New Delhi: The Finance Minister Arun Jaitley on Monday presented the Economic Survey of 2017 in the parliament. The survey has predicted a growth rate of 7-7.5% in the year 2018-19, The Government while presenting the survey, which is the report card of the developments in the Indian economy over the previous 12 months promised to “whole-heartedly spend on the development projects”. The government has also urged to divert the focus from fiscal deficit and instead focus on development. Economic Survey 2017-18:
  • In  2017-18, the Real GDP growth rate was 6.75%, nominal growth of 10.5%
  • GST revenues doing well: 12 percent growth, better buoyancy than previous taxes
  • Post-demonetization and GST, increase in new tax filers (over and above natural increase) of about 1.8 million and some boost to individual income tax collections
 
  • Upside potential: Exports, pick-up in private investment Factors to be watched: high/rising oil prices, sharp corrections of stock prices, “sudden stall” of capital flows
 
  • Policy Agenda for coming year: Support agriculture; stabilize GST; finish resolution + recapitalization; privatize Air-India; head off macro-economic pressures
 
  • Are markets misunderstanding government borrowing? About Rs 40,000 crores of general government’s 2017-18 borrowing does not reflect underlying deficits
 
  • India’s stock market boom different from U.S. Better profit expectations, large portfolio allocation away from gold and real estate into stocks and higher interest rates; warrants heightened vigilance
 
  • Capital raising (public+pvt.) has increased substantially but incommensurate with low cost of stock market capital (inverse of price-earnings ratio); compare with previous episode
 
  • GST shows cooperative federalism “technology” is powerful, must be used for other reforms involving states: agriculture, power, DBT India went from “crony socialism to stigmatized capitalism” hence recent actions on twin balance sheet noteworthy
 
  • Textile package boosted exports of key man-made ready-made garments by 16 percent