Indo-Asian News Service
New Delhi, Feb 26: India’s Economic Survey Friday projected no significant upside for economic growth in the next financial year and sees it to remain at 7-7.75 percent due to domestic factors and warns that the upcoming budget will have to contend with an unusually challenging and weak external environment.
The survey, tabled in parliament by Finance Minister Arun Jaitley here on Friday, also expresses concern over pan-India GST being elusive, the divestment programme falling short of target and recast of the distortive subsidy regime, especially for fertilizers, being a work-in-progress. This apart, the survey says, balance sheets of Indian banks remain stressed, becoming a roadblock to the revival of private investments, adding to the anxiety that the country’s growth potential of 8-10 percent in the long term.
On the positive side, though, the survey says India will remain the fastest-growing large economy and a refuge of stability with an outpost of opportunity, even as steps taken toward a stable tax system, ease of doing business and foreign participation have gone down well globally. It also projects the retail inflation to ease further to 4.5-5 percent in 2016-17.
Meanwhile, the survey prescribes an exit policy for industry, notably for start-ups, as it will remove impediments to investments, job creation and growth. On fiscal deficit, it says the target of 3.9 percent of GDP for this fiscal was achievable. But it also says the coming year will be a challenging one, calling for improving tax compliance, tapping new revenue sources, re-look expenditure and recast subsidies. It wants the income tax net to widen from 5.5 percent of earning individuals to 20 percent.
On social aspects, the survey makes some worrisome observations and calls for corrective action. It says India still has the second highest number of undernourished people, warranting immediate action. Over 42 percent of its pregnant women are underweight.
