projects, etc, will start showing visible results over the next few
months.
18
INDIAN ECONOMY: INFRASTRUCTURE
Infrastructure: Demand & Supply

The total investment in infrastructure sector in the
Table 16: Infrastructure Investment & Financing during the
12th Five Year Plan
Items
Amount
(Rs Cr)
% of
Total
crore (136% more than 11th plan), which is rough-
Total Infrastructure Investment (C+F)
55,74,663
100%
ly one trillion dollars at prevailing exchange rates.
Govt (Central/State) Budget and Internal generation (A)
19,73,732
35%
The share of private investment in the total invest-
Private -Internal Accruals / Equity (B)
8,25,291
15%
ment in infrastructure rose from 22% in the Tenth
Sub-Total / C =(A+B)
27,99,023
50%
Plan to 38% in the Eleventh Plan. It will have to
Borrowing
increase to about 48% during the Twelfth Plan if
Govt PSU (D)
9,17,092
16%
the infrastructure investment target is to be met.
Private (E)
18,58,549
33%
Sub-Total (F=D+E))
27,75,641
50%
Twelfth Plan is estimated to be at Rs 56.3 lakh

Funding Gap: The total requirement of debt by
the public and private sectors is likely to be Rs 27.7
Availability of Borrowing
Domestic Bank Credit
11,64,646
21%
lakh crore. However, the availability of debt fi-
NBFCs
6,18,462
11%
nancing for infrastructure during the Twelfth Plan
Pension/Insurance funds
1,50,248
3%
is estimated at Rs 22.6 lakh crore. There is a likely
External Commercial Borrowings
3,31,834
6%
funding gap of about Rs 5.1 lakh crore for the debt
Likely Total Borrowing (G)
22,65,171
41%
component. Measures would have to be taken for
Gap between Estimates and Likely
5,10,470
Requirement (G-F)
Source: Planning Commission 2013; SBI Research
addressing this gap.
Sectors
Teleports, DTH, Big Cable Networks,
Mobile TV & HITS
Small Cable Networks
FM Radio
Uplinking of News Channels
Uplinking of Non-News Channels
Downloading TV Channels
Private Banks
Civil Aviation
Defence
Plantations
Retail -Single Branded
Table 17: FDI Easing in Sectors
Revised Policy
Broadcasting
9%
Earlier Policy
100% (Automatic: ≤49% and Govt Approval: Beyond 74% (Automatic: ≤49% and Govt Approval:
49%)
49-74%)
100%
Broadcasting Content Services
49%
49% (Govt Route)
26% (Govt Route)
100% (Automatic)
100% (Automatic)
Other Sectors
74% (all sub-limits removed)
100% (for non-scheduled air transport); 49% (for
regional air transport)
100% (Govt Route)
100% (Govt Route)
Automatic: ≤49% and FIPB Approval: Beyond 49%;
Portfolio & Venture capital up to 49%
74% with sub-limits
74% New Category of Aviation
Govt Approved: ≤49%; Portfolio Investment and Foreign Venture Capital: 24%
100% in Coffee, Rubber, Cardamom, Palm Oil Plantations
100% in Tea Only
30% Local Sourcing Rule Relaxed
Local Sourcing Rule Applied
Source: PIB; SBI Research
FDI Easing to Send positive signal for Make in India

The relaxation in FDI norms by Government would give crucial fillip to its ‘Make in India’ campaign at least
in four major sectors viz. Construction, Aviation, Defence and Broadcasting. In all these sectors there are
ample opportunities and currently a lot of foreign investors are planning to invest in these sectors. In particular, the relaxation in construction would help in realizing dream of 100 smart cities while increase in FDI
to 100% in aviation will lead to building of strong air-network in India.
19
INDIAN ECONOMY: CORPORATE SECTOR
Graph 39: Ratio of Upgrade to Downgrade
Corporates Credit Rating performance

After a lull in H113, there is a positive trend in up-
2.3
grades to downgrades ratio. As expected, firms
2.1
with low leverage have traditionally enjoyed a


1.5
Credit quality has improved for firms that are
1.3
0.9
Such firms invariably, are generally found to be
0.7
profit, EBITDA, net profit and interest coverage
ratio for corporates showed improvement in the
Q2FY16.
Industry Outlook

The Government is promoting start-up funds and
also encouraging brick & mortar companies. Generation of thermal & renewable power, waterways
and railways are some of the key sectors that will
1.64
1.1
largely dependent on consumption and exports.
Critical performance parameters such as operating
1.75
1.7
better upgrade to downgrade ratio.
low leveraged.
2.13
1.9
0.87
0.66
0.73
0.62
0.5
H1 FY13
H2 FY13
H1 FY14
H1 FY15
H2 FY15
H1 FY16
Source: Crisil; SBI Research
Table 18: Ratio of Upgrade to Downgrade on Size and
Leverage
Firm Size/
Leverage
Low
Medium
High
H1 FY16
Small
6.3
2.4
1.0
Medium
3.9
3.1
0.9
Large
6.8
0.2
0.1
see action in the road ahead. These sectors are
FY15
vital cog in the progress in the economy and im-
Small
3.1
2.8
0.7
proving this is expected to lend impetus to sup-
Medium
4.8
5.7
1.1
porting sectors that are likely to benefit the pri-
Large
4.4
2.6
0.3
vate sector too.

H2 FY14
In railways, the World Bank would be the anchor
Source: CRISIL; SBI Research; Small - Revenue up to Rs.100 cr,
Medium - above Rs. 100-500 cr and Large - above Rs. 500 cr
investor in the new formed Railway Development
Fund, which would be used to fund modernisation.
In power generation, NTPC has been undertaking a
good amount of capacity utilization.


