Economic Survey Volume II forecasts 7.5% growth

Achieving Upper End Of 6.75% To 7.5% GDP Target For 2017-18 Difficult: Mid-Year Economic Survey

"In 2016-17, services exports recorded a positive growth of 5.7 per cent with pick up in some major sectors like transportation, business services and financial services; and good growth in travel", the survey said.

On the structural reform agenda, the Survey said the Government is implementing GST, Air India privatisation, further cutting down on energy subsidies, addressing twin balance sheet challenge facing banks.

He said the Survey has also rightly pin-pointed the moderation in growth in industrial output as also services, the key drivers of the economy.

There has been a 20 per cent decline in cumulative cash holding by companies and individuals post demonetisation while the number of taxpayers has increased 45 per cent since then, the Economic Survey has said, pointing to positives from the withdrawal of high-denomination banknotes in November previous year. However, going forward, there is scope for monetary easing that will facilitate the economy bounce back quicker.

Tabled in Parliament, the Survey - which is the second part of the one brought out in January-end and carries the mid-year review, warned of fiscal slippages as "a series of deflationary impulses are weighing on an economy yet to gather its full momentum". "Also, farm loan waivers could reduce aggregate demand by as much as 0.7 percent of gross domestic product (GDP), imparting a significant deflationary shock to an economy", the report cautioned.

India's GDP growth projection of 6.75-7.5 per cent for the current fiscal faces downside risks from deflationary impulses generated by various factors, according to the government's Economic Survey-II unveiled on Friday.

Subramanian said India is undergoing a structural shift in the inflationary process toward low inflation.

"Cyclical conditions suggest that the policy rate should actually be below. the neutral rate". However, passenger earnings grew at registered an increase of 4.5% during 2016-17 leading revenue of Rs 46,280 from the sector. "More dramatic have been developments during 2016-17- inflation declined sharply from 6.1 percent in July 2016 to 1.5 per cent in June 2017", it said.

On stressed assets, the Survey said that the ratio of stressed companies in the power sector (defined as the share of debt owed by companies with an interest coverage (IC) ratio of less than 1) has been steadily rising this year, reaching 70%, with an associated vulnerable debt of over Rs. 3.6 lakh crore.

On the inflation outlook, Subramanian, however, said our Survey stated that there was considerable scope for further easing in monetary policy as the repo rate was 25-75 basis above the neutral rate.

The Federation of Indian Chambers of Commerce and Industry (FICCI) urged for the need to enable a further cut down of policy rates by the Reserve Bank of India (RBI), to spur demand and help ease the pressure on corporate balance sheets.

As per the Survey, the Government and the RBI have taken prominent steps to address the twin balance sheet challenge which has boosted market confidence in the short run.

Related News:

  • Billie Lourd will inherit $6.8M from Carrie Fisher's estate

    Billie Lourd will inherit $6.8M from Carrie Fisher's estate

    This includes ongoing proceeds from Fisher's books (she wrote more than half a dozen), specials, trademarks and copyrights. The Star Wars actress had been taken ill onboard a transatlantic flight from London to Los Angeles just four days before.
    Time to Buy Mylan NV (MYL) After Today's Huge Increase?

    Time to Buy Mylan NV (MYL) After Today's Huge Increase?

    Following the completion of the transaction, the president now directly owns 799,855 shares in the company, valued at $31,994,200. As for the rest of their products, Mylan reportedly expects their sales to increase in North America for the rest of the year.
    Second natural disaster  hits China; 32 hurt

    Second natural disaster hits China; 32 hurt

    The massive natural disaster struck at 9:19 PM (local time) Tuesday and the epicenter was monitored at a depth of 20 km, it said. The death toll in the quake in Sichuan has risen to 19, with 247 injured, including 40 seriously, authorities said.
  • Jordan Spieth : American golfer says PGA win could make this best year

