FY16 growth above 8%, inflation easing: Key facts from the Economic Survey

India’s economic survey pegged growth at more than 8 percent for the next fiscal and said inflation was now declining, while also setting the agenda for reforms needed to further drive the expansion, prune wasteful expenditure and promote productive investment. On inflation, the survey said, there has been a fall of over 6 percentage points since 2013, even as the external sector, which includes exports and inflow of foreign funds, was returning to a path of strength and resilience. Industrial growth has also picked up now. It also had some good news to report on the farm sector. “Foodgrain production for year 2014-15 is estimated at 257.07 million tonnes and will exceed that of last years by 8.5 million tonnes.” It also made a case for rationalisation of subsidies and said such doles did not appear to have had a transformative effect on the living standards of the poor. On the fiscal side, it said the government was committed to consolidation with revenue generation a priority. Highlights of the Economic Survey for 2014-15 tabled in parliament on Friday by Finance Minister Arun Jaitley: [caption id=“attachment_2121249” align=“alignleft” width=“380”]  Reuters[/caption]Growth rate of over eight percent expected in 2015-16 * Double-digit economic growth trajectory now a possibility * Infrastructure growth of eight core industries higher than industrial growth since 2011-12 * Inflation showed declining trend during April-December 2014-15, average WPI inflation declined to 3.4 percent against average of six percent during the previous year, WPI food inflation fell to 4.8 percent after high of 9.4 percent in 2013-14, CPI inflation touched all-time low of 5 percent after remaining high at 9-10 percent for last two years * Government measures to control food inflation and persistent decline in crude prices resulted in declining trend in inflation * Foodgrain production in 2014-15 estimated at 257.07 million tonnes; will exceed average foodgrain production of last five years by 8.5 million tonnes * Agriculture and allied sectors contributed 18 percent to GDP * Number of macro level and sectoral initiatives undertaken to improve industrial growth * Political mandate for reform and benign external environment * Scope for big bang reforms * Services sector clocks double digit growth of 10.6 percent * External sector returning to path of strength and resilience * Major reform initiatives undertaken in banking, insurance and financial sectors * National Solar Mission being scaled up five-fold to 100,000 MW * Clean Energy Cess doubled to Rs.100 per tonne to mop up Rs. 17,000 crore * Action-oriented policies to bring rapid development to people while purposefully addressing climate change * Reforms recommended of Indian Railways’ structure, commercial practices, technology * Greater public investment in railways to boost growth and manufacturing in India * Government remains committed to fiscal consolidation, enhanced revenue generation a priority * India needs to create additional fiscal space * Male literacy at 80.9 percent, female literacy at 64.6 percent * Need for balance between Make in India and Skilling India; skill development and employment are major challenges * Food subsidy bill at Rs.1,07,823.75 crore during 2014-15 (upto January), an increase of 20 percent over previous year * Rationalisation of subsidies and better targeting of beneficiaries will release resources for public investment in agriculture * Create National Common Market for agricultural commodities * Revive public investment to improve investment climate * Fourteenth Finance Commission will enhance fiscal federalism * Hyper-growth in tech startups * Rural penetration of IT services to drive Make in India mission * Electronic visa gives fillip to tourism sector IANS