Monthly Economic Review January 2020

4(8)/Ec. Dn. /2017 Ministry of Finance Department of Economic Affairs Economic Division MONTHLY ECONOMIC REPORT Consolidated Report of December 2019 and January 2020 ***** HIGHLIGHTS  The growth of real GDP in 2019-20 is estimated at 5.0 percent (first advance estimates) as compared to 6.1 percent (first revised estimates) in 2018-19.  The consumer price inflation stood at 7.3 percent in December 2019, as compared to 5.5 percent in November 2019.  The Budget Estimate of the fiscal deficit for 2020-21 has been set at 3.5 percent of GDP, as compared to 3.8 percent in 2019-20 (Revised Estimates).  Growth of M3 (Year on Year (YoY) basis) as on 3rd January 2020 stood at 10.1 percent, as compared to a growth rate of 10.6 percent recorded in the corresponding fortnight end in the previous year.  The value of merchandise exports and imports(in US$ terms) declined by 1.8 percent and 8.8 percent respectively in December 2019.  India’s current account deficit as percentage of GDP was 0.9 percent in Q2 of 2019-20, as compared to 2.9 percent in the corresponding period of previous year.  Foreign exchange reserves stood at US$ 466.7 billion as on 24th January 2020, as compared to US$ 412.9 billion at end-March 2019.  As per the first advance estimates for 2019-20, the total production of kharif foodgrains is estimated at 140.6 million tonnes.  Index of Industrial Production (IIP) grew by 1.8 percent during November 2019, as compared to a growth of 0.2 percent during November 2018. 11. ECONOMIC GROWTH 1.1 Global Growth  As per IMF‟s World Economic Outlook (WEO) Update, January 2020, the global economic activity remained weak with growth for 2019 downgraded to 2.9 percent, which is slowest pace since the global financial crisis (Figure 1).  The subdued growth is a result of trade policy uncertainty, geopolitical tensions, weather-related disasters, and idiosyncratic stress in key emerging market economies. Figure 1: Growth of real GDP: world and major economies World Advanced economies EMDEs 9.0 8.0 India 7.0 t China n 6.0 e c r 5.0 e P 4.0 3.0 2.0 1.0 0.0 2014 2015 2016 2017 2018 2019 Data Source: World Economic Outlook Update, January 2020, IMF; National Statistical Office, Ministry of Statistics & Programme Implementation. Note: EMDE – Emerging Market and Developing Economies 1.2 India’s Economic Growth in 2019-20  Real GDP in 2019-20 is estimated to grow at 5.0 percent (1st advance estimates), lower than 6.1 percent in 2018-19(1st revised estimates) (Table 1). The real Gross Value Added (GVA) is estimated to grow at 4.9 percent in 2019-20 (1st advance estimates) as compared to 6.0 percent in 2018-19 (1st revised estimates) (Table 1). Figure 2: Quarter wise growth of real GDP and GVA 10.0 GDP GVA 9.0 8.0 tn e 7.0 c r e P 6.0 5.0 4.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015-16 2016-17 2017-18 2018-19 2019-20 Data Source: National Statistical Office, Ministry of Statistics & Programme Implementation. 22. INFLATION 2.1 Consumer Price Inflation: India and World  While consumer price inflation among the major economies mostly increased during the course of last five years, India‟s inflation declined significantly from 5.9 percent in 2014-15 to 3.4 percent in 2018-19 (Figure 3). Figure 3: Consumer Price Inflation 6.0 5.0 4.0 t n e c3.0 r e P 2.0 1.0 0.0 2014 2015 2016 2017 2018 2019 World Advanced economies EMDE China India Data Source: World Economic Outlook, October 2019 Database, IMF; National Statistical Office, Ministry of Statistics & Programme Implementation. Note: EMDE – Emerging Market and Developing Economies 2.2 Consumer Price Index (CPI) Inflation in 2019-20  Consumer Price Index (CPI) – Combined inflation was 4.1 percent in April-December 2019, as compared to 3.7 percent in April –December 2018.  CPI-combined inflation was 7.3 percent in December 2019 as compared to 5.5 percent in November 2019 (Figure 4).  Food inflation based on Consumer Food Price Index (CFPI) increased to 14.1 percent in December 2019 as compared to 10.0 percent in November 2019, mainly due to increase in inflation of cereals and products, milk and products, meat and fish, egg, oils and fats, fruits, vegetables, pulses & products, sugar and confectionery and spices.  CPI inflation for fuel and light stood at 0.7 percent in December 2019 as compared (-)1.9 percent in November 2019.  Inflation based on CPI-IW for November 2019 increased to 8.6 percent as compared to 7.6 percent in October 2019. Inflation based on CPI (Agricultural Labourers) and CPI ((Rural Labourers) stood at 11.1 percent and 10.6 percent respectively in December 2019. 2.3 Inflation based on Wholesale Price Index (WPI)  WPI inflation rate increased to 2.6 percent in December 2019, as compared to 0.6 percent in November 2019. WPI food inflation (food articles + food products) increased to 11.1 percent in December 2019 from 9.0 percent in November 2019, mainly on account of increase in inflation of vegetables, sugar, edible oils and milk. Inflation in fuel & power stood at (-)1.46 percent in December 2019 as compared to (-)7.32 percent in November 2019. 