    Jordan Spieth : American golfer says PGA win could make this best year

    Each of the world's top-10 golfers will be at Quail Hollow this week, including one who has historically mastered the course. That couldn't be until 2024 at the earliest, given the PGA Championship sites are set for the next six years.
    EPS & OPS meet Modi, set to reunite this weekend — AIADMK merger

    EPS & OPS meet Modi, set to reunite this weekend — AIADMK merger

    It was during his absence that EPS reportedly strengthened his position in the party and emerged as a real threat to Dinakaran. However, she was convicted in a money laundering case and sent to jail, post which the AIADMK was split into two factions.
    Stock markets slip as North Korea tensions build

    Stock markets slip as North Korea tensions build

    London's benchmark share index closed down 45 points amid fears of a military conflict between the United States and North Korea. Stocks across Europe closed sharply lower Wednesday as tensions between the USA and North Korea escalated.
  • Morocco to challenge joint North American bid to host 2026 World Cup

    Morocco to challenge joint North American bid to host 2026 World Cup

    Africa has the second highest number of voting Federation Internationale de Football Association member countries behind Europe. Morocco has hosted two Club World Cup tournaments, in 2013 and 2014, although that is a vastly smaller and shorter tournament.
    Cuba Acoustic Attack: US Diplomats Suffer Hearing Loss

    Cuba Acoustic Attack: US Diplomats Suffer Hearing Loss

    Florida Senator Marco Rubio said the alleged incidents were just the latest examples of harassment toward U.S. diplomats in Cuba. According to the Canadian national broadcaster, the government is working with Cuban authorities to determine what happened.
    Sale strikes out 13 as Red Sox beat Rays

    Sale strikes out 13 as Red Sox beat Rays

    Benintendi finished the night 3-for-5 and is 11-for-22 (.500) in six games since sitting two games in a row to regroup last week. After the game, he revealed that it wasn't until he returned to the dugout after the inning when he realized what he had done.
  • Why did Nawaz Sharif's convoy speed off ahead of the rally?

    Why did Nawaz Sharif's convoy speed off ahead of the rally?

    Sharif, in recent meetings with party leaders, lawyers and the media, has expressed his displeasure over the court rulings. The minister said that the PML-N rally would be joined by the people as it would pass through different cities.
    God stops by Colbert to talk Donald Trump and nuclear war

    God stops by Colbert to talk Donald Trump and nuclear war

    And I just started the "Handmaid's Tale .' You know Kim Jong-un is insane , right?" "And I just started "The Handmaid's Tale"!" Immediately, Colbert questions him on the potential war, asking if he really gives Trump permission to "take out" North Korea.
    Taylor Swift in court over claims she was 'groped' by DJ

    Taylor Swift in court over claims she was 'groped' by DJ

    Arthur Lewis, also 32 and a real estate agent, said he's "a big supporter of Taylor Swift and just wanted to check it out". David Mueller has been accused of sexually assaulting the superstar during a photo opportunity before a concert in 2013.


Most liked

In the United Kingdom , found eggs with toxins
Romania has found one tonne of egg yolk which was contaminated by fipronil in a warehouse to the west of the country. German supermarket chain Aldi has recalled eggs as the pesticide scandal continues to rock European food markets.

Snap Shares Plummet After Tech Company Misses Expectations
Analysts such as Ralph Schackart at William Blair have suggested investors should wait it out as Snap captures more interest. The company reported ($2.31) earnings per share for the quarter, missing the Zacks' consensus estimate of ($2.05) by $0.26.

Gold Prices Hit 2-Month Highs, Defensive Demand Continues
In overseas trading, stock markets across the Asia-Pacific region saw further downside during trading on Thursday. The VIX closed 1.4 per cent higher but at the lowest level of the day at 11.11, after rising as high as 12.63.

After Pacquiao yawner in 2015, Mayweather feels he owes fans better fight
Mayweather recently said, however, that he's open to changing his approach when he takes on Conor McGregor later this month. Mayweather and McGregor will need to explain why they want to wear lighter gloves and why they should be allowed to.