Table 19: State-wise break-up of generation capacity to
be added by NTPC during 2015-18
It is expected to add 16,330 mw generation capacity by March 2018. Nearly 95% of this capacity is in
State
the thermal power segment. NTPC is also foraying
Madhya Pradesh
4,740
into hydel power generation by setting up plants
Maharashtra
2.64
at Uttarakhand and Himachal Pradesh.
Karnataka
2,400
In railway infrastructure, most segments in subur-
Bihar
1,980
ban rail, metro rail, locomotive and rolling stock,
Chhattisgarh
1,600
manufacturing and maintenance, signaling and
Odisha
800
Assam
750
Uttarakhand
520
Uttar Pradesh
500
Himachal Pradesh
400
electric works and dedicated freight lines have
been allowed 100% investment. The Ministry envisages US$142 billion in this space to boost Indian
transportation and lend fillip to Make in India initiative.
Capacity (MW)
20
INDIAN ECONOMY: EXTERNAL SECTOR
Merchandise Trade

Graph 40: Latest Month Exports Growth of Select
Economies (yoy %)
Amidst weaker global economy, exports have
-1.6
-0.9
UK
US
-3.3
-10.8
-10.4
-10.2
Philippines
Chile
Turkey
-6.8
-11.5
FY15, exports have performed poorly this fiscal
-14.8
-17.6
with around 18.1% contraction so far.

-4.1
Japan
rate since Dec’14. After declining around 1.7% in
Mexico
been on a declining trend with negative growth
The decline in Indian exports is also on account of
fall in commodity prices and consequent weak de-
primary items such as cotton and iron ore from
China
Brazil
India .

India
Indonesia
pressed commodity prices is hurting exports of
-44.0
Russia
mand in commodity exporting countries. Also de-
Interestingly, a look at the value and volume index
of exports reveals decline in the value index only
Graph 41: Exports: Value and Volume Index
in 2015 but accompanied by continuous increase
(1999-2000 = 100)
397
in volume index, indicating price effect is higher
378
357
than volume effect.

Meanwhile,
soft
331
commodity
prices
have
300
284
enabled a reduction in imports with 17.2%
268
264
decline during Apr-Nov’15. Oil imports which
account for greater reduction in import bill
312
304
223
196
Value Index
Trade Diversification

If we look at the direction of Indian exports, there
was a clear discerning trend as Indian exports to
Asia and Africa during FY 15 touched US$ 183.8
billion, accounting for around 60% of our total
export basket.
Production networks have been the significant
feature of Asian regional trade and commerce
with goods being processed and value being added
in multiple countries that are part of the chain.

2015
2014
2013
Source: SBI Research, CEIC
gesting strengthening South-South relations.

Volume Index
India has diversified its export destinations, increasing exports to the developing countries, sug-

2012
continued to slide thereafter.
2011
declined substantially in H22014 (around 50%) and
2010
witnessed 42.4% decline. Crude oil prices have
Value added exports including pharmaceuticals,
textiles (excluding readymade garments)
and
engineering goods accounted for around 33% of
the total export basket in FY15.
Table 20: India's Exports ($ million)
Destination
No of times
1991-92
2014-15
48.7
11964.7
increase
246X
353.8
11119.6
31X
175.5
13.0
326.3
17.4
203.9
53.5
1.0
6711.8
6240.8
6236.4
5943.0
5824.2
5356.5
5290.0
38X
480X
19X
342X
29X
100X
5290X
South Korea
246.2
Nepal
77.7
Iran
123.4
Kenya
42.1
Indonesia
149.5
Thailand
200.1
Source: SBI Research, CEIC
4593.8
4456.3
4175.0
4112.5
4035.0
3458.3
19X
57X
34X
98X
27X
17X
Countries
China
Saudi
Arabia
Sri Lanka
Vietnam
Bangladesh
Brazil
Malaysia
Turkey
South Africa
21
INDIAN ECONOMY: EXTERNAL SECTOR
thereafter. Restriction on imports, especially gold
-1.2
-0.9
-1.6
FY15
-1.7
-2.0
-3.0
CAD declining to -1.2% in Q1.
investment (178% yoy hike) with both direct and
FY14
-1.3
-1.6
The improving momentum persisted in FY16 with
FY15 recorded a huge surge in net foreign
FY13
-1.2
-1.7
comfortable CAD in FY14 and FY15.

FY12
FY11
Q2 FY16
Q1 FY16
Q4 FY15
-0.2
-0.3
and low crude oil prices, enabled India to post a

Q3 FY15
Q2 FY15
Q4 FY14
Q3 FY14
count deficit has narrowed down significantly
Q2 FY14
After peaking to 4.8% of GDP in FY13, Current ac-
Q1 FY14

Q1 FY15
Graph 42: CAD to GDP (%)
Balance of Payment
-4.5
-4.9
-4.8
portfolio investment rising. While net FDI reached
Graph 43: Import Cover (in month) & Forex Reserves
an all time high $32.6 billion, net portfolio
FY16
investment also peaked to $40.9 billion.

Rising foreign investment has enabled accretion of
10.4
10.0
10.3
comfortable level of forex reserves amounting to
8.0
10.3 months of imports in Q2 FY16.
6.7
Though the interest rate differential has declined
FX Reserves
($ Bn)
293
342
Q2
304
Q1
FY13
Funds rate has attracted portfolio inflows in India.
FY15
Interest rate differential between Repo and Fed
FY14

355
351
with increase in US Fed funds rate, it still remains
favorable for India.
External Debt
India’s external debt is at $483.2 billion as on 30
Sep’15, recording an increase of $8.0 billion (1.7%)
over the level at end-March 2015. The rise in ex-
13000
ternal debt during the period was due to long-
8000
term external debt particularly commercial bor-
3000
rowings and NRI deposits.
-2000
However, External Debt to GDP has increased
from 18.2% in FY11 to 23.7% in FY15, but it re-
7.0
6.0
5.0
4.0
3.0
2.0
1.0
Portfolio Inflows
2016:Q3
2016:Q1
2015:Q3
2015:Q1
2014:Q3
2014:Q1
2013:Q3
2013:Q1
2012:Q3
2012:Q1
2011:Q3
2011:Q1
2010:Q3
0.0
2010:Q1
-7000
2009:Q3
Q2 FY16 from 20.4% in FY11.
8.0
2009:Q1
Meanwhile, the share of short-term debt to total
external debt also continues to slide to 17.8% in

9.0
18000
2008:Q3

Graph 44: Interest Rate Differential & Portfolio Inflows
2008:Q1

India-US Interest Rate Differential
Source: SBI Research, Bloomberg
mains at a comfortable level.
Outlook

Given weak global economic prospects, exports are expected to remain benign. Furthermore, trade balance will
continue to improve on the back of weak oil prices leading to further reduction in imports in value terms. But
fall in oil prices may impact our exports to Middle-East, especially construction project exports.

