India Faces Challenge On Fiscal Front After Slowdown, Says Economic Survey: Highlights

India predicted on Thursday that economic 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 in Parliament on Thursday, said the country 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 Economic Survey 2018-19 report:

GROWTH

• 2019/20 GDP growth will pick up on higher private investment and robust consumption
• 2019/20 GDP growth seen at 7 per cent year-on-year
• 2018/19 growth rate for agriculture, forestry and fishing sector growth seen at 2.9 per cent
• Lower global oil prices will boost consumption
• Lower global growth, increased uncertainty over trade tensions could hit exports

FISCAL DEFICIT

• Fiscal deficit pegged at 3.4 per cent of GDP for 2018-19
• Revised glide path projects fiscal deficit of 3 per cent 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 billion, down from $424.5 billion in previous year
• Imports slated to grow 15.4 per cent while exports projected to grow 12.5 per cent in 2018/9

INFLATION

• Average inflation in the last five years was less than the inflation level of the preceding five 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