Economic Survey 2016-17

Thursday, February 9th, 2017

The Economic Survey is out and it has lots of interesting charts and figures about the Indian economy. Here are four of them which we found quite interesting.

 

1. Peak Demographic Dividend

When people generally talk about India, they quite often talk about how its growing middle class is a source of growth. The prevailing assumption is that this demographic dividend has a quite some time to run, maybe a decade or more. However according to the Economic Survey, India will reach its peak demographic dividend within 4 years! As we can see in Figure B above, peninsular India will peak around 2020 while hinterland India will have more time and will peak around 2040. This does not mean that the demographic dividend will turn negative, but that the positive impacts will start slowing down once we cross the peak.

 

 

2. Taxpayers per population

As mentioned in the budget, India has a large number of people who do not pay taxes. We can see the magnitude of this tax evasion in the chart above that compares the number of taxpayers per voting age population across countries.

 

 

3. Access to Banking services

 

Over the last few years, there has been a lot of movement by the government and the regulators to improve financial inclusion for the population. However, despite tremendous improvement of the last few years, India has a long way to go before financial access to all poor is achieved.

 

 

4. Inter-State Migration

 

Historically, migration of people for education and for work has been a phenomenon that accompanies the structural transformation of economies. India is on the move, and the pattern of flows shows people moving from less affluent states to more affluent ones. States like Delhi, Maharashtra, Tamil Nadu, and Gujarat attract large swathes of migrants from the Hindi heartland of Uttar Pradesh, Bihar, and Madhya Pradesh


About the author

Rishad is the founder of Kairos Capital. He started his career with Standard Chartered Wealth Management and has extensive experience in markets, particularly in terms of mutual funds and stocks.

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