3Figure 4 : Inflation in WPI and CPI 16.0 14.0 12.0 10.0 t 8.0 n e c 6.0 r e P 4.0 2.0 0.0 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 -2.0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - - - - - - - - - - - - - - - - - - - - - - -4.0 c e D n a J b e F r a M r p A y a M n u J lu J g u A p e S tc O v o N c e D n a J b e F r a M r p A y a M n u J lu J g u A p e S tc O v o N c e D WPI All Commodities WPI Food CPI Headline CPI Food (CFPI)  Core inflation (non-food manufactured products) stood at (-)1.6 percent in December 2019, as compared to (-)1.9 percent in November 2019. 2.4 Global Commodity Prices (based on the World Bank Pink Sheet data)  Food inflation based on World Bank Food Index stood at 6.99 percent in December 2019, as compared to 5.97 percent in November 2019. Energy prices inflation as measured by the World Bank Energy Index stood at 5.91 percent and „metals & minerals‟ stood at 1.84 percent in December 2019 (Table 4). 3. DOMESTIC DEMAND 3.1 Consumption Expenditure  The share of private final consumption in GDP at current prices in 2019-20 is estimated at 60.2 percent, as compared to 59.3 percent in 2018-19. The share of total final consumption (private + public consumption) in GDP at current prices in 2019-20 is estimated at 72.1 percent, as compared to 70.4 percent in 2018-19. 3.2 Government Consumption  The share of government final consumption in GDP at current prices in 2019-20 is estimated at 11.9 percent, as compared to 11.1 percent in 2018-19. The real government consumption is estimated to grow at 10.5 percent in 2019-20, as compared to 10.1 percent in 2018-19. 3.2.1 Fiscal Development  The Budget Estimate of the fiscal deficit as percentage of GDP for 2020-21 has been set at 3.5 percent, as compared to 3.8 percent in 2018-19 (Revised Estimates (RE)) (Figure 5).  The revenue deficit as a percentage of GDP for 2019-20 was 2.4 percent (RE), same as compared 2018-19. The revenue deficit for 2020-21 is budgeted to be 2.7 percent of GDP. 4Figure 5 : Gross Fiscal Deficit (as percentage of GDP) 4.0 3.8 3.5 3.5 3.5 3.5 3.4 3.0 2016-17 2017-18 2018-19 2019-20(RE)2020-21(BE)  The growth in some fiscal parameters (provisional figures) for April-December 2019 over April- December 2018 and absolute figures in April-December 2019 are as follows: o Gross tax revenue declined by 2.9 percent to ` 13.8 lakh crore. o Revenue Receipts (net to Centre) increased by 5.8 percent to ` 11.5 lakh crore. o Tax revenue (net to Centre) declined by 3.4 percent to ` 9.0 lakh crore. o Non-tax revenue increase by 63.8 percent to ` 2.4 lakh crore. o Revenue expenditure grew by 14.4 percent to ` 18.5 lakh crore. o Capital expenditure increased by 20.6 percent to ` 2.6 lakh crore. o Total expenditure increased by 15.2 percent, amounting to ` 21.1 lakh crore. 3.3 Investment  The fixed investment rate (ratio of gross fixed capital formation to GDP) is estimated at 28.1 percent in 2019-20, as compared to 29.0 percent in 2018-19. The real fixed investment is estimated to grow at 1.0 percent in 2019-20, as compared to 9.8 percent in 2018-19. 3.3.1 Money and Banking  Money Supply (M3): Growth of M3 (Year on Year (YoY) basis) as on 3rd January 2020 stood at 10.1 percent, as compared to a growth rate of 10.6 percent as recorded in the corresponding fortnight end in the previous year (Table 11). As on 3rd January 2020, the growth of „currency with the public‟, „time deposits with banks‟, and „demand deposits‟ was 11.7 percent, 9.8 percent, and 10.5 percent respectively, as against 19.5 percent, 9.4 percent, and 9.5 percent respectively registered during the corresponding fortnight end of the previous year. Figure 6 : Growth of Bank Credit - as on (Y-o-Y) 17 15 13 t n e c 11 r e P 9 7 5 5 Aggregate deposits of Scheduled Commercial Banks (SCBs) grew by 9.8 percent (YoY basis) as on 3rd January 2020, as compared to 9.9 percent recorded during the corresponding fortnight end of the previous year.  Growth of bank credit was 7.6 percent (YoY basis) as on 3rd January 2020, as compared to 14.5 percent in the corresponding fortnight end of the previous year. Growth of investment in Government and other approved securities by SCBs was 11.6 percent as on 3rd January 2020, as compared to (-)0.1 percent in the corresponding fortnight end of the previous year. 3.3.2 Lending and deposit rates  The base lending rate as of 10th January 2020 was 8.45/9.40 percent, as compared to 8.95/9.45 percent during the corresponding end of the week of the previous year. The term deposit rates for above one year was 6.10/6.40 percent as of 10th January 2020, as against 6.25/7.50 percent during the corresponding end of the week of the previous year. 4. EXTERNAL DEMAND 4.1 Merchandise Trade  Merchandise exports and imports (in US$ terms) declined by 2.0 percent and 8.9 percent respectively in April-December 2019 (Figure 7). Oil imports declined by 11.8 percent and non-oil imports declined by 7.8 percent in April-December 2019. Figure 7 : Growth of merchandise exports and imports 25 0 -20 20 -40 15 -60 ) ) t 10 -80 n o n e c 5 -100 illib r e $ p ( 0 -120 S U 2016-17 2017-18 2018-19 2018-19 2019-20 -140 ( -5 -160 -10 -180 (APRIL-DEC.) -15 -200 Trade Balance in US$ bn.