Economic Survey 2015-16

Finance Minister Arun Jaitley tables Economic Survey 2015-16 report.

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% y/y

  • Double digit economic growth trajectory now a possibility

  • Economic growth at market prices seen between 8.1 – 8.5 percent in 2015/16 on new GDP calculation formula

  • Total stalled projects seen at about 7 percent 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 percent

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 at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in 2015/16

Subsidies

Overhauling of subsidy regime would pave the way for expenditure rationalisation

Liquidity

Liquidity conditions expected to remain comfortable in 2015/16

Taxation

  • Tax base should widen to over 20% from 5.5% now

  • Need to phase out tax exemptions

  • Property taxation an area needing “urgent attention”

  • Higher property tax rates to check realty speculation

  • Higher property tax to improve local govt finances

External Sector

  • Exports may pick up FY17

  • Headwinds to growth may come from weak global demand

  • Export slowdown may continue for a while

  • FTAs leading to higher imports, exports

  • India must plan for major currency readjustment in Asia

  • India compares favourably with peer economies

  • Foreign demand seen weak

Farm Sector

  • India farm growth seen low for second year in a row

  • La Nina to have positive impact on farm

  • Fertiliser subsidy should shift to direct cash transfer

  • Subsidised fertiliser bag purchase cap to improve targeting

  • Must bring urea under Nutrient Based Subsidy programme

  • Need to rationalise fertiliser subsidy based on inputs, crops

  • Need deft supply management as rabi output seen low

Service Sector

Services sector growth in 2015-16 seen at 9.2%

X
- Enter Your Location -
- or -
Exambin | IBPS SSC UPSC Preparations
Exambin | IBPS SSC UPSC Preparations
Register New Account
Reset Password
Compare items
  • Total (0)
Compare
0
ARE YOU READY? GET IT NOW!
Increase more than 500% of Email Subscribers!
Your Information will never be shared with any third party.
ARE YOU READY? GET IT NOW!
Get Weekly Current Affairs Magazine to your inbox.
Your Information will never be shared with any third party.
CURRENT AFFAIRS THAT MATTERS TO YOU
Get Weekly Current Affairs Magazine to your inbox.
We never share your details.
CURRENT AFFAIRS THAT MATTERS TO YOU
Get Weekly Current Affairs Magazine to your inbox.
We never share your details.