Economic Survey: GDP growth seen lower at 6.75-7.5% in 2017-18

K. R. Srivats New Delhi | Updated on January 12, 2018 Published on January 31, 2017


The Finance Minister Arun Jaitley on Tuesday tabled the Economic Survey 2016-17 in the lower house.

The Economic Survey -- a flagship annual document of the Finance Ministry -- is a report card on the economy during the ongoing fiscal. It also indicates the Government's priorities and thrust areas for the upcoming Budget on Wednesday.

The Lok Sabha was later adjourned for the day.

The Indian economy is projected to grow 6.75-7.5 per cent in 2017-18 post demonetisation, the Survey said.

It also said the adverse impact of demonetisation on GDP growth will be transitional.

The Economic Survey has highlighted that once the cash supply is replenished, which is likely to be achieved by end-March 2017, the economy would revert to the normal.

The Indian economy is expected to slow down significantly in the current fiscal in the wake of demonetisation. The Central Statistics Office (CSO) had recently pegged the advance estimates of 2016-17 at 7.1 per cent.

The International Monetary Fund (IMF) had recently scaled down India's growth projection for 2016-17 to 6.6 per cent from 7.6 per cent forecast earlier.

The Indian economy grew 7.6 per cent in 2015-16 and at 7.2 per cent in 2014-15.

Demonetisation Impact


Soumyajit Niyogi, Associate Director- Credit & Market Research, India Ratings, Mumbai

“One surprising element from the report is that the GDP projection range means they are not expecting much pick-up and are expecting stable growth. The short synopsis has not talked about any support for monetary policy easing. They are not expecting any significant easing from the RBI. Also, now they have shifted the direction from a twin deficit problem to a twin balancing problem with regard to stressed corporate debts and high NPAs in banks. So twin deficit problem is not an intrinsic issue anymore, while they have recognised the twin balancing problem as a significant issue to be sorted out.”

Achin Goel, Head of Wealth Management, Bonanza Portfolio, Mumbai

“The challenge will be to keep the fiscal deficit under 3.5 per cent. We expect inflation should be around 6 per cent, it will be heading to that level. The RBI shouldn't cut the interest rates in the next policy meeting. We are already at a low interest rate regime. The kind of spending we have to see, we haven't yet seen. So cutting interest rate would not add anything to that.”

Varun Khandelwal, Managing Director, Bulleo Capital, Delhi

“Broadly, the economic survey seems to be quite sensible. Assumptions on GDP and inflation are reasonable. On GDP my estimates are about 25 basis points lower. Fiscal deficit will be a moving target due to uncertainty coming in from GST in the next fiscal year. Monetary policy will be biased towards moderate easing. I expect cumulative cuts of 25 to 50 basis points this calendar year. Low inflation expectations, recent pass-through of interest rates by banks and a demonetisation driven slowdown - all these factors allow room for rate cuts by the RBI.”

Samrat Dasgupta, CEO, Esquire Capital Investment Advisors, Mumbai

“There is a lot of uncertainty regarding GST and demonetization, and they have highlighted the risks to growth because of global trade tensions and GST collection. So its a balanced survey - it's not very optimistic nor very pessimistic. There may be a 25 bps cut (in the upcoming monetary policy review), but it will also depend on what the U.S. does.”

Published on January 31, 2017
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