The Economic Survey for 2017-18 expects the GDP growth to be 7-7.5% in 2018-19 compared to the 6.75% estimated for 2017-18. It projects India to retain the tag ‘the fastest growing major world economy’. At the same time, the economic survey indicates the need for maintaining policy credibility by the central government.
What is Economic survey?
Economic Survey in India is the view of Ministry of Finance on the annual economic developments in the country. The Department of Economic affairs under the finance ministry is responsible for conducting the Economy survey. The Chief Economic Adviser, Finance Ministry co-ordinates the survey. It is a very important document as far as the Finance ministry is concerned. The findings are placed in both houses of the parliament every year, just before the Union Budget. The survey reviews the economic developments in the country during the previous year, consolidates the progress in development activities, suggests policy initiatives and provides guidance on the performance of the economy of the country in the in the short to medium term.
What are the major positives of the Economic Survey 2017-18?
• GDP growth is expected to be 7-7.5% against the estimate of 6.75% for current year.
• Negative impacts of Demonetization and GST implementation have come down
• GST implementation increased tax base and brought in many new tax payers
• Exports and investments have revived
What are the major positive factors for the economy in medium term?
Economy survey predicts the following to boost economic growth in near term.
• Implementation of Insolvency and Bankruptcy Code
• Recapitalization of public sector banks
• Global recovery will improve demands for goods and services from India
What are the concerns expressed by the Economic Survey?
Survey demands focused vigilance on
• Rising crude prices. Increases of $ 10 per barrel of oil can slowdown GDP growth by 0.2-0.4% apart from causing a rise in inflation by 0.3-0.4%.
• More focus needed on Employment, Education and Agriculture
• Correction in high stock prices followed by capital outflows
• Climate change can reduce agricultural income from 20-25% of unirrigated areas.
The economic survey indicates that the Central government needs to refix its priorities. Modest consolidation is suggested by the survey. Survey recommends to give time for GST to stabilize, carry out recapitalization banks urgently and fast adoption of irrigation technologies for agriculture.