Mumbai: India's economy will grow at a rate of more than 8 per cent in the 2015-16 fiscal year while consumer inflation will drop to between 5 and 5.5 per cent, a government economic report said.
The report also indicated India can increase public investments and still hit its borrowing targets, while saying the country needed to adhere to its medium-term fiscal deficit target of 3 per cent of gross domestic product.
Commentary
Ganti Murthy, Head of Fixed Income, IDBI Asset Management, Mumbai
"The economic survey is the government's statement of intent. We still need to see how they manage the revenue and expenditure sides in the budget tomorrow.
"But the good thing is that they have confirmed their intent to stick to the 4.1 per cent fiscal deficit target for this fiscal (year), and more importantly they have come out with the 3 per cent fiscal deficit target for the medium term.
"But what's not clear is how they define medium term, we will have to watch out the budget for clues on that.
"The positive for the market is that there is now a clear scope for big bang reforms, with both WPI (wholesale price inflation) and CPI (consumer price inflation) expected to stay under the central bank's target"
S. Ramasamy, Chief Investment Officer, LIC Nomura Mutual Fund, Mumbai
"The survey shows positive numbers on fiscal deficit and GDP. If these targets are confirmed in the budget, expect a rally in bonds and equities.
"Given where crude is, I don't see why RBI can't cut rates. If budget sticks with these numbers of economic survey then I would not be surprised to see a rate cut by the Reserve Bank of India on Monday."
Shubhada Rao, Chief Economist, YES Bank, Mumbai
"It basically says the economy is now poised to take off, with key enablers getting into place.
"Triggering an investment-led growth environment should augur well for India's growth trajectory to get on to a higher path.
"The government is not going to be easing its resolve to maintain fiscal consolidation. We anticipate that given the comfort on inflation, measures to boost investment are likely to concretely come on board.
"We expect the Union Budget to maintain a similar underlying theme. We are looking at fiscal deficit projection of 3.6 per cent for FY16.
