Economic Survey Volume II forecasts 7.5% growth

Representative Image

Offering hope that the RBI will ease its monetary policy, the survey called for more interest rate cuts to boost the country's economy.

Drafted by Chief Economic Advisor Arvind Subramanian, the survey was tabled in the Parliament by Finance Minister Arun Jaitley in the Lok Sabha on the last day of the monsoon session.

Besides, it warned of fiscal slippages as a series of deflationary impulses are weighing on an economy yet to gather its full momentum. It noted that the economy underwent a transition-possibly, structural and permanent-from high to low inflation in the last three years.

The Finance Ministry on Friday tabled the second volume of the Economic Survey for the financial year 2016-17, which stated that it will be hard for the government to achieve real gross domestic product growth of 6.75%-7.5% in this financial year.

Chief Economic Adviser Arvind Subramanian (right) with National Affairs Editor P Vaidyanathan Iyer at the The Indian Express office. "Has cash come down in the economy?" It states that there may be a slowdown in growth in real activity in indicators such as Gross Domestic Product (GDP), Index of Industrial Production (IIP), credit, investment, and capacity utilisation since first quarter of 2016-17. "It seems something quite substantial has been achieved", Subramanian said. He further said that 5.4 lakh additional taxpayers were added during post demonetisation, November 8-March 31. "So whether this increase in taxpayer will lead to increased taxes remains to be seen", Subramanian said. "Such waivers would be deflationary and impact demand by up to Rs 1.14 lakh crore". It said, "This growth suggested that the economy was relatively resilient to the large liquidity shock of demonetisation which reduced cash in circulation by 22.6% in the second half of 2016-17". There will be downside risks to FY18 GDP forecast of 6.75-7.5%, said the Survey.

Signalling price stability, the Economic Survey-II on Friday said retail inflation at the end of March 2018 will remain within Reserve Bank of India's (RBI) medium term target of 4%.

As per the survey, the Union Budget for 2017-18 opted for a gradual fiscal consolidation path: the fiscal deficit is expected to decline to 3.2 percent of GDP in 2017-2018. These include farm loan waivers, real exchange rate appreciation, increasing stress to balance sheet in power, telecom, agricultural stress and of course all these coupled with challenges from implementation of the GST.

"The survey is a comprehensive and forthright document which lucidly and cogently articulates the current challenges and offers credible solutions for restoring the economy on its potential growth path", CII Director General Chandrajit Banerjee said in a statement. "Cyclical conditions, then, suggest that the policy rate should actually be below-not 50-100 basis points or so above-the neutral rate. The neutral rate. The conclusion is inescapable that the scope for monetary easing is considerable", the Survey said.

To prop up agriculture sector, he prescribed remunerative minimum support prices (MSPs) for crops backed by effective procurement. Also, he said, restrictions on stock limits and exports that impede realisation of better prices should be eliminated. Since February 2017, the rupee has appreciated by about 1.5 per cent. "Demonetisation should continue to pay dividends over time as the impetus towards formalising the economy and expanding tax base that it has set in motion continues". Both these sectors need some immediate steps like resolution of the bank non-performing assets (NPAs) and a pragmatic approach for the "twin balance sheet" problem, Rawat said.

Related News:

  • 28 killed in Egypt train crash, 80 injured

    28 killed in Egypt train crash, 80 injured

    The collision involved one train that had been traveling from Cairo and another from Port Said, according to Al-Ahram newspaper. The dead and injured were initially placed on blankets by the sides of the tracks amid farmland on the outskirts of Alexandria.
    Mosque bombing an act of terrorism, Minnesota governor says

    Mosque bombing an act of terrorism, Minnesota governor says

    Mark Dayton (D) on Sunday visited the center and called the bombing "an act of terrorism". No injuries were reported after the building was heavily damaged at 5:05 a.m.
    Income Tax Department Deactivated 11 Lakh PAN Cards ; Know your PAN Status

    Income Tax Department Deactivated 11 Lakh PAN Cards ; Know your PAN Status

    Now you will direct to next page, and you need to provide information such as your name, status, date of birth and mobile number. If there is more than one PAN number registered with the same details, you will see a notification regarding the same.
  • Snap Inc. (NYSE:SNAP) Given

    Snap Inc. (NYSE:SNAP) Given "Buy" Rating at Drexel Hamilton

    Analysts such as Ralph Schackart at William Blair have suggested investors should wait it out as Snap captures more interest. The company earns some revenue from branded or sponsored filters and lenses, but the bulk comes from advertisements.
    AIADMK merger issue: Apt word for Dinakaran is '420', says TN CM

    AIADMK merger issue: Apt word for Dinakaran is '420', says TN CM

    If Dinakaran were to mobilise support - 37 MLAs were said to be backing him - it would endanger the Palaniswami government. But negotiations appear to be stuck at the Panneerselvam demand of sacking Sasikala from the party and government.

