Indian economy would grow by between 7.0 per cent and 7.75 per cent in the 2016-17 fiscal year that starts on April 1.
Fiscal Deficit
Inflation
Current Account Deficit 2016/17 current account deficit seen around 1-1.5 per cent of GDP
Currency
Banking & Corporate Sector
Taxes
For more details on the Economic Survey 2015-16: Click here
Fiscal Deficit
- 2016-17 expected to be challenging from fiscal point of view; time is right for a review of medium-term fiscal framework
- 2015-16 fiscal deficit, seen at 3.9 per cent of GDP, seems achievable
- Credibility and optimality argue for adhering to 3.5 per cent of GDP fiscal deficit target
Inflation
- CPI inflation seen around 4.5 to 5 per cent in 2016-17
- Low inflation has taken hold, confidence in price stability has improved
- Expect RBI to meet 5 per cent inflation target by March 2017
- Prospect of lower oil prices over medium term likely to dampen inflationary expectations
Current Account Deficit 2016/17 current account deficit seen around 1-1.5 per cent of GDP
Currency
- Rupee's value must be fair, avoid strengthening; fair value can be achieved through monetary relaxation
- India needs to prepare itself for a major currency readjustment in Asia in wake of a similar adjustment in China
- Rupee's gradual depreciation can be allowed if capital inflows are weak
Banking & Corporate Sector
- Estimated capital requirement for banks around 1.8 trillion rupees by 2018-19
- Proposes to make 700 billion rupees available via budgetary allocations during current and succeeding years in banks
- Government could sell off certain non-financial companies to infuse capital in state-run banks
- Corporate, bank balance sheets remain stretched, affecting prospects for reviving private investments
- Underlying stressed assets in corporate sector must be sold or rehabilitated
Taxes
- Tax revenue expected to be higher than budgeted levels in 2015-16
- Proposes widening tax net from 5.5 per cent of earning individuals to more than 20 per cent
- Favours review and phasing out of tax exemptions; easiest way to widen the tax base not to raise exemption thresholds
For more details on the Economic Survey 2015-16: Click here