The Economic Survey 2016-17, tabled in the Parliament by Finance Minister Arun Jaitley on January 31, 2017, underlined the need for more reforms.
Growth
• GDP growth rate at constant market prices for
the current year 2016-17 is placed at 7.1%.
• The federal statistics office's estimate of 7.1% growth for 2016-17 likely to be revised downwards.
Fiscal Deficit
• The CAD narrowed in the first half (Hl) of 2016-17 to 0.3% of GDP from 1.5% in H1 of 2015-16 and 1.1% in 2015-16 full year.
• Trade deficit declined to $ 76.5 billion in 2016-17 as compared to $ 100.1 billion in the corresponding period of the previous year.
Monetary Policy
• Sharp rise in prices in 2017-18 may cap monetary easing headroom.
• Market interest rates seen lower in 2017-18 due to demonetisation.
• The government debt to GDP ratio in 2016 seen at 68.5% down from 69.1% in 2015.
Demonetisation
• Demonetisation to affect growth rate by 0.25-0.5%, but to have long-term benefits.
• Remonetisation will ensure that the cash squeeze is eliminated by April, 2017.
Banks
• Suggests setting-up of public sector asset rehabilitation agency to take charge of large bad loans in banks.
* The central agency with government backing could overcome coordination and political issues on bad loans.
Taxation
• Income tax rates and real estate stamp duties could be reduced.
• Time table for reducing corporate tax rate could be accelerated.Universal Basic Income
• The UBI proposal a powerful idea, but not ready for implementation.
• The UBI an alternative to plethora of State subsidies for poverty alleviation.
Highlights
Growth
• GDP growth rate at constant market prices for
the current year 2016-17 is placed at 7.1%.
• The federal statistics office's estimate of 7.1% growth for 2016-17 likely to be revised downwards.
Fiscal Deficit
• The CAD narrowed in the first half (Hl) of 2016-17 to 0.3% of GDP from 1.5% in H1 of 2015-16 and 1.1% in 2015-16 full year.
• Trade deficit declined to $ 76.5 billion in 2016-17 as compared to $ 100.1 billion in the corresponding period of the previous year.
Monetary Policy
• Sharp rise in prices in 2017-18 may cap monetary easing headroom.
• Market interest rates seen lower in 2017-18 due to demonetisation.
• The government debt to GDP ratio in 2016 seen at 68.5% down from 69.1% in 2015.
Demonetisation
• Demonetisation to affect growth rate by 0.25-0.5%, but to have long-term benefits.
• Remonetisation will ensure that the cash squeeze is eliminated by April, 2017.
Banks
• Suggests setting-up of public sector asset rehabilitation agency to take charge of large bad loans in banks.
* The central agency with government backing could overcome coordination and political issues on bad loans.
Taxation
• Income tax rates and real estate stamp duties could be reduced.
• Time table for reducing corporate tax rate could be accelerated.Universal Basic Income
• The UBI proposal a powerful idea, but not ready for implementation.
• The UBI an alternative to plethora of State subsidies for poverty alleviation.
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