(RHS) Exports Imports  During April-December 2019, merchandise trade deficit was US$ 118.1 billion, lower as compared to US$ 148.2 billion in April- December 2018. 4.2 India’s Balance of Payments  India‟s current account deficit (CAD) was 0.9 percent of GDP (US$ 6.3 billion) in Q2 of 2019-20, as compared to 2.9 percent of GDP (US$ 19.0 billion) in Q2 of 2018-19 (Table 6 & Figure 8). The contraction of the CAD in Q2 of 2019-20 was primarily on account of lower trade deficit. 6Figure 8: Current Account Deficit (as percentage of GDP) 3.0 2.5 2.0 Annual CAD 1.5 (% of GDP) 1.0 0.5 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -0.5 2015-16 2016-17 2017-18 2018-19 2019-20  Net foreign direct investment was US$ 7.4 billion in Q2 of 2019-20, almost at same level as compared to Q2 of 2018-19. There was net inflow of US$ 2.5 billion of foreign portfolio investment in Q2 of 2019-20, as against inflow of US$ 0.2 billion in the corresponding period of previous year. 4.3 Foreign Exchange Reserves  Foreign exchange reserves stood at US$ 466.7 billion as on 24th January 2020, as compared to US$ 412.9 billion at end-March 2019 (Table 7 and Figure 9). Figure 9 : Foreign Exchange Reserves 450 430 n 410 o illiB $ S U390 Gold, RTP & SDRs 370 Foreign Currency Assets 350 7 8 8 8 8 8 8 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 - v o N -n a J -r a M -y a M -lu J - p e S - v o N -n a J -r a M -y a M -lu J - p e S - v o N Note: RTP: Tranche Position, SDRs: Special Drawing Rights 74.4 Exchange Rate  The rupee appreciated against the Pound sterling and Euro by 1.2 percent and 0.2 percent respectively. However it depreciated against US dollar and Japanese Yen by 0.3 percent and 0.6 percent respectively. (Figure 10 and Table 8). Figure. 10: Movement of Exchange Rate 76 74 72 $ S U r70 e p e e68 p u R 66 64 62 6 7 7 7 7 7 7 8 8 8 8 8 8 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - v o N -n a J -r a M -y a M -lu J - p e S - v o N -n a J -r a M -y a M -lu J - p e S - v o N -n a J -r a M -y a M -lu J - p e S - v o N 4.5 External Debt  India‟s external debt stood at US$ 557.5 billion at end-September 2019, recording an increase of 0.5 percent over the level at end-June 2019. Long-term debt was US$ 448.4 billion at end- September 2019, as compared to US$ 447.3 billion at end-June 2019. Short-term external debt (by original maturity) was US$ 109.1 billion at end-September 2019, as compared to US$ 109.7 billion at end-June 2019 (Figure 11). Figure. 11 : India's External Debt 550 Short term debt n 400 o illiB $ S U 250 Long Term Debt 100 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 9 0 -n u J 0 -r a M 0 -r a M 0 -r a M 0 -r a M 0 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 -r a M 1 - p e S 85. SECTORAL GROWTH  Real GVA growth of Agriculture and allied sectors is estimated at 2.8 percent in 2019-20 (1st advance estimates), as compared to 2.4 percent in 2018-19 (1st revised estimates) (Table 1). 5.1 Agriculture and Food Management  All India production of food-grains: As per the first Advance estimates for 2019-20, the total production of kharif foodgrains is estimated at 140.6 million tonnes. As per the 4th advance estimates for 2018-19, the total production of foodgrains during 2018-19 is estimated at 285 million tonnes, same as in 2017-18 (final estimate) (Table 12).  Rainfall: The cumulative rainfall received for the country as a whole during the period 1st January, 2020 to 27th January, 2020 has been 70 percent above normal. The actual rainfall received during this period has been 24.4 mm as compared to the normal rainfall of 14.4 mm. Out of the total 36 meteorological subdivisions, 13 subdivisions received large excess rainfall, 7 subdivisions received excess rainfall, 4 subdivisions received normal rainfall, 5 subdivisions received deficient rainfall, 4 of the subdivisions received large deficient rainfall and 3 subdivision remained without rainfall during the period. Figure 12: Production of Food-grains 300 Kharif Rabi 250 200 s e n n o150 T n o illiM100 50 0 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20  Procurement: Procurement of rice as on 31st December 2019 during kharif marketing season 2019- 20 was 25.6 million tonnes while procurement in the previous marketing season (KMS 2018- 19) during corresponding period was 25.1 million tonnes (Table 13). . Procurement of Wheat during the Rabi Marketing Season 2019-20 was 34.1 million tonnes while procurement in the previous marketing season (RMS 2018-19) during corresponding period was 35.8 million tonnes.  