Pitching for 'Big Bang' reforms, the pre-budget Economic Survey today called for improving business environment by making regulation and taxes less onerous to help push growth to 8.1-8.5% next fiscal, and to double digits in the coming years.
"India has reached a sweet spot and there is scope for Big Bang reforms now," said the Survey on the eve of the new government's first full-year Budget, to be presented by Finance Minister Arun Jaitley..
Read our full coverage on Union Budget
A clear political mandate for reforms and a benign external environment, it said, "is now expected to propel India to double digit growth trajectory". The BJP-led NDA government came to power in May last year wining a clear mandate.
Other areas highlighted by the Survey include reforming labour laws, building infrastructure and enabling connectivity to reduce cost of doing business in the country.
"In the short run, growth will receive a boost from lower oil prices, from likely monetary policy easing facilitated by lower inflation and lower inflationary expectations, and forecast of a normal monsoon," the Survey said.
It also indicated that the growth during 2014-15 may touch 8% on better farm output. The CSO had projected growth at 7.4% for current fiscal.
"Several reforms have been undertaken and more are on the anvil. The introduction of the GST and expanding direct benefit transfers can be game-changers," it added.
The major reforms undertaken by the government include deregulation of diesel prices, direct transfer of cooking gas subsidy, hiking FDI cap in defence and insurance, Ordinance on Coal.
Stating that macro economic situation in the country has improved significantly in the current year, the Survey raised concerns over growth pattern in exports, construction and mining activities.
Investment activity, which is slowly picking up, needs to be grounded on a stronger footing, it said.
India must adhere to the medium term fiscal deficit target of 3% of the GDP, it said, adding "this will provide fiscal space to insure against future shocks and also to move closer to the fiscal performance of its emerging peers.