Survey sees robust revival of economy

The Economic Survey 2017-18 is a combination of an economic and social document in line with the government’s programme of inclusive growth. It takes note of modern-day realities and draws the government’s attention to uncertainties created by climate change and new emerging threats like cyberwarfare. It nudges the government to show stronger commitment on the gender front as it does in the ease of doing business, as the sex ratio remains highly skewed despite programmes like Beti Bachao, Beti Padao. It also suggests India should transit from a consumer economy to a knowledge economy if it’s to keep its number one position as the fastest-growing economy globally.

As the Survey precedes the Union Budget, to be presented on February 1, it’s a pointer to the Budget on these critical issues. The Survey places growth at 6.75 per cent this year and 7-7.5 per cent in 2019, indicating that the devastating impact of demonetisation and the hasty introduction of GST is receding. The country is likely to see a robust revival of the economy with a pickup in manufacturing, private investment and exports, among other indicators. However, it cautions the government to be watchful about oil prices, saying it’s a risk it must contend with. If prices remain at the current high level, it could lead to a rise in inflation.

The Budget’s focus is expected to be on education, agriculture and employment.  The finance minister has to find ways to boost implementation of the Prime Minister’s poll promises of fair price plus bonus to farmers who are in a state of unrest as none of these promises have materialised. The denial of remunerative prices to farmers is a major factor responsible for rural distress. They are also unable to avail of education and health facilities. There’s also good news on the government’s revenue front as the tax base  has expanded considerably after GST’s introduction. Union finance minister Arun Jaitley had said if the tax base widens, it might be possible to reduce the burden on honest taxpayers. It’s hoped this will be reflected in the Budget.

The Survey did well to bring up the issue of government litigation. The State is known as the biggest litigant and the Survey suggests the tax department can use greater self-restraint by limiting appeals, and also set up more lower courts to reduce the higher judiciary’s burden. As in last year, no “big bang” reforms are expected. The Survey says the government doesn’t have to do anything new but concentrate on what it has already started, like resolution of non-performing assets of banks, recapitalisation of banks, implementing the Bankruptcy Code and making it easier for global investors to bring their funds into India, besides maintaining vigil on the oil and stockmarket front, where there could be a sharp correction in stock prices.