Offtake: The offtake of rice, all schemes during the month of November, 2019 has been 30.5 lakh tonnes. This comprises 25.0 lakh tonnes under NFSA (offtake against the allocation for the month of December, 2019) and 5.5 lakh tonnes under other schemes. In respect of wheat, the total offtake has been 24 lakh tonnes comprising of 19.4 lakh tonnes under NFSA (offtake against the allocation for the month of December,2019) and 4.4 lakh tonnes under other schemes. The cumulative offtake of foodgrains during 2019-20 is 44.6 million tonnes (Table 14).  Stocks: The total stocks of rice and wheat held by FCI as on 1st January, 2020 was 74.9 million tonnes compared to 63.4 million tonnes as on 1st January, 2019 (Table 15). 95.2 Industry and Infrastructure  Real GVA growth of industry sector in 2019-20 is estimated at 2.5 percent (1st advance estimates), lower than 4.9 percent (1st revised estimates) in 2018-19 (Table 1). 5.2.1 Index of Industrial Production (IIP)  IIP grew by 1.8 percent in November 2019, as compared to 0.2 percent recorded in November 2018 (Table 16). IIP registered a growth of 0.6 percent in April-November 2019, as compared to 5.0 percent during April-November 2018.  IIP of manufacturing sector grew by 2.7 percent in November 2019, as compared to a contraction of 0.7 percent in November 2018. The manufacturing sector‟s growth during April-November 2019 was 0.9 percent, lower as compared to 4.9 percent during the corresponding period of previous year (Figure 13). Figure 13: Index of Industrial Production growth 12.0 10.0 IIP-General Manufacturing 8.0 6.0 4.0 2.0 0.0 7 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 -2.0 - v o N - c e D - n a J - b e F - r a M - r p A - y a M - n u J - lu J - g u A - p e S - t c O - v o N - c e D - n a J - b e F - r a M - r p A - y a M - n u J - lu J - g u A - p e S - t c O -4.0 -6.0  IIP of mining sector grew by 1.7 percent in November 2019, as compared to a growth of 2.7 percent in November 2018. During April-November 2019, production of mining sector declined by 0.1 percent, as compared to a growth of 3.7 percent during the corresponding period of previous year. 5.2.2 Performance of Eight Core Infrastructure Industries  In December 2019, the production of eight core industries grew by 1.3 percent, as compared to a growth of 2.1 percent recorded in December 2018 (Table 17 & Figure 14). Production of eight core industries grew by 0.2 percent in April-December 2019 as compared to a growth of 4.8 percent in the corresponding period of previous year. 10Figure. 14: Eight Core Industries – Production growth 25.0 Eight core - overall Steel Cement 20.0 15.0 t 10.0 n e c r e P 5.0 0.0 7 8 8 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - - - - - - - - - - - - - - - - - - - - - - - - - -5.0 c e D n a J b e F r a M r p A y a M n u J lu J g u A p e S tc O v o N c e D n a J b e F r a M r p A y a M n u J lu J g u A p e S tc O v o N c e D -10.0 5.3 Services Sector  Real GVA growth of services sector is estimated at 6.9 percent in 2019-20 (1st advance estimates), lower than 7.7 percent in 2018-19(1st revised estiamtes) (Table 1). 5.3.1 Some Infrastructure Indicators  The number of telephone subscribers in India declined from 1204.9 million at end October 2019 to 1175.9 million at end November 2019. The overall tele-density in India was 88.9 at end November 2019; the urban tele-density was 157.3 and rural tele-density was 56.7 at end November 2019.  The traffic handled at major ports grew by 1.0 percent to 524 million tonnes in April-December 2019, from 518.9 million tonnes in the corresponding period of the previous year.  As per the Central Electricity Authority, electricity generation declined by 2.1 percent in December 2019 (YoY basis).  The total installed capacity for electricity generation was 3,67,281 MW at the end of December 2019, of which the share of thermal, hydro, renewable and nuclear sources was 62.8 percent, 12.4 percent, 23 percent and 1.8 percent respectively. 6. REFORMS SINCE MAY, 2019 Alive to the imperatives of achieving a USD 5 trillion economy and to boost economic growth, Government of India has been taking pro-active steps. The major reforms undertaken by the government since May, 2019, are as follows: 6.1 Spending  Government to infuse ₹70,000 crores into public sector banks to enable release of ₹5 lakh crore liquidity in the market.  To spend Rs. 100 lakh crores for developing modern infrastructure over 5 years.  The cash transfer scheme, “PM-Kisan” providing an income support of Rs. 6000 per year, which was earlier limited to farmers with a land holding of less than 2 hectares, has now been extended to all farmers. 11 The scope of voluntary pension scheme for retail traders and shopkeepers, has now been extended to everyone with an annual turnover of less than Rs. 1.5 crore entitling them to a minimum monthly pension of Rs. 3,000/- per month after attaining the age of 60 years. 