From biases against India by global credit rating agencies to poor targeting of social programmes, the Economic Survey 2016-17 brought out eight interesting facts about the country:
1. Indians on the move: New estimates based on railway passenger traffic data reveal an annual work-related migration of about nine million people, which is almost double of what the 2011 Census suggests.
2. Biases in perception: China’s credit rating was upgraded from A+ to AA- in December 2010 while India’s has remained unchanged at BBB-. From 2009 to 2015, China’s credit-to-GDP (gross domestic product) soared from about 142 per cent to 205 per cent and its growth decelerated. The contrast with India’s indicators is striking.
3. New evidence on weak targeting of social programmes: Welfare spending in India suffers from misallocation as districts with the most poor are the ones that suffer from the greatest shortfall of funds allocated to social programmes. The districts accounting for the poorest 40 per cent receive 29 per cent of the total funding.
4. Narrow tax base: India has seven taxpayers for every 100 voters, ranking us 13th amongst 18 of our democratic G-20 peers.
5. India’s distinctive demographic dividend: The country’s share of working age to non-working age population will peak later but at a lower level than for other countries and will last longer. The peak of the growth boost due to the demographic dividend is fast approaching, with peninsular states peaking soon.
6. India trades more than China and a lot within itself: As of 2011, India’s openness — measured as the ratio of trade in goods and services to GDP has far overtaken that of China. India’s internal trade to GDP is also comparable to that of other large countries.
7. Divergence within India, big time: Spatial dispersion in income is still rising in India in the last decade (2004-14), unlike the rest of the world and even China. That is, despite more porous borders within India than between countries internationally, the forces of “convergence” have been elusive.
8. Property tax potential unexploited: Evidence from satellite data indicates that Bengaluru and Jaipur collect only between 5 per cent and 20 per cent of their potential property taxes.