MUMBAI (Commoditiescontrol) – The Economic Survey 2016-17 tabled in the Parliament on 31 January has pegged India’s economic growth at 6.5 per cent for 2016-17, down from 7.6 per cent recorded in 2015-16 financial year. The survey expects growth to rebound to 6.75-7.5 per cent in 2017-18. To achieve this, the Economic Survey has underlined the need for more reforms to be undertaken.
The Central Statistics Office had estimated GDP growth figure the year at 7.1 per cent, earlier this month, without factoring in the impact of demonetization on various economic activities. The growth number of the Economic Survey appears to have taken into account the impact as it said that demonetisation has affected growth rate by 0.25-0.5 per cent, but will have long-term benefits. However, it has chopped off 1.1 percentage points from last year and by about 1.5 percentage point from the target of 8 per cent.
The key highlights of the Economic Survey 2016-17 are as follows:
> GDP growth for next fiscal pegged at 6.75-7.5 per cent against 6.5 per cent this fiscal
> Farm sector to grow at 4.1 per cent this fiscal, up from 1.2 per cent last year
> Growth rate of industrial sector to moderate to 5.2 per cent this fiscal, from 7.4 per cent last fiscal
> Demonetisation to affect growth rate by 0.25-0.5 per cent, but to have long-term benefits
> Demonetisation may affect supplies of certain agricultural products like sugar, milk, potatoes and onions
> Efforts to collect taxes on disclosed and undisclosed wealth should not lead to tax harassment
> GST, other structural reforms should take the trend growth rate to 8-10 per cent
> Fiscal gains from GST will take time to realise
> Tax administration could be improved to reduce discretion and improve accountability
> Prescribes cut in individual I-T rates, real estate stamp duties
> Income Tax net could be widened gradually by encompassing all high income earners
> Time table for cutting corporate tax should be accelerated
> Fiscal windfall likely from Pradhan Mantri Garib Kalyan Yojana, low oil price
> Universal Basic Income Scheme is an alternative to plethora of state subsidies for poverty alleviation.
(By Commoditiescontrol Bureau; +91-22-40015522)
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