Finance Minister Arun Jaitley tabled the second volume of Economic Survey 2016-17 in the Lok Sabha on Friday. The Survey has come out with a pessimistic view on growth forecast with downward risk to the earlier estimated growth range of 6.75-7.5 per cent GDP growth for 2017-18.
The major highlights of the Economic Survey Volume II are as follows :
#India's FY18 economic outlook remains uncertain.
#It further added that there still remains considerable scope for monetary easing. The RBI recently cut repo rate by 25 basis points bringing interest rates down to 6%.
# CPI inflation to be below 4 per cent by March this fiscal.
#India's fiscal deficit gap may decline to 3.2% of the GDP in FY18.
# On farm loan waivers of many state governments, the survey said that there are rising concerns that the waivers may disrupt finances of the said state government.
#Since February 2017, the rupee has appreciated by about 1.5 per cent. It said the government and the RBI have taken prominent steps" to address the twin balance sheet challenge which has boosted market confidence in the short run. Also, the removal of checkposts and easing of transport constraints after Goods and Service Tax (GST) implementation can provide some short-term fillip to economic activity.
# The Survey said that the balance of risk to achieving the 6.75-7.5 per cent growth has shifted to the downside. "The balance of probabilities has changed accordingly, with outcomes closer to the upper end having much less weight than previously,"
Tabling of the survey was scheduled earlier but was delayed as the government wanted CEA to tone down his criticism of the Reserve Bank of India (RBI) on rate cuts. Business Standard said, "The tabling of the survey has been delayed as some sections in the top rung of the government had objected to Chief Economic Advisor Arvind Subramanian’s strong criticism of the Reserve Bank of India’s six-member Monetary Policy Committee’s inflation modelling and monetary policy decisions. Some changes have been made to the document, it is understood."