The Economic Survey 2016-17
The Economic Survey 2016-17. The recent Economic Survey 2016-17 bolstered the third annual budget presented by the Finance Ministry under the leadership of Mr Arun Jaitely. India has been well titled as a “Haven of Stability” by Chief Economic Advisor Arvind Subramaniam and his team, yet projecting a cautious situation due to the gloomy international landscape. The main concerns though have been possible currency turmoils in Asia after China’s recent devaluation of Yuan.
The idiopathic recommendations of the survey concern to review Medium-term fiscal framework and realize the Medium Term Potential in two definite ways in the next two to five years. The Government firstly needs to pay attention to the retrievable setbacks and secondly the unfinished agendas waiting to be completed. The unfinished agendas though are multitudinous but to list the main ones: the Goods and Services Tax, strategic disinvestment, rationalization of subsidies, de-stressing of the balance sheet of both banks and private companies which is causing an effect on revival of private investments and the purpose can be solved by either selling or rehabilitating underlying stressed assets. STARTUPS IDEAS
The positive reflections in the survey indicate that Real GDP for the current fiscal year would be in between 7–7.5%. Also, the Government would keep up the 2015/16 fiscal deficit target of 3.9 per cent of GDP in the present year. Tax revenue is expected to be higher than budgeted levels in 2015/16. The Survey puts 2015-16 GDP growth at 7.6% below its earlier expectations of 8.1-8.5% expansion and hopes for India to achieve the potential of 8-10% rate in a couple of years.
The survey calls for reviewing and phasing out of the tax exemption raj that benefited the richer private sector and reasonable taxation to be applied to individuals. Indian Taxation scheme covers only 5.5 per cent of earning individuals under the tax nett, the ratio needs to be raised to a desirable estimate of about 23 per cent. Also, the survey recommends the property tax rates to be increased as Smart cities planned by the Government require public finance and for the same sound property taxation regime that is vital to India’s urban future.
The Government needs to spend on some particular priorities including, essential services that all citizens consume: public infrastructure, law and order, less pollution and congestion. The survey also recommended building fiscal capacity for the long run which can be achieved by transparent and efficient auctioning of public assets. Moreover, it has been stressed that economic development in India lags political development, an example is right in front of us, the Economic Survey has laid down that India’s rich feed off subsidies worth over Rs. 1 lakh crore a year that are meant for the poor. Such as railway tickets but the rich avail the subsidies of 34 per cent. Another example is the Aviation fuel that is taxed at about 20 per cent while diesel and petrol are taxed at about 55 per cent and 61 per cent. The real consumers of aviation fuel have essentially to be well-off.
The increased protectionism of information technology business of India is affecting around $143-billion and the survey puts forth an urge to open up its markets under various trade agreement. The survey also notes that free trade agreements implemented by India so far have pushed up imports more than the country’s exports. There is a need for barriers to be removed for free movement of skill and data.
The Economic Survey underlines that there is a wide scope for easing monetary policy. The expenditure needs to be planned especially in the medium-term fiscal framework. The financial system is though stable but still, the survey calls for liquidity to be injected in the system to keep it in line with the coming stumbles which India might face being an Asian economy. The survey has given the focus of attention to almost all aspects that the leaders need to keep in mind while handling the management of the country by way of responsible decisions.