Current account deficit will continue to moderate against the backdrop of low commodity prices. Meanwhile,
India will continue to be attractive destination for foreign investment.
22
ANNEXURE
Startup India, Standup India

The Prime Minister, Shri Narendra Modi, recently launched the ‘Startup India, Standup India’ movement to
boost start-up businesses, offering them a corpus of Rs 10,000 crore.

Profits earned by start-ups will be exempt from payment of income tax during the first three years of business. To boost financing, a 20% tax on capital gains made on investments by entrepreneurs after selling own
assets as well as government-recognised venture capitalists will also be exempt.

Further, an unencumbered easy exit option will be provided under the bankruptcy Act so that start-ups can
exit within 90 days.

PM has also announced a self-certification scheme in respect of nine labour and environment laws and said
there will be no inspection during the first three years of launch of the venture. Also, a liberalised patent regime is being brought to help start-up businesses register patents, for which the fee will be slashed by 80%.

India, which has the third-largest number of start-ups globally, will also support the ventures by removing
the criteria of experience and turnover for bagging government procurement contracts.
Make in India

Government 'Make in India' campaign aims at transforming the country into a global manufacturing hub and
has already made a "tremendous" impact on the investment climate. The initiative was launched in
September 2014 to invigorate the country's manufacturing sector. India received $33.09 billion FDI during
October 2014 to September 2015, a growth of 21% compared to the corresponding period last year.

The notable sectors that received huge inflows are Computer Software & Hardware ($4.9 billion, growth of
285%), Construction Activities ($1.7 billion, growth of 316%) and Automobile Industry ($3.1 billion, growth
of 71%).
Table 21: Impact of Make in India: FDI Inflows in various Sectors (Rs Crore)
Sectors
Oct'13 to Sep'14
Oct'14 to Sep'15
Fertilizers
1.2
224.4
Sugar
4.1
124.9
Boilers & Steam Generating Plants
1.3
26.1
Paper & Pulp (Including Paper Products)
21.0
144.4
Ports
0.3
1.9
Construction (Infrastructure) Activities
415.0
1725.4
Computer Software & Hardware
1280.6
4931.7
Glass
13.9
52.3
Information & Broadcasting (Including Print Media)
140.5
514.5
Sea Transport
150.4
477.5
Earth-Moving Machinery
32.4
86.2
Agricultural Machinery
28.2
57.2
Miscellaneous Industries
388.9
698.4
Miscellaneous Mechanical & Engineering Industries
160.0
283.0
Automobile Industry
1842.8
3155.3
Hospital & Diagnostic Centres
437.7
711.9
Mining
466.2
744.2
Leather, Leather Goods & Pickers
17.2
26.2
Total
27395.3
33089.7
Source: DIPP; SBI Research
% Growth
18445
2962
1861
587
494
316
285
276
266
218
166
102
80
77
71
63
60
53
21
23
INDIA’S REFORM PROCESS
Sector
Banking, Finance &
Insurance
Reform











Ease of Doing Business
Plan to Revamp Public Sector Banks (PSB) under ‘Indradhanush’
Allowed PSBs to raise capital from public markets through FPO or QIP by
diluting Government holding upto 52% in a phased manner
Payment and Settlement Systems (Amendment) Bill 2014 for establishing a legal
framework for regulation of trade repositories and legal entity identifier issuer
FDI limit in Insurance increased to 49%
Social Security Schemes; Jan Dhan to Jan Suraksha
MUDRA Bank to bring finance to 5.7 crore small entrepreneurs
Payment Banks for better financial inclusion through digital technology
Small Finance Banks for sustainable credit flow to priority sectors, small and medium
enterprises
Gold monetization schemes to reduce government borrowing cost and use latent savings in gold
Creation of Infrastructure Debt Fund and National Investment and Infrastructure Fund
to kick start investment cycle
Notification of Investment Pattern for Non-Government Provident Funds, Superannuation Funds and Gratuity Funds to create additional demand for equity funds

Amendment in Companies Act 2013

New de-licensing and de-regulation measures in reducing complexity and significantly
increasing speed and transparency

Major components of Defence products’ list excluded from industrial licensing

Process of obtaining environmental clearances made online

Withdrawing excise and customs duty exemptions presently available to goods
manufactured and supplied to Ministry of Defence by Ordinance Factory Board and
Defence PSUs
FDI in New Sectors

India’s high-value industrial sectors - Defence, Construction and Railways - are now
open to global participation

FDI in Defence cap raised from 26% to 49%. Portfolio investment in Defence
permitted upto 24%

100% FDI under automatic route permitted in construction, operation and
maintenance in specified Rail Infrastructure
Manufacturing

Upto 100% FDI under the automatic route allowed for port development projects

Make in India programme

Scheme on "Enhancement of Competitiveness in the Indian Capital Goods Sector
launched
Foreign Trade Policy 2015-

National Portal for Online Registration of MSMEs (Udyog Aadhaar) launched

Funds to create additional demand for equity funds

FTP for 2015-20 based on principles such as encouraging the export of labour inten-
2020
sive products, agricultural products, high tech products with high export earning potential and eco-friendly and green products

FTP for 2015-20 has introduced two new schemes: (i) Merchandise Exports from India
Scheme (MEIS) and (ii) Services Exports from India Scheme (SEIS)
24
Sector
Industrial Corridor
Reform

