Growth to top 8%, inflation shows declining trend in 2014-15 | business | Hindustan Times
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Growth to top 8%, inflation shows declining trend in 2014-15

Finance minister Arun Jaitley tabled the Economic Survey in the Lok Sabha on Friday.

business Updated: Feb 27, 2015 18:09 IST
Finance minister Arun Jaitley

Prime-Minister-Narendra-Modi-has-put-the-manufacturing-sector-at-the-forefront-with-his-Make-in-India-programme-AFP-File-Photo

India's economic survey pegged growth at more than 8% for the next fiscal and said inflation was now declining, while also setting the agenda for reforms needed to further drive the expansion, prune wasteful expenditure and promote productive investment. Here are the highlights of the survey:

Fiscal deficit
*India must meet its medium-term fiscal deficit target of 3 percent of GDP
*Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15
*Govt should ensure expenditure control to reduce fiscal deficit
*Expenditure control and expenditure switching to investment key

Growth
*2015-16 GDP growth seen at over 8 pct year on year
* Double digit economic growth trajectory now a possibility
*Economic growth at market prices seen between 8.1-8.5% in 2015-16 on new GDP calculation formula
*Total stalled projects seen at about 7% of GDP, mostly in private sector

Reforms
*There is scope for big bang reforms now
*India can increase public investments and still hit its borrowing targets

Inflation
*Inflation shows declining trend in 2014-15
*Inflation likely to be below central bank target by 0.5-1 percentage point
*Lower inflation opens up space for more monetary policy easing
*Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control
*Consumer inflation in 2015-16 likely to range between 5 - 5.5%

Fiscal consolidation
*Govt remains committed to fiscal consolidation
*India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline
*Outlook for external financing is correspondingly favourable

Current account deficit
*Estimated to fall 1% of GDP in coming fiscal year
Subsidies
*Overhauling of subsidy regime would pave the way for expenditure rationalisation
Liquidity
*Liquidity conditions expected to remain comfortable in 2015-16