6.2 Taxation  The base corporate tax rate reduced from 30 percent to 22 percent. Companies choosing to pay 22 percent will not pay minimum alternate tax (MAT) but will give up on all exemptions and incentives. With surcharges and cess, the reduced 22 percent rate in effect becomes 25.17 percent.  The base corporate tax rate reduced to 15 percent for any new domestic company incorporated on or after 1st October 2019, and making fresh investment in manufacturing and initiating operations, before 31st March, 2023.  Additional income tax deduction of Rs. 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. GST rate on electric vehicles reduced from 12 percent to 5 percent. 6.3 Ease of Doing Business  Permitting 100 percent FDI under automatic route for sale of coal, and for coal mining activities including associated processing infrastructure.  Permitting 100 percent FDI under automatic route in contract manufacturing.  Permitting all procurements made from India by the Single Brand Retail Trade (SBRT) entity to be counted towards local sourcing, irrespective of whether the goods procured are sold in India or exported.  SBRT entity permitted to undertake retail trading through online trade prior to opening of brick and mortar stores, subject to the condition that the entity opens brick and mortar stores within 2 years from date of start of online retail. Online sales will lead to creation of jobs in logistics, digital payments, customer care, training and product skilling.  Twenty-six percent FDI permitted under government route for uploading/ streaming of News & Current Affairs through Digital Media, on the lines of print media. 6.4 Banking and Financial Sector Reforms  Following the merger of 10 public sector banks into four entities, the country will now have a total of 12 public sector banks.  RBI vide its circular RBI/2019-20/53 dated September 04, 2019 made it mandatory for banks to link all new floating rates for personal or retail loans and floating rate loans to MSMEs, to an external benchmark effective October 1, 2019.  In order to enhance debt flow to housing and infrastructure projects, it is proposed to establish an organization tp provide Credit Enhancement for infrastructure and housing Projects. 126.5 Reforms to boost Exports  For reimbursement of taxes & duties for export promotion, the scheme for Remission of Duties or Taxes on Export Product (RoDTEP) to replace Merchandise Exports from India Scheme (MEIS).  Revised Priority Sector Lending (PSL) norms for Exports, which will release an additional Rs. 36,000 crores to Rs 68,000 crores as export credit under the priority sector.  Annual mega shopping festivals in India will be organized in 4 places across March, 2020 covering 4 themes – Gems and Jewelry, Handicrafts/Yoga/Tourism, Textiles and Leather.  For enabling handicrafts industry to effectively harness e-commerce for exports, mass enrolment of artisans across India will be effected with the help of M/o Textile and organizations like TRIFED, CIE, etc. 6.6. Housing Sector  Relaxation of ECB guidelines for Affordable Housing. to facilitate financing of home buyers who are eligible under the PMAY, in consultation with RBI.  The interest rate on House Building Advance in government shall be lowered and linked with the 10 Year G Sec Yields.  A special window for affordable and middle income housing shall be set up to provide last mile funding for housing projects which are non-NPA and non-NCLT projects and are net worth positive. 6.7. Auto Sector  BS IV vehicles purchased till 31.3.20 to remain operational for entire period of registration.  Both EVs and ICVs will continue to be registered and government will focus on setting up of infrastructure for development of ancillaries /components including batteries for export. 6.8. MSME  The government has asked the banks not to declare any stressed loan on account of MSMEs as NPA till March 2020 and instead work on recasting their debt. 7. SOME MAJOR ECONOMIC DECISIONS IN DECEMBER 2019  The Union Cabinet approved a proposal to promulgate an Ordinance and to amend the Insolvency and Bankruptcy Code, 2016. The Amendment will remove certain ambiguities in the Insolvency and Bankruptcy Code, 2016 and ensure smooth implementation of the Code.  The Union Cabinet approved for implementation of the Atal Bhujal Yojana (ATAL JAL), a Central Sector Scheme with a total outlay of Rs.6000 crore to be implemented over a period of 5 years (2020- 21 to 2024-25).  The Union Cabinet approved to release funds to the tune of Rs. 627.40 crore for the 10 projects sanctioned during 2018-19 and additional Rs. 1854.67 crore for sanctioning of new projects during 2019-20 in Swadesh Darshan Scheme.  The Union Cabinet has approved the proposal for conducting Census of India 2021 at a cost of Rs. 8,754.23 crore and updation of National Population Register (NPR) at a cost of Rs. 3,941.35 crore. 13 The Union Cabinet has approved a transformational organisational restructuring of the Indian Railways. This historic reform will go a long way in achieving Government‟s vision of making Indian Railways the growth engine of India's vikas yatra.  