GOI is building a pentagon of corridors across the country to boost manufacturing as a
Global Manufacturing destination of the world

Delhi-Mumbai Industrial Corridor (DMIC)

24 manufacturing cities envisaged in the DMIC project

Bengaluru-Mumbai Economic Corridor (BMEC), Amritsar-Kolkata Industrial
Development Corridor (AKIC), Chennai-Bengaluru Industrial Corridor (CBIC), East
Coast Economic Corridor (ECEC) with Chennai Vizag Industrial Corridor (CVIC)
Coal

Renovation, Modernization and Life Extension of old thermal power generating units
in phased manner is being undertaken

Policy on automatic transfer of linkage in case of scrapping of old units and replacing
them with new supercritical plants

Doubling coal cess from Rs.100 per tonne to Rs.200 per tonne for funding projects
under National Clean Energy Fund
Agriculture

Policy for swapping of coal between State Utilities and Central Power Utilities

1 Billion Tonnes production program of CIL by 2019-20 has been finalized

Coal block auction and allotment under the Coal Mines (Special Provisions) Act, 2015

Online Coal Project Monitoring Portal (CPMP)

Pradhan Mantri Fasal Bima Yojana

Initiated process to establish two new Agricultural Universities in Andhra Pradesh and
Rajasthan and two new Horticultural Universities in Telangana and Haryana

Mera Gaon, Mera Gaurav, Krishi Dak

Input subsidy for farmers if 33% or more of their crop is damaged

National Dairy Development Board (NDDB)

Launch of a farmer centric TV channel DD Kisan

Soil Health Card

Adoption of a four-year “Peace Clause” at WTO sanctions to protect India’s agriculture
as India transitions to a new system of food security
Communications & Infor-

Digital India programme—BharatNet in 11 states and Next Generation Network (NGN)
mation Technology

MyGov.in implemented as a platform for citizen engagement in Governance

Swachh Bharat Mission (SBM) Mobile app

e-Sign framework

Online Registration System (ORS)

National Scholarships Portal

Digitize India Platform (DIP)

Electronics Development Fund (EDF) Policy

National Centre for Flexible Electronics (NCFlexE)

Jeevan Pramaan portal for pensioners to submit life certificate

Government of India cloud (GI Cloud) services

Trading in spectrum permitted
25
Sector
Labour
Reform

Shram Suvidha Portal

Random inspection Scheme

Universal Account number

Apprentice Protsahan Yojana

Revamped Rashtriya Swasthya Bima Yojana

The Labour Law (exemption from furnishing Returns and Maintaining Registers by
Certain Establishments) Act, 2014
Urban Development
Tax Reforms
MSME

The Small Factories (Regulation of Employment & Condition of Service) Bill 2014

National Declaration on Housing for All by 2022

100 Smart Cities

Atal Mission for Rejuvenation and Urban Transformation

Swachh Bharat

Deen Dayal Antyodaya Yojana

Tax rebates given to tax payers by raising the income tax limit

Incentives on both savings and housing investments

A scheme for Promoting Innovation, Entrepreneurship and Agro Industry (ASPIRE)

Introduction of Micro, Small and Medium Enterprises Development (Amendment) Bill,
2015
Export Credit

