Economic Survey 2014-15 Highlights

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Ahead of the Union Budget tomorrow (28th February 2015), the Finance Minister Arun Jaitley today (27th February 2015) tabled the Economic Survey 2014-2015 in Lok Sabha, which outlines the broad direction of the Budget and the economic performance of the country. This survey, prepared by the finance ministry's chief economic adviser Arvind Subramanian, forecasts Indian economy is likely to grow above 8 percent in 2015-16. The Survey further said that economic growth for the financial year 2015-16 is likely to remain between 8.1 and 8.5 percent.

Key Points to Remember

• Growth rate of over 8% expected for 2015-2016
• Fiscal deficit of 4.1 pc achievable
• Inflation rate pegged at 5 to 5.5 pc

Below are the highlights of the survey.

Highlights of Economic Survey 2014-15

• Fiscal Deficit
• India must meet its medium-term fiscal deficit target of 3 per cent of GDP
• Government will adhere to fiscal deficit target of 4.1 per cent of GDP in 2014/15
• Govt should ensure expenditure control to reduce fiscal deficit
• Growth
• 2015/16 GDP growth seen at over 8 pct y/y 
• Double digit economic growth trajectory now a possibility 
• Economic growth at market prices seen between 8.1 - 8.5 per cent in 2015/16 on basis on new GDP calculation formula
• Current Account Deficit
• Estimated to fall 1 pct of GDP in coming fiscal year
• Inflation
• Inflation shows declining trend in 2014/15
• Inflation likely to be below central bank target by 0.5 - 1 per centage point
• Lower inflation opens up space for more monetary policy easing
• Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control
• CPI inflation in 2015/16 is likely to range between 5 - 5.5 per cent
  
• Reforms
• There is scope for big bang reforms now 
• India can increase public investments and still hit its borrowing targets
• Fiscal Consolidation
• Govt remains committed to fiscal consolidation 
• India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline
• Outlook for external financing is correspondingly favorable
• Subsidies
• Overhauling of subsidy regime would pave the way for expenditure rationalization
• IT & ITeS Sector
• IT and ITeS sector including Business Process Management (BPM), continues to be one of the largest employers in the country
• Software products and services revenues for 2015-16 is projected to grow at 12-14 per cent.
• Government's "Make in India" mission has included IT and BPM among the 25 focus sectors
• Tourism
• Increase in growth on both foreign tourist arrivals at 7.1 per cent and foreign exchange earnings at 6.6 per cent in the year 2014.
• Easing of the Indian tourism visa regime through the expansion of Tourist Visa on Arrival enabled by Electronic Travel Authorization (ETA) will give a fillip to foreign tourist arrivals in the country.
• Trade & Repair Services Sector
• Migration from traditional stores to modern retail continues, though the latter still accounts for only 8 per cent of the total market.
• E-Commerce Market
• Government proposes to include sufficient provisions for consumer safeguards in the ongoing amendments to the Consumer Protection Act, 1986.
• Media & Entertainment Industry
• With 100 per cent FDI permitted in the Film Sector, India is emerging as the new favorite of international studios.

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