The Economic Survey 2015-16 was tabled in the Parliament last week by Mr Arun Jaitley, Union Minister for Finance, Government of India. The survey forecasts an economic growth rate of 7 to 7.75 per cent for FY17, as compared to the growth rate of 7.6 per cent in FY16. More importantly, the Survey said that a three-pronged strategy of promoting competition, investing in health and education while not neglecting agriculture will help India to achieve its long-term potential growth rate of around 8-10 per cent. While the Economic Survey has been traditionally seen as presenting a prescriptive narrative for government policies, the recent Survey moved a step further bringing a perspective keeping the global economy in mind.
Other important highlights like India’s potential to become a leading investment destination going ahead, fiscal deficit of 3.9 per cent 2015-16 of GDP seems achievable, Reserve Bank of India (RBI) expected to meet 5 per cent inflation target by March 2017, services sector contributed 66.1 per cent of India’s Gross Value Added (GVA) growth in 2015-16, among others made the Survey a balanced and forward looking at the same time. Factors like increased spending from higher wages and allowances of government workers if the 7th Pay Commission is implemented and return of normal monsoon are expected to result in a boost to the consumption side, the Survey added.
The Survey not only highlighted the urgency to move on key issues like port infrastructure, it also highlighted achievements like a 40 per cent rise in foreign direct investment (FDI) from October 2014 to June 2015 since the launch of the Make in India initiative (in September 2014). Similarly, JAM ( Jan Dhan, Aadhaar and mobile) has been a successful programme from the Government of India. In 2014-15, JAM was involved in distributing benefits to 20 per cent of India’s population across a range of government programs, from education and labour schemes to subsidies and pensions.
Overall, market experts have shown confidence in the direction provided by the Survey and an improvement in the global economic forces can be expected to further boost the growth of Indian economy.