Govt. committed to growth, development: Bibek Debroy

The Chairman of the Economic Advisory Council Dr. Bibek Debroy said on Monday that the Economic Survey reflects the government's commitment to both growth and development.

Highlighting the optimistic outlook of the economy as reflected in the survey, he said the emphasis on women's empowerment is a welcome step.

This year's Economic Survey estimated a real Gross Domestic Product (GDP) growth rate of 6.75 per cent for the full year, based on a 7.5 per cent real growth for the second half of the year. For 2018-19, it projected a real GDP growth between 7 - 7.5 per cent.

This, Debroy said, is optimistic in its tone because of the government's commitment to carry forward structural reforms like the Goods and Services Tax (GST), deregulation measures, bank re-capitalisation and resolution through the Insolvency and Bankruptcy Code (IBC) process.

Debroy, however, claimed that in 2018-19, the real GDP growth rate is likely to be closer to 7.5 per cent rather than 7 per cent.

"The government is committed to fiscal consolidation and prudent public expenditure. It would be in order if public expenditure is also financed through off-Budget instruments. It is rightly mentioned that growth drivers will have to fundamentally emerge through exports, private investments and consumption. The survey has already noted the likely pick-up in both exports and private investments," an official statement read.

Debroy also opined that the impact of any increase in crude prices, will be more than compensated by recovery in exports, private investments and even private consumption, unless real interest rates remain too high.

The Economic Survey, tabled earlier in the day, emphasized that demonetisation was only a blip that did not last beyond mid-2017, after a number of misconceptions arose on the same.

The survey also noted that the number of tax payers has increased due to the government's policy measures, though many of these tax payers declared incomes that are close to the minimum threshold levels.

Furthermore, the survey showed that formal sector employment was much higher than what is commonly suggested.