The Union Cabinet approved the "Partial Credit Guarantee Scheme" for purchase of high-rated pooled assets from financially sound NBFCs/HFCs by PSBs.  The Union Cabinet approved to the proposal of Ministry of Road Transport and Highways, authorizing National Highways Authority of India(NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by SEBI. This will enable NHAI to monetize completed National Highways that have a toll collection track record of atleast one year and NHAI reserves the right to levy toll on the identified highway.  The Cabinet Committee on Economic Affairs (CCEA) approved for extension of timeline upto 31.03.2022 for development of Horticulture in the UTs of Jammu & Kashmir and Ladakh under Mission for Integrated Development of Horticulture (MIDH).  The CCEA approved for creation and launch of Bharat Bond Exchange Traded Fund (ETF) to create an additional source of funding for Central Public Sector Undertakings (CPSUs) Central Public Sector Enterprises (CPSEs), Central Public Financial Institutions (CPFIs) and other Government organizations. Bharat Bond ETF would be the first corporate Bond ETF in the country. ******* 14TABLES Table 1: Growth of GVA at Basic Prices by Economic Activity and GDP at Market Prices (percent) Sectors Growth rate at constant Share in GVA at current prices (2011-12) prices (percent) (percent) 2017-18 2018-19 2019-20 2017-18 2018-19 2019-20 2nd RE 1st RE 1st AE 2nd RE 1st RE 1st AE Agriculture, forestry & fishing 5.9 2.4 2.8 18.0 17.1 16.5 Industry 6.3 4.9 2.5 29.2 28.9 28.3 Mining & quarrying 4.9 -5.8 1.5 2.3 2.3 2.2 Manufacturing 6.6 5.7 2.0 16.4 16.1 15.6 Electricity, gas, water supply & other 11.2 8.2 5.4 2.7 2.7 2.7 utility services Construction 5.0 6.1 3.2 7.7 7.8 7.8 Services 6.9 7.7 6.9 52.8 54.0 55.3 Trade, hotel, transport storage 7.6 7.7 5.9 18.1 18.3 18.3 Financial , real estate & prof. services 4.7 6.8 6.4 20.7 21.1 21.3 Public administration, defence and 9.9 9.4 9.1 14.0 14.6 15.6 other services GVA at basic prices 6.6 6.0 4.9 100.0 100.0 100.0 GDP at market prices 7.0 6.1 5.0 --- --- --- Source: National Statistical Office (NSO). Notes: 2nd RE: Second Revised Estimates, 1st RE: First Revised Estimates, 1st AE: First Advance Estimates and growth is caclauted over provisional estimates of 2018-19. Table 2: Quarter-wise Growth of GVA and GDP at Constant (2011-12) Prices (percent) Sectors 2017-18 2018-19 2019-20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Agriculture, forestry & 4.2 4.5 4.6 6.5 5.1 4.9 2.8 -0.1 2.0 2.1 fishing Industry 0.8 6.9 8.0 8.1 9.8 6.7 7.0 4.2 2.7 0.5 Mining & quarrying 2.9 10.8 4.5 3.8 0.4 -2.2 1.8 4.2 2.7 0.1 Manufacturing -1.7 7.1 8.6 9.5 12.1 6.9 6.4 3.1 0.6 -1.0 Electricity, gas, water supply 8.6 9.2 7.5 9.2 6.7 8.7 8.3 4.3 8.6 3.6 & other utility services Construction 3.3 4.8 8.0 6.4 9.6 8.5 9.7 7.1 5.7 3.3 Services 9.4 6.8 8.0 8.2 7.1 7.3 7.2 8.4 6.9 6.8 Trade, hotel, transport, 8.3 8.3 8.3 6.4 7.8 6.9 6.9 6.0 7.1 4.8 communication and services related to broadcasting Financial, real estate & 7.8 4.8 6.8 5.5 6.5 7.0 7.2 9.5 5.9 5.8 professional services Public administration, defence 14.8 8.8 9.2 15.2 7.5 8.6 7.5 10.7 8.5 11.6 and other services GVA at basic price 5.9 6.6 7.3 7.9 7.7 6.9 6.3 5.7 4.9 4.3 GDP at market prices 6.0 6.8 7.7 8.1 8.0 7.0 6.6 5.8 5.0 4.5 Source: National Statistical Office (NSO). 15Table 3 : Year-on-Year inflation based on WPI and CPI’s (percent) WPI CPI-IW CPI-AL CPI-RL CPI-C Base Year: 2011-12 2001 1986-87 1986-87 2012 2015-16 -3.7 5.6 4.4 4.6 4.9 2016-17 1.7 4.1 4.2 4.2 4.5 2017-18 3.0 3.1 2.3 2.3 3.6 2018-19 4.3 5.4 2.1 2.2 3.4 2018-19 Monthly Inflation Apr-2018 3.6 4.0 2.1 2.3 4.6 May-2018 4.8 4.0 2.2 2.4 4.9 Jun-2018 5.7 3.9 1.9 2.0 4.9 Jul-2018 5.3 5.6 2.0 2.2 4.2 Aug-2018 4.6 5.6 1.5 1.7 3.7 Sept-2018 5.2 5.6 1.9 2.0 3.7 Oct-2018 5.5 5.2 1.3 1.4 3.4 Nov-2018 4.6 4.9 1.0 1.2 2.3 Dec-2018 3.5 5.2 1.4 1.7 2.1 Jan-2019 2.8 6.6 2.2 2.4 2.0 Feb-2019 2.9 7.0 3.1 3.2 2.6 Mar-2019 3.1 7.7 4.2 4.3 2.9 2019-20 Apr-2019 3.2 8.3 5.0 4.8 3.0 May-2019 2.8 8.7 5.5 5.5 3.0 June-2019 2.0 8.6 6.3 6.1 3.2 July-2019 1.1 6.0 6.2 6.0 3.1 Aug.- 2019 1.1 6.3 6.4 6.2 3.2 Sept.- 2019 0.3 7.0 7.3 7.2 4.0 Oct.- 2019 0.2 7.6 8.1 7.9 4.6 Nov.- 2019 0.6 8.6 9.4 9.2 5.5 Dec.-2019 2.6 -- 11.1 10.6 7.35 Source: Office of Economic Adviser- DIPP, Labour Bureau and National Statistical Office. Note: WPI inflation for last two months and CPI-C inflation for last one month are provisional. Table 4 : Year-on-Year global inflation for major groups/sub-groups (percent) Dec.-2018 Oct.-2019 Nov.-2019 Dec.