Economic Survey 2014-15

Sakshi Education

while also setting the agenda for reforms needed to further drive the expansion, prune wasteful expenditure and promote productive investment.

Tabled in parliament by Finance Minister Arun Jaitley and authored by a team led by Chief Economic Advisor Arvind Subramanian, the annual report card on the state of the economy said the growth should now rise further and double digit expansion was a possibility.

On inflation, the survey said, there has been a fall of over 6 percentage points since 2013, even as the external sector, which includes exports and inflow of foreign funds, was returning to a path of strength and resilience. Industrial growth has also picked up now.

It also had some good news to report on the farm sector. “Foodgrain production for year 2014-15 is estimated at 257.07 million tonnes and will exceed that of last years by 8.5 million tonnes.”

It also made a case for rationalisation of subsidies and said such doles did not appear to have had a transformative effect on the living standards of the poor. On the fiscal side, it said the government was committed to consolidation with revenue generation a priority.

Following are the highlights of the survey:

GDP growth seen at 8.1–8.5 per cent in 2015-16
Double digit growth trajectory; 8–10 per cent GDP in coming years
Inflation shows declining trend during April-December
Current Account Deficit (CAD) to decline to about 1 per cent in 2015-16
To adhere to fiscal deficit target of 4.1 per cent of GDP; to aim for 3 per cent
Committed to fiscal consolidation; to enhance revenue generation
More reforms on anvil; Goods and Services Tax, expanding direct benefit transfers to be game-changers
Food grains production for 2014-15 estimated at 257.07 million tonnes; will exceed last 5-year average by 8.5 million tonnes
NITI Aayog, 14th Finance Commission to enhance fiscal federalism
External Sector returning to strength, resilience
Need balance between ‘Make in India’ and ‘Skilling India’
Services sector negotiations at WTO crucial for India in removing many market access barriers
Revitalise PPP model to revive investment
Manufacturing and services equally important for growth
Consumer inflation in 2015-16 to be between 5-5.5%
Lower inflation opens up space for more monetary easing
There is scope for big bang reforms
Labour, capital, land, market reform and skills to be engines of growth
JAM Trinity — Jan Dhan Yojana, Aadhaar, Mobile — to help transfer of funds to poor without leakage
Shield domestic industry to promote ‘Make In India’
Borrowings to fund investment, not for meeting expenses
Food subsidy bill in April-Jan up 20% to Rs. 1.08 lakh cr
Reform Railway’s structure, commercial practices, overhaul of technology
Public investment key growth engine in short-run for Railways, but not a substitute for private investment
More disinvestments on the anvil in current fiscal
Under-recoveries on petroleum products to come down to Rs. 74,664 crore in 2014-15, from Rs. 1.39 lakh crore in FY14
4Ds — Deregulation, Differentiation, Diversification, Disinter (better bankruptcy laws) — to push financial sector growth
Implementation of GST to boost GDP, exports
Suggests medium to long term fiscal policy to target deficit, expenditure
Global commodity prices to remain weak in 2015
Ecommerce sector to witness 50% growth in 5 years