Economic Survey right in emphasising remonetisation: Assocham

“One must compliment the Chief Economic Adviser for coming out with an honest assessment and suggesting that the credibility of the system would be strengthened if tax arbitrariness and harassment are ended,” said the Assocham president.

On the GDP growth projections both for the current fiscal and 2017-18, Kanoria said, the range given by the Economic Survey is wide enough and the global headwinds from the new US administration and the firming of oil prices have to be watched carefully. But, certainly, the impact of demonetisation is visible on the GDP in the current fiscal, as has also been conceded by the Economic Survey in the range of 0.75 and 0.5 percentage point.

“The survey has rightly picked up the potential risks to the global economy and its impact on India in the form of higher oil prices, trade tensions from sharp currency movements and geo-political factors. An upsurge in protectionism that could affect India’s exports, is surely a matter of concern,” opined Kanoria.

On the positive side, the impending Goods and Services Tax (GST) would be a game changer, for sure, in the medium to long term, though we may see some teething troubles.

With respect to Universal Basic Income (UBI), the Assocham suggested that it should not be another add-on; but if it can replace all and sundry subsidies and consolidate them into a single programme which is easy to implement with minimum of pilferage, then it could be considered.     

On fiscal deficit, the Assocham felt that while some amount of flexibility is desirable to boost consumption demand by way of cut in corporate tax and raising the personal income tax rate, overall direction of fiscal consolidation should not be compromised.