Economic survey highlights: External situation challenging but GDP may grow 7-7.5% in fiscal 2017

Ahead of the Union Budget, the Economic Survey today termed external environment as challenging but projected a 7-7.5 per cent GDP growth rate in the next fiscal which could accelerate to eight per cent in a couple of year. The Economic Survey for 2015-16, which was tabled in Parliament today, also made a case for carrying forward the reform process to achieve macro-economic stability. [caption id=“attachment_2644726” align=“alignleft” width=“380”]  Chief economic advisor Arvind Subramanian. PIB image[/caption] In spite of challenges and lower than projected GDP growth rate during 2015-16, “the fiscal deficit target of 3.9 per cent of GDP seems achievable”, the survey said. Here are the highlights from the survey: * Indian economy needs to create enough “good” safe productive well-paying jobs * Services sector remains the key driver of economic growth contributing almost 66.1 percent in 2015-16 * Fiscal Deficit target of 3.9% for 2015-16 seems achievable. This is mainly because of the performance of indirect taxes in the first 9 months. This indicates the budget estimates are likely to be achieved and possibly exceeded. The reason for this is the increase in excise duty on petroleum products. * JAM trinity - Jan Dhan, Aadhaar and Mobile - needs to be spread further. Based on leakages and the extent of the central government control, survey suggests fertilizer subsidies and within-government transfers as two most promising areas for introduction of the JAM next. The JAM-PAHAL has managed to reduce leakages by 24 percent in 2015-16. * Subsidies will remain below 2 percent of GDP. There has been a 1.7% decline in majors subsidies. The reason for this is a nearly 44.7% decline in petroleum subsidy during April–December 2015. However, other major subsidies - food and fertilizer - increased 10.4 percent and 13.7 percent, respectably. * Better off taking the benefit of subsidies; recommends interventions and rectification of anomalies * Need for more investment in human capital, concerned over declining educational outcomes. Survey has also emphasized the importance of improving efficiency in delivery of services in the health sector * GST rollout to mark an unprecedented reforms measure in the modern global tax history * Trade deficit declines to $106.8 billion in April-January 2015-16 from $119.6 billion in the year-ago period * Impressive strides made in the power sector in the last two years: addition of record generation capacity, moves towards one market in power, reform of discoms and development of renewable energy * Equity market relatively resilient compared to other major emerging market economies * Labour force participation rate higher in rural areas than urban, significantly lower for females than males * The year 2015 was a landmark for the country in climate change initiatives * Free trade agreements leading to increased imports and exports * Several initiatives taken would help transforming infrastructure sector * The Chakravyuha Challenge: Ease to enter, barriers to exit 26-February,2016 * Positive changes sweeping power sector * Economy stands out as a haven of macroeconomic stability, resilience and optimism and can be expected to register GDP growth that could be in the range of 7-7.75 per cent in the coming year * Despite difficult global environment, India is Likely to be the fastest growing major economy in the world in 2016 * Reform package of the fertilizer sector * Economy to clock more than 7 percent growth this fiscal; survey sees over 8 percent growth in next couple of years * Making investments in maternal nutrition and sanitation and changing social norms to enhance their effectiveness can help to exploit the country’s demographic dividend * Agriculture sector needs a transformation to ensure sustainable livelihoods for the farmers and food security * Economy will continue to weather global sluggishness with resilience; outlook of multilateral institutions positive for India * Percentage share of horticulture output in agriculture is more than 33 percent In order to provide food security, in the current agriculture scenario, India has to focus on supplies which are timely and uninterrupted and affordable for the poor * India ranks first in milk production, accounting for 18.5 percent of world production With PTI