The Government has announced the Interest Equalisation Scheme on Pre and Post
Shipment Rupee Export Credit to eligible exporters, w.e.f. Apr 01, 2015 for five years.
The scheme is available to all exports of MSME and 416 tariff lines. However, the
scheme is not available to merchant exporters.
26
ANNEXURE TABLES: GLOBAL ECONOMY
Overview of Global Economy
Real GDP (% Growth)
World GDP
Advanced Economies
United States
Euro
Japan
United Kingdom
Emerging & Developing Economies
Russia
China
India
Brazil
South Africa
2016
P
3.5
2.2
2.8
1.6
1.0
2.2
4.5
-0.6
6.3
7.5
-1.0
1.3
2015
P
3.1
2.0
2.6
1.5
0.6
2.5
4.0
-3.8
6.8
7.3
-3.0
1.4
3.4
1.2
1.1
1.0
0.4
1.5
5.1
8.6
1.8
5.5
6.3
5.9
2014
2013
2012
2011
2010
2009
2008
2007
3.4
1.8
2.4
0.9
-0.1
3.0
4.6
0.6
7.3
7.3
0.1
1.5
3.3
1.1
1.5
-0.3
1.6
1.7
5.0
1.3
7.7
6.9
2.7
2.2
3.4
1.2
2.3
-0.8
1.8
0.7
5.2
3.4
7.8
5.1
1.8
2.2
4.2
1.7
1.6
1.6
-0.5
1.6
6.2
4.3
9.3
6.6
3.9
3.2
5.4
3.1
2.5
2.0
4.7
1.9
7.4
4.5
10.4
10.3
7.6
3.0
0.0
-3.4
-2.8
-4.5
-5.5
-4.3
3.1
-7.8
9.2
8.5
-0.2
-1.5
3.1
0.2
-0.3
0.5
-1.0
-0.3
5.8
5.2
9.6
3.9
5.0
3.2
5.7
2.8
1.8
3.0
2.2
2.6
8.7
8.5
14.2
9.8
6.0
5.4
3.3
0.3
0.1
0.2
0.7
0.1
5.6
15.8
1.5
5.4
8.9
4.8
3.5
1.4
1.6
0.4
2.7
1.5
5.1
7.8
2.0
5.9
6.3
6.1
3.9
1.4
1.5
1.3
0.4
2.6
5.8
6.8
2.6
10.0
6.2
5.8
4.2
2.0
2.1
2.5
0.0
2.8
6.1
5.1
2.6
10.2
5.4
5.7
5.2
2.7
3.1
2.7
-0.3
4.5
7.3
8.4
5.4
9.4
6.6
5.0
3.8
1.5
1.6
1.6
-0.7
3.3
5.9
6.9
3.3
9.5
5.0
4.3
2.8
0.1
-0.3
0.3
-1.3
2.2
5.3
11.7
-0.7
10.6
4.9
7.1
6.4
3.4
3.8
3.3
1.4
3.6
9.4
14.1
5.9
9.2
5.7
11.5
4.4
2.2
2.9
2.2
0.1
2.3
6.6
9.0
4.8
5.9
3.6
7.1
0.3
-3.0
3.0
3.0
-4.3
-0.2
5.4
2.8
-1.6
-3.8
-4.5
0.5
-2.6
3.2
3.0
-4.7
-0.1
5.0
3.1
-1.4
-4.0
-4.3
0.4
-2.2
2.0
0.5
-5.9
0.5
3.2
2.1
-1.3
-4.4
-5.4
0.4
-2.3
1.8
0.8
-4.5
0.6
1.6
1.6
-1.7
-3.8
-5.8
0.0
-2.8
1.2
1.0
-3.7
1.3
3.5
2.5
-4.8
-3.5
-5.0
-0.1
-3.0
0.1
2.2
-1.7
1.5
5.1
1.8
-4.2
-2.8
-2.2
0.0
-3.0
0.1
4.0
-2.6
1.2
4.4
3.9
-2.8
-3.5
-1.5
-0.2
-2.6
-0.2
2.9
-2.8
1.3
4.1
4.8
-2.8
-1.5
-2.7
-1.3
-4.7
-1.6
2.9
-3.7
3.5
6.3
9.2
-2.3
-1.7
-5.5
-0.9
-5.0
0.1
4.9
-2.7
3.8
5.5
10.1
-1.3
0.1
-5.4
21.2
17.7
23.0
24.3
13.4
31.7
23.5
45.9
29.0
12.9
15.3
21.5
18.2
22.9
24.8
12.8
31.9
23.7
47.4
29.3
14.0
15.6
21.7
18.8
22.7
22.4
11.9
32.1
23.1
48.5
30.2
15.6
14.9
21.4
18.2
22.3
22.0
12.5
32.0
23.3
48.2
30.8
17.2
14.4
21.2
17.7
22.2
21.9
12.6
32.8
27.2
49.1
31.5
16.8
15.1
20.8
15.7
22.3
22.4
14.6
33.0
29.5
48.8
34.7
19.0
17.0
20.3
15.0
21.5
23.8
13.7
32.3
26.1
50.9
33.7
18.3
18.0
19.2
14.3
20.8
22.6
12.3
31.3
21.3
50.6
33.7
17.5
18.0
21.1
15.4
22.9
25.9
14.3
33.4
30.3
51.9
32.0
20.1
17.6
22.5
17.3
24.3
27.8
16.3
32.8
30.9
50.9
36.8
20.1
15.6
Average Consumer Prices (% Growth)
World
Advanced Economies
United States
Euro
Japan
United Kingdom
Russia
China
India
Brazil
South Africa
Current Account Balance (% of GDP)
Advanced Economies
United States
Euro
Japan
United Kingdom
Russia
China
India
Brazil
South Africa
Gross National Savings (% of GDP)
Advanced Economies
United States
Euro
Japan
United Kingdom
Russia
China
India
Brazil
South Africa
Source: IMF WEO Oct'15, SBI Research
27
ANNEXURE TABLES: INDIAN ECONOMY
Macro-Economic Indicators
I. National Income (Growth %)
GDP
Agriculture
Food grains (Million Tonnes)
Industry#
Services#
Saving (% of GDP)
Investment (% of GDP)
II. Inflation (%YoY)
All commodities
Primary articles
Fuel & Power
Manufactured products
CPI-IW
CPI All India
III. Fiscal Situation (as % of GDP)
Total receipts
Direct tax
Indirect tax
Total expenditure
Subsidies
Fiscal deficit
Revenue deficit
IV. Money and Banking (%YoY)
Reserve Money (M0)
Money Supply (M3)
Aggregate Deposits
Demand Deposits
Time Deposits
Bank credit
V. External Sector (in $ billion)
Exports
% YoY
Imports
% YoY
