The Economic Survey, a yearly report released by the finance ministry ahead of the national budget on Monday, said gross domestic product (GDP) would expand between 7 per cent and 7.75 per cent in 2016-17.
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By D K Aggarwal The Pre-Budget Economic Survey for 2015-16 by the Indian government stated that India would remain the world’s fastest growing major economy and a “haven of stability” in a fragile global economy.
India is expected to accelerate to 8-10 percent growth rate in two to five years on account of structure reforms and encouraging competitive federalism.
India is among the highest-growing economies, but it urgently needs to push reforms like GST, phase out subsidies for the “better-off”, stick to fiscal deficit targets and widen tax base, the Survey said.
The report, written by economic adviser Arvind Subramanian, said that “credibility and optimality” argued in favor of sticking to next year’s deficit target of 3.5 percent of GDP, but left room for an upward revision.
Surjewala said that while the Survey says that Government is relieved that it has met its fiscal deficit target of 3.9 percent, what is actually revealed is that the government has missed its disinvestment targets by a mile.
India’s trade deficit in April to January period of the fiscal declined to $106.8 billion from $119.6 billion in the corresponding period of 2014-15.
India’s current plan aims to shrink the gap by 0.4 percentage points in the year starting April 1, to 3.5 percent from an estimated 3.9 percent.
In contrast, the Survey of a year ago had project 8.1-8.5 per cent growth for 2015-16.
Fisheries constitute about 1 % of the GDP of the country and 5.08 per cent of agriculture GDP.
The Goods and Services Tax bill will mark an unprecedented reform measure.
“In long run, if India is to stay “on the line” as its per capita income grows, it will need to build fiscal capacity”.
– India stable amid gloomy global markets.
However, there is a need to revisit medium-term fiscal framework, he said. In 2014-15, although the rupee declined in value against the dollar by 1 per cent, it became stronger against other currencies, it said.
However, minister for state for finance Jayant Sinha, in reply to a question in the Lok Sabha on Friday, said that the government has taken steps to decrease stress in all sectors of the industry which will eventually decrease stress in the banking system.
Even if private sector wage increases, the existence of substantial capacity underutilisation suggests that companies might find it hard to pass the cost increase onto consumer prices.
It called for more easing of interest rates in view of current low inflation to help industry, implementation of the Goods and Services Tax and bringing down subsidies.
“On the education front, the declining educational outcomes reflected in lower reading levels in both public and private sector schools are areas of concern”, the survey said.
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Elaborating on the economic fundamentals leading to steady growth, the survey said low inflation has taken hold and confidence in price stability had improved.
