ASSOCHAM hails Economic Survey-II as 'correct assessment of economy'

The Economic Survey 2016-17, Part II, presented in the Parliament on Friday has done a correct assessment of the state of the economy, highlighting the stress in various sectors such as power and telecom, even as deflationary impulses are due to subdued demand, said D S Rawat, ASSOCHAM Secretary General.

"The survey has rightly pin pointed the moderation in growth in the industrial output as also services, the key drivers of the economy. Both these sectors need some immediate steps like resolution of the bank NPAs and a pragmatic approach for the "twin balance sheet" problem," he added.

Further, Rawat opined that reforms like disinvestment of Air India and emphasis on raising non-fare revenue for the Railways are welcome suggestions, along with those relating to education and health.

Highlighting monetary management and financial intermediation, the Economic Survey Part II, tabled in the Parliament reflected strong growth in tax revenue, sustenance of the pace of capital spending and a consolidation of non-salary or pension revenue expenditure.

As per the survey, the Union Budget for 2017-18 opted for a gradual fiscal consolidation path: the fiscal deficit is expected to decline to 3.2 percent of the GDP in 2017-2018.

The fiscal deficit target of three percent of the GDP under the FRBM framework is projected to be achieved in 2018-19.

The survey mentioned that inflation is expected to remain below the Reserve Bank of India's (RBI) four percent target through to the end of the fiscal year and described scope for monetary easing as "considerable".

However, it indicated that sluggish growth and increasing indebtedness in some sectors of the economy have impacted the asset quality of banks and this is a cause for concern.