Trade deficit declines, FTAs increase exports, imports: Economic Survey
New Delhi : India's trade deficit declined to $106.8 billion between April 2015 and January 2016 compared with $119.6 billion in the corresponding period of 2014-15, the 2015-16 Economic Survey said on Friday.
Forecasting a strong economic outlook for the country, the survey said the Current Account Deficit (CAD) was limited to 1.4 percent of the GDP from April to September 2015 while foreign exchange reserves stood at 351.4 billion dollars as of February 5, 2016.
"During the current financial year (April-January), the growth in India's exports declined year-on-year by 17.6 percent and stood at 217.7 billion dollars. The imports also declined by 15.5 percent during the period to 324.5 billion dollars," said the survey that was tabled in parliament on Friday by Finance Minister Arun Jaitley.
Fall in Petroleum Oil Lubricants imports resulted in decline of imports in the current fiscal.
"While exports slowdown may continue for a while before picking up in the next fiscal, continuation of low commodity prices globally augurs well for sustaining low trade and CAD," said the survey.
The survey forecast that CAD as a portion of GDP is likely to be in the low range of 1-1.5 percent.
Lower CAD of 26.8 billion dollars (1.3 percent of GDP) in 2014-15 and 14.4 billion dollars (1.4 percent) in H1 2015-16 has been attributed to moderate growth in invisible surplus along with lower trade deficit.
According to the survey, India's Balance of Payments (BoP) position remained comfortable in H1 2015-16.
Shedding light on the rise in foreign exchange reserves, the survey said low CAD levels coupled with moderate rise in capital inflows contributed to the spike of 10.6 billion dollars in H1 2015-16.
"India's foreign exchange reserves at 351.5 billion dollars as of February 5, 2016, mainly comprised foreign currency assets equal to 328.4 billion dollars (93.4 percent of the total) and gold at 17.7 billion dollars, the survey added.
Foreign exchange reserves increase improved the external sector vulnerability indicators and reserves cover for the imports rose from 8.9 months to 9.8 months from March 2015 to September 2015.
India's external debt to GDP ratio is within safe limits at 23.7 percent, said the survey.
Commenting on India's Free Trade Agreements (FTAs), the Economic Survey said FTAs have led to increased imports and exports.
"Since the mid-2000s, India's FTAs have doubled to about 42 today. They have increased trade with FTA countries more than would have happened otherwise," said the survey.
However, trade on imports side is higher than exports side as India maintains relatively high tariffs and had larger tariff reductions compared to its FTA partners.
Trade flow on both sides (imports and exports) benefitted healthily in case of Association of Southeast Asian Nations (Asean) FTAs, exports rose by 33 percent and imports by 79 percent.
"The trade increases have been much greater with the Asean than other FTAs and they have been greater in certain industries, such as metals on the import side. On the export side, FTAs have led to increased dynamism in apparels, especially in Asean markets," the survey said.
Interestingly, 10 percent reduction in FTA tariffs on metals and machinery increased their imports by 1.4 percent and 2.1 percent respectively, compared with others.
"In the current contest of slowing demand and excess capacity with threats of circumvention of trade rules, progress on FTAs, if pursued, must be combined with strengthening India's ability to respond with World Trade Organisation-consistent measures such as anti-dumping and conventional duties and safeguard measures," said the survey.
Analytical and other preparatory work must begin in earnest to prepare India for a mega-regional world, the Economic Survey added.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


GST to bring dramatic changes in tax system: Survey
New Delhi : As a reform measure, the Goods and Services Tax (GST) would result in dramatic changes in the Indian tax system, the Economic Survey 2015-16 said on Friday.
"GST rollout will be a major reform measure in the global tax history as it is estimated to affect 2-2.5 million excise and service tax payers across the country when implemented," said the survey, presented in the Lok Sabha by Finance Minister Arun Jaitley.
The tax requires a constitution amendment bill, which has been passed by the Lok Sabha last year but awaits approval of the Rajya Sabha where it is stuck as the government does not have a majority.
The GST will also check speculation in real estate with higher property tax rates, it said.
The survey proposed widening the tax net to 20 percent from 5.5 percent of earning individuals, reasonable taxation of the better-off and income from real estate and agriculture, annd phasing out of the tax exemption raj.
It also called for widening the individual tax payers' base as 85 percent of the economy remains outside the tax net despite the number of tax returns filed picking up since mid-1980s.
As a step towards building fiscal capacity, the survey suggested that the easiest way to widen the tax base would be not to raise exemption thresholds, unlike in the past when they were raised much more rapidly than underlying income growth.
Calling for a review and phasing out of the tax exemption raj that benefited the richer private sector, the survey recalled the promise of reducing corporate taxes to 25 percent from 30 percent and phasing out of exemptions, reasonable taxation of the better-off individuals in industry, services, real estate or agriculture.
It identified higher property tax rates with periodic updation to improve local government finances, discourage speculation in real estate sector and pave way for smart cities.
Another alternative to fiscal consolidation will be to reduce subsidies to the well-off amounting to Rs.1 lakh crore by better targeting subsides to the poor. 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.