    Sanchez to miss start of season

    Players like Mesut Ozil, Aaron Ramsey and Per Mertesacker are also uncertain for the Leicester clash. When asked if the club had any others for the Chilean, Wenger replied "I can not tell you that.
  • Natural disaster  in Sichuan, China Kills 19

    Natural disaster in Sichuan, China Kills 19

    The epicentre of the tremor was in Ngawa prefecture, largely populated by ethnic Tibetans, many of whom are nomadic herders. The number of people injured during a powerful natural disaster in China's southwestern Sichuan province has grown to 493.
    PlayStation 4 Firmware Update 5.0 Will Add 1080p Twitch Streaming, Other Improvements

    PlayStation 4 Firmware Update 5.0 Will Add 1080p Twitch Streaming, Other Improvements

    Why the change? Sony's documentation states this is to "encourage more sharing of content and more interactions". The update is also going to include several minor changes such as support for additional languages and more.
    Atlantic high pressure to affect weekday weather

    Atlantic high pressure to affect weekday weather

    The rain and clouds will help keep temperatures slightly lower than is typical for this time of year. Scattered thunderstorms are expected on Tuesday through Thursday with the front in the area.
  • Mylan NV (NASDAQ:MYL) Shares Bought by Aperio Group LLC

    Mylan NV (NASDAQ:MYL) Shares Bought by Aperio Group LLC

    In related news, President Rajiv Malik sold 25,000 shares of the stock in a transaction that occurred on Friday, June 9th. Following the transaction, the insider now owns 140,653 shares in the company, valued at approximately $5,626,120.
    Trump fires off new Twitter attack

    Trump fires off new Twitter attack

    Mr Trump spent his 200th day in office at his golf course in New Jersey in what White House officials called a "working vacation". Those numbers have soured in recent months, particularly among Trump's core supporters.
    Alibaba, Marriott teaming up to court Chinese travelers

    Alibaba, Marriott teaming up to court Chinese travelers

    The deal includes direct marketing to Alibaba's existing customer base and open up the loyalty programs of the two travel giants. But Alibaba is also working to expand the way it interacts with consumers beyond being a mere website where people buy products.


Most liked

Sports Chelsea Makes £25m Bid for Chamberlain
The north London side have also signed Alexandre Lacazette in a club-record £52m deal from Ligue 1 side Lyon. Oxlade-Chamberlain could soon be making the trip across London to play for the Premier League champions.

Rick Porcello's Immaculate Inning Sets MLB Record For Most In Season
Rays reliever Ryne Stanek gave up singles to Xander Bogaerts and Mitch Moreland to put runners on first and third with no outs. A bad throw by Austin Pruitt (6-3) prevented a possible inning-ending double play on Rafael Devers' chopper to the mound.

Deposed Pakistani Prime Minister Continues March Toward Lahore
The PTI leader further stated that PML-N is not allowing Shehbaz Sharif to take the reigns of the party. He said that most of the PML-N members were of the opinion that party be handed over to Shahbaz Sharif.

McGregor and Mayweather request smaller gloves
Floyd Mayweather hasn't forgotten about the racist comments Conor McGregor made during their worldwide press tour last month. The Mayweather-McGregor bout will be available on Showtime pay-per-view at a cost of $89.95 ($99.95 for high definition).

Senate Majority Leader Mitch McConnell vents about Trump's 'excessive expectations' regarding legislation
McConnell's message to his president, knocked on his heels after a major legislative defeat, is "This time, we'll do it my way". Trump had repeatedly used Twitter to pressurise McConnell to find votes to repeal the health care bill.

Rafael Benitez admits to his frustrations at Newcastle United
But if they are available, the price isn't £20million, the wages are not the same, and the commission of the agents is huge. Rafa Benitez says he's "not happy" after Newcastle United missed out on several transfer targets.

Want to live like a Trump? President's old home is on Airbnb
The house was built by Mr Trump's father, developer Fred Trump, in 1940 and is listed on Mr Trump's birth certificate. Newsday reports that the principal of Paramount Realty USA, Misha Hagani, confirmed the listing's authenticity.

Johns Hopkins Hospital Voted 3rd Best Hospital In US
Massachusetts General Hospital in Boston took the No. 4 spot, and UCSF Medical Center in San Francisco came in No. 5. And they're practically all-encompassing - they include ratings of 25 specialties, conditions and procedures.

As Tillerson Downplays North Korea Threat, White House Continues to Escalate Tensions
Gorka defended Trump's silence on the issue by claiming that the attack may have been a left-wing plot disguised as a hate crime. For the people of Minnesota, whose mosque was attacked on Saturday, however, Trump has nothing to say.

IDF strikes Hamas targets following Gaza rocket attack
Missiles and rockets are periodically fired into Israel, generally by hardline Islamist groups opposed to Hamas. Three injuries were reported، one of them critical، due to a fracture in the skull.

Disney, ESPN to launch multi-sport streaming service in 2018
Big titles coming that year include " Toy Story 4 ", " Frozen 2 ", and the live-action " The Lion King ", CNBC reported . Disney's exclusive deal with Netflix was settled in 2012, but had only come into action a year ago .

Mobile US cuts unlimited plan price for over-55s
It aims to provide them with a proper cellphone plan equipped with unlimited data and more compatible with modern devices. T-Mobile said there are 93 million over-55s in the USA , and 74 percent of these have a smartphone.

Jaguars retain rights to Branden Albert should he play again
Now a short time later, Albert is ready to come back, which complicates matters for a Jaguars team that was forced to move on. On Monday, August 7, team officials met with Albert and mutually agreed to place him on the club's reserve/retired list .

Russian billionaire Roman Abramovich splits from wife
They had five children together and ended their marriage in Russian Federation with no details of the divorce made public. He is known for his love of luxury, owning the world's second-largest yacht and a portfolio of property across the world.

Record Audiences Get Set to Make the 2017 Grand National the Biggest To Date
For some , it will be a case of asking which horses have been at their most impressive this season that will give them the clues as to which Grand National horses to bet on .