New Delhi: Chief Economic Adviser Arvind Subramanian is addressing the media on the details of the economic survey.
"The economic recovery from demonetisation requires policy support," Subramaniam said.
Economic Survey, the government sees FY18 GDP growth in range of 6.75-7.5%. It also outlines three main downside risks to FY18 GDP growth forecast adding that demoetisation, rise in oil prices and global trade tensions will affect the growth forecast.
The Survey sees fiscal windfall from invalid notes not returned. Excise related taxes will also fall around 0.1% of FY18 GDP.
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Jan 31, 2017 2:31 pm (IST)
HIGHLIGHTS OF ARVIND SUBRAMANIAN’s SPEECH
• Demonetisation has affected aggregate demand and aggregate supply
• There is genuine uncertainty on how the economy performing
• Wheat production has gone up to 7%, and main pulse is up by 10%
• Indirect tax collection has seen a dip
• There is a decline in the real estate price, purchase, launches, but that was the aim so that the equilibrium is achieved in India
• Two-wheelers sectors has seen a huge dip because demand for rural India has seen a setback
• Land should be included under the ambit of GST
• Need to reduce tax and stamp duties
• Investments, credit, cash investment, has suffered a setback
• Consumption should increase as remonetisation happens
• Consumption and government has been the drivers of growth in India
• There is a festering twin balance sheet problem that is affecting private investments
• Overall private investments declining. Investments in negative and that is worrisome.
• For bank credit, real credit from corporate sector to industry is declining
• But personal loans to consumers is increasing in double digits
• India may need a Public Sector Asset Rehabilitation Agency.
• Oil prices could go higher. Macro fiscal escalation will also increase.
• Trade tensions with China possible.
• If the world economy picks up, then outlook could be better than what projected so ar.
The Economic Survey is often seen as a signpost to the Union Budget. One of the key take away from the Economic Survey 2017-18 is the mention of Universal Basic Income, a concept that has been in currency recently.
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Jan 31, 2017 1:55 pm (IST)
Speaking on demonetisation, Arvind Subramanian quips the headline should now be ‘Finally, Chief Economic Adviser Speaks on Demonetisation’. Here’s what he says on note ban:
— Demonetisation is a radical currency social engineering measure
— Public debate on demonetisation has raised three issues —design and implementation, which the Economic Survey won’t dwell on; costs and benefits; and broader implications for future economic policy
— It’s fair to say that there has been a short-term cost for demonetisation that is real and significant, but also has the potential for long-term benefit
— GDP and tax collection will improve post-demonetisation in the long-term run
— Demonetisation has affected different forms of money differently
— It reduced the supply of cash dramatically, but increased the supply of deposits dramatically
Jan 31, 2017 1:53 pm (IST)
Demonetisation a very unusual experiment, says Arvind Subramian
The Economic Survey includes 14 chapters with medium-term and long-term vision. Chief Economic Advisor Arvind Subramanian says last year was characterised by robust macro-economic growth and stability when reserves were at an all-time high. He also takes a dig at rating agencies. “We should question the methodologies of these rating agencies,” he says.
CEA Arvind Subramanian says excise-related taxes to fall around 0.1% of GDP in FY18. Adds that the Indian economy successfully weathered volatility from US presidential elections and demonetisation. Further adds that the operational framework of FRBM needs to be modified.
Arvind Subramanian says rising crude prices could fan inflation. He adds that the outlook for GST collections in Finance Year 2018 is cautious, strongly advocates for universal basic income. The economic recovery from demonetisation requires policy support, says the Chief Economic Advisor
Jan 31, 2017 1:39 pm (IST)
Arvind Subramaniam’s press conference begins on a lighter note. He starts by quoting John Maynard Keynes on how a survey should have everything, then shifts to a Sholay dialogue that it should have comedy, drama and tragedy.
Jan 31, 2017 1:36 pm (IST)
The Economic Survey's GDP growth figure for the current fiscal is lower than 7.1 per cent the Central Statistics Office had forecast earlier this month. The Survey lists some of the challenges that might impede India’s progress. These include ambivalence about property rights and the private sector, deficiencies in state capacity, especially in delivering essential services and inefficient redistribution.
Jan 31, 2017 1:35 pm (IST)
The Economic Survey 2017, tabled in Parliament on Tuesday, pegs India's economic growth at 6.5 per cent for the current fiscal, down from 7.6 per cent recorded in the last financial year. It is expected to rebound in the range of 6.75-7.5 per cent in 2017-18.
Jan 31, 2017 1:34 pm (IST)
Chief Economic Advisor Arvind Subramanian is addressing the media on the Economic Survey 2017