Economic Survey 2014-15 Part 6

23)The low ratio of Gross Value Added(GVA) to Gross Value Output(GVO) in manufacturing signifies ,on the one hand, that the sector creates substantial demand for the output of other sectors and, on the other, that Indian manufacturing needs to move up the value chain to improve its contributions to overall GVA.

24)The savings rate(gross domestic savings as a percentage of GDP) reached its historical peak in 2007-08, and then remained volatile with a general downward movement. While private corporate savings steadily declined, household savings witnessed realignment in favour of accumulation of physical assets at the cost of financial savings. The household financial savings need to be raised to keep the saving-investment gap at acceptable levels.

25)Global factors namely persistent decline in crude prices, soft global prices of tradables, particularly edible oil and even coal, helped moderate headline inflation. The tight monetary pressures helped in containing demand pressures, creating a buffer against any external shock and keeping volatility in the value of rupee under check. During the last one year, the rupee remained relatively stable vis-à-vis major global currencies, which too had sobering influence on inflation. Moderation in wage rate growth reduced demand pressures on protein-based items.

26)Two important factors resulting in lower CAD:i) lower trade deficit along with moderate growth in invisibles ii)surge in capital inflows,enabled by higher portfolio investments,FDI and ECBs.

27)For providing efficient advance-price discovery to farmers and enable them to hedge price risk, the Forward Markets Commission should be strengthened and empowered to regulate the markets more effectively(pg 18). The ASER report states that learning levels across the country, whether in public or private schools, have not improved. Clearly, the policy prescription lies in shifting the attention away from inputs to outcomes and focus on building quality education and skill development infrastructure. The Padhe Bharat Badhe Bharat initiative to create a base for reading, writing and math-fluency is a good step in this direction.