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Malcolm Adiseshiah Mid-Year Review of the Indian Economy, 2016-17
November 5, 2016

India International Centre

NCAER presented the 2016-17 Mid Year Review (MYR) of Indian Economy at this seminar held in New Delhi.  The MYR presents the most comprehensive, independent assessment of the Indian economy as the Indian Government and its Ministry of Finance begin preparation of the FY 2017-18 Union Budget.  


Dr Shekhar Shah opened the seminar delivering his opening remarks, followed by Dr Pronab Sen, Country Director, International Growth Centre’s India Central Programme who was invited to chair the Review. Ms Mythili Bhusnurmath, Senior Consultant, NCAER and Dr Bornali Bhandari, Fellow, NCAER presented the main findings of the Review. The MYR provides an independent stocktaking of the Indian economy’s performance. The Review included two special presentations on ‘New Paradigms for Financial Sector Development in India’ and ‘Healthy Ageing in India: Situation and Challenges’. The first presentation by Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI  assesses the four pillars of the financial sector in India. The second paper by Dr Debasis Barik, Associate Fellow, NCAER examines whether the Indian health delivery system is prepared to tackle the rise in communicable and non-communicable diseases among the elderly as India’s demography changes. During the latter half of the seminar, two invited discussants, Dr Indira Rajaraman, Member, 13th Finance Commission and Dr Shubhashis Gangopadhyay, Research Director, IDF, shared their comments. 



Key highlights of the NCAER’s 2016-17 Mid-Year Review of the Indian Economy are as follows:


GDP Growth: NCAER places overall 2016-17 GDP growth (GDP at market prices), in constant 2011–12 prices, at 7.6%. On one hand, the anticipated improvement in the agricultural sector and the associated increase in rural demand will give an upward push to economic growth. The manufacturing sector is also giving positive signals with the Purchasers’ Managers Index and Index of Industrial Production for core sectors and auto sales going up. The domestic aviation sector growth continues to be robust. However, other service index indicators continue to be muted.  Food inflation is also showing signs of dampening in the latter part of the second quarter.  However, fuel inflation may revive. Although urban demand is predicted to remain strong, external demand continues to be volatile. 


Agriculture: Unlike the past two years, this year witnessed a normalisation in rainfall at just short of the 100% long period average. The actual rainfall measured as an index on the basis of un-irrigated area under foodgrains as weights was 1.5 per cent above its normal level. Consequently, the area under kharif sowing is about 3.5% more than last year, with the sowing of pulses being about 29.1% more than last year. Thus, our estimates show that the output of kharif foodgrains is expected to reflect an increase of 10 per cent to 11 per cent over last year's output of 124 million tonnes.


Industry: The Index of Industrial Production (IIP), a measure of industrial perf