Economic Survey 2015-16

Finance Minister Arun Jaitley tables Economic Survey 2015-16 report.

Fiscal Deficit

  • India must meet its medium-term fiscal deficit target of 3 percent of GDP

  • Government will adhere to fiscal deficit target of 4.1 percent of GDP in 2014/15

  • Govt should ensure expenditure control to reduce fiscal deficit

  • Expenditure control and expenditure switching to investment key


  • 2015/16 GDP growth seen at over 8% y/y

  • Double digit economic growth trajectory now a possibility

  • Economic growth at market prices seen between 8.1 – 8.5 percent in 2015/16 on new GDP calculation formula

  • Total stalled projects seen at about 7 percent of GDP, mostly in private sector


  • There is scope for big bang reforms now

  • India can increase public investments and still hit its borrowing targets


  • Inflation shows declining trend in 2014/15

  • Inflation likely to be below central bank target by 0.5 – 1 percentage point

  • Lower inflation opens up space for more monetary policy easing

  • Govt. and central bank need to conclude monetary framework pact to consolidate gains in inflation control

  • Consumer inflation in 2015/16 likely to range between 5-5.5 percent

Fiscal Consolidation

  • Govt. remains committed to fiscal consolidation

  • India can balance short-term imperative of boosting public investment to revitalize growth with fiscal discipline

  • Outlook for external financing is correspondingly favourable

Current Account Deficit

Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in 2015/16


Overhauling of subsidy regime would pave the way for expenditure rationalisation


Liquidity conditions expected to remain comfortable in 2015/16


  • Tax base should widen to over 20% from 5.5% now

  • Need to phase out tax exemptions

  • Property taxation an area needing “urgent attention”

  • Higher property tax rates to check realty speculation

  • Higher property tax to improve local govt finances

External Sector

  • Exports may pick up FY17

  • Headwinds to growth may come from weak global demand

  • Export slowdown may continue for a while

  • FTAs leading to higher imports, exports

  • India must plan for major currency readjustment in Asia

  • India compares favourably with peer economies

  • Foreign demand seen weak

Farm Sector

  • India farm growth seen low for second year in a row

  • La Nina to have positive impact on farm

  • Fertiliser subsidy should shift to direct cash transfer

  • Subsidised fertiliser bag purchase cap to improve targeting

  • Must bring urea under Nutrient Based Subsidy programme

  • Need to rationalise fertiliser subsidy based on inputs, crops

  • Need deft supply management as rabi output seen low

Service Sector

Services sector growth in 2015-16 seen at 9.2%

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