Highlights of Economic Survey 2014-15

Hon. Finance Minister Arun Jaitley tabled Economic Survey 2014-15

FISCAL DEFICIT

* India needs sharp fiscal correction

* Fiscal situation of the central government is worse than it appears

* Need for subsidy reforms for fiscal consolidation

* Recommends raising tax-to-GDP ratio for fiscal consolidation

* Shortfall in revenues can be contained through better mobilisation and reforms

* External debt remains within manageable limits

GROWTH

* GDP growth seen at 5.4-5.9 pct in 2014/15

* Economic growth of 7-8 pct not seen before 2016/17

* Downward risk to economic growth due to poor monsoon, external factors

INFLATION

* Government needs to move towards low and stable inflation through fiscal consolidation

* Wholesale Price Index (WPI)inflation expected to moderate by end-2014

* Consumer Price Index (CPI) inflation showing signs of moderation

* Needs to create a competitive national market for food

BALANCE OF PAYMENTS

* Improvement in balance of payments position during late 2013-14 was swift thanks to import restrictions and economic slowdown

* Need to adjust to advanced economies’ event exit from accommodative monetary policy stance

SUBSIDIES

* Rationalization of subsidies such as fertilizer and food essential

* Need to shift subsidy programme from price subsidies to income support

TAXATION

* Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods and services tax (GST)

* GST to play vital role in indirect tax reform

FOREX MARKET

* Intervention in forex market by Reserve Bank of India is behind accumulation of reserves “generally”