 "Labourers works at the construction site of a residential building in Mumbai. Photo: Reuters")
India forecast its economy would grow 7-7.5% in the fiscal year to March 2017, the Economic Survey said on Friday, ahead of the presentation of the annual budget by Finance Minister Arun Jaitley on Monday.
The economic survey, the basis for Jaitley's budget for the fiscal year starting April 1, projected India to grow 8% in the next couple of years.
Read our full coverage on Union Budget 2016
Read our full coverage on Union Budget 2016
However, the government cautioned that if the world economy remained weak, India's growth will face considerable headwinds.
On the domestic side, two factors can boost consumption, increased spending from higher wages and allowances of government workers if the Seventh Pay Commission is implemented and return of normal monsoon.
At the same time, the Survey enumerated three downside risks - turmoil in global economy could worsen the outlook of exports, contrary to expectations oil price rise would increase the drag from consumption and the most serious risk is the combination of these two factors.
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#EconomicSurvey 2015-16:Expects GDP growth rate for 2015-16 in the range of 7 % to 7.75 % pic.twitter.com/kO5CVG96QR
— Ministry of Finance (@FinMinIndia) February 26, 2016
The survey was prepared by the finance ministry's chief economic adviser Arvind Subramanian.
Following are the highlights of the report:
Fiscal Deficit
- 2015/16 fiscal deficit seen at 3.9% of GDP seems achievable
- 2016/17 expected to be challenging from fiscal point of view
The three main deficit figures, as per #EconomicSurvey #EconomicSurvey2016 pic.twitter.com/VQd9CIJw1W
— PIB India (@PIB_India) February 26, 2016
Inflation
- Low inflation has taken hold, confidence in price stability has improved
Current Account Deficit
- 2016/17 current account deficit seen around 1-1.5%of GDP
