Economic Survey 2016: Here Are 10 Must-Know Points

The Economic Survey, tabled in Parliament on Friday three days ahead of budget, called for fiscal prudence and stable inflation, while acknowledging the risks to growth. The flagship document prepared by Chief Economic Adviser Arvind Subramanian termed India as a "haven of stability" and an "outpost of opportunity" amidst gloomy international economic landscape. The Sensex snapped a three-day losing streak, while the rupee and bonds also rallied after the tabling of the Economic Survey. Here is your 10-point cheat-sheet on the Economic Survey 1) The Economic Survey expects India's GDP to growth at 7-7.75 per cent in FY17, the same pace as in the current fiscal (7.6 per cent); the wide range is on account of external and monsoon uncertainties, the Survey said. India can grow at 8 per cent or higher in next two years, according to the Economic Survey. 2) The government can achieve FY16 fiscal deficit target of 3.9 per cent of GDP, the Survey said. In good news for investors, the Economic Survey argued for adhering to 3.5 per cent fiscal deficit target in FY17. However, the document conceded that FY17 will be challenging from fiscal point of view. 3) The government should review its medium-term fiscal strategy, in view of the 7th Pay Commission salary hike proposal and upcoming recapitalization of banks, the Economic Survey said. 4) Consumer price or retail inflation is seen around 4.5 to 5 per cent in FY17 as against 4.9 per cent between April to January 2016. Inflationary expectations are muted because of the weakness in crude oil prices, the Economic Survey said. 5) India's current account deficit is seen around 1-1.5 per cent of GDP in FY17, the Economic Survey said. 6) The rupee's fair value can be achieved through monetary relaxation, the Survey said. India needs to prepare itself for a major currency readjustment in Asia in wake of a similar adjustment in China. Rupee's gradual depreciation can be allowed if capital inflows are weak, the Economic Survey said. 7) Stretched corporate and bank balance sheets have affected the prospects for reviving private investments, the Survey said. The government should make available Rs 70,000 crore via budgetary allocations during current and succeeding years to banks. By FY19, state-run banks would require around Rs 1.8 lakh crore in fresh capital. Non-financial companies should be sold to infuse capital in state-run banks. Underlying stressed assets in corporate sector must be sold or rehabilitated. 8) Tax exemptions should be phased out and tax base should be widened from current 5.5 per cent of earning individuals to more than 20 per cent. Tax revenue will be higher than budgeted levels in FY16, the Economic Survey said. 9) In order to take advantage of the democratic dividend and meet growing aspirations of those entering the workforce, the economy needs jobs that are good, safe, productive and well paying, the Economic Survey said. 10) The Economic Survey enumerated three downside risks - turmoil in global economy could worsen the outlook of exports, oil prices rise would increase the drag from consumption and the most serious risk is combination of the above two factors.

Economic Survey 2016: Here Are 10 Must-Know Points

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