
## Vital Stats State Of The Economy 2016-17 The Union Budget For 2017-18 Will Be Presented On February 1, 2017.  In This Context, We Present Data Regarding The State Of The Indian Economy In 2016-17, Across Indicators Such As Gross Domestic Product, Inflation, And Current Account Deficit. Cso Estimates Gdp To Grow At 7.1% In 2016-17 (Not Accounting For The Effect Of Demonetisation)

 
The gross domestic product (GDP) growth estimate of 7.1% in 2016-17 is lower than the 7.6% growth in 2015-16. Note that this does not account for the impact of demonetisation.  The fall in growth rate may be attributed to a slower growth in the manufacturing and construction sectors.  However, GDP has been growing over the past few years, from 5.3% in 2012-13 to 7.3% in 2014-15.   
 
On the other hand, the agriculture sector which has been witnessing low growth over the past few years, is estimated to grow at 4.1% in 2016-17.  Growth in the manufacturing sector is estimated at 7.4%, and in the services sector, at 8.8%.   

## Retail Inflation Lowest In 10 Years, At 3.4% In December 2016; Food Inflation At 1.4%

 Note: Retail inflation in calculated as change in consumer price index. 

 
Retail inflation has been declining over the past few years.  It has dropped from 8.3% in 2012-13 to 4.9% in 2015-16, owing to a fall in the prices of food and oil.  
 
Over the past few months, retail inflation fell from 5.5% in April 2016 to 3.4% in December 2016.  Food inflation, which accounts for 54% of the retail inflation basket, fell from 6.3% to 1.4% during the same period.  This is mainly owing to a fall in the prices of vegetables and pulses, which decreased by 19.6% and 35.8% respectively.   

## Industrial Production (Iip) Grew At 3.1% In 2015-16; Average Iip Growth In 2016-17 (Apr–Nov) Was 0.4%

 
Index of Industrial Production (IIP) measures the level of production of sectors such as manufacturing, electricity and mining.  IIP has increased over the past few years, 
from 1.1% in 2012-13 to 3.1% in 2015-16. 
 
Recently, IIP increased from -0.8% in April 2016 to 5.7% 
in November 2016, with a low of -2.5% in July 2016.   
 
 
While electricity production decreased from 14.6% in April 2016 to 8.9% in November 2016, that of the manufacturing and mining sectors saw an increase over this period, from -3.1% to 5.5% and from 1.4% to 3.9% 
respectively. 
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## Fiscal Deficit Estimated At 3.5% Of Gdp In 2016-17; Revenue Deficit At 2.3%

 
The Fiscal Responsibility and Budget Management Act, 2003 (FRBM) requires the government to reduce its fiscal deficit to 3% of GDP and eliminate revenue deficit by 
March 2018.  A higher deficit implies a higher borrowing requirement and future debt repayment obligation for the 
government. 
 
Fiscal deficit indicates the borrowings of the government used to finance its expenditure.  It reduced from 6.4% of GDP in 2009-10 to an estimated 3.5% in 2016-17.   
 
 
Revenue deficit indicates the excess of revenue expenditure over revenue receipts, and is used to fund the 
government's expenditure that does not provide returns.  
This deficit has reduced from a peak of 5.2% of GDP in 2009-10 to an estimated 2.3% in 2016-17. 
Note: Figures for 2015-16 and 2016-17 are revised and budget estimates, respectively. 

## Current Account Deficit On A Decline, From Usd 88 Billion In 2012-13 To Usd 22 Billion In 2015-16

 
Current account indicates the foreign transactions of a country.  A deficit in the current account implies that 
imports of a country exceed its exports.   
 
India's current account deficit for 2015-16 was USD 22 billion.  The decline in the current account deficit has been mainly owing to a lower trade deficit on account of 
higher exports.   
 
Trade deficit in the first half of 2016-17 (April– September) was USD 49.5 billion, compared to USD 71.3 
billion in the first half of 2015-16.   

## Tax To Gdp Ratio Of The Central Government At 10.3%; 5.6% From Direct Taxes And 4.7% From Indirect Taxes

Sources: All data compiled from Ministry of Statistics and Programme Implementation, Reserve Bank of India, Economic Survey 2015-16, and Ministry of Finance: Indian Public Finance Statistics 2015-16. DISCLAIMER: This document is being furnished to you for your information.  You may choose to reproduce or redistribute this report for non-commercial purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research ("PRS").  The opinions expressed herein are entirely those of the author(s).  PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are accurate or complete.  PRS is an independent, not-for-profit group.  This document has been prepared without regard to the objectives or opinions of those who may receive it. 

 
The tax to GDP ratio of a country reflects the proportion of economic activity translating into tax collections for the government.  It depends on various factors such as tax 
rates, number of taxpayers and tax exemptions.   
 
The tax to GDP ratio more than doubled from 4% in 1951 
to 10% in 1991.  In the last five years, it has stayed close 
to 10%. 
 
In 2015-16, the tax to GDP ratio was 10.3% for the central government and 17.2% for the centre and states combined.  In comparison, the combined tax to GDP ratio in other BRICS countries was higher - Brazil (35.6%), South Africa (28.8%), Russia (23%), and China (19.4%). 