-2019 Energy -7.00 -26.80 -8.90 5.91 Non-energy -4.08 -2.44 1.44 3.79 Agriculture -2.63 -1.32 4.17 6.02 Beverages -3.59 -1.78 3.61 9.99 Food -2.41 -0.08 5.97 6.99 Raw Materials -2.74 -4.39 -0.28 1.50 Fertilizers 20.64 -11.82 -19.40 -18.79 Metals & Minerals -9.56 -3.65 -1.66 1.84 Precious Metals -2.50 22.41 20.10 17.93 Source: World Bank. 16Table 5 : Exports and Imports (US$ billion) Item 2018-19 December Growth April-December Growth 2018 2019 (P) (%) 2018 2019 (P) (%) Exports 330.1 27.9 27.4 -1.8 244.1 239.3 -2.0 Imports 514.1 42.4 38.6 -8.8 392.3 357.4 -8.9 Oil Imports 140.9 10.8 10.7 -0.8 108.5 95.7 -11.8 Non-Oil Imports 373.2 31.6 27.9 -11.6 283.8 261.7 -7.8 Trade Deficit -184 -14.5 -11.3 - -148.2 -118.1 - Source: Ministry of Commerce and Industry. Note: P – Provisional Table 6 : Balance of Payments: (US$ billion) 2018-19 2019-20(P) Items 2017-18 2018-19 (P) Q2 (July-September) Merchandise Exports 309 337.2 83.4 80.0 Merchandise Imports 469 517.5 133.4 118.1 Trade Balance -160 -180.3 -50.0 -38.1 Net Invisibles 111.3 123 31.0 31.8 Current Account Balance -48.7 -57.3 -19.0 -6.3 Commercial Borrowings (MT & LT) -0.2 10.4 2.2 3.4 Foreign Investment (Net) 52.4 30.1 7.6 9.9 Foreign Direct Investment (Net) 30.3 30.7 7.4 7.4 Foreign Portfolio Investment (Net) 22.1 -0.6 0.2 2.5 Capital Account Balance (including error & omission) 92.3 53.9 -1.8 5.1 Change in Reserves (Increase - / Decrease +) -43.6 3.3 1.9 -5.1 Trade balance/GDP (%) -6 -6.3 -7.7 -5.4 Net Invisible Balance / GDP (%) 4.2 4.3 4.6 4.5 Current Account Balance/ GDP (%) -1.8 -2.1 -2.9 -0.9 Source: Reserve Bank of India. Note: P – Preliminary 17Table 7 : Foreign Exchange Reserves (in Billion) End of Financial Year Foreign Exchange Reserves Variation (Rupees ) (US Dollar) (Rupees ) (US Dollar ) At the end of year (Variation over last year) 2016-17 23982 370.0 195 9.8 2017-18 27609 424.5 3627 54.6 2018-19 28559 412.9 -88 10.5 At the end of month (Variation over last month) 2018-19 April 2018 28073 420.5 464 -4.0 May 2018 27805 412.4 -268 -8.1 June 2018 27811 405.7 6 -6.7 July 2018 27682 403.7 -129 -2.1 August 2018 28359 400.1 678 -3.6 September 2018 29038 400.5 679 0.4 October 2018 28993 392.1 -45 -8.4 November 2018 27425 393.7 -1568 1.6 December 2018 276.1 395.6 184 1.9 January 2019 28427 400.2 818 4.6 February 2019 28646 402.4 219 2.2 March 2019 28559 412.9 -88 10.5 2019-20 April 2019 29247 418.8 688 5.9 May 2019 29449 421.9 202 3.1 June 2019 29624 429.8 175 8.0 July 2019 29620 429.6 -4 -0.2 August 2019 30631 428.6 1011 -1.0 September 2019 30711 433.7 80 5.1 October 2019 31592 445.1 881 11.4 November 2019 32372 451.3 780 6.1 December 2019 32647 457.5 275 6.2 Source: Reserve Bank of India 18Table 8 : Rupees per unit of foreign currency* Financial Year US dollar Pound sterling Euro Japanese yen 2015-16 65.4647 98.5730 72.2907 0.5459 2016-17 67.0731 87.6952 73.6141 0.6204 2017-18 64.4551 85.5128 75.4379 0.5816 2018-19 69.9229 91.7865 80.9580 0.6305 Monthly 2018-19 April 2018 65.6363 92.5691 80.6612 0.6102 May 2018 67.5394 90.9732 79.8248 0.6155 June 2018 67.7931 90.0672 79.1619 0.6161 July 2018 68.6934 90.4956 80.2993 0.6166 August 2018 69.5465 89.6929 80.4388 62.5900 September 2018 72.2153 94.1888 84.2155 64.5000 October 2018 73.6323 95.8700 84.6103 65.2724 November-18 71.8542 92.6219 81.6155 63.3722 December-18 70.7311 89.5832 80.4786 62.9615 January 2019 70.7329 91.1581 80.8306 0.6496 February 2019 71.2218 92.6679 80.8479 0.6455 March 2019 69.4786 91.5494 78.5121 0.6251 2019-20 April 2019 69.4274 90.5274 78.0306 0.6220 May 2019 69.7731 89.6546 78.0492 0.6344 June 2019 69.4389 87.9945 78.4054 0.6428 July 2019 68.8083 85.8747 77.2293 0.6359 August 2019 71.1457 86.4887 79.1191 0.6694 September 2019 71.3337 88.1391 78.5396 0.6635 October 2019 71.0394 89.7397 78.4973 65.6789 November 2019 71.4517 92.0928 78.9980 65.6570 December 2019 71.2328 93.2020 79.1209 65.2978 Source: Reserve Bank of India. Note: * - FEDAI Indicative Market Rates (on monthly average basis), 19Table 9 : External Assistance and Debt Service Payments (` crore)* During the During the December December Financial Financial year 2018-19 year 2019-20 2018 2019 External Assistance (Government Account) 1) Gross Disbursement 8299.6 33676.3 5139.7 46857.2 2) Repayments 4098.1 22629.6 4353.7 24728.7 3) Interest Payments 1174.1 5822.2 1198.3 6930.0 4) Net Disbursement (1-2) 4201.5 11046.8 786.0 22128.5 5) Net Transfers (4-3) 3027.4 5224.6 -412.4 15198.5 External Assistance (Non-Government Account) 1) Gross Disbursement 4680.4 9062.4 0.0 4043.4 2) Repayments 1132.1 3909.1 0.0 3535.9 3) Interest Payments 209.9 881.6 0.0 706.0 4) Net Disbursement (1-2) 3548.3 5153.2 0.0 507.5 5) Net Transfers (4-3) 3338.3 4271.6 0.0 -198.5 Government Grants 1) Gross Disbursement 246.0 687.2 63.6 252.6 2) Repayments 0.0 0.0 0.0 0.0 3) Interest Payments 0.0 0.0 0.0 0.0 4) Net Disbursement (1-2) 246.0 687.2 63.6 252.6 5) Net Transfers (4-3) 246.0 687.2 63.6 252.6 Non Government Grants 1) Gross Disbursement 0 0 0 0 2) Repayments 0 0 0 0 3) Interest Payments 0 0 0 0 4) Net Disbursement (1-2) 0 0 0 0 5) Net Transfers (4-3) 0 0 0 0 Grand Total 1) Gross Disbursements 13225.9 43425.9 5203.3 51153.2 2) Repayments 5230.2 26538.7 4353.7 28264.7 3) Interest Payments 1384.0 6703.8 1198.3 7635.9 4) Net Disbursement (1-2) 7995.7 16887.2 849.5 22888.5 5) Net Transfers (4-3) 6611.8 10183.5 -348.8 15252.6 Source: Office of the Controller of Aid, Accounts and Audit, Ministry of Finance. Note: * - Data are provisional. 