The economy should grow between 7 per cent and 7.5 per cent in the next fiscal year starting April 1, 2018, with exports and private investment set to rebound, the Economic Survey says. Finance Minister Arun Jaitley tabled the survey, the annual report card of the country's financial health, in Parliament on Monday as the Budget session began.
- Economic Survey sees GDP growth at 6.75% in current fiscal year
- Economic Survey is a report card of country's financial health
- IMF projects India to grow at 7.4% in 2018, 7.8% in 2019
The Economic Survey sees GDP growth at 6.75 per cent in the current fiscal year, ending March 31, 2018. It says a series of major reforms undertaken over the past year will allow real GDP growth to rise to between 7.0 per cent and 7.5 per cent in 2018-19, thereby reinstating India as the world's fastest growing major economy.
The stock markets ended at record closing highs, with the Sensex gaining 232 points to 36,283 and the Nifty rising 60 points to 11,130. But bonds took a hit after the Survey called for a pause in fiscal consolidation, leading to concerns that the government may widen its fiscal deficit targets when it unveils its Budget on Thursday.
Chief Economic Advisor Arvind Subramanian, who has prepared the Economic Survey, said in a tweet that growth is reviving after temporary decoupling. There are robust and broad-based signs of revival in economic activity, he added.
"The temporary impact of GST and demonetisation has dissipated. Directionally, economy is picking up nicely and exports have picked up quite briskly in last three quarters," he said at a media briefing.
The economic survey says the launch of the Goods and Services Tax (GST), resolution of long-festering bad loans under the Bankruptcy Code, the implementation of a bank recapitalisation package for public sector banks and further liberalisation of the foreign direct investment regime will lift GDP growth, which began to accelerate from the second half of the current fiscal year.
The International Monetary Fund (IMF) projects the Indian economy to grow at 7.4 per cent in 2018, which will make it the fastest growing country among emerging economies. The IMF has also projected a growth rate of 7.8 per cent for India in 2019.
The economic survey has flagged risks from rising oil prices. "Some of the factors could have dampening effect on GDP growth in the coming year viz. the possibility of an increase in crude oil prices in the international market," it says.
It has also said that concerns have been expressed about growing protectionist tendencies in some countries but it remains to be seen as to how the situation unfolds.
The survey also listed out a series of policy agendas for fiscal 2018-19. These include lending an unequivocal support to agriculture sector, stablilising the GST, completing and recapitalisation of PSU banks and privatisation of Air India.
The economic survey is tabled ahead of the presentation of the union budget. Mr Jaitley will present the budget for 2018-19 on Thursday, February 1.