India can gain over $500 bn yearly joining TPP: Economic Survey
New Delhi : India could experience export gains of more than $500 billion per year, or 60 percent increase, from joining an expanded Trans-Pacific Partnership (TPP) or participating in a comprehensive Free Trade Area of the Asia Pacific (FTAAP) and the country's national income would expand by 4 percent, or $200 billion, said the Economic Survey 2015-16.
The Survey, presented by Finance Minister Arun Jaitley in parliament on Friday, cited experts to say that India is most competitive in services trade and reduction of trade barriers in services among TPP members will result in growth in India's services exports.
"The possible risks of not joining the TPP are difficult to quantify, but some of the research has highlighted the possibility of trade diversion and raised concerns about erosion of India's share in exports to the US and Europe," it said.
The TPP is a US-led trade agreement involving twelve Pacific Rim countries and concerning a variety of matters of trade and economic policy, on which consensus was reached in October last year after seven years of negotiations.
"The TPP is expected to make around 11,000 tariff lines duty free for its members, which may result in loss of competitiveness of Indian exports in these markets," it added.
Noting TPP economies on average are more open than the Indian economy, the survey said the service trade restriction index of the World Bank indicates that the TPP economies are less stringent about entry of services than India.
Last month, Commerce Minister Nirmala Sitharaman sought to reassure Indian industry that there would be no adverse impact of entering into the TPP agreement.
"There is nothing to worry about the adverse impact of TPP on India. We have taken necessary steps to boost India's trade and investment in the wake of emerging new trade architecture," she said in her address at the Confederation of Indian Industry's annual partnership summit here.
Sitharaman also said the real implementation of TPP has a long way to go as till date, not a single TPP member has got it passed through their parliament.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.



David Smith

2 years ago

TPP & the other Global Corporate treaties/'arrangements'; Suing the Global Corporate Economy via ‘your’ government.
Japan; ‘The Submission’ to The Supreme Court of Canada paves the way for Expanding & Improving the basis of the Yamada led ‘Sword & Shield’ Counter attack Suit against the Japanese gov’t, et al. TPP & other Global Corporate Treaties/’Arrangements’ signatory gov’ts. in Conflict of Interest.

(CAN.) – The TPP & the other global corporate treaties/’arrangements’ provides that the signatory governments will not only be no longer able to sue corporations for not adhering to the laws of their host countries & thereby, replace the desire of American lead corporations for tort reform with tort abolishment, but the TPP will also place the signatory governments in positions of a conflict of interest in regard to their own harmless citizens who are being forced to find their own, non-governmental means of enforcing existing & future laws that have been passed by way of:
1) the secrecy of unethical lobbyists for the benefits of their wealthy corporation clients & their shareholders,
2) the ethical desire to compete with other countries by passing laws that protect & enhance the well-being of its citizens regarding their health care, education, worker safety, environment, transfer payments, etc.

However, it seems that it is only recently that the harmless citizens of Japan & other nations are learning that due to Corporate Canada’s, &/or, the government of Canada’s anxious desire to impress its TPP corporate associates, &/or, the citizens of Japan, et al, with:
1) its unencumbered access to the natural resources that are continuing to be discovered in Canada,
2) its ability to ‘manage’ Native Canadians in regard to accessing the aforementioned natural resources in Canada
3) et al,
Corporate Canada, &/or, the Canadian government has misinformed its corporate associates & deprived its corporate associates of due diligence information (eg. the Canadian government, et al, is continuing to deprive Native Canadians, et al, of the information & questions in The W.A.D. Accord),
which will greatly affect the costs of developing the aforementioned natural resources, and thus, as a consequence of Corporate Canada’s, &/or, the Canadian government’s actions it has given the harmless citizens of Japan, et al, the basis for:

1) not only, suing Corporate Canada, &/or, the government of Canada, via the Canadian government,
but, for :
2) also expanding & improving upon Mr. Yamada’s existing suit against the Japanese government, &/or, Corporate Japan, et al, as well.
And, thus, Corporate Canada, via their lobbyists to the Canadian government, are most anxious to escape from their liabilities by a rapid ratification of the TPP, et al.

Therefore, the Japanese group, led by Mr. Masahiko Yamada, who are suing their government regarding the Trans-Pacific Partnership on behalf of themselves & the citizens of Japan, might seriously consider suing Corporate Canada, in order to ensure that they, the harmless citizens, do not end up having to ‘contribute’ any of their tax dollars to pay for The Compensation in The W.A.D. Accord, et al, & thereby, prevent Corporate Canada from escaping its liabilities by way of the ratification of the TPP, et al.

Furthermore, by suing Corporate Canada &/or, the government of Canada, by Mr. Yamada’s group, would enable the harmless citizens of Japan as a ‘sword’ & a ‘shield’ to prevent the government of Japan from using any of tax dollars of the harmless citizens of Japan to further punish the harmless citizens, ie. the ‘shield’ & to provide the monies necessary from the punitive damages, on an on-going basis, to continue to fight the future capricious forays & assaults against the harmless citizens’ democracy
and counteract the damages to it, etc. caused by Corporate Japan, the government of Japan, et al, ie. the ‘sword’.

In the meantime,
Please see the reference material below:
‘The Submission’ to The Supreme Court of Canada:
‘The SHAREHOLDERS & Corporations of JAPAN, America, China, Canada, the EU,
the Trans-Pacific nations, et al,
the (harmless) Canadian NON shareholders, both; Native & non Native, et al’

which includes:
1) The W.A.D. Accord,
2) ‘The MERKEL (Chancellor of Germany) Letter; To Sue, or, Be Sued?’
3) et al.

‘The Submission’ also considers:
1) what is a ‘good corporate citizen’
2) how to make those corporations which are not good corporate citizens to conform, or, to make the corporations persona non grata.

The letter to Prime Minister Shinzo Abe, ‘Prime Minister Abe; You’ve been Served with; The NOTIFICATION of Pre-existing CHALLENGE to The TPP’, was sent separately.

Please also see; ‘The Basis for Litigation & Litigation Funders; Suing the Global Corporate Economy’.
For More Info, see;
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