20Table 10 : Fiscal parameters of the Central Government (Rs. crore) 2019-20 April-December Growth Rate (percent) (BE) Apr.-Dec. Apr.-Dec. 2018-19 2019-20 2018-19 2019-20 1. Revenue Receipts 1962761 1084044 1146897 6.9 5.8 Gross tax revenue 2461195 1424451 1383035 6.6 -2.9 Tax (net to Centre) 1649582 936333 904944 4.0 -3.4 Non Tax 313179 147711 241953 30.1 63.8 2. Capital Receipts (of which) 823588 747989 962750 9.1 28.7 Recovery of loans 14828 12317 12925 15.8 4.9 Other Receipts 105000 34215 18100 -36.3 -47.1 Borrowings and other liabilities 703760 701457 931725 13.0 32.8 3. Total Receipts (1+2) 2786349 1832033 2109647 7.8 15.2 4. Total Expenditure (a)+(b) 2786349 1832033 2109647 7.8 15.2 (a) Revenue Expenditure 2447780 1620211 1854125 10.8 14.4 Interest payments 660471 421193 424314 12.6 0.7 Major Subsidies 301694 244977 252038 14.0 2.9 Pensions 174300 144472 160656 18.4 11.2 Grants for creation of Capital 207333 151018 142945 3.3 -5.3 Assets (b) Capital Expenditure 338569 211822 255522 -10.5 20.6 5. Revenue Deficit 485019 536167 707228 19.5 31.9 6. Effective Revenue Deficit 277686 385149 564283 27.3 46.5 7. Fiscal Deficit 703760 701457 931725 13.0 32.8 8. Primary Deficit 43289 280264 507411 13.5 81.0 Source: Union Budget 2019-20 Ministry of Finance, ; Controller General of Accounts (CGA) Note: BE - Budget estimate Table 11 : Broad Money: Sources (in ₹ Crore) Item Outstanding as on YoY Growth 2018 2019 2018 2019 Mar. 31 January 03 (percent) (percent) M3 15432067 16266409 10.6 10.1 Sources Net Bank Credit to Government 4388490 5133426 8.9 14.9 Bank Credit to Commercial Sector 10382719 10706202 13.7 7.8 Net Foreign Exchange Assets of Banking Sector 3070841 3516415 5.5 21.5 Government's Currency Liabilities to the Public 25887 26178 0.8 1.5 Banking Sector's Net Non-Monetary Liabilities 2435870 3115812 13.3 22.3 Source: Reserve Bank of India. Note: * - Year on Year growth. 21Table 12 : Production of Major Agricultural Crops (1st Adv. Est.) Crops Production (Million Tonnes) 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20* (Final) (4th AE) (1st AE) Total Food-grains 252.0 251.6 275.1 285.0 285.0 140.6** Rice 105.5 104.4 109.7 112.8 116.4 100.4 Wheat 86.5 92.3 98.5 100.0 102.2 -- Total Coarse Cereals 42.9 38.5 43.8 47.0 43.0 32.0 Total Pulses 17.2 16.4 23.1 25.4 23.4 8.2 Total Oilseeds 27.5 25.3 31.3 31.5 32.3 22.4 Sugarcane 362.3 348.4 306.1 379.9 400.2 377.8 Cotton# 34.8 30.0 32.6 32.8 28.7 32.3 Source: DES, DAC&FW, M/o Agriculture & Farmers Welfare. Note: *:- Kharif crops only; 1st AE: 1st Advance Estimates ; 4th AE: 4th Advance Estimates; # Million bales of 170 kgs. Each; **Data for Wheat is not available Table 13 : Procurement of Crops (Million Tonnes) Crops 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20* Rice# 31.8 32.0 34.2 38.1 38.2 44.4 25.6 Wheat@ 25.1 28.0 28.1 23.0 30.8 35.8 34.1 Total 56.9 60.2 62.3 61.1 69.0 80.2 59.7 Source: FCI and DFPD, M/o Consumer Affairs, Food and Public Distribution. Notes: * - Procurement of rice as on 30.12.2019. # - Kharif Marketing Season (October-September), @ - Rabi Marketing Season (April-March). Table 14 : Offtake of Food-grains (Million Tonnes) Crops 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20* Rice 30.7 31.8 32.8 35.0 34.4 25.8 Wheat 25.2 31.8 29.1 25.3 31.5 18.8 Total 55.9 63.6 61.9 60.3 65.9 44.6 (Rice & Wheat) Source: DFPD, M/o Consumer Affairs, Food and Public Distribution. Note: * - upto December 2019. Table 15 : Stocks of Food-grains (Million Tonnes) Crops January 1, 2019 January 1, 2020 1. Rice 18.3 23.7 2. Unmilled Paddy# 27.4 27.9 3. Converted Unmilled Paddy in terms of Rice 18.0 18.4 4. Wheat 27.1 32.8 Total (Rice & Wheat)(1+3+4) 63.4 74.9 Source: FCI. Notes: # Since September, 2013, FCI gives separate figures for rice and unmilled paddy lying with FCI & state agencies in terms of rice. 22Table 16 : Percentage Change in Index of Industrial Production (Base 2011-12) April-November April-November November November 2018-19 2019-20 2018 2019* General 5.0 0.6 0.2 1.8 Sectoral Mining 3.7 -0.1 2.7 1.7 Manufacturing 4.9 0.9 -0.7 2.7 Electricity 6.6 0.8 5.1 -5.0 Use-based Primary goods 4.8 0.1 3.2 -0.3 Capital goods 7.2 -11.6 -4.1 -8.6 Intermediate goods 0.7 12.2 -4.1 17.1 Infrastructure/ construction goods 8.3 -2.7 4.8 -3.5 Consumer durables 7.8 -6.5 -3.0 -1.5 Consumer non-durables 4.0 3.9 -0.3 2.0 Source: NSO. Note: * Figures for October 2019 are Quick Estimates Table 17 : Production growth (percent) in Core Infrastructure-Supportive Industries Industry April-December April-December December December 2018-19 2019-20 2018 2019 Coal 7.9 -3.8 1.1 6.1 Crude oil -3.7 -6.0 -4.3 -7.4 Natural Gas -0.1 -3.8 4.2 -9.2 Refinery 4.1 -0.6 -4.8 3.0 PFreortdiluizcetsrs -1.4 4.7 -2.4 10.2 Steel 4.3 5.2 10.1 1.9 Cement 13.9 0.7 11.6 5.5 Electricity 6.4 0.5 4.4 -1.6 Overall growth 4.8 0.2 2.1 1.3 Source: Office of the Economic Adviser, DIPP (Ministry of Commerce & Industry). 23