In nine charts we capture the problems plaguing the economy.
At historic lows
In FY20, the real GDP is expected to grow at 5% (slowest since FY09, the year of the global financial crisis) and the nominal GDP is expected to grow at 7.5% (slowest since FY76). Nominal GDP is a proxy for income growth, especially that of corporates. A slowing nominal GDP will eventually lead to low tax collections.
Real and nominal GDP growth rates
Widening deficits
The fiscal deficit of ₹8.08 trillion for April-November is nearly 15% more than the projected amount. The deficit has widened due to dwindling tax revenues, following an economic slowdown. The chart compares projected and actual fiscal deficit between April and November since FY15
State of fiscal deficit
Fiscal deficit Panel_New - Budget 2020-21
Lows across sectors
Gross value added (GVA) across most sectors fell in FY20 compared to FY19, with the manufacturing and construction sectors falling the most. Only the public administration and defence services, mostly fuelled by the government, grew robustly. The table shows the GVA growth.
Sector-wise growth rates
In search of jobs
The number of people in salaried employment has remained stagnant in the last few years. Growth in employment in this period was seen only in the self-employed category, which includes gig workers like Ola/Uber cab drivers. The data were sourced from the CMIE database.
State of employment
Brakes on
Automobile sales in the country declined year-on-year (YoY) by 23.55% in August 2019, the worst drop since 1997-98. While the decline has been moderate since then, sales continue to suffer. The chart shows the YoY change in sale of passenger vehicles (PV), commercial vehicles and two-wheelers (2W).
State of the auto sector
Budget 2021 Panel - Pg 5 - Investor
Loan distress
The NPA ratio of all sectors, except agriculture, saw a reduction in 2019 as compared to 2018. NPAs in the agriculture sector saw an increase of 27.5% in this period. Table shows gross NPAs in ₹ crore in 2018 and 2019 and the % change.
Sector-wise NPAs
Tax reliance
Income Tax has increased substantially as a component of Gross Tax Revenues (GTR) over the last two decades. Corporate tax as a share of GTR grew till 2009-10 but fell thereafter, while the share of indirect tax, which was falling till 2009-10, increased thereafter. Graph traces tax share since FY96.
Share of income tax in total taxes
Budget 2021 Panel - Pg 3 - Tax
Income levels up for tax filers
The gross total income of individuals who filed income tax returns has gone up in the last five years. For instance, 24.7% of taxpayers were earning below ₹2 lakh in 2013-14, while only 7.1% did so in 2018-19. Similarly, the share of income tax payers who earned between ₹4 lakh and ₹10 lakh saw a significant jump. However, it is important to note that only around 7.4% adults in India pay income tax.
Income tax levels
Budget 2021 Panel - Pg 2 - Tax
Bear run
The Sensex fell 2.43% at the end of the day after the budget presentation by the Finance Minister. This is the worst such fall since 2009 (when the Sensex fell nearly 6% points). Stocks in the realty sector fell the most (-8%). Stocks in the IT sector registered a 1.4% increase over the day.
Market ups and downs
Budget 2021 Panel - Pg 4 - Investor
