Economic Survey 2014 – 15, is tabled by the
Finance Minister Arun Jaitely today in the Parliament. The survey has projected
economic growth rate between 8.1 – 8.5 per cent in 2015-16 on the basis of new
GDP calculation formula. As per the survey, the government is committed
to fiscal consolidation and will restrict fiscal deficit to 4.1 per cent of the
GDP in the current financial year.
Background: Economic Survey is presented by the Union
Finance Minister of India every year in the Parliament, before the Union Budget.
It is an annual document of the Ministry of Finance, Government of India, which
reviews the developments of Indian Economy over the previous year. It also
summarizes the performance on major development programmes and highlights the
policy initiatives of the government and prospect of the economy in the short
to medium term.
Highlights of Economic Survey 2014-15:
Fiscal Deficit
i. India must meet its medium-term fiscal deficit
target of 3 per cent of GDP
ii. Government will stick on to fiscal deficit target
of 4.1 percent of GDP in 2014/15
iii. Govt should ensure expenditure control to reduce
fiscal deficit
iv. Expenditure control and expenditure switching to
investment key
Economic Growth
i. 2015-16 GDP growth seen at over 8 pct year-on-year
ii. Double digit economic growth trajectory now a
possibility
iii. Economic growth at market prices seen between
8.1-8.5 per cent in 2015-16 on new GDP calculation formula
iv. Total stalled projects seen at about 7 per cent of
GDP, mostly in private sector
Current Account Deficit
Estimated to fall 1 pct of GDP in coming fiscal
year
Inflation
i. Inflation shows declining trend in 2014-15
ii. Inflation likely to be below central bank
target by 0.5-1 percentage point
iii. Lower inflation opens up space for more
monetary policy easing
iv. Government and central bank need to conclude
monetary framework pact to consolidate gains in inflation control
v. Consumer inflation in 2015-16 likely to range
between 5-5.5 per cent
Reforms
i. There is scope for big bang reforms now
ii. India can increase public investments and still
hit its borrowing targets
Fiscal Consolidation
i. Government remains committed to fiscal
consolidation
ii. India can balance short-term imperative of
boosting public investment to revitalize growth with fiscal discipline
iii. Outlook for external financing is
correspondingly favourable
Agriculture
Food grains production for 2014-15 estimated at 257
million tonnes
Liquidity
Liquidity conditions expected to remain comfortable
in 2015-16
The Economic Survey is compiled by Chief
Economic Advisor of India Arvind Subramanian.