Growth of Indian Economy

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Growth of Indian Economy
As per the World Economic Situation and Prospects 2018 report of the United Nations, the Indian economy is projected to grow at 7.2 per cent in 2018-19 and 7.4 per cent in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms.

            Share of public sector (including public financial and non-financial corporations and general government) in total Gross Fixed Capital Formation (GFCF) increased from 21.4 per cent in 2011-12 to 22.0 per cent in 2014-15 and further to 25.2 per cent in 2015-16 (the latest year for which data is available). The share of public GFCF in GDP at current prices increased from 6.7 per cent in 2014-15 to 7.4 per cent in 2015-16. From the demand side, the contribution of Public sector GFCF to GDP growth was about 20 per cent in 2015-16.
            The confidence in the Indian economy has increased on account of policy measures taken up by the government and Reserve Bank of India. Recently, Moody’s rating agency upgraded India’s local and foreign currency issuer rating to Baa2 with a stable outlook from Baa3 on the expectation that continued progress in India’s economic reforms will enhance India’s growth potential over time. According to World Bank’s Ease of Doing Business 2018 Report, India’s ranking improved by 30 positions to 100th rank in 2018. As per the World Economic Forum, India’s rank in Global Competitiveness Index is 40 out of 137 countries in 2017-18, improvement over 71 out of 144 countries in 2014-15 and 55 out of 140 countries in 2015-16. The gross FDI flows to India in 2016-17 amounted to US$ 60.2 billion, as compared to US$ 55.6 billion in 2015-16 and US$ 45.1 billion in 2014-15. During first half of 2017-18, the gross FDI inflow in the economy was US$ 33.7 billion, higher as compared to the corresponding period of last year.
            The Government of India has taken various initiatives to improve the confidence in the Indian economy and boost the growth of the economy and which, inter-alia, include; fillip to manufacturing, concrete measures for transport and power sectors as well as other urban and rural infrastructure and comprehensive reforms in the foreign direct investment policy. Government had also announced various measures in the budget 2017-18 which, among others, include push to infrastructure development by giving infrastructure status to affordable housing, higher allocation to highway construction, and focus on coastal connectivity. For highways development the Bharatmala Pariyojana has been launched. The government has announced a phased program for bank recapitalization to the tune of about Rs 2.11 lakh crore over the next two years. This is expected to encourage banks to enhance lending. The Insolvency and Bankruptcy Code was enacted to achieve insolvency resolution in a time bound manner. The other measures include: lower income tax for companies with annual turnover up to Rs 50 crore and, a major push to digital economy. The introduction of the Goods and Services Tax has provided a significant opportunity to improve growth momentum by reducing barriers to trade, business and related economic activities. Reserve Bank of India (RBI) reduced the repo rate by 200 basis points in 3 years (2015 to 2017). RBI undertook many steps to address the vulnerabilities in the banking system, that inter-alia include, issuing the framework to revitalise the distressed assets in the economy and establishment of Central Repository of Information on Large Credits to reduce information asymmetry.
This information was shared by Union Minister of Finance and Corporate Affairs Shri Arun Jaitley in Lok Sabha today.

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Aadhaar seeding with bank accounts
As per notifications dated 1.6.2017 and 13.12.2017 by Department of Revenue, amendments have been effected to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 to provide that account-holders eligible to be enrolled for Aadhaar, shall inter alia submit their Aadhaar number to banks, by 31.3.2018 or six months from the date of commencement of account-based relationship by the account-holder whichever is later, for the purpose of Client Due Diligence.
            Department of Revenue (DoR) has informed that the objectives of Aadhaar seeding with bank accounts is to weed out bogus, fictitious and benami accounts used for money laundering, terror funding or avoiding taxes and to ensure reduction in leakages of Government spending. For the beneficiaries, Aadhaar has emerged as powerful instrument to establish their identity anywhere at any time, receive entitlements and exercise their rights.
            The said rules further provide inter alia that an individual eligible to be enrolled for an Aadhaar number shall, at the time of commencement of an account based relationship, submit the Aadhaar number and, where Aadhaar number has not been assigned, furnish proof of enrolment for Aadhaar.

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Accidental Insurance Coverage
 ‘Pradhan Mantri Suraksha Bima Yojana (PMSBY) was launched on 9th May, 2015 by the Government to provide accidental insurance cover. PMSBY provides accidental death/disability insurance cover of Rs. 2 Lakhs for an annual premium of Rs.12/-. Any person within the age group of 18-70 years having a bank account can enroll for PMSBY. The scheme is offered/ administered through Insurance Companies both public sector and private in tie-up with scheduled commercial banks / Regional Rural Banks / Cooperative Banks concerned.

 One of the challenges faced is lack of insurance awareness and providing the low cost PMSBY Insurance cover to common men, especially poor and the under-privileged sections of the society. The Government and Public Sector General Insurance Companies organized massive promotion campaign to create awareness amongst the greater section of population. Several steps have been taken in this regard such as creation of an exclusive website www.jansuraksha.gov.in, which hosts all relevant material / information including forms, rules etc. related to this scheme in english, hindi and regional languages. Further, banks and insurance companies have also organized camps and outreach efforts to facilitate access to the scheme. Banners displaying features of the scheme were also installed at all banks and insurance company branches.

A wide Media based publicity campaign through Local/National Newspapers and advertisements on Television/Radio/ Internet was used to create awareness about the various aspects of the schemes.

There is an improvement in the number of enrolments (auto-debit) under the Scheme from 8.85 crore in the year 2015-16 to 12.75 crore till 15th December 2017. All the accidental insurance policies being offered by different Central Government Departments have been converged to PMSBY w.e.f. 1st June 2017.

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