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Economic Survey predicts growth of 6.75-7.5% and other highlights

By
Arun Jaitley

New Delhi: India's economy should grow between 6.75 percent and 7.5 percent in the financial year beginning on April 1, a government report forecast on Tuesday.

The Economic Survey, which sets the scene for Finance Minister Arun Jaitley's fourth annual budget on Wednesday, also said the implementation of wage hikes and muted tax receipts would put pressure on the fiscal deficit in 2017/18.

The survey was prepared by the finance ministry's chief economic adviser Arvind Subramanian. 

Here are the highlights of the report:

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

Monetary Policy

  • Sharp rise in prices in 2017/18 may cap monetary easing headroom - ET NOW on Twitter
  • Market interest rates seen lower in 2017/18 due to demonetisation - ET NOW on Twitter

Fiscal Deficit

  • Implementation of wage hike, muted tax receipts to put pressure on fiscal deficit in 2017/18

Demonetisation

  • Remonetisation will ensure that the cash squeeze is eliminated by April 2017

Universal Basic Income

  • Universal basic income (UBI) proposal a powerful idea, but not ready for 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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