NEW DELHI: The Indian Economy to grow between 8.1 to 8.5 % next year, the Economic ssurvey said.

Tabled in Parliament on Friday by finance minister Arun Jaitley and authored by a team led by chief economic advisor Arvind Subramanian, the annual report card on the state of the economy said the growth should now rise further and double digit expansion was a possibility.

The survey also indicated that economic growth during 2014-15 may touch 8 per cent on better farm output. The CSO had projected growth at 7.4 per cent for current fiscal.

On inflation, the survey said, there has been a fall of over 6 percentage points since 2013, even as the external sector, which includes exports and inflow of foreign funds, was returning to a path of strength and resilience. Industrial growth has also picked up now. 

It also had some good news to report on the farm sector. "Foodgrain production for year 2014-15 is estimated at 257.07 million tonnes and will exceed that of last years by 8.5 million tonnes." 

It also made a case for rationalisation of subsidies and said such doles did not appear to have had a transformative effect on the living standards of the poor. On the fiscal side, it said the government was committed to consolidation with revenue generation a priority.

Foodgrain production for 2014-15 estimated at 257.07 mn tonnes; to exceed that of last 5 years by 8.5 million tonnes

Inflation showing declining trend as a result of government measures and falling international oil prices

Government will adhere to fiscal deficit target of 4.1 pct of GDP in 2014/15

Food subsidy bill rises 20 per cent in April-January 2014-15 at Rs 1.07 lakh crore.

Noting India had hit an economic sweet spot, the report added the country had room for big bang reforms.

This gives an indication that Finance Minister Arun Jaitley will stick to debt targets in his maiden full-year budget on Saturday.

The Economic Survey prepared by the Finance Ministry’s chief economic adviser Arvind Subramanian on the state of Asia’s third-largest economy was released ahead of Union Budget announcement for 2015/16 that begins on April 1. 

It said a return to the heady days of double-digit economic growth was expected. “India has reached a sweet spot and that there is a scope for Big Bang reforms now,” the report said.

The survey also indicated that economic growth during 2014-15 may touch 8 per cent on better farm output. The CSO had projected growth at 7.4 per cent for current fiscal.

“Several reforms have been undertaken and more are on the anvil. The introduction of the GST and expanding direct benefit transfers can be game-changers,” it added.

“In the short run, growth will receive a boost from lower oil prices, from likely monetary policy easing facilitated by lower inflation and lower inflationary expectations, and forecast of a normal monsoon,” the Survey said.

The major reforms undertaken by the government include deregulation of diesel prices, direct transfer of cooking gas subsidy, hiking FDI cap in defence and insurance, Ordinance on Coal.

The country’s consumer inflation will also drop to between 5 and 5.5 per cent in 2015-16, opening up space for more monetary easing, the survey report said.

Stating that macro economic situation in the country has improved significantly in the current year, the Survey raised concerns over growth pattern in exports, construction and mining activities. Investment activity, which is slowly picking up, needs to be grounded on a stronger footing, it said.

India must adhere to the medium term fiscal deficit target of 3 per cent of the GDP, it said, adding “this will provide fiscal space to insure against future shocks and also to move closer to the fiscal performance of its emerging peers.

Economic Survey 2015-16 Highlights:

12.43 PM: Fiscal action cannot wait, it should continue in upcoming year as well, says Survey

12.33 PM: Total stalled projects seen at about 7 percent of GDP, mostly in private sector

12.35 PM: Double digit economic growth trajectory now a possibility

12.37 PM: Expenditure control and expenditure switching to investment key

12.40 PM: There is scope for big bang reforms now

12.30 PM: BSE Sensex trading more than 200 pts higher as govt tables Economic Survey 2014-15

12.25 PM: Current Account Deficit (CAD) to come down to 1% of GDP in 2015-16, says Economic Survey.

12.22 PM: Govt must adhere to medium-term fiscal deficit target of 3 per cent of the country’s gross domestic product (GDP), says Economic Survey.

12.20 PM: Govt will adhere to fiscal deficit target of 4.1% of GDP in 2014-15 despite challenges

12.18 PM: Double digit economic growth trajectory now a possibility

12.15 PM: Govt committed to fiscal consolidation; enhancing revenue generation is a priority: survey

12.15 PM: India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline, says Economic Survey.

12.14 PM: Overhauling of subsidy regime would pave the way for expenditure rationalisation

12.14 PM: Food subsidy bill rises 20 pc in April-January 2014-15 at Rs 1.07 lakh cr, says Economic Survey.

12.12 PM: Foodgrain output in 2014-15 at 257.07 mn tons; will exceed the average production of last 5 years by 8.5 mn tons

12.12 PM: There’s political mandate for reform & benign external env now. Forex reserves going up

 

 

 

(With inputs from agencies)