Key takeaways from Economic Survey: GDP to grow at 7-7.5% in 2016/17
India expects its economy to grow 7-7.5% in the fiscal year to March 2017, the Economic Survey report said on Friday, ahead of the presentation of the annual budget by finance minister Arun Jaitley on Monday.
India expects its economy to grow 7-7.5% in the fiscal year to March 2017, the Economic Survey report said on Friday, ahead of the presentation of the annual budget by finance minister Arun Jaitley on Monday.
The economic survey, the basis for Jaitley’s budget for the fiscal year starting April 1, projected India to grow 8% in the next couple of years.
The survey was prepared by the finance ministry’s chief economic adviser Arvind Subramanian.
Following are the highlights of the report:
Fiscal deficit
* 2015/16 fiscal deficit seen at 3.9% of GDP seems achievable
* 2016/17 expected to be challenging from fiscal point of view
* Credibility and optimality argue for adhering to 3.5% of GDP fiscal deficit target
* Time is right for a review of medium-term fiscal framework
Inflation
* CPI inflation seen around 4.5% to 5% in 2016/17
* Low inflation has taken hold, confidence in price stability has improved
* Expect RBI to meet 5% inflation target by March 2017
* Low inflation has taken hold, confidence in price stability has improved
Current account deficit
* 2016/17 current account deficit seen around 1-1.5% of GDP
Taxes
* Proposes widening tax net from 5.5 percent of earning individuals to more than 20%
* Tax revenue expected to be higher than budgeted levels in FY15/16
Banking & corporate sector
* Estimated capital requirement for banks likely around 1.8 trln rupees by 2018/19
* Corporate, bank balance sheets remain stretched, affecting prospects for reviving private investments
* Underlying stressed assets in corporate sector must be sold or rehabilitated
* Govt could sell off certain non financial cos to infuse capital in state-run banks
* Govt proposes to make available 700 bln rupees via budgetary allocations during current, succeeding years in banks