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
7.3@
1.1$
257.1
6.0$
10.0$
…
…
6.9@
3.8$
264.4
5.1$
8.1$
30.0*
32.3
5.1@
1.7$
257.1
5.0$
5.9$
31.1*
36.6
6.7
5.0
259.3
6.7
7.1
33.0*
38.2
8.9
8.6
244.8
8.3
9.2
33.7
36.5
8.6
0.8
218.1
10.2
10.0
33.7
36.5
6.7
0.1
234.5
4.1
9.4
32.0
34.3
9.3
5.8
230.8
9.2
10.3
36.8
38.1
9.6
4.2
217.3
12.9
10.1
34.6
35.7
9.5
5.1
208.6
8.5
11.1
33.4
34.7
7.0
0.2
198.4
7.5
9.1
32.4
32.8
2.0
3.0
-1.0
2.4
6.3
5.9
5.9
9.9
10.1
2.9
9.7
9.4
7.4
9.8
10.3
5.4
10.4
9.9
8.9
9.8
14.0
7.3
8.4
…
9.6
17.7
12.3
5.7
10.5
…
3.8
12.7
-2.1
2.2
12.2
…
8.1
11.0
11.6
6.2
9.1
…
4.7
8.3
0.0
4.8
6.2
…
6.6
9.6
6.5
5.7
6.7
…
4.4
4.3
13.5
2.4
4.4
…
6.5
3.6
10.1
6.3
3.8
…
13.3
5.5
4.3
13.3
2.1
4.0
2.9
14.0
5.6
4.6
13.8
2.3
4.6
3.2
13.9
5.5
4.7
13.9
2.5
4.8
3.6
14.5
5.4
4.3
14.5
2.4
5.8
4.4
15.3
5.8
4.5
15.6
2.3
4.9
3.3
15.8
5.8
3.8
15.9
2.2
6.5
5.2
14.9
5.9
4.8
15.7
2.3
6.0
4.5
14.8
6.3
5.6
14.3
1.4
2.5
1.1
13.5
5.4
5.7
13.6
1.3
3.3
1.9
14.3
4.5
5.5
13.7
1.3
4.0
2.5
15.6
4.1
5.3
15.4
1.4
3.9
2.4
11.3
11.1
10.7
12.5
11.3
9.0
14.4
13.3
14.1
7.8
15.3
13.9
6.2
13.9
14.2
5.9
15.2
14.1
3.6
13.2
13.5
-2.6
15.7
17.0
19.1
16.1
15.9
-0.6
18.7
21.5
17.0
16.9
17.2
23.4
16.2
16.9
6.4
19.3
19.9
-0.2
23.9
17.5
31.0
21.4
22.4
22.0
22.5
22.3
23.9
21.7
23.8
17.9
25.1
28.1
16.9
21.1
24.0
47.0
20.1
37.0
12.1
12.0
13.0
10.2
13.5
30.9
316.7
-0.6
460.9
-1.1
318.6
3.9
466.2
-7.2
306.6
-1.0
502.2
0.5
309.8
23.7
499.5
31.1
250.5
37.3
381.1
26.8
182.4
-3.5
300.6
-2.6
189.0
13.7
308.5
19.8
166.2
28.9
257.6
35.1
128.9
22.5
190.7
21.4
105.2
23.5
157.1
32.1
85.2
28.5
118.9
48.6
Trade Balance
-144.2
-147.6
-195.7
-189.8 -130.6 -118.2 -119.5
-91.5
-61.8
-51.9
-33.7
Invisibles
116.4
115.2
107.5
111.6
84.6
80.0
91.6
75.7
52.2
42.0
31.2
Current Account Balance
-27.5
-32.4
-87.8
-78.2
-45.9
-38.2
-27.9
-15.7
-9.6
-9.9
-2.5
Net FDI
Forex Reserves
External Debt
(As % of GDP)
Exports
Imports
32.6
341.4
475.8
21.6
304.2
446.3
19.8
292.0
409.4
22.1
294.4
360.8
9.4
304.8
317.9
18.0
279.1
260.9
22.4
252.0
224.5
15.9
309.7
224.4
7.7
199.2
172.4
3.0
151.6
139.1
3.7
141.5
134.0
15.4
22.5
17.0
24.8
16.8
27.5
16.8
27.0
14.9
22.6
13.4
22.1
15.4
25.2
13.4
20.8
13.6
20.1
13.0
19.4
12.1
16.9
Trade Balance
-6.6
-7.8
-10.7
-10.2
-7.7
-8.7
-9.8
-7.4
-6.5
-6.4
-4.8
Invisibles
Current Account Balance
VI. Financial Markets (Avg %)
Call rate
1-yr AAA corporate bond
Yield on 10-yr G-sec (%)
Exchange Rate (INR/USD)
5.7
-1.3
6.1
-1.7
5.9
-4.8
6.0
-4.2
5.0
-2.7
5.9
-2.8
7.5
-2.3
6.1
-1.3
5.5
-1.0
5.2
-1.2
4.4
-0.4
7.7
8.6
8.3
61.2
8.1
9.4
8.3
57.5
8.0
9.2
8.2
54.4
8.0
9.6
8.4
47.9
5.8
8.1
7.9
45.6
3.2
6.1
7.3
47.4
7.1
9.8
7.6
45.9
6.1
9.3
7.9
40.2
7.2
8.5
7.8
45.3
5.6
6.7
7.2
44.3
4.7
5.5
6.3
44.9
BSE Sensex return
24.9
18.4
8.2
-10.5
10.9
80.5
-37.9
19.7
15.9
73.7
16.1
Oil price (Indian Basket, US$/bbl.)
84.0
105.5
107.7
111.6 84.6
69.1
83.1
78.8
62.1
55.5
Source: RBI, MOSPI, SBI Research, #RBI Classification, *Gross Saving to GNDI,$ GVA at Basic Prices & @ GDP at 2011-12 Prices
38.6
28
Quarterly
Sep-15 Jun-15 Mar-15 Dec-14
I. National Income (Growth %)
GVA at Basic Prices
7.4
7.1
6.1
6.8
Agriculture
2.2
1.9
-1.4
-1.1
Industry*
8.3
6.4
7.2
3.8
Services *
8.0
8.6
8.0
11.1
II. External Sector ($ billion)
Exports
67.6
68.0
70.8
79.0
Imports
105.0
102.2
102.5
118.2
Trade Balance
-37.4
-34.2
-31.7
-39.2
Invisibles
29.2
28.0
30.2
30.9
Net FDI
6.6
10.2
9.6
7.4
Forex Reserves
350
355
341
320
CAD
-8.2
-6.2
-1.5
-8.4
Source: RBI, SBI Research, *As per RBI Classification, GDP at 2011-12 Base Year
Sep-14
Jun-14 Mar-14 Dec-13
Sep-13
Jun-13
8.4
2.1
7.2
10.2
7.4
2.6
8.1
8.4
5.3
4.4
5.5
5.6
6.6
3.8
5.5
8.3
7.5
3.6
4.2
9.7
7.2
2.7
5.9
8.9
85.3
123.8
-38.6
28.5
8.5
314
-10.1
81.7
116.4
-34.6
