Analysis of the President's Address to Parliament in 2020
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Analysis of the President’s Address to Parliament in 2020 The President of India, Mr. Ram Nath Kovind, addressed Parliament on January 31, 2020.1 In his address, he outlined the major policy priorities of the central government. This note highlights some items outlined in the President’s Address and the current status of the initiatives undertaken with respect to these items based on data available till January 18, 2021. Data sources have been indicated in the end notes. Policy Priority Current Status Economy and Finance India is on the way to becoming a five trillion- ▪ As per International Monetary Fund, India was the sixth largest economy in 2020 in terms of GDP at current prices, which was estimated to be USD 2.59 dollar economy. trillion.2,3 The growth rate for GDP is estimated to decline to -7.7% in 2020-21 compared to 4.2% growth in 2019-20. The government has stated that the COVID-19 pandemic and lockdown measures implemented since March, 2020 have impacted key economic activities. The Central Statistical Organisation projects GDP for 2020-21 to be Rs 134.4 lakh crore, which at the current exchange rate (INR 72.9/USD) is 1.84 trillion dollars.6 Table 1: Growth rate of Agriculture, Manufacturing, and Services sectors (2011-12 prices)4,5,6 Growth Rate 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Agriculture 4.8 5.4 7.9 5 2.1 3.4 3.4 Manufacturing 6.5 7.1 8 6.7 7.6 0.03 -9.4 Services 9.6 9 8.5 8.6 7.6 3.6 -21.4 GDP 7.4 8 8.2 7.2 6.8 4.2 -7.7 Note: Agriculture includes agriculture, forestry, and mining; manufacturing includes manufacturing, construction, and electricity and water supply; and services includes trade, transport, and financial, real estate, and defence services. Inflow of Foreign Direct Investment (FDI) is ▪ FDI: FDI inflows during the first half of 2020-21 (Apr-Sep) stood at USD 30 billion, as compared to USD 26 billion and USD 22.7 billion for the same period increasing. in 2019-20 and 2018-19 respectively.7,8,9 Table 2: FDI inflows between 2015-16 and 2020-217 Parameter 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (up to of September) FDI inflows (in USD billion) 40 43.47 44.85 44.36 49.97 30 % growth 35% 9% 3% -1% 13% - Foreign exchange reserves have reached a ▪ Foreign Exchange Reserves: As of January, 2021, foreign exchange reserves stood at USD 585 billion, 27% higher than reserves of USD 467 billion in historical high of over USD 450 billion. January, 2020. Table 3: Foreign exchange reserves as of January each year10 Parameter 2016 2017 2018 2019 2020 2021 Foreign exchange reserves (in USD billion) 349 360 414 397 461 585 % change from previous year 8.4% 3.2% 15.0% -4.1% 16.1% 26.9% ▪ Foreign Trade: Between April to December 2020, India’s exports declined by 12.65% over the same period in 2019, and stood at USD 348.49 billion; whereas, imports declined by 25.8% and stood at USD 343.2 billion.11 Shruti Gupta January 27, 2021 [email protected] PRS Legislative Research ◼ Institute for Policy Research Studies rd 3 Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi – 110002 Tel: (011) 43434035 ◼ www.prsindia.org Analysis of the President’s Address to Parliament in 2020 PRS Legislative Research Policy Priority Current Status 121 crore people have Aadhaar cards. ▪ As of January 18, 2021, 127.8 crore Aadhaar cards have been issued (96% of India’s population based on the projected population for the year 2020). 12,12 Bank accounts have been created for 38 crore ▪ As on January 6, 2021, 41.6 crore accounts have been opened under the Pradhan Mantri Jan Dhan Yojana since its launch in 2014 with a total deposit poor persons. amount of Rs 1.35 lakh crore. 65% of these accounts have been opened in rural areas.13 Table 4: Accounts opened under Jan Dhan Yojana13 Parameter Jan 2017 Jan-18 Jan-19 Jan-20 Jan-21 Number of Accounts opened (in crore) 6.84 3.72 3.1 3.68 3.76 Cumulative amount of deposits held (in Rs lakh crore) 0.67 0.74 0.87 1.11 1.35 Implementation of 450 schemes has been ▪ Between April, 2020 and January, 2021, Rs 2.94 lakh crore has been disbursed through the DBT programme to beneficiaries under 316 schemes. This has linked to Direct Benefit Transfers (DBT) to led to savings of Rs 1.78 lakh crore according to government estimates.14 prevent leakages. Table 5: Amount disbursed through DBT14 Parameter 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (as of January, 2021) Number of Beneficiaries (crore) 31.2 35.7 124 129.2 144.7 149 Amount disbursed through DBT (Rs crore) 61,492 