Economic Survey 2016-17 Reviewed by Momizat on .   India's economy should grow between 6.75 percent and 7.5 percent in the financial year beginning on April 1, 2017 according to the Economic Survey placed   India's economy should grow between 6.75 percent and 7.5 percent in the financial year beginning on April 1, 2017 according to the Economic Survey placed Rating: 0
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Economic Survey 2016-17

Bhavani

 

India’s economy should grow between 6.75 percent and 7.5 percent in the financial year beginning on April 1, 2017 according to the Economic Survey placed before the Parliament today in sequel to the annual budget being presented on Wednesday.

Some of the highlights of the Economic Survey:

GROWTH
* 2017/18 GDP growth seen between 6.75 and 7.5 percent year on year
* GDP growth rate at constant market prices for the current year 2016/17 is placed at 7.1 percent
* The federal statistics office’s estimate of 7.1 percent growth for 2016/17 likely to be revised downwards
* Service sector is estimated to grow at 8.9 percent in 2016/17
* Industrial growth rate expected to moderate to 5.2 percent in 2016/17 from 7.4 percent in 2015/16
* The agriculture sector is estimated to grow at 4.1 percent in 2016/17 as opposed to 1.2 percent in 2015/16

FISCAL DEFICIT
* Implementation of wage hike, muted tax receipts to put pressure on fiscal deficit in 2017/18
* Need for fiscal prudence for both centre and states for fiscal health of the economy
* Fiscal windfall from low oil prices to disappear in 2017/18 – TV channels

INFLATION
* The average consumer price index (CPI) inflation rate declined to 4.9 percent in 2015/16 from 5.9 percent in 2014/15
* CPI-based core inflation has remained sticky in the current fiscal year averaging around 5 percent
* Oil prices, seen rising by one-sixth in 2017/18 over 2016/17 prices, could dampen India’s economic growth

DEMONETISATION
* Remonetisation will ensure that the cash squeeze is eliminated by April 2017
* Supply of currency should follow actual demand and not be dictated by official estimate of desirable demand
* Government windfall arising from unreturned notes should be deployed towards capital spending

GOVERNMENT DEBT
* Government debt to GDP ratio in 2016 seen at 68.5 percent down from 69.1 percent in 2015

BANKING
* Suggests setting up public sector asset rehabilitation agency to take charge of large bad loans in banks
* Central agency with government backing could overcome coordination and political issues on bad loans

TAXATION
* Income tax rates and real estate stamp duties could be reduced
* Timetable for reducing corporate tax rate could be accelerated

UNIVERSAL BASIC INCOME
* Universal Basic Income (UBI) proposal a powerful idea, but not ready for immediate implementation
* UBI an alternative to plethora of state subsidies for poverty alleviation; UBI would cost between 4 and 5 percent of GDP

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