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February 26, 2016

Economic Survey 2015-16 Highlights

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Ahead of the Union Budget (29th February 2016), the Finance Minister Arun Jaitley today (26th February 2016) tabled the Economic Survey 2015-2016 in Lok Sabha, which outlines the broad direction of the Budget and the economic performance of the country. It has been revealed that GDP growth rate in India is seen in range of 7 to 7.75 per cent in 2016-17 (it expects Indian economy to grow 7-7.5 percent in the fiscal year to March 2017).

The Economic Survey, the basis for Arun Jaitley's budget for the fiscal year starting April 1, projected India to grow 8 percent in the next couple of years. The survey was prepared by the finance ministry's chief economic adviser Arvind Subramanian. Following are the highlights of Economic Survey 2015-16.

Key Points to Remember
  • GDP growth rate for 2015-16 to be in the range of 7% to 7.75 %
  • Fiscal deficit of 3.9 pc achievable
  • Inflation rate pegged at  4.5 to 5 pc
  • Current account deficit seen around 1-1.5% of GDP

Highlights of the survey

  • India haven of stability amidst gloomy global landscape.
  • Crude oil prices to be about USD 35 a barrel next fiscal, as against USD 45 this year.
  • Low inflation takes hold, price stability has increased.
  • Pay Commission implementation not to destabilise prices.
  • Challenging external environment to cast shadow on economic policies.
  • Subsidy bill to be below 2% of GDP next fiscal.
  • Concerned over delay in GST Bill.
  • Balance sheets of corporate, banks remain stressed; need 4Rs: Recognition, Recapitalisation, Resolution and Reform.
  • Suggests revival of domestic demand as foreign capital outflow likely.
  • Sees good performance by industrial, infrastructure, corporate sectors due to recent reform.
  • More investment in health, education; focus on agriculture.
  • Government tax revenues to be higher than budgeted.
  • Exports slowdown to continue; pick up in next fiscal.
  • India should resist protectionist measures in trade.
  • Suggests reform package for fertiliser sector.
  • GDP growth next fiscal to be between 7-7.75%
  • Current account deficit at 1-1.5%, forex reserves at USD 351.5 bn in mid-Feb.
  • PSU banks’ capital need at Rs 1.8 lakh crore by FY19.
  • 3.9% fiscal deficit target achievable this year, coming year to be challenging.
  • Proposes widening of tax net from 5.5% of earning individuals to more than 20%
  • Services sector growth in 2015-16 seen at 9.2%
  • Projects retail inflation at 4.5-5% for 2016-17.
  • Growth this fiscal to be 7.6%, long-term potential at 8-10% if exports grow rapidly.

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