Comments
India's economy should grow between 6.75 per cent and 7.5 per cent in the financial year beginning on April 1, Economic Survey, estimated on Tuesday.
The Economic Survey, which sets the scene for Finance Minister Arun Jaitley's fourth annual budget on Wednesday, forecast that Asia's third-largest economy should steady after a hit from the government's shock decision in November to scrap most cash in circulation.
The survey was prepared by the finance ministry's chief economic adviser Arvind Subramanian.
Here are the highlights of the report:
Growth
* 2017/18 GDP growth seen between 6.75 and 7.5 per cent year on year
* GDP growth rate at constant market prices for the current year 2016/17 is placed at 7.1 per cent
* The federal statistics office's estimate of 7.1 per cent growth for 2016/17 likely to be revised downwards
* Service sector is estimated to grow at 8.9 per cent in 2016/17
* Industrial growth rate expected to moderate to 5.2 per cent in 2016/17 from 7.4 per cent in 2015/16
Fiscal Deficit
* Implementation of wage hike, muted tax receipts to put pressure on fiscal deficit in 2017/18
* Need for fiscal prudence for both centre and states for fiscal health of the economy
* Fiscal windfall from low oil prices to disappear in2017/18 - TV channels
Monetary Policy
* Sharp rise in prices in 2017/18 may cap monetary easing headroom
* Market interest rates seen lower in 2017/18 due to demonetisation
Government debt
* Government debt to GDP ratio in 2016 seen at 68.5 per cent down from 69.1 per cent in 2015
Demonetisation
* Remonetisation will ensure that the cash squeeze is eliminated by April 2017
* Supply of currency should follow actual demand and not be dictated by official estimate of desirable demand
* Government windfall arising from unreturned notes should be deployed towards capital spending
Banks
* Suggests setting up public sector asset rehabilitation agency to take charge of large bad loans in banks
* Central agency with government backing could overcome coordination and political issues on bad loans
Taxation
* Income tax rates and real estate stamp duties could be reduced
* Timetable for reducing corporate tax rate could be accelerated
Universal basic income
* Universal Basic Income (UBI) proposal a powerful idea, but not ready for implementation
* UBI an alternative to plethora of state subsidies for poverty alleviation
* UBI would cost between 4 and 5 per cent of GDP
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.