Economic Survey: Substantially overachieved on checking inflation, says Arvind Subramanian; Top developmentshttps://indianexpress.com/article/business/economy/economic-survey-gdp-rbi-arvind-subramanian-4792259/

Economic Survey: Substantially overachieved on checking inflation, says Arvind Subramanian; Top developments

Economic Survey: CEA Arvind Subramanian said today that the Centre won't relax fiscal borrowing limit of states. To accommodate loan waiver states to cut expenditure/raise taxes, it'll be deflationary.

Economic Survey, Arvind Subramanian, GDP growth, GDP growth India, India Economic Survey, Economic Survey 2017-17, GDP Growth India,
The Economic Survey warned of fiscal slippages as “a series of deflationary impulses are weighing on an economy yet to gather its full momentum”.

Chief Economic Advisor Arvind Subramanian on Friday said that the government has substantially achieved in checking inflation and by end of March inflation will be well within the target. Subramanian addressed a gathering in New Delhi after releasing the second part of the Economic Survey, which stated that achieving higher end of the 6.75-7.5 per cent GDP growth estimated earlier will be difficult and called for more interest rate cuts to boost the economy.

The Economic Survey warned of fiscal slippages as “a series of deflationary impulses are weighing on an economy yet to gather its full momentum”. Authored by Chief Economic Adviser Arvind Subramanian and tabled in Parliament, the Survey said farm loan waiver could cut economy demand by up to 0.7 per cent of GDP. It saw farm loan waivers by states touching Rs 2.7 lakh crore. It said inflation is expected to remain below the Reserve Bank of India’s medium-term target of 4 per cent, through the fiscal deficit will be 3.2 per cent of GDP in 2017-18 as compared to 3.5 per cent last fiscal.

Also Read: Economic Survey raises concerns over farm loan waivers; meeting 7.5 per cent GDP growth a challenge

What CEA Arvind Subramanian said on the Economic Survey today:

1. 5.4 lakh new tax payers added post demonetisation.

Advertising

2. Goods and Services Tax is an astonishing feat of administration, politics and technology.

3. Substantially overachieved on checking inflation; by the end of March, inflation will be well within the target.

4. Farmer loan waiver going to be deflationary not inflationary.

5. Centre wont relax fiscal borrowing limit of states.To accommodate loan waiver states to cut expenditure/raise taxes, it’ll be deflationary.

The Economic Survey warned of fiscal slippages as “a series of deflationary impulses are weighing on an economy yet to gather its full momentum”. Authored by Chief Economic Adviser Arvind Subramanian and tabled in Parliament, the Survey said farm loan waiver could cut economy demand by up to 0.7 per cent of GDP. It saw farm loan waivers by states touching Rs 2.7 lakh crore. It said inflation is expected to remain below the Reserve Bank of India’s medium-term target of 4 per cent, through the fiscal deficit will be 3.2 per cent of GDP in 2017-18 as compared to 3.5 per cent last fiscal.

The mid-year survey of the economy said there was “considerable” scope for further easing in monetary policy as the repo rate was 25-75 basis above the neutral rate. RBI had last week cut its main policy rate by 25 basis points to 6 per cent, the lowest since November 2010.

(With inputs from PTI)