New Delhi, January 31: After the president`s speech Finance Minister Arun Jaitley tabled the Economic Survey for 2016-17 in the Parliament, today. It projected real Gross Domestic Products (GDP) to be in the range of 6.75 percent to 7.5 percent during next financial year. It also said India would remain fastest growing major economy in the world. The survey said GDP growth rate at constant market prices for the current fiscal is placed at 7.1 per cent. It also said Agriculture sector will grow at 4.1 percent in the current year which is up from 1.2 percent in 2015-16.
The Survey Report says that demonetization has had short-term costs but holds the potential for long-term benefits. However, follow-up actions to minimize the costs and maximize the benefits would possibly make India the fastest-growing major economy in the world in 2017-18, following a temporary dip in 2016-17. The report also said the cash squeeze in the meantime will have significant implications for GDP, reducing 2016-17 growth by 0.25 percent to 0.5 percentage points compared to the baseline of 7 percent.
The Survey points out that the capacity of the State in delivering essential services such as health and education is weak due to low capacity, with high levels of corruption and red tape. According to the Survey, redistribution by the government is far from efficient in targeting the poor.
The Survey notes that over the past two years, the government has made considerable progress toward reducing subsidies, especially related to petroleum products. Technology has been the main instrument for addressing the leakage problem and the pilots for direct benefit transfer in fertilizer represent a very important new direction in this regard.
The Survey highlights difficulties in privatizing public enterprises, even for firms where economists have made strong arguments that they belong in the private sector. In this context, the Survey points towards the need to further privatize the Civil Aviation, Banking and Fertilizer sectors.