Economic survey called spade a spade

Mumbai: The difference in the presentation of the Rail Budget by railway minister Suresh Prabhu and the Economic Survey 2015-16 is as different as chalk and cheese.

Though the Economic Survey was presented by finance minister Arun Jaitley, it was authored by the chief economic adviser Arvind Subramanian.

The rail budget was a please-all, tame, low-key budget, even pleasing mothers with babies who were to be provided with baby food and encouraging railway employees to set up start-ups.

It was more about expanding the existing services of rail networks, hi-fi availability, and generating more mandays of employment and offering hi-funda stuff like bio-toilets.

It was devoid of the usual figures as to where, for instance, the finance for the 44 new projects estimated to cost Rs 93,000 crore would come from. There was nothing specific except vague things like tappi-ng market borrowings, foreign participation.

The Survey in total contrast was bold, fearless of calling a spade a spade, and ooooooouch! had no compunction in taking on even RBI governor Raghuram Rajan, as Mr Subramanian was unapologetic about “treading on toes” as he me-ntioned in his post-survey conference budget.

He even accused Dr Rajan of mismanaging liquidity as being the main cause and not the small savings rates, the excuse trotted out, for banks being unable to pass on the rate cuts.

He went further to suggest that the RBI should contribute from its huge reserves, one of the highest in the world, towards capitalisation of banks. The government has also been trying to dip into these reserves hoping for huge dividends from the RBI.

He took on the super-rich in no uncertain terms and painstakingly provided figures to show how in just six items like aviation fuel, gold, cooking gas et the rich are subsidised by the government to the tune of Rs 1.03 lakh crore.

His was really a cracker of an Economic Survey though in one area where Mr Prabhu scores over him is in mentioning job generation numbers.

The CEA could have given numbers for the mandays generated through the PM’s Swachh Bharat, Make-in-India and several others since no one seems to consider this.

Following are the highlights of Economic Survey 2015-16, tabled in Parliament on Friday.

• Projects retail inflation at 4.5-5% for 2016-17    
• Low inflation takes hold, price stability has increased
• Pay Commission implementation not to destabilise prices
• Proposes widening of tax net from 5.5% of earning individuals to more than 20%
• Challenging external environment to cast shadow on economic policies
• 3.9% fiscal deficit target achievable this year, coming year to be challenging
• Subsidy bill to be below 2% of GDP next fiscal
• Concerned over delay in GST Bill
• Balance sheets of corporate, banks remain stressed
• Need 4Rs: Recognition, Recapitalisation, Resolution and Reform
• PSU banks’ capital need at Rs 1.8 lakh crore by FY19
• Current account deficit at 1-1.5%, forex reserves at USD 351.5 bn in
• mid-February
• Services sector growth in 2015-16 seen at 9.2%
• Suggests revival of domestic demand as foreign capital outflow likely
• Sees good performance by industrial, infrastructure, corporate sectors due to recent reform
• More investment in health, education; focus on agriculture
• Government tax revenues to be higher than budgeted
• Exports slowdown to continue; pick up in next fiscal
• India should resist protectionist measures in trade
• Suggests reform package for fertiliser sector