2016-17 Economic Survey tabled in the Parliament Tuesday Jan 31,2017

India's economy should grow between 6.75%  and 7.5 %  in the financial year beginning on April 1, 2017 Economic Survey, estimated on Tuesday Jan 31,2017

The Economic Survey, which sets the scene for Finance Minister Arun Jaitley's fourth annual budget on Wednesday, forecast that Asia's third-largest economy should steady after a hit from the government's shock decision in November to scrap most cash in circulation.

The survey was prepared by the finance ministry's chief economic adviser Arvind Subramanian.

The Economic Survey for 2016-17, tabled in the Parliament by Finance Minister Arun Jaitley on Tuesday Jan 31,2017  underlined the need for more reforms.

Highlights of the Economic Survey  2016-17

Growth

* 2017/18 GDP growth seen between 6.75 and 7.5 per cent year on year

* GDP growth rate at constant market prices for the current year 2016/17 is placed at 7.1 per cent

* The federal statistics office's estimate of 7.1 per cent growth for 2016/17 likely to be revised downwards

* Service sector is estimated to grow at 8.9 per cent in 2016/17

* Industrial growth rate expected to moderate to 5.2 per cent in 2016/17 from 7.4 per cent in 2015/16

Fiscal Deficit

* Implementation of wage hike, muted tax receipts to put pressure on fiscal deficit in 2017/18

* Need for fiscal prudence for both centre and states for fiscal health of the economy

* Fiscal windfall from low oil prices to disappear in2017/18 - TV channels

Monetary Policy

* Sharp rise in prices in 2017/18 may cap monetary easing headroom

* Market interest rates seen lower in 2017/18 due to demonetisation

Government debt

* Government debt to GDP ratio in 2016 seen at 68.5 per cent down from 69.1 per cent in 2015

Demonetisation

* Remonetisation will ensure that the cash squeeze is eliminated by April 2017

* Supply of currency should follow actual demand and not be dictated by official estimate of desirable demand

* Government windfall arising from unreturned notes should be deployed towards capital spending

Banks

* Suggests setting up public sector asset rehabilitation agency to take charge of large bad loans in banks

* Central agency with government backing could overcome coordination and political issues on bad loans

Taxation

* Income tax rates and real estate stamp duties could be reduced

* Timetable for reducing corporate tax rate could be accelerated

Universal basic income

* Universal Basic Income (UBI) proposal a powerful idea, but not ready for implementation

* UBI an alternative to plethora of state subsidies for poverty alleviation

* UBI would cost between 4 and 5 per cent of GDP