ECONOMIC SURVEY 2016-17 | A PIONEER
The Economic Survey 2016-17 embraces Big Data to highlight the interplay between flow of goods and people and its impact on economic activity.
ECONOMIC SURVEY 2016-17 | STATE OF THE ECONOMY
- GDP growth in 2016-17 to dip to 6.5%, down from 7.6% in the past financial year.
- Economic growth to rebound to 6.75-7.5% in 2017-18.
- Farm sector to grow at 4.1% this year, up from 1.2% in 2015-16.
- Growth rate of industrial sector estimated to moderate to 5.2% in 2016-17 from 7.4% last year.
- Demonetisation to affect growth rate by 0.25-0.5%, but to have long-term benefits.
- Fiscal gains from GST will take time to realise.
ECONOMIC SURVEY 2016-17 | ISSUES AND PRIORITIES
- The Survey advocates a different approach to tackle the twin balance sheet problems of overleveraged companies and bad loan-encumbered banks.
- Set up a centralised Public Sector Asset Rehabilitation Agency to take charge of the largest, most difficult cases, and make politically tough decisions to reduce debt.
- The Survey says structural reform in the banking sector has to consider the issue of government majority ownership in public sector banks.
- On fiscal management, the Survey highlights the risk in India’s strategy of relying on rapid growth, rather than steady primary balance adjustment, to reduce debt.
- To build on the long-term benefits of demonetisation, the Survey suggests a series of follow-up actions. This includes measures to drive demand, faster remonetisation, tax reforms, including bringing land and real estate into the GST, reducing tax rates and stamp duties.
- While giving a thumbs-up to the concept of a universal basic income (UBI), the Survey notes a number of implementation challenges could make UBI another add-on to anti-poverty and social programmes, making it financially unaffordable.
- The Survey suggests a radically different route to regional and social development, including offering UBI as an option for availing social benefits.
- The Survey calls for more privatisation in the civil aviation, banking and fertiliser sectors, to further the economic reforms process.
- Real estate prices could fall further, as investing undeclared income in real estate becomes more difficult, the Survey says.