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Data | Lowest GDP since 1976 to widening fiscal deficit: Capturing Indian economy in 9 charts

Stressed: Production in micro enterprises such as this unit located on Sakkimangalam Road at Karuppayurani in Madurai has come down drastically due to the slump in demand for automobiles and economic slowdown. S. James S_James

Stressed: Production in micro enterprises such as this unit located on Sakkimangalam Road at Karuppayurani in Madurai has come down drastically due to the slump in demand for automobiles and economic slowdown. S. James S_James  

Finance Minister Nirmala Sitharaman on Saturday, February 1, 2020 presented the budget for the year 2020-21 amid growing concerns about the dismal state of the economy.

In nine charts we capture the problems plaguing the economy.

At historic lows

In FY20, the real GDP is expected to grow at 5% (slowest since FY09, the year of the global financial crisis) and the nominal GDP is expected to grow at 7.5% (slowest since FY76). Nominal GDP is a proxy for income growth, especially that of corporates. A slowing nominal GDP will eventually lead to low tax collections.

Real and nominal GDP growth rates

image/svg+xml 1970-71 1974-75 1978-79 1982-83 1986-87 1990-91 1994-05 1998-99 2002-03 2006-07 2010-11 2014-15 2018-19 Real GDP growth (%, Left axis) Nominal GDP growth (%, Right axis) 10 5 0 -5 25 20 15 10 5 0 At historic lows
 

Widening deficits

The fiscal deficit of ₹8.08 trillion for April-November is nearly 15% more than the projected amount. The deficit has widened due to dwindling tax revenues, following an economic slowdown. The chart compares projected  and actual fiscal deficit between April and November since FY15

State of fiscal deficit

image/svg+xml 8 6 4 2 0 Fiscal deficit projected April to Nov. (in Rs. trillion) Actual fiscal deficit April to Nov. (in Rs.trillion) April-Nov. 2015-16 April-Nov. 2017-18 April-Nov. 2016-17 April-Nov. 2018-19 April-Nov. 2019-20 Widening deficits

Lows across sectors

Gross value added (GVA) across most sectors fell in FY20 compared to FY19, with the manufacturing and construction sectors falling the most. Only the public administration and defence services, mostly fuelled by the government, grew robustly. The table shows the GVA growth.

Sector-wise growth rates

image/svg+xml Year 2015-16 0.6 10.1 13.1 4.7 3.6 10.2 10.7 6.1 2016-17 6.3 9.5 7.9 10 6.1 7.7 8.7 9.2 2017-18 5 5.1 5.9 8.6 5.6 7.8 6.2 11.9 2018-19 2.9 1.3 6.9 7 8.7 6.9 7.4 8.6 2019-20 2.8 1.5 2 5.4 3.2 5.9 6.4 9.1 AGRICULTURE MINING MANUFACTURING TRADE, HOTELS, TRANSPORT CONSTRUCTION UTILITIES FINANCIAL & REAL ESTATE PUBLIC ADMIN & DEFENCE Lows across sectors
 

In search of jobs

The number of people in salaried employment has remained stagnant in the last few years. Growth in employment in this period was seen only in the self-employed category, which  includes gig workers like Ola/Uber cab drivers. The data were sourced from the CMIE database.

State of employment

image/svg+xml Jan. to Apr. '16 May to Apr. '17 Jan. to Apr. '18 Sept. to Dec. '19 Sept. to Dec. '18 Sept. to Dec. '16 110 90 70 50 30 10 Businessmen & qualifed professionals (mn) Self employed entrepreneurs (mn) Salaried employee (mn) In search of jobs
 

Brakes on

Automobile sales in the country declined year-on-year (YoY) by 23.55% in August 2019, the worst drop since 1997-98. While the decline has been moderate since then, sales continue to suffer. The chart shows the YoY change in sale of passenger vehicles (PV), commercial vehicles and two-wheelers (2W).

State of the auto sector

image/svg+xml 40 20 0 -20 -40 Dec. 2018 Nov. 2018 Oct. 2018 Sept. 2018 Aug. 2018 Jan. 2019 Feb. 2019 Mar. 2019 Apr. 2019 May 2019 June 2019 July 2019 Aug. 2019 Sept. 2019 Oct. 2019 Nov. 2019 Dec. 2019 PV sales Commercial vehicle sales 2W sales All figures in % Brakes on
 

Loan distress

The NPA ratio of all sectors, except agriculture, saw a reduction in 2019 as compared to 2018. NPAs in the agriculture sector saw an increase of 27.5% in this period. Table shows gross NPAs in ₹ crore in 2018 and 2019 and the % change.

Sector-wise NPAs

image/svg+xml SECTORS GNPA 2018 GNPA 2019 % CHANGE IN GNPAs Agriculture 75,274 95,938 27.5% Micro & small enterprises 82,094 73,381 -10.6% Other priority sectors 30,143 28,016 -7.1% Non-priority sector 6,57,964 5,12,774 -22.1% Total NPAs 8,45,475 7,10,109 -16.0% Loan distress
 

Tax reliance

Income Tax has increased substantially as a component of Gross Tax Revenues (GTR) over the last two decades. Corporate tax as a share of GTR grew till 2009-10 but fell thereafter,  while the share of indirect tax, which was falling till 2009-10, increased thereafter. Graph traces tax share since FY96.

Share of income tax in total taxes

image/svg+xml 25 20 15 10 5 80 60 40 20 Tax reliance Corporate tax (Left axis) Income Tax (Right axis) Indirect tax (Left axis) FY96 FY98 FY00 FY02 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 All figures are a % of GTR Source: Central Board of Direct Taxation

Income levels up for tax filers

The gross total income of individuals who filed income tax returns has gone up in the last five years. For instance, 24.7% of taxpayers were earning below ₹2 lakh in 2013-14, while only 7.1% did so in 2018-19. Similarly, the share of income tax payers who earned between ₹4 lakh and ₹10 lakh saw a significant jump. However, it is important to note that only around 7.4% adults in India pay income tax.

Income tax levels

image/svg+xml TAX BRACKETS AY 2014 AY 2019 0 to 2 lakh 24.7% 7.1% 2 to 4 lakh 44.4% 41.8% 4 to 10 lakh 24.9% 41.1% 10 to 50 lakh 5.7% 9.5% >50 lakh 0.4% 0.6% Source: Central Board of Direct Taxation Income levels up for tax filers

Bear run

The Sensex fell 2.43% at the end of the day after the budget presentation by the Finance Minister. This is the worst such fall since 2009 (when the Sensex fell nearly 6% points). Stocks in the realty sector fell the most (-8%). Stocks in the IT sector registered a 1.4% increase over the day.

Market ups and downs

image/svg+xml 2 0 -2 -4 -6 Feb. 16, 09* Jul. 6, 09 Feb. 26, 10 Feb. 28, 11 Mar. 16, 12 Feb. 28, 13 Feb. 28, 15 Feb. 29, 16 Feb. 1, 17 Feb .1, 18 Jul. 5, 19* Feb. 1, 20 Feb. 17, 14* Jul. 10, 14 % CHANGE OVER BUDGET DAY Bear run

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Printable version | Feb 25, 2020 12:16:05 PM | https://www.thehindu.com/data/lowest-gdp-since-1976-to-widening-fiscal-deficit-capturing-indian-economy-in-9-charts/article30719590.ece

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