Economic Survey 2019 Highlights: GDP Growth to Rebound, Elections Blamed For Slowdown
The government's economic survey, presented to Parliament on Thursday, said India will face a challenge on the fiscal front following an economic slowdown impacting tax collections.
The Economic Survey was tabled in Parliament by Finance Minister Nirmala Sitharaman.
New Delhi: The Economic Survey of the government has predicted that GDP growth in the current fiscal year could rise to 7.0 per cent from the 6.8 per cent for the year that ended March 31, which was the slowest pace in five years.
The government's economic survey, presented to Parliament on Thursday, said India will face a challenge on the fiscal front following an economic slowdown impacting tax collections amid rising state expenditure on the farm sector. However, the investment rate was expected to pick up following improvement in consumer demand and bank lending, the report said.
Here are the highlights of the report:
- 2019/20 GDP growth will pick up on higher private investment and robust consumption
- 2019/20 GDP growth seen at 7% year-on-year
- 2018/19 growth rate for agriculture, forestry and fishing sector growth seen at 2.9%
- Lower global oil prices will boost consumption
- Lower global growth, increased uncertainty over trade tensions could hit exports
- Warns that investment rate seems to have bottomed out
- Blames January-March slowdown partly on poll-related uncertainty and NBFC crisis
- Fiscal deficit pegged at 3.4% of GDP for 2018-19
- Revised glide path projects fiscal deficit of 3% of GDP by FY2021
- Slow growth, goods and services tax, farm schemes will all pose challenges on the fiscal front
- There are apprehensions of slowing growth, which will have implications for revenue collections
- 2018/19 forex reserves seen at $412.9 bln, down from $424.5 bln in previous year
- Imports slated to grow at 15.4% while exports projected to grow at 12.5% in 2018/9
- Average inflation in the last 5 years was less than the inflation level of the preceding 5 years, matching the lowest levels attained in the country’s post-independence history
-Core inflation averaged higher than last year
- 2018/19 saw low headline as well as food inflation
- Deflation in the prices of pulses, vegetables and sugar
- Rural wage growth, that had bottomed out, has been rising since mid-2018
- Expects government policy to further lift restrictions on FPI inflows
- Warns revenue mop-up may be hit if growth slows in FY20
- In a veiled hint at the Reserve Bank to lower interest rates, the Finance Ministry says liquidity has remained systematically tight since September last year, impacting yields
- Aggressive export strategy must be part of investment-driven model
- Survey makes the case for investment as a key driver; says focus on SMEs key
With Reuters inputs
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