Highlights - Economic Survey ahead of budget

REUTERS - India's economy will grow at a rate of more than 8 percent in the 2015/16 fiscal year, a key economic report said on Friday, indicating scope for big bang reforms.

Economic growth at market prices is expected to be between 8.1 and 8.5 percent, it said.

The survey prepared by the finance ministry's chief economic adviser Arvind Subramanian on the state of Asia's third-largest economy was released ahead of Saturday's federal budget announcement for 2015/16 fiscal year that begins on April 1.

Following are the highlights of the survey:

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

GROWTH

* 2015/16 GDP growth seen at over 8 pct y/y

* Double digit economic growth trajectory now a possibility

* Econ growth at market prices seen between 8.1 - 8.5 percent in 2015/16 on basis on new GDP calculation formula

CURRENT ACCOUNT DEFICIT

* Estimated to fall 1 pct of GDP in coming fiscal year

INFLATION

* 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

* CPI inflation in 2015/16 is likely to range between 5 - 5.5 percent

REFORMS

* There is scope for big bang reforms now

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

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

SUBSIDIES

* Overhauling of subsidy regime would pave the way for expenditure rationalisation

(Compiled by Tony Tharakan and Rupam Jain Nair in NEW DELHI)