The Economic Survey put forward by Arun Jaitley in the Parliament on Wednesday says that India will have an economic growth of 6.5% to 7.5% in the financial year of 2017-18 beginning from April 1. The Economic Survey sets the stand for the fourth annual budget session for the finance minister Arun Jaitley. It also predicts the implementation of hikes in wages and reduced tax receipts that would put pressure on the fiscal deficit of 2017-18.
The mastermind behind the survey is the finance ministry’s chief economic adviser Aravind Subramanian. The current year fiscal deficit for GDP according to the Central Statistics Office is less than 7.1% according to the Economic Survey. The survey also states that there are challenges which might be an interference in India’s progress. Some of the challenges include property rights and private sectors, deficiency in state capacity and also problems that will be present in essential services and inefficient redistribution.
The important points mentioned in this survey include growth, fiscal deficit, monetary policy, and Demonetization.
Growth:
The GDP for the 2017-18 year is seen between 6.75 – 7.5 percent and the growth rate is also expected to be constant for the current year 2016-17 at 7.1 percent.
Fiscal Deficit:
The pressure points on the fiscal deficit of 2017-18 are mainly the implementation of wage hike and also muted tax receipts.
Monetary Policy:
There is a prediction of a sharp rise in the prices which will act a cap for the monetary headroom. Also, as a result of Demonetisation, there is expected to be lowering of Market interest rates for 2017-18
Universal Basic income:
A strong idea not yet ready for implementing is the Universal Basic Income(UBI.) It is an alternative to the state subsidies and also poverty alleviation. It would cost the GDP almost 4-5%.
Demonetisation:
The cash problem caused by the Demonetisation move is predicted to be solved by the month of April in 2017.
All in all an interesting fiscal year to look forward to according to the Economic Survey.