26.8
8.3
316
-7.9
83.7
114.3
-30.7
29.3
0.9
299
-1.3
79.8
112.9
-33.2
29.1
6.1
296
-4.1
81.2
114.5
-33.3
28.1
6.9
276
-5.2
73.9
124.4
-50.5
28.7
6.5
285
-21.8
Monthly
Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14
I. Industry and inflation (%YoY)
SBI Composite Index
52.0
54.5
53.5
53.9
53.4
49.7
53.2
56.5
IIP
…
-3.2
9.9
3.8
6.3
4.3
4.2
2.5
Core Sector
…
-1.3
3.2
3.2
2.6
1.1
3.0
4.4
Markit PMI (Manufacturing)
49.1
50.3
50.7
51.2
52.3
52.7
51.3
52.6
Overall WPI
-0.7
-2.0
-3.7
-4.6
-5.1
-4.0
-2.1
-2.20
58.5
54.6
53.4
51.8
52.9
3.0
2.5
4.8
2.8
3.6
-0.4
-0.1
1.4
1.8
2.4
51.3
52.1
51.2
52.9
54.5
-2.4
-2.3
-2.2
-0.9
-0.5
Primary articles
5.5
2.3
-0.4
-2.3
-4.2
-4.0
-0.5
-1.1
0.5
-0.2
1.0
1.4
0.3
Fuel & power
-9.1
-11.1
-16.3
-17.7
-16.2
-11.6
-8.9
-9.4
-13.0
-12.2
-14.8
-11.0
-7.8
Manf. products
-1.4
-1.4
-1.7
-1.7
-2.0
-1.5
-0.8
-0.5
-0.5
-0.2
0.3
1.0
1.4
Core WPI
-2.0
-1.9
-2.1
-1.9
-1.9
-1.5
-0.8
-0.57
-0.41
-0.4
0.1
0.9
1.4
Imported Inflation
-4.1
-5.4
-7.9
-8.9
-8.8
-6.7
-4.8
-5.2
-6.8
-6.7
-7.5
-5.9
-4.5
Corporate Pricing Power Index
-0.3
-0.6
-0.9
-1.1
-1.1
-0.7
0.1
0.0
-0.1
-0.1
0.2
1.0
1.5
Pass-through Index
-15.2 -11.4
-8.4
-11.9
-18.4
-21.3
-20.3
-12.7
-17.3
-16.8
-19.8
-16.4
-12.5
CPI-IW
…
6.7
6.3
5.1
4.4
4.4
6.1
5.7
5.8
6.3
6.3
7.2
5.9
CPI (Combined)
5.6
5.4
5.0
4.4
3.7
3.7
5.4
5.0
4.9
5.3
5.4
5.2
4.3
CPI-Rural
6.3
5.9
5.5
5.0
4.5
4.4
6.1
5.5
5.3
5.7
5.8
5.3
4.2
CPI-Urban
4.7
4.7
4.3
3.6
2.8
2.9
4.6
4.4
4.4
4.7
5.0
5.0
4.5
Vehicle sales (Commercial)
13.6
7.0
12.3
9.8
10.6
10.0
3.5
7.3
8.1
2.3
7.8
6.5
9.9
Car sales (Domestic)
12.9
10.4
21.8
9.5
6.1
17.5
1.5
7.7
18.1
2.6
6.9
3.1
15.3
Repo Rate
6.75
6.75
6.75
6.75
7.25
7.25
7.25
7.50
7.50
7.50
7.75
7.75
8.00
MSF
7.75
7.75
7.75
7.75
8.25
8.25
8.25
8.50
8.50
8.50
8.75
8.75
9.00
CRR
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
4.00
SLR
21.50
9.30-
21.50
9.30-
21.50
9.30-
21.50
9.70-
21.50 21.50 21.50
9.70- 9.70- 9.70-
21.50
9.75-
21.50 21.50 21.50 22.00 22.00
9.75- 10.00- 10.00- 10.00- 10.00-
9.70
7.00-
9.70
7.00-
9.70
7.00-
10.00
7.25-
10.00 10.00 10.00
7.25- 7.75- 8.00-
10.00
8.00-
10.25
8.00-
10.25
8.00-
10.25 10.25 10.25
8.00- 8.00- 8.00-
7.90
14.2
7.90
13.2
7.90
11.2
8.00
12.0
8.00
8.3
8.25
10.2
8.50
10.3
8.50
11.2
8.50
11.9
8.75
7.7
8.75
10.8
8.75
10.3
9.00
9.4
11.0
10.7
10.9
11.0
11.3
11.5
11.1
11.0
11.0
11.1
11.5
11.2
10.7
11.1
9.8
9.0
9.6
9.5
9.4
9.8
9.8
9.8
9.5
10.4
10.7
10.1
Agg. Deposits (%YoY)
10.9
10.4
11.1
11.2
11.9
11.8
11.7
11.5
11.4
11.4
11.9
11.6
10.8
Average LAF (Rs Bn)
Source: RBI, CGA, SBI Research
-194.1 -203.9 -59.4
-11.2
-107.5 -206
-26.0
II. Money and Banking (%)
Base Rate (Range)
Term deposit rate > 1 Year
Reserve Money (M0)
(%YoY)
Money Supply (M3)
(%YoY)
Bank Credit (%YoY)
-251.7 -116.8 -74.0
-239.2 -265.2 -305.4
29
Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14
III. Financial Markets (Avg %)
Call rate
6.4
6.5
6.7
7.0
7.0
7.0
6.8
7.1
7.1
7.3
7.9
7.2
7.9
91-day T-bill
7.2
7.1
7.1
7.4
7.4
7.5
7.7
7.7
7.9
8.3
8.3
8.3
8.3
Yield on 10-yr G-sec
7.8
7.7
7.6
7.7
7.8
7.8
7.8
7.9
7.8
7.8
7.7
7.8
7.9
SBI Base Rate
9.30
9.30
9.30
9.30
9.70
9.70
9.70
9.85
9.85
10.00
10.0
10.0
10.0
CP-3 month
7.8
7.7
7.6
7.9
7.8
8.0
8.15
8.5
8.5
9.0
9.1
8.8
8.6
CD-1 year
7.4
7.3
7.2
7.5
7.5
8.5
8.7
8.9
8.8
9.0
9.1
9.0
9.0
45.4
30.2
37.1
76.7
53.5
64.5
58.1
69.6
32.2
47.8
51.9
50.0
58.1
-0.1
-1.9
1.9
-0.5
-6.5
1.2
-0.2
3.0
-3.4
-4.8
0.6
6.1
-4.2
Exports ($ billion)
22.3
20.0
21.4
21.8
21.3
23.1
22.3
22.3
22.1
24.0
21.5
23.9
26.2
Exports (%YoY)
-14.7
-24.4
-17.5
-24.3
-20.7
-10.3
-15.8
-20.2
-14.0
-21.1
-15.0
-11.2
-0.9
Imports ($ billion)
34.0
29.8
31.1
32.2
33.7
35.9
33.1
32.8
33.0
35.7
28.4
32.2
35.3
Imports (%YoY)
-3.9
-30.3
-21.2
-25.4
