Sunday, Nov 23, 2014

FM Arun Jaitley tables Economic Survey: Highlights

Finance Minister Arun Jaitley tables a report on the state of Indian economy on Wednesday, a day before Prime Minister Narendra Modi's new government presents its first budget. (PTI) FM Arun Jaitley tables a report on the state of Indian economy on Wednesday, a day before PM Narendra Modi's new government presents its first budget. (PTI)
New Delhi | Posted: July 9, 2014 1:48 pm

Finance Minister Arun Jaitley tables a report on the state of Indian economy on Wednesday, a day before Prime Minister Narendra Modi’s new government presents its first budget.

The annual report was prepared by Ila Patnaik, a well-respected economist who was appointed as senior economic advisor to the finance ministry in April.

Following are highlights of the report:

FISCAL DEFICIT

* India needs sharp fiscal correction

* Fiscal situation of the central government is worse than it appears

* Need for subsidy reforms for fiscal consolidation

* Recommends raising tax-to-GDP ratio for fiscal consolidation

* Shortfall in revenues can be contained through better mobilisation and reforms

* External debt remains within manageable limits

GROWTH

* GDP growth seen at 5.4-5.9 pct in 2014/15

* Economic growth of 7-8 pct not seen before 2016/17

* Downward risk to economic growth due to poor monsoon, external factors

INFLATION

* Government needs to move towards low and stable inflation through fiscal consolidation

* Wholesale Price Index (WPI)inflation expected to moderate by end-2014

* Consumer Price Index (CPI) inflation showing signs of moderation

* Needs to create a competitive national market for food

BALANCE OF PAYMENTS

* Improvement in balance of payments position during late 2013-14 was swift thanks to import restrictions and economic slowdown

* Need to adjust to advanced economies’ event exit from accommodative monetary policy stance

SUBSIDIES

* Rationalization of subsidies such as fertilizer and food essential

* Need to shift subsidy programme from price subsidies to income support

TAXATION

* Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods and services tax (GST)

* GST to play vital role in indirect tax reform

FOREX MARKET

* Intervention in forex market by Reserve Bank of India is behind accumulation of reserves “generally”

Agencies | The Financial Express

comments powered by Disqus
Featured ad: Discount Shopping