74,689 1,90,871 2,32,105 3,81,631 2,95,546 Nearly Rs 3.5 lakh crore has been recovered ▪ A time-bound process for resolving insolvency has been established under the Insolvency and Bankruptcy Code, 2016. The Insolvency and Bankruptcy by banks and other institutions under the Board of India noted that the economic impact of the COVID-19 pandemic has led to significant financial stress among borrowers and impacted the potential Insolvency and Bankruptcy Code, 2016 (IBC). viability of several firms.15 The Code was amended to: (i) prohibit the initiation of insolvency proceedings for defaults arising between March, 2020 and March, 2021, and (ii) increase the threshold for initiating an insolvency resolution process from one lakh rupees to one crore rupees.16,17,18,19,20 ▪ Between January and September, 2020, 4,008 cases have been admitted under the Corporate Insolvency Resolution Process, of which 1025 (26%) have ended in orders for liquidation, 277 (7%) have ended in approval of resolution plans, and 1,942 (49%) cases are ongoing. The realisable value of assets for 277 corporate debtors rescued was Rs 1.02 lakh crore, though they owed Rs 4.89 lakh crore. Rs 1.97 lakh crore was recovered from resolution. Industry India’s rank in the Ease of Doing Business ▪ The World Bank suspended the Annual ‘Doing Business’ Report in August, 2020 in light of reported irregularities which are currently being investigated.21 In Index improved from 142 in 2014 to 63 in the last report, released in October 2019, India ranked 63 out of 190 countries. India was among the top ten countries showing improvement, primarily 2020. because of changes related to starting a business, obtaining construction permits, trading across borders, and resolving insolvency. ▪ The central government notified a list of 180 reforms under the Business Reform Action Plan (BRAP) towards enabling Ease of Doing Business in 2018 which were to be implemented by 2019.22 In the state-wise rankings for achievement under BRAP, Andhra Pradesh, Uttar Pradesh and Telangana were the top performers. Tripura, Sikkim and Odisha placed last.23 India has moved from 108th to 52nd position ▪ India was ranked 48th by the World Intellectual Property Organisation in its annual Global Innovation Index in 2020. The ranking measures innovation in the Global Innovation rankings between performance of 131 countries based on indicators including political environments, education, and infrastructure.24 2015 and 2020. Number of patents granted in ▪ As of November, 2020, 17,148 patents were granted and 1.35 lakh trademarks were filed by the Controller General of Patents, Designs and Trade Marks in the country has increased four times between 2020-21. The number of patents granted is 2.8 times higher than the number of patents granted in 2015-16 and the number of trademarks filed is 3.2 times 2015 and 2020. Trademark registrations have higher. increased five-fold. 2 Analysis of the President’s Address to Parliament in 2020 PRS Legislative Research Policy Priority Current Status Table 6: Patents filed between 2015-16 and 2020-21 (till November, 2020)25,26,25,26 Parameter 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 (as of November, 2020) Number of Patents Filed 42,763 46,904 45,444 47,854 50,659 37,660 Number of Patents granted 5,978 6,326 9,847 13,045 15,283 17,148 % of Patents granted 14% 13.5% 21.7% 27.3% 30.2% 45.5% Number of Trademarks Filed 2,10,501 2,83,060 2,78,170 2,72,974 3,23,798 2,78,023 Number of Trademarks registered 41,583 65,045 2,50,070 2,00,913 3,16,798 1,35,289 % of Trademarks registered 19.8% 23% 90% 73.6% 97.8% 48.7% India has the world’s third largest start-up ▪ Under the scheme, recognised start-ups are eligible to avail benefits such as self-certification under labour and environmental compliances, public ecosystem. 27,000 start-ups have been procurement relaxations, intellectual property rights support, and tax incentives.27 As of September 2020, 36,106 start-ups have been recognised by the recognised under the Start-up India government under the Start-Up India Campaign, since its launch in 2016. As per the government, 4.2 lakh jobs have been created through the Campaign.28 Campaign. Table 7: Start-ups recognised under the Start-up India Campaign27,28 Parameter 2016 2017 2018 2019 2020 (as of September) Start-ups recognised 503 5,444 8,918 11,754 36,106 Jobs reported (in thousand) - 49 95 156 422 More than 5.5 crore new entrepreneurs have ▪ Pradhan Mantri MUDRA Yojana was launched in 2015 for providing loans of up to Rs 10 lakh to the non-corporate, non-farm small/ micro enterprises.