-9.9
-10.3
-13.4
-16.5
-7.5
-13.4
-15.7
-11.4
-3.4
Trade Deficit ($ billion)
-11.7
-9.8
-9.8
-10.5
-12.5
-12.8
-10.8
-10.4
-11
-11.8
-6.8
-8.3
-9.2
FDI ($ Million)
…
2701
4912
2773
2226
1735
1681
3751
3306
1714
3793
4687
3459
FII ($ Million)
-1243
-1641
3444
-874
-2645
842
-250
-2235
2441
3337
3966
5453
1998
Equity
-419
-1071
1023
-978
-2549
840
-521
-904
1870
1948
1852
2104
192
Debt
-824
-570
2421
105
-96
2
272
-1331
570
1389
2113
3349
1807
…
121.2
122.5
121.8
119.4
120.6
119.9
118.5
116.4
115.2
114.4
113.6
110.0
352
351.6
353.6
350
351.9
353.5
355.2
352.5
344.6
341.4
338.1
328
320
REER (Base: 2004-05)
124.7
125.3
124.9
122.2
123.9
125.5
123.7
123.4
125.7
126.0
124.3
123.0
119.7
Exchange Rate (INR/USD)
66.58
66.14
65.04
66.2
65.08
63.65
63.84
63.79
62.76
62.48
62.03
62.24
62.74
Oil (Indian basket, USD / bbl)
35.8
42.7
46.8
46.1
47.2
56.3
61.8
63.6
59.2
55.6
57.5
46.4
61.2
AAA corporate spread – 10 yr
(in bps)
BSE Sensex Return
IV. External Sector
NRI Deposits Outstanding
($ billion)
Forex Reserves ($ billion)
V. Fiscal situation (as % of
budgeted)
Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14
Total receipts
53.9
50.0
43.5
21.7
17.7
11.8
4.4
2.2
97.8
73.3
60.9
55.7
43.4
of which tax revenue
50.5
46.6
40.2
19
16.7
11.1
2.2
-0.3
99.3
71.7
60.9
55.8
42.3
Corporation Tax
43.3
42.1
38.8
17.3
14.1
11.1
0.2
-0.9
95.1
66.9
63.8
61.6
41.8
Taxes on Income
48.1
44.4
38.2
26.0
19.3
14.0
9.9
6.2
90.9
70.2
64.1
58.6
49.3
Customs
66.7
58.5
49.7
40.9
31.9
22.6
14.4
6.9
93.2
83.0
75.2
67.2
59.6
Union Excise Duties
63.7
53.7
44.8
34.9
25.3
16.3
5.9
-1.2
91.3
67.8
57.0
49.2
41.5
Total Expenditure
64.3
57.5
51.2
37.5
33.8
24.2
14.8
8.7
97.8
86.8
74.6
68.9
59.8
Non-plan Expenditure
64.3
57.2
50
40.6
33.8
24.1
15.3
9.1
98.2
87.2
79.4
72.4
64.0
Revenue Account
64.9
57.8
50.7
40.9
33.9
23.9
15.0
8.6
98.1
87.1
80.8
73.0
64.7
Capital Account
57.6
50.3
42.7
37.4
32.4
26
18.2
14.3
99.5
88.8
64.1
67.0
56.3
Plan Expenditure
64.1
58.2
54.6
30.9
33.9
24.7
13.4
7.6
96.9
85.8
64.3
61.3
51.1
Revenue Account
60.7
54.8
51.8
30.8
32.2
25.4
13.3
7.3
97.4
87.9
64.8
62.2
51.0
Capital Account
72.3
66.5
61.2
31.4
38.2
23
13.6
8.2
95.1
78.1
62.7
57.9
51.2
Fiscal Deficit
87.0
74.0
68.1
74.9
69.3
51.6
37.5
23
97.9
117.5
107
100.2
98.9
Revenue Deficit
87.5
72.9
68.2
85.8
77.6
58.6
43.8
26.1
98.8
133.3
116.7
106.2
108.6
Source: RBI, CGA, FIMMDA, SBI Research
30
Contact Details
Economic Research Department
State Bank of India, Corporate Centre
Madam Cama Road, Nariman Point
Mumbai - 400 021
Phone: 022-22742440
Email: gm.erd@sbi.co.in
Economic Research Team
Name
Dr. Soumya Kanti Ghosh
Designation
Email
Chief Economic Advisor
soumya.ghosh@sbi.co.in
Disha Kheterpal
Economist
disha.kheterpal@sbi.co.in
Saket Hishikar
Economist
saket.hishikar@sbi.co.in
Shambhavi Sharma
Economist
shambhavi.sharma@sbi.co.in
Sumit Jain
Economist
sumit.jain@sbi.co.in
Tapas Kumar Parida
Economist
tapas.parida@sbi.co.in
Poonam Sharma
Statistician
poonam.jrstat@sbi.co.in
Disclaimer: The report is not a priced publication of the Bank. The opinions expressed in the
publication, are that of the Research Team and not necessarily reflect those of the Bank or its
subsidiaries. The contents can be reproduced with proper acknowledgement. The write-up on Economic
& Financial Developments is based on information & data procured from various sources and no
responsibility is accepted for the accuracy of facts and figures. The Bank or the Research Team assumes
no liability if any person or entity relies on views, opinions or facts & figures finding place in this report.
31

Economic Overview - Review and Outlook of Indian Economy

Transcription

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