Growth indicated in Economic Survey, are the 'good days' ahead, finally?

Union Finance Minister Arun Jaitley tabled the Economic Survey 2015-2016 in Parliament on Friday. India expects its economy to grow 7-7.5 per cent in the fiscal year to March 2017 according to the Economic Survey report.

The survey was prepared by the finance ministry’s chief economic advisor Arvind Subramanian. The Economic Survey, the basis for Jaitley’s budget for the fiscal year starting April 1, projected India to grow 8 per cent in the next couple of years.

Following are the highlights of the report:

Fiscal deficit

* 2015/16 fiscal deficit seen at 3.9 per cent of GDP seems achievable

* 2016/17 expected to be challenging from fiscal point of view

* Credibility and optimality argue for adhering to 3.5 per cent of GDP fiscal deficit target

* Time is right for a review of medium-term fiscal framework

Inflation

* CPI inflation seen around 4.5 per cent 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

* Low inflation has taken hold, confidence in price stability has improved

Current account deficit

* 2016/17 current account deficit seen around 1-1.5 per cent of GDP

Taxes

* Proposes widening tax net from 5.5 per cent of earning individuals to more than 20 per cent

* Tax revenue expected to be higher than budgeted levels in FY15/16

Banking & corporate sector

* Estimated capital requirement for banks likely around 1.8 trillion rupees by 2018/19

* Corporate, bank balance sheets remain stretched, affecting prospects for reviving private investments

* Underlying stressed assets in corporate sector must be sold or rehabilitated

* Govt could sell off certain non financial companies to infuse capital in state-run banks

* Govt proposes to make available 700 billion rupees via budgetary allocations during current, succeeding years in banks