Malcolm Adiseshiah Mid-Year Review of the Indian Economy 2015-16

The Review of Indian Economy presented by NCAER today, covered the performance of the economy during the first half of the current year (April- September 2015-16), and made projections for the later part of the year. Besides a stocktaking of the economy’s performance, the Review also included detailed discussions on key policy issues in form of two presentations, titled, ‘Towards a Clean, Green, Inclusive Urban India’ and ‘A Critical Perspective on the Trinity: Jan Dhan Yojana, Aadhar and Mobile Telephone (JAM)’.

The Review presented by Mythli Bhusnurmath and Dr Bornali Bhandari from NCAER covered diverse aspects of the economy with the following highlights.

• NCAER expects GDP (GDP at market prices in constant 2011–12 prices) will grow at 7.4 per cent in 2015-16.

• Despite deficit rainfall, NCAER estimates overall food grain output during this year’s kharif season may be marginally higher compared to last year due to better rainfall conditions in areas where coarse cereals and pulses are grown.

• The industrial sector performed better with 4.0 per cent growth in the first half of the FY 16 as against 2.9 percent in the comparable period of the last fiscal. Further, using deseasonalised data, the quarter-on-quarter    growth continues to be strong and positive for three consecutive quarters. The non-annualised growth rates are 1.98 per cent in 2014:Q4, 1.38% in 2015–16:Q1 and 1.43% in 2015–16:Q2 overall signalling nascent revival in the industrial sector.

• The services’ sector, excluding construction, shows signs of waning growth; slowing down in the first quarter of the current fiscal (on year–on-year basis) to 8.9 per cent compared to 9.2 per cent in the quarter 4 of 2014–15. The outlook for the second half remains mixed.

• Inflation has declined over the period of the last one and half years. Retail inflation declined by an average of 1.4 percentage points between 2014–15:H1 and 2015–16:H1. Wholesale Price Index (WPI) inflation fell sharply, averaging 4.1 per cent (y-o-y) in the same period. Despite moderating inflation, inflation expectations continue to be high and inflation volatility shows signs of increasing, post the inflation-targeting regime.

• On the fiscal front, performance during the first half of FY16 is largely commendable with all key parameters for the first half of FY15 comparing favourably with the comparable period last fiscal. On the external front the first half has not been good and prospects for recovery remain poor in the rest of the year. The period April–September 2015–16 has posted a sharp year-on-year decline of 17.6 per cent in merchandise exports over the corresponding period of 2014–15 (55.5 per cent). Merchandise imports decreased 14.2 per cent in April–September 2015–16 compared with a decline of 1.6 per cent in the corresponding period of 2014–15.

Dr Pronab Sen, Chairman, National Statistical Commission chaired the sessions. The presentation of the Mid-Year Review was followed by Dr D B Gupta from NCAER presenting his paper on the opportunities to transform the urban scenario with new policies and programmes while Ms Vineeta Dixit presented her paper that examines the policy utility and challenges of J.A.M for the delivery of public services.

The Mid-Year Review of the Indian Economy was started at the India International Centre (IIC) in 1976 by Dr Malcolm S. Adiseshiah. Dr Adiseshiah was one of India’s most distinguished economists and educationists, Life Trustee of IIC, recipient of the Padma Bhushan, founder of the Madras Institute of Development Studies, and one of the key architects of UNESCO’s work on education and technical assistance. Now conducted in collaboration with the Malcolm and Elizabeth Adiseshiah Trust, Chennai, the Review has been presented by many distinguished Indian economists since Dr Adiseshiah’s passing away and remains an apex event on IIC’s programme schedule. NCAER has presented this Review for the fifth successive year now.

The Presentations were Webcast Live.