Arvind Subramanian on Economic Survey 2018

The Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM), Dr Bibek Debroy, has said that the Economic Survey is a reflection of government's commitment to growth and development. However, the formal sector, defined in terms of being part of the GST net, suggests a formal sector payroll share of 53 per cent.

Congress President Rahul Gandhi today took a swipe at the Modi government after the Economic Survey was released, saying "Acche Din" are here, except for "minor hiccups" such as a decrease in the growth of GDP, agriculture and job creation.

The Indian economy will grow at 6.75 per cent for the rest of 2017-18 as opposed to 6.5 per cent predicted by the advance estimates by CSO.

In 2017-18 (April-December) trade deficit (on custom basis) shot up by 46.4 percent to US$ 114.9 billion with POL deficit growing by 27.4 percent and non-POL deficit by 65.0 per cent.

The survey, which is released every year just before the central government presents its budget in Parliament, has devoted an entire chapter to climate change and its impact on agriculture.

Arvind Subramanian on Tuesday argued that the estimated GDP growth for the next fiscal in the Economic Survey 2017-18 is based on the pre-assumed crude oil prices.

He said that going by the "Introduction" and paragraphs 1.31 to 1.33, it emerges that after almost four years in office, the NDA government has "admitted that it has failed to address the challenges in education, employment, and agriculture, and hopes to do so in the last year of its 5-year term".

Subramanian warned that oil prices remained a big cause for concern.

Subramanian said that when asset prices rise beyond a certain level, a correction is very likely. He added that there is a need to see why the Indian economy de-coupled from the rest of the economy over 3-4 quarters.

"This has led to a convergence in the price-earnings ratios of the Indian stock market to that of the United States at a lofty level of about 26".

The other risk which can emerge is if the booming stock markets (Sensex touched a new lifetime high of 36,283 on Monday) corrected sharply, provoking a "sudden stall" in capital flows.

The CEA added that if the Insolvency and Bankruptcy Code process progresses well and expeditiously - and if actions happen on time and are accepted without glitches - then there is a chance that private investment will pick up again "after so many years of languishing".

". Taking seasonality into account it is found that there is a 0.8 percent monthly trend increase in new tax filers (annual growth of 10 percent)", the survey report said.

Direct and Indirect taxes registered bound to largely increase.

In Tourism, India's foreign tourist arrivals (FTA) grew 9.7% in 2017 to 8.8 million and Foreign Exchange Earnings (FEE) grew by 8.8%.

  • Santos West