Chief Economic Adviser Arvind Subramanian, the author of the Survey, said well-off individuals should be taxed irrespective of the source of income.
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However, the survey points out that the growth in the agriculture sector in 2015-16 continued to be lower than the average of the last decade, mainly on account of it being the second successive year with lower-than-normal monsoon rains.
“The (Indian) market has rebounded time and time again, and it is hoped that as the global financial markets settle down, India can become the leading investment owing to its robust macroeconomic fundamentals”, as per the 2015-16 report card of the state of the economy tabled by Finance Minister Arun Jaitely in Parliament today.
“If the world continues to grow at close to 3 per cent over the next few years rather than returning to the buoyant 4-4.5 per cent recorded during 2003-2011, India’s medium-term growth trajectory could well remain closer to 7-7.5 per cent”, the survey said.
“Further, the implementation of the Pay Commission recommendations and the One Rank One Pay (OROP) scheme will put an additional burden on expenditure”, the survey explained.
The country’s current account deficit (CAD) during April-September period of the fiscal was at 1.4 percent of the GDP.
“Oil prices have plunged in the first two months of 2016, as have some commodity prices, suggesting that input prices are likely to be lower next fiscal year”.
Invoking the Charkravyuha legend of the Mahabharata – the ability to enter but not exit – the Survey said India has made great strides removing the barriers to the entry of firms, talent, and technology into the economy. “Further, the loan-to-value ratio has been increased to 90 per cent for loans up to Rs 30 lakh”, it said.
“Accelerated structural reforms at the Centre, the dynamism of competitive federalism, and good economics being good politics could all combine to maintain the fundamental promise that is India”, the Survey said. Also tax exemptions raj which often amount to redistribution toward the richer private sector will also need to be reviewed and phased out. Central and state governments have come together to address problems related to the health of distribution companies and the debt overhang problem via the Ujwal DISCOM Assurance Yojana (UDAY).
Globally, aluminum prices like other metal prices are cyclical and though it is hard to forecast when they will begin to move upwards, the trend is expected to change when world industrial growth improves, it added. It generates significant income and employment owing to large forward and backward linkages through creation of demand in the input sectors and real estate services. Being the main driver of the economy, the sector contributed about 69 per cent of the total growth during 2011-12 to 2015-16 and in the process expanding its share in the economy by four percentage points from 49 to 53 per cent.
It says the government will meet its fiscal deficit target of 3.9 per cent of GDP.
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The report called India “a haven of stability” in a gloomy worldwide landscape but, as Group of 20 finance ministers gathered for talks in Shanghai, warned too of possible currency turmoil